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Marketing Planning Simulation - Acsu Buffalo

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  • pg 1
									      xcalibur
            William Johnson
           Eduardo Kamisato
            Barbara Mulvenna


The Might of Markland
The Road To Success
Starting Position
                        Strengths

 Initial Market Placement
      High Brand Awareness in Key Market Segments
         – Singles and Others
      Initial evaluation tools
         – Brand awareness
         – Purchase Intention
         – Market Share based on Unit sales
                       Initial Indicators
 SECT                            SELL
     BRAND AWARENESS                   BRAND AWARENESS

    Buffs              47%            Buffs              64%
    Singles            67%            Singles            76%
    Pros               39%            Pros               54%
    Highs              38%            Highs              53%
    Others             71%            Others             47%
    Total              55%            Total              58%

    PURCHASE INTENTIONS                PURCHASE INTENTIONS

    Buffs                5%           Buffs                8%
    Singles             12%           Singles             26%
    Pros                 0%           Pros                 2%
    Highs                1%           Highs                3%
    Others              29%           Others               6%
    Total               11%           Total                9%

        MARKET SHARES                     MARKET SHARES
          Based On Units                    Based On Units
    Buffs                 4%          Buffs                 7%
    Singles              11%          Singles              26%
    Pros                  0%          Pros                  2%
    Highs                 1%          Highs                 3%
    Others               29%          Others                5%
    Total                12%          Total                 8%
               Weaknesses

   Small Overall Market Share
   Low Product Volume
   Inferior Products (low Power)
   Small Budget

The company’s strong initial positioning
 will overcome its shortcomings.
Objectives
                   Initial Objectives
 Growth in Singles of 24%

 Growth in Others of 19%

 Large potential in these markets.

 Cumulative growth 226% and 135%, respectively.

 Greatest potential off all market segments.

 If Excalibur merely maintains its market share, it can
  achieve an estimated growth rate of 177% over five
  periods.
                Evolving Objectives


 Sequential market entry
   – Singles, Others, Pros, Buffs, High Earners
 Full product portfolio
 Contrarian strategy
                     Successes
 Excalibur did maintain its market share in the key
  segments discussed.

 In the Others and Singles markets, Excalibur had
  market shares of 33% and 35%, respectively in period
  6.

 This resulted in cumulative growth (on a unit basis) of
  302% and 196% in the Singles and Others markets.

 The net growth in unit sales of Excalibur by period 6
  was 251%, even better than the projected value of
  177%
                Successes (continued)

• Broad product offering
   – Range of portfolio products
   – Large price range
• Overwhelming presence in Sonite market
• Leadership position in all markets
                          Setbacks
 Too much focus on market share in terms of units sold.

 Not looking for the market share in terms of dollars.

 Failed to deploy strong individual brand management.

 Lower profit margins.

 Using advertising to seek market share, ignoring the
  importance of profitability of each brand.
                Setbacks (continued)

 Neglected to use the advertising experiment and the sales
  force experiment surveys in an efficient manner until the
  last four rounds.
 Overspending in advertising and neglecting the distribution
  channels.
 Flanking strategy was not efficient.
 Needed to aim directly to target markets with exact
  product.
 Using one brand to serve two market segments.
Key Factors Driving
     Demand
        Factors Driving Demand Growth

 Growth in Singles and Others Population
 Changing market needs
   – Higher power needs
   – Changing pricing
   – Product obsolescence
 Advertising
Competitive
 Barriers
              Competitive Conditions

 Market entrenchment
   – Over-crowded market segments
 Lack of distribution channel coverage
 High R&D costs to innovate
   – Low budget of Excalibur caused disadvantage
 High market introduction costs
   – Advertising
   – Distribution
Expanding Market
     Share
                   Starting Position

 Excalibur began as the smallest company in the Samurai
  industry.

 Its sales were less than half of the first company and 10%
  smaller than the fourth company.

 Low power products only nominally met the needs of the
  market.
                   Current Position
 Excalibur now has the second largest dollar sales of
  sonites and the largest unit sales of sonites.

 Excellent progress was made resulting in substantial
  growth in sales, product lines, and profitability.

 The executives of Excalibur have left the company with
  products in every major sonite market segment.

 All market segments are dominated by Excalibur.
               Advantage

Companies leaving the sonites market to focus
   on the vodite market gave Excalibur an
 opportunity to excel in its core competency.
Products
                                     Portfolio

                                  SONITE MARKET
BRAND COST* RETAIL*    LIFE      UNITS SOLD    CONT. AFTER MKT           SEGMENT TARGET
      $     $       PERIODS                   K$
SECT 52     210     0-5 DISC.         322,000             16,616     52 OTHERS
                                                                        ORIGINALLY SINGLES-
                                                                        REPOSITIONED TO
SELL   99    340     0-7 DISC.        590,000             52,315     89 TARGET OTHERS
                                                                        ORIGINALLY SINGLES-
                                                                        REPOSITIONED TO
SEXY   113   330     3-PRES.         1184000               86297     73 TARGET OTHERS
SEXT   155   320     5-PRES.         813,000              70,286     86 SINGLES
SEPT   155   430     5-PRES.         240,000              19,452     81 PROFESSIONALS
SEBU   260   401     8-PRES.          42,000              -4,747   -113 BUFF
SEHE   260   519     8-PRES.          17,000              -3,248   -191 HIGH EARNERS
                     TOTAL          3,208,000           236,971     74
Enhancing Future Market
        Position
                 Recommendations

 Reduce costs of SEBU and SEHE
   – Improve margins
 Introduce new Singles product
   – Higher power product needed
 Enter vodite market
   – Wait for some market stabilization
   – Focus on followers segment
     Effectiveness
           of
Excalibur Management
                       Initial roles

 Specialization within Excalibur accelerated over time.
 Occurring as it became obvious that there was no time for
  the group to make all decisions by committee.
 Building trust among the individual members played an
  important role in later decision processes.
 As the complexity of the data and the decisions grew, it was
  necessary to specialize, each individual contributing what
  was needed for the group to succeed.
 By period 9, the activities of any one member could not
  have easily been duplicated by any other member.
    xcalibur


What We Learned
                    Conclusions

 Focus on profits not market share
 Focus on overall strategy
   – Not on individual product performance
   – Not individual market segments
 Think big
   – Not just where you are now
 Learn from your mistakes
   – Be flexible
   – Change your strategies as necessary

								
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