The Markstrat Challenge I
222 Third Street
Cambridge, MA 02142
Tel: (617) 494-8282
Fax: (617) 494-1421
Markstrat is a simulation designed to focus on
strategic marketing issues
Understanding customer needs
Long-term perspective
Marketing as a profit center
Competitive environment
Marketing strategy is based on segmentation,
positioning, and resource allocation... marketing mix
decisions are secondary
The Markstrat
World
Managing
your firm
Getting started
The Markstrat World: A large territory with a highly
developed economy
The Markstrat World
Population: 250 million
Currency: Markstrat Dollar ($)
The basic scenario begins with firms starting in
the same competitive position
Each firm can compete in TWO product markets
SONITES
independent
not substitutes
not complements
VODITES
Maximum: 5 brands/firms marketed at a time
The Sonite market is already developed, each
product having 6 determining product
characteristics
Weight
Kg
10 - 20
Volume
Design
Index
dm3
3 - 10
Max. Frequency
Power
kHz
5 - 50
20 - 100
5 - 100
Base Cost
$
min. 10
7
Vodites will likely also have 6 main physical
characteristics, but the market is as yet untapped
Autonomy
m
5 -100
Design
Index
3 -10
Max. Frequency
kHz
5 -20
Weight
Kg
10 -100
Diameter
mm
10 -100
Base Cost
$
min. 10
8
It is easy to recognize the origin of the brands
from their names
Product
Type:
Company
marketing
the brand:
S=Sonite
V=Vodite
Freely chosen
letters or numbers
A, E, I, ...
Sonite customers have traditionally been
classified into 5 segments
Singles / Si
Professionals / Pr
Others / Oi
Buffs / Bf
High Earners / Hi
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...whereas initial studies for Vodites have pointed
to a different segmentation scheme
Typical segment size evolution over time
sales
Followers
Early adopters
Innovators
time
11
Sonite & Vodite customers have the choice of
purchasing through 3 distinct distribution
channels
12
Summary of the Markstrat World Environment
Market Growth
Technology
Economic Environment
13
The Markstrat
World
Managing
your firm
Getting started
14
Your objective in managing your company is to
maximize your Share Price Index
To do that, you will have to
optimize:
Market share
Sales growth
Net contribution
Cumulative net contribution
R & D investments
.but the main objective is to LEARN!
15
You will need to do a certain amount of analysis,
before setting a strategic direction for your firm
Data
Data
A
P0
P1
P2
P3
Information
Information
B
457
542
650
745
Strategic
Strategic
Options
Options
C
856
596
587
900
745
789
824
1203
16
Market research studies provide market data
it is up to you to prioritize, digest, and interpret
them
Consumer survey
Industry benchmarking
Consumer panel
Market forecast
Distribution panel
Competitive advertising
Semantic scales
Competitive sales force
Multi-dimensional scaling
(MDS)
Advertising experiment
Sales force experiment
Conjoint analysis
17
Once your strategy is clear, you should proceed to
make a number of tactical decisions each year
1)
Production planning
2)
Inventory disposal
3)
Pricing
4)
Mass communication
5)
Sales force & distribution
6)
Market research
18
Each firm receives a marketing budget for the
coming period, based on the previous periods
performance
Budget
Advertising
Advertising
Advertising expenditures
expenditures
Advertising
Advertising research
research
expenditures
expenditures
for
for each
each
brand
brand
Operating
Operating cost
cost
Sales force
Hiring
Hiring &
& training
training cost
cost
Firing
Firing cost
cost
R&D
Development
Development budget
budget
Market
Research
Sonite
Sonite and
and Vodite
Vodite
study
costs
study costs
for
for each
each
project
project
19
Brand results
20
Company performance
21
The simulation starts at the end of the initial period,
the new management (you!) making decisions for
the next period
START
MSPH
22
The decisions for the first period are limited in
scope, so that your team can familiarize itself with
Markstrat
Gather information
Do not make any major changes in your firm's operation
Do not introduce new brands, modify or withdraw
existing ones
Do not start R&D projects
Do not give perceptual objectives for advertising
23
Organize yourselves and manage the group
process
Time
pressure
Information
overload
Conflicting
opinions
24
The Markstrat
World
Managing
your firm
Getting started
25
When you return to your team room,
the Main Menu will be on your screen
Click here to open
a session &
access the
decisions screen
26
Within the Decision Screen, you will start making
decisions for the coming Click
period
here to
make Production,
Price &
Advertising
decisions
The
decisions
you
will
make
27
Decisions on production, price and advertising
should be entered for each brand
Switch from
Sonites to
Vodites
You are
making
decisions for
the brand
SAMA
Switch from
one brand to
the other
28
The sales force is organized by channel type to
better meet the specific needs of the channels
Click on the
assistant to help
you allocate to
sales forces
automatically
29
Buying market research studies will help you
The cost of
make sound decisions
each study
appears as
you make your
selections
30
You can monitor the status of your decisions at
any time
31
Don't forget to transfer your decisions to your
You can close
instructor by closing the session
your session by
clicking on
Interface/Close
Markstrat
Session
32
On your marks, get set, GO!
Give a name to your company
Respect the deadlines
Good luck!
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