MARKETING STRATEGY GAME
FREE WINNING GUIDES AND TIPS - PART 1/3
MARKETING STRATEGY GAME FREE WINNING GUIDES AND TIPS - PART 1
New Winning Guide and Tips
Markstrat Tips: Introduction - How to Win Markstrat
Top 10 Markstrat tips - How to Master Markstrat Simulations
Win Markstrat Period 1 - How to Master Markstrat Simulations
Win Markstrat Period 1 - How to Master Markstrat Simulations
Win Markstrat All 10 Periods - How to Master Markstrat Simulations
How is Markstrat production calculated?
How do you allocate commercial teams with Markstrat?
When to launch a new brand in Markstrat?
What business lessons learnt from Markstrat?
MarkStrat Simulation: Top 10 Tips for MarkStrat Simulation
10 Tips to Win Markstrat fro All Periods
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TOP 10 TIPS TO WIN MARKSTRAT
IF YOU FIND AND START READING THIS GUIDE, YOU WIN HALF OF MARKSTRAT SIMULATION
1. Two categories of
products
The game has two categories
of products, Sonite and Vodite.
They are durable consumer products, such as
computer, digital camera, smart phones, laptop, tablets…).
Sonite products have
50 attributes, but 5 top important include: processing power, display size,
design, battery life and features (think about PC, Laptop, smart phones).
Vodite products also focus on 5 key characteristics, including: resolution,
energy, carbon footprint, connectivity and apps (thinks about smart phone,
tablets…)
2. Manage a company in
competition
We and our team will manage a
company, competing with other five companies in this industry.
Companies name
start with L, M, N, R, S, T.
We will involve in all the marketing decisions,
from R&D, products specification, target customers, brand awareness, market
shares, distribution coverage, profitability, competition, long term
strategies.
Brands are developed based on Project, project name start with PO
for Sonite and PE for Vodite.
Brand names start with Company first letter and O
for Sonite and E for Vodite, eg. LOOK and LOOPEA, MOST and MOVE, or ROCKY and ROLLE
(Sonite) and LESOLEE, METOR, TEMPO, SEASTAR (for Vodite).
3. Tip: Be the first one
in the Vodite market.
We can launch the new product
from Round 4 or 5 and gain good sales and profit all rounds from 6, 7 to 8.
Do not
be afraid that our product won’t be good enough.
We can always change it later
through R&D.
Consumer’s awareness and perceptions are the most important
factors to gain the market share in the Vodite market.
4. Tip: Get start as
early as possible
Understand the game and all
the software functions to transfer business ideas into the game, competitive
ideas into the game.
Ask professor any question right from round 1 or even talk
to others who already played this game.
Read all winning guides and tips from
Internet, and tutorial videos, can save time and start with the right decisions
and direction.
5.Tip: Implement R&D
every round
To improve the products every
round.
See the samples decisions for R&D at the end of this guides.
In this
marketing simulation game, product life cycle is applied, so, products need
updated every round to close to customer expectation or perception (ideal
spots).
6. Tip: A product should
only target one segment.
Trying to target more
segments with one product will be the disadvantage for the long run.
In fact, we
can still have a product, that sell mainly in one segment (70%) and in some
other segments (20% and 10%).
7. Take a risk to win
the long term strategy game.
Don’t be afraid to take short
term losses for long term gains.
Be creative but smart about our decision.
If we
invest in R&D, new product, we may have good sales but lower net profit in
round 1-2-3 but will have both highest sales and profit, leading the game all
rounds from 4 to 8.
8. Tip: Win with four,
five for six products
Make sure that we have enough
money to keep our product in the portfolio competitively.
Too many products
without management will decrease the market share in the long run.
One of the
winning strategies is to have two or three products in Sonite (add one more product in
round 5 or 6) and one or two new product in Vodite from round 5 or 6.
THIS IS IMPORTANT KEY TO WIN MARKSTRAT SIMULATION
9. BUY and Read the Report every
round
In early round to find needed
data and numbers to support our decisions. Eg. Sales, Unit sold, Market
demands, Segment Growth, Product specification of competitors, competitor
prices…
Map out our team decisions. Know why we are doing what we doing, have
data, and numbers to support it.
Do not go with “I think we should”.
That’s
vague and dangerous.
Win the game is important, and learning the reasons to
make right decisions are also equally important.
10. Again, this is long
term strategy game
Performances in the later
periods determine our win or loss, so do not get too comfortable with the
initial success.
Start early to get good sales and profit from early rounds,
and invest to launch new products from round 4 or 5 or 6
NOTE AGAIN, VODITE PRODUCTS ARE KEY TO WIN IN LATER ROUNDS
11. AGAIN, Buying the market
reports
People said buy all the
reports. But I think it is redundant. A couple of research reports I suggest
buying are:
i. Industry benchmarking: we will
be able to see what other teams spend on R&D, thus predict their next
steps.
ii. Market Report: shows how much
product did other teams sold, their prices, and based costs
iii. Consumer Panel: shows the market
share each product gains in each segment.
iv. Distribution Panel:
market share per distribution channel. This will help to allocate the
commercial team
v. Semantic Scales: Brand
perceptions, important characteristics that consumers want.
vi. Market Forecast: Helps we
calculate production plan.
vii. Competitive advertising and
competitive commercial teams: shows how much competitors spend on these two
categories. Help we determine how much we should spend to gain more market
share.
AGAIN, THIS IS MARKETING SIMULATION GAME
READING REPORTS, MARKET RESEARCH IS THE KEY AND
FOUNDATIONS TO MAKE DECISIONS
- BUY COMPETITIVE INTELLIGENCE REPORT
WILL FIND TARTGET MARKET OF EACH PRODUCTS
ADVERTISING SPENDINGS FOR A PRODUCT IN EACH SEGMENT
ALSO FIND COMMERCIAL TEAMS OF EACH PRODUCTS
BUY SEMANTIC SCALES REPORT
THIS IS ONE OF THE MOST IMPORANT REPORT
YOU CAN FIND IDEAL SPOT FOR EACH SEGMENT
THEN CAN R&D TO UPDATE PRODUCT OR LAUNCH A NEW PRODUCT
BUY MARKET FORECAST REPORT
WILL SEE TOTAL DEMANDS FOR NEXT PERIOD AND NEXT FIVE PERIODS
12. Tip: What to focus in
Round 1
In round 1,
select the right target segment for 2 products, eg. LOCKERERfor Savers and LOOPEA for
Professional.
Note that products are
sold in all five segments in early rounds, but about 60-70% in the target
segment.
In round 4 or 5 or 6 launch a new product, focus on one more segment,
eg. High earners.
And also one more
new product in Vodite focus on Followers
at the end.
TIP:
- Launch 2 Vodite products, one in Follower and one in Adopter will have top sales
13. Have a reason for any decision (In-depth understanding of marketing)
Have a reason or strategy behind each decision our team makes.
Don’t pull numbers out of our head. “120,000 units sound like a good
number of units to order.” NO!
We don’t use phrases like “it sounds
good” or ” I think” with Markstrat.
We are an MBA in training.
Think
like it!
So, just check market demand and also market growth to estimate sales
forecast for each round. Also, look at competitors’ sales.
TIP
CHECK MARKET FORECAST REPORT
TO SEE DEMANDS FOR NEXT ROUND AND NEXT FIVE ROUNDS
NOTE THE SHOPPER AND SAVERS DEMANDS IN LATER ROUNDS
NOTE THE ADOPTER DEMANDS AND FOLLOWER DEMANDS IN LATER ROUNDS
14. Do not over analyze
Marketing Strategy Game gives our more information than we can
handle.
Determine as quickly as possible what data our team needs to
focus on.
If our team starts developing a bunch of products, assign
product managers to monitor individual results, changing trends, and be the
decision maker behind any R&D modifications.
15. Focus on Advertising.
Give generously in both in media and market research budgets to insure our
product’s success.
We always gave 7-15% of our media budget to market
research.
Advertising is a real key to the game, our brand awareness, and
ultimately, our sales.
CHECK FOR HOW MUCH TO SPEND ON ADVERTISING AND HOW MUCH TO SPEND ON COMMERCIAL TEAMS EACH ROUND.
TIP
CHECK COMPETITIVE INTELLIGENCE REPORT
TO FIND OUT ADVERTISING SPENDING OF EACH COMPETITOR
TIP: THIS IS IMPORTANT REPORT - WE CAN FIND OUT SPENDDING FOR ADVERTISING AND COMMERCIAL TEAMS OF EACH COMPETITOR
16. Decide in the first round if we want
to go into Vodite.
If we want to go Vodite, start saving money.
Just a
little tip: It will take around $8,000 to create a Vodite project.
That is alot in the Marketing Strategy Game
world.
Our team’s average budget for a given period was about the
same amount.
So, it requires saving for 3-4 rounds to start introduce a new
product in Vodite.
Go into Vodite.
My team researched other
games outside our own.
There is a lot of money to be made in
Vodite.
The winner in our game and in other games usually had at least one
Vodite in the market.
SHOULD HAVE 2 OR 3 VODITE TO WIN IN LATER ROUNDS (7-8-9-10)
THIS IS KEY TO WIN - LAUNCH VODITE IN ROUND 4 OR 5
TWO VODITE WILL HAVE TOP SALES AND PROFIT IN LATER ROUNDS
17. Speaking of R&D
Think about it and plan two/three periods in advance.
It takes one period just to develop or modify a product, two periods if we want
to develop it at the lowest cost.
BUY THE REPORT
CHECK FOR IDEAL SPOTS
THEN UPDATE PRODUCTS
TIP
ONE OF THE MOST IMPORTANT TOOL FOR R&D
THIS IS THE KEY TO WIN THE GAME
AGAIN THIS IS THE KEY TO WIN THE SIMULATION
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REGRESSION-BASED CHARTS - SEMANTIC
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WE CAN FIND IDEAL CHARACTERISTICS FOR NEW PRODUCT IN EACH SEGMENT NEXT ROUND
USE THIS FOR R&D PROJECT TO DEVELOP NEW PRODUCTS OR UPDATE/MODIFY CURRENT PRODUCTS
18. Use minimum base cost
When doing R&D, Always, Always, Always check the
box to develop our product at minimum base cost.
One of our teams forgot
to check it.
The base cost for their product was $1000, everyone else’s
was $300.
Let’s just say their margins were in the negative.
19. Do not spend too much on Sales Force
Sales Force is tricky, costly, and offers little return.
Sales Force is most needed in new markets, not as much in established
ones.
Give real thought if we start hiring people because it costs twice
as much to fire them.
Use that money instead on R&D or Advertising.
TIPS
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WHERE TO FIND COMMERCIAL TEAM COST OF OTHER COMPETITORS
WE CAN FIND THIS INFORMATION IN 2 REPORTS
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#REPORT 1: INDUSTRY BENCHMARKING
AGAIN, BUY THE REPORT, SO WE CAN HAVE BASIS OR FOUNDATION TO MAKE DECISIONS
MAKE DECISIONS BASED ON LAST ROUND REPORTS
SO AGAIN, BUY REPORTS.
THIS IS THE WAY WE DO MARKETING RESEARCH AND MAKING MARKETING DECISIONS. BASED ON NUMBERS
20. Production and Inventory
This is a real balancing act.
Over producing leads to
very high holding costs and under producing leads to missed sales.
Our
team learned that it was better to over produce by a certain amount than run
out of inventory completely.
We missed around 200,000 unit sales in one
period because we didn’t order enough.
Bad for us, good for the other
team who happily filled the orders.
21. Pay attention to our holding
costs
Not to mention all our accounting figures.
Just because they
don’t have pretty colors and graphs doesn’t mean they are not EXTREMELY
informative.
22. Tip, Again: Target each product
for one market segment.
If our product fits the needs of what Professionals want, then target
that group 100%.
Splitting target segment percentages goes against you.
23. Don’t create the most basic
product possible.
Let’s just say our team had a plan to create the most basic Vodite and
utilize a skimming strategy (charge a very high price and drop it slowly to
gain more market shares).
No one will buy scrap medal, Period!
Even
if we are one of the first to the Vodite market, it’s not a good idea to spend
$8,000 to develop a tin can.
Best to stay in the middle when putting
together our R&D specs.
TIP
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YOU BUY REPORT AND HAVE TOOL TO FIND THE IDEAL CHARACTERISTICS OF PRODUCTS
JUST DEVELOP THE IDEAL PRODUCTS TO SELL IN LATER ROUNDS TO GAIN TOP SALES AND PROFIT.
24. Always spend our entire budget in the beginning periods.
In the beginning periods, it is
common to see all teams receive a fixed and equal budget.
This ensures that the
game is as fair as possible, as some teams will start off in better positions
than others.
Because the budget is fixed to a set amount each period, any
leftover budget will not carry over to the next period.
Our focus in the
beginning should also be to gain as much market share as possible; this is not
the time to begin cutting down margins.
In the later periods our budget will be
determined by our performance in the previous round, and budget surpluses will
carry over into the next period.
If you’re doing well, we may find that we have
more budget in a single period than we need for advertising and commercial team
(we can see this in the Experiments market research reports, which show
expected change in contribution had we increased our ad/commercial team spend).
The fight for market share should be pretty much over by these periods, and the
new focus is maximizing our net margin; if increasing advertising or commercial
team spend is going to decrease our net margins, don’t do it, let it carry
over.
25. Focus on the ideal points.
This is probably the most basic
but important Marketing Strategy Game tip.
In our Semantic Scales market
research report, we will see each target segment’s “ideal point” on positioning
maps laid out by price and each other physical attribute.
We will also see
where each brand on the market lands on this map.
This is showing we what each
segment wants and how well they perceive each brand at delivering it.
Unless we
have no competitors on a segment (meaning we can charge higher prices or not
deliver a perfect product and still get sales), we want each of our brands to
stay as close to its target segment’s ideal point as possible.
These points
will move each period, typically in a pretty linear trajectory (click “access
additional charts” at the bottom of our Semantic Scales report), so make sure
to track this and forecast ahead when building new base projects in R&D.
26. Find out what is most important to our segment.
Segments place higher value on
certain product attributes than others.
Typically this is Power and Price for
Sonite segments,
Connectivity and Price for Vodite segments (we can see this in
the Conjoint Analysis report).
When trying to hit a segment’s ideal point,
focus on the positioning map that plots those two most important
characteristics.
Every period when we advertise our brands, set perceptual
objectives for these two characteristics to try and bring our brand closer to
that point.
27. Don’t under-produce in the beginning periods.
The beginning periods are all
about gaining market share.
There is much more harm in selling out (losing
potential sales and share) early on than incurring inventory costs, especially
if our budget is fixed for the next period
(i.e. EI costs won’t be deducted
from our next period budget).
28. Use our market research reports.
We want to make this as little
of a guessing game as possible.
Use our market research reports to learn what our
competitors are doing: how much they’re spending on advertising and commercial
team per brand, which segments they are or will be targeting, when they’re
investing in R&D, and so forth.
You’ll also need market research to learn
about our segments and measure the results of our decisions.
There’s a lot of
data, so spend the first period or so familiarizing yourself with each report
so we know what to look for moving forward.
29. Don’t be afraid to drop under-performing brands
Should do it as early as possible.
If we have a brand that comes in far off the ideal point and is not
being received well by our target segment, it will be very hard (and take lots
of money) to change those perceptions and gain market share with that brand.
It
is much easier to drop the brand and launch a new one; if we give the new brand
lots of advertising money, market share can be gained relatively quickly in the
early rounds.
One of the best decisions our team made was to drop one of our
beginning brands very early on in the game (LOCKER) and focus on the higher end
segments where we had a good product (LOOPEA) to base new brands off of.
30. First impressions matter.
As mentioned in the previous
point, it can be hard to change the initial perception that a brand receives on
the market.
If the brands that we start with are far off the ideal point of the
segments we wish to target, it may be better to wait until we have new base
projects created before we launch new brands.
If we launch a brand and it is
far off the ideal point, take it off the market and try again with different
perceptual objectives or wait until we have a better base project.
Brands that
come on the market earlier than others, but are far from the ideal point, will
capture much less market share (both short-term and long-term) than brands
which come in a period later and hit the ideal point perfectly.
31. Use perceptual objectives.
The “base project” of a brand
determines its physical attributes; a perceptual objective determines what we want
our target segment to perceive each physical attribute as.
Because segments’
ideal points are always moving, we base project will not always deliver exactly
what they are asking for.
Use perceptual objectives to bring our brand closer
to the ideal point each period.
For example, if our brand is perceived as a 3.0
in power on the Semantic Scales chart and the segment’s ideal point for power
will be a 3.2, we can set our perceptual objective to 3.4 to land directly on
the ideal point.
As a note, never use perceptual objectives to make a segment
perceive our price as higher (some teams made the mistake of doing this); if
the ideal point is moving towards higher prices, just raise our actual prices
so we can increase our margins.
32. Don’t skimp on advertising research.
In order for our perceptual
objectives to work, we need to spend at least 10–15% of our advertising budget
per brand on advertising research.
33. Tip: Again, Out-spend our competitors in advertising and
commercial team.
If our brand is perceived as
being close to a segment’s ideal point, this is the biggest determinant of
market share.
Throughout my simulation, it was common to see teams leapfrog
others in market share based on one round of outspending them in advertising.
In the early periods (when brand awareness is low) advertising seemed to be a
little more important, but as the game moved forward it became evident that
having a higher commercial team helped to increase our sales and net
contribution.
Early on we gave our commercial team about 20% of our marketing
spend (ads + commercial); in later rounds as budget increased we made it 50/50.
Pay attention to our Experiments report to see where we should be spending more
money.
34. Give heavier advertising to our high-performing brands.
Look at which brands are
generating the most unit sales and the highest per unit contribution margins.
Brands with high unit sales have a good opportunity to become the market
leaders in their segments, support them with lots of advertising power to keep
them on top of the competition (if they have slim margins, we can focus on
improving these later by minimizing costs through R&D or increasing prices
through price setting and perceptual objectives).
For brands with good unit
contributions margins, focus on trying to maximize their sales, as each dollar
spent here will go a longer way for our overall net marketing contribution.
In
the first period, we split our budget in terms of how much net contribution
each brand gave us (LOOPEA generated 75% of our net contribution, so it got 75%
of our budget).
35. Tip: Try to target maximum 2 (maybe 3) segments in Sonites.
We can launch a maximum of 5
Sonite brands and 5 Vodite brands. In Markstrat, think of a “brand” as the
packaging of a product, and the “base project” as what is actually inside. We will
typically need a different base project to target different segments, but
multiple brands can use the same base project.
Limiting yourself to two
segments means that we can limit yourself to two base projects, which will save
costs. This is because the more units we sell of each base project, the lower our
“transfer costs” (cost of production).
This is also because it will cost we a
good amount of money each time we want to create a new base project through
R&D, therefore we don’t want to have too many.
With those two base
projects, we can then launch 5 brands in the Sonites market.
This will spread our
advertising, but allow we to capture as much market share in each target
segment as possible
36. Plan our long-term strategy (Sonites and Vodites) in Period
1.
Decide where we want to be by
the final period, and then set a period-by-period strategy to get there.
Knowing when we plan to invest in R&D and when (if) we plan to enter the
Vodite market will help we organize our spending each period.
Spend a good
amount of time looking at the data we have in Period 1 to do this, and choose
target segments wisely (based on size, price-sensitivity, competition, etc.).
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