New Product Alert - New Product Alert - New Product Alert

SOUPER HOTThe innovative self-heating soup for busy people on the

move.

A short computerised simulation to explore essential marketing and financial concepts.

To build skills in analysis, decision-making and team working.

You will be divided into small groups to run the Souper Hot company for at least eight periods.

The Task

You will use your own micro-computer to simulate the effect of your decisions.

The Good News

• Souper Hot is a totally new product• and there is no competition• Each period, potential sales are 1,000,000• It only costs £0.50 to make• but you should be able to sell it for £2.00

The Bad News

• Eventually competition will arrive.• No one knows about Souper Hot.• Fixed Costs (each period) are £20,000.• Every time you increase production you

invest £2 per unit of new capacity.• Souper Hot has a limited shelf-life and so you

lose half any inventory remaining at period end.

The Even Worse News!

• You only have £400,000 to fund your growth.• If you over spend on

– production capacity– inventory– initial losses

• You may go bankrupt!

Your DecisionsPRICE 1.90PROMOTION 75000PRODUCTION 70000

Besides illustrating the decisions, these have been tested and a forecast of the results produced.

Your ResultsPenetration 5Market Share 100Unit Sales 50000Inventory (units) 10000

Sales Income 95000Net Profit -30000

Fixed Assets 140000Inventory (value) 5000Cash 225000

Cum Profit -30000

Using the Computer

Enter a team name – to identify your data and demonstrate creativity,

aggression etc.Enter Decisions into the template & confirmResults will be printed and displayedAnalyse and make your next decisions

YOUR OBJECTIVES

• run the business for at least eight periods• make the greatest possible cumulative profit• without going bankrupt• explore essential marketing & finance• practice your decision-making skills• work as a team sharing understanding• HAVE FUN!