MARKSTRAT

SIMULATION

MKT 6339

UTD SPRING 2014

BUFFALO

Team TaunTaun

Paul Flesher

Zhaodi(Jodi) Liu

Tanachai Thosapornvichai

Michael Stone

STARTING POSITION & STRATEGY

• Sonite Market – 20% Market Share

Initial Position

• Vodites are the KEY

• Be first to Vodites

• Maintain position in Sonites

• Avoid spreading to thin

Initial Strategy

OBJECTIVES & ACTUAL PERFORMANCE

0

200

400

600

800

1,000

0 1 2 3 4 5 6 7 8

TaunTaun

Legend

Resolute

Marvelus

Sharks

• WIN

• 50% Vodite Market Share

• 10% Sonite Market Share

Objectives

• Cum Net Contribution = $904M

• 55% Vodite Market Share

• 8% Sonite Market Share

Actual Performance

STRATEGY: TRIAL ROUNDS R&D Queries vs. Feasibility Studies

Sonite Feasibility Studies Never Profitable

Determine Required Budget for first Vodite

STRATEGY: PERIODS 1 & 2

Target profitable segments

TOPS – Maximize penetration

TONE – Maintain market presence

Needed $6.4 M, Period 2 Budget = $8.1

Expected Loss of NC in Period 2

Cut Advertising & CT to $1.7 M

STRATEGY: PERIOD 3 & 4TEEK Period 3 Period 4

Target Innovators Innovators

Price $2,000 $1,850

Production 111,000 140,000

Sales 95,000 168,000

Net Contribution $63 M $107 M

Price Semantic 6.5 6.5

Period 3 Results TEEK TOPS TONE

Net Contribution 63,471 12,590 3589

Marketing Expenses 4,227 1,662 993

Return on Marketing Investment

15.0 7.6 3.6

• Market

Size?

• Price?

• Production?

Vodite

• ROMI

• Drop TONE Sonite

STRATEGY: PERIOD 5

New Competition

Launch 2 Vodites

TEMOC

TEMAK

Cancel Sonite for Savers

STRATEGY: PERIOD 5 & BEYOND

Reposition TEEK (Adopters)

Market Growth??

Theory: Pricing is King

Set as close to ideal point as possible

Estimated Actual

Period 4 72+66+20= 158 74+71+23= 168

Period 5 84+110+77= 271 49+70+58= 177

POSITION GOING FORWARD

Meet Customer Preferences

Research & Development

P9 Update for TEMOC/TEMAK

New Sonite for Savers?

Vodite pricing now optimal

Top ROMI Brands

Sonite: 5.74 vs. 4.56 (R, 2nd)

Vodite: 8.72 vs. 3.17 (R, 2nd)

• $849

• 4.24 - Perception 4.37 - Ideal

TEMOC

#1 Vodite

23.9% Mkt Share

• $899

• 4.64 - Perception 4.37 - Ideal

TEMAK

#3 Vodite

16.3% Mkt Share

• $999

• 4.96 - Perception 4.91- Ideal

TEEK

#4 Vodite

14.9% Mkt Share

IMPORTANT LESSONS LEARNED

• First mover has a big advantage

• Always consider ROI

• Brand awareness is vital

• Pricing matters

• Be organized & have defined roles

• Study the competition

• Be decisive

QUESTIONS?