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MarkStrat Group Report

Section A Group 2

Shahan Arshad Saad Jamil Fahad Zafar Sobani Tuba Javed Bilal Salim

20130026 20130023 20130008 20130030 20130014

Team: Rockets Market: Germany

Period 0
ecisions: After doin! a fe" #ractice rounds "e thou!ht "e had a #lan of attack on ho" to tar!et our customers$ %ur team set out several ob&ectives in the be!innin!: Be first mover in 'utrites Tar!et Medium (ncome and )i!h (ncome se!ments for *linites market initially$ +ook closely at market forecast to fi!ure out se!ment !ro"th ,tili-e R. and re!ression tools e/tensively$

After vie"in! market research re#orts0 "e decided that "e "ould increase #roduction levels by utili-in! market shares of brands !iven by consumer survey and se!ment !ro"th rates !iven by market forecasts$ Advertisin! "ould be increased #er #eriod usin! the formula 123 avera!e Brand A"areness #ercenta!e !iven by consumer surveys4 / #revious #eriod advertisin!$ The reason for this "as because this "ould be #ercenta!e of #eo#le "ho "ere not a"are of our brand and therefore "e "ould "ant them to become a"are by advertisin!$ Advertisin! allocation "as ke#t in accordance "ith the se!ments "e "anted to tar!et$ 5e also decided to increase commercial team si-e and merchandisin! by #urchase intention #ercenta!e !iven by consumer surveys i$e$ #urchase intention 6 / #revious commercial team si-e$ Same formula "as used for merchandisin! e/#enditure$ *hannel allocation "as selected accordin! to sho##in! habits as #rovided by consumer surveys$ 5e "ould order re#orts for each #eriod es#ecially consumer surveys0 distribution #anel0 market forecast0 semantic scales and M S$ Semantic scales "ere used for R. and M S "as used for strate!y$ %ur decisions on advertisin! and commercial team "ere fle/ible de#endin! u#on circumstances e$!$ leftover inventory 1decrease #roduction ne/t #eriod40 "hether a #roduct "as a cash co" or star or 7uestion mark 1decrease8increase advertisin! accordin!ly40 #ricin! issues and other factors as the situation demanded$ %ur #ricin! #olicies "ere set usin! ideal values from semantic scales and re!ression tools$ The #hysical attributes assi!ned to R. #ro&ects "ere also derived from semantic scales and converted to out of 299 usin! re!ression tools$ 5e "ould also kee# a close eye on com#etitor #rices in case they !ot into #rice "ars for #rice sensitive se!ments$ This is a sna#shot of re!ression tools section "e used to convert #rice and #hysical attributes from out of : to out of 299$ ;

5e started off "ith ; brands R(*) and R(S< and a bud!et of =:299>$ +ookin! at the #ricin! and R. base of these brands0 "e decided to tar!et )i!h (ncome se!ment "ith R(S< and the medium income se!ment "ith R(*)$ 5e set the #rices of R(S< and R(*) at =;; and =2? res#ectively and #roduction #lans at @A9> units and 2BA9> units res#ectively$ Advertisin! costs for brand R(*) "as ke#t at =2ACB> and for R(S< at =2B;B>$ 5e increased and reallocated *ommercial Team si-e of R(*) and R(S< accordin! to the se!mentsD sho##in! habits$

5e ordered the follo"in! research re#orts: (ndustry benchmark0 *onsumer survey and #anel0 istribution #anel0 Semantic scales and M S0 *on&oint Analysis0 Market forecast0 Semantic scales for 'utrites$ 5e also invested in R. #ro&ect E(3R(M< to modify brand R(*) and ordered a feasibility re#ort for it durin! #eriod 9$ 5e in#ut the values for E(3R(M< after !ettin! the ideal values from semantic scales$ Result: %ur revenues increased to =CF0C??> and "e made a #rofit of =220?9B>$ %ur SE( "ent u# to 29CC$ 5e came in ?th at the be!innin! of Eeriod 2$

Period 1
ecisions: %ur R(S< and R(*) "ere flyin! off the shelf$ %ur endin! inventory for R(*) and R(S< "ere 2B2 and C res#ectively "hich "as a !ood si!n$ 5e #ossessed 2A$;6 of the market share of *linites$ %ur decisions this round varied a little in #roduction0 advertisin!0 salesforce and R. $ 5e ke#t the #rices at the same level and increased #roduction #lan of R(*) and R(S< to ;0A;B> and 20BC9> res#ectively$ Advertisin! costs "ere increased to =;@F@>$

5e increased the salesforce to ?: for R(*) focusin! on mass merchandisin! and s#eciali-ed mass and C: for R(S< focusin! on de#artment stores and s#eciali-ed mass channels because "e "ere caterin! R(*) for medium income se!ment and R(S< for hi!h income se!ment$ C

5e ordered the follo"in! research re#orts durin! Eeriod 2: *onsumer Eanel0 istribution Eanel0 Semantic scales0 Market forecast for *linites and *onsumer Eanel and Semantic scales for 'utrites 5e invested in 2 R. #ro&ect E,3R,)+ durin! this #eriod aimed at the health conscious se!ment of the 'utrite market and 2 R. #ro&ect E(3R(M< for modifyin! R(*) to tar!et Medium (ncome se!ment$ Results: %ur SE( rose mar!inally to 29CA "hile the leaders "ere at 2AC:$ 5e held ? th #osition durin! this #eriod$ %ur R(S< brand sold 2?99 units and R(*) sold 2::2 units "ith CA9 units left$ %ur inventory mana!ement "as !oin! e/cellent$ R(S< made a contribution of =2@@AC and R(*) contributed =2B0AAA$ 5e "ere risin! slo"ly but steadily$

Period 2:
ecisions: 5e launched t"o R. #ro&ects0 E(3R(S' for sin!les se!ment and E,3R,)+ for the health conscious se!ment$ 5e had ordered semantic scales and market forecasts for 'utrites durin! the #revious #eriod and feasibility re#ort as "ell so "e had a !ood idea of the ideal #hysical attributes and bud!et to allocate to our 'utrite R. #ro&ect$ Accordin! to our estimations0 "e decided to #roduce the follo"in! units:

Eroduction levels "ere calculated usin! market shares from consumer survey and se!ment !ro"th rates from market forecast usin! the formula market share 6 / !ro"th rate 6 / #revious #roduction$ 5e did not chan!e our #rices in this #eriod$ 5e decreased advertisin! e/#enditure by around 29991from C229 to ;2@C4 in order to kee# costs lo"$ *ommercial team si-e "as:
RISE #eriod ; #reviou s chan!e B? C: ;F RICH AC ?: 32A

5e ordered the follo"in! re#orts for *+('(T<S: consumer #anel0 distribution #anel0 semantic scales and market forecast$ For ',TR(T<S: semantic scales$ Results: As a result of our decisions0 "e rose to Crd #osition at the be!innin! of #eriod C "ith an SE( of 2C:2$ %ur endin! inventory for R(*) 1CA94 and R(S< 1C4 "as very lo"0 sho"in! that our #roduction #lan "as nearly accurate$ %ur total market share 1in dollars4 dro##ed from 2A6 to 226 due to decreased advertisin! e/#enditure$ %ur market share in *linites also fell from 2A6 to 2;6$ %ur revenue decreased by about ;999 resultin! in our #rofit !oin! do"n by ;99$

Period 3:

5e entered the 'utrites market in this #eriod$ 5e tar!eted the )ealth conscious se!ment "ith R,> $ 5e had ordered the #ro#er research re#orts and tailored the #roduct and advertisin! to s#ecifically tar!et this se!ment$ 5e decided to make a #ro&ect E,3R,FAM to tar!et families se!ment$ %ur attributes for this se!ment tar!etin! came from ideal values !iven by semantic scales$ *onsumer #anel0 *onsumer survey0 istribution #anel0 Multidimensional scalin!0 Market forecast "ere ordered at a cost of =AC@k$ Eroduction units
RIOV ;0A99 RUKD 20B:? RUZL 20A;? RUXX B99

Erices "ere ke#t at the follo"in! levels usin! ideal #rice values from semantic scales:
R(*) 2A$99 R,> 320A9F R(S< ;2$99 R(S< 3@F2 R,> C9$99 R(*) 320BC? R(%G 22$?9 R(%G 320A2C

Advertisin! "as ke#t at these levels usin! Brand A"areness ratios from consumer surveys:

*ommercial e/#enditure "as ke#t at the follo"in! levels usin! Eurchase (ntentions #ercenta!e from consumer surveys:
R,> 3?C: R(S< 320??@ R(*) 3:B@ R(%G 3;@?

Results: %ur SE( rose to 2AC? as a result of our decisions$ 5e held onto A th #osition and distanced ourselves from ?th$ R,> became our cash co"$ %ur other #roducts "ere risin! very slo"ly in market share$ R,> had been launched #recisely to cater to )ealth *onscious se!ment and it fit their re7uirements #erfectly$ That is "hy "e "ere able to ca#ture the leadin! market share in this se!ment$ Period 4: ecisions: 5e introduced R,HH to tar!et Families se!ment in the 'utrites market$ 5e also started an R. #ro&ect called E,3R,MB to make a #roduct for <lderly se!ment$ 5e ordered ? R. re#orts namely consumer survey and #anel0 semantic scales0 multidimensional scalin! and market forecast for both *linites and 'utrites$ For R,> "e #roduced 2AAA> units "hile for R,HH "e #roduced 2F99> units and the ?

#rices "e set for them "ere =C: and =CA res#ectively$ 5e increased the #roduction #lans of each brand by their res#ective market shares$ Results: %ur SE( increased to 2AC? as a result$ %ur revenues increased to =:B0:9: and our <BT "as =2@0FFB$ The market share value of our com#any as a "hole "as 2C$?60 a decrease from 2?$C6 in last #eriod$ R,> "as our leadin! brand and "as tar!eted to health conscious #eo#le "hile R,HH "as for families "hich had not sho"n the level of success "hat "e e/#ected from it$

Period 5:
ecisions: The ne/t day "e reconvened after revie"in! "hat "e had done so far$ After lookin! at our com#etitorsD advertisin! and commercial team e/#enditures0 "e decided to increase our advertisin! and commercial e/#enditure as "ell$ 5e took a look at our !ro"th3share matri/ to see ho" our brands "ere doin!$ %ur theory had told us that cash co"s should be ke#t and more money should be invested in stars$ o!s ou!ht to be sold off as they de#ress Return on Assets$ >ee#in! this in mind0 "e decided to sell off our brands R(*) and R(S< since they "ere clearly in the do!s 7uadrant and to kee# R,> since it "as in the cash co" 7uadrant$ 5e also had to im#rove R,Z+ since it "as in the 7uestion mark 7uadrant$ %ur #roduction units "ere:
RIOV ?0B?9 RUKD ::? RUZL 20::? RUXX 2:?

Erices "ere obtained from ideal values usin! semantic scales and re!ression tools:
R,> CA$99 R(%G 22$?9 R,HH ;F$C9 R,Z+ C9$C9

Advertisin! "as calculated usin! the brand a"areness #ercenta!e !iven in customer surveys and increasin! the #revious amount by 123 brand a"areness4:
*linites 3C0;9F 'utrites 3B0;CC

*ommercial Team "as increased by Eurchase (ntentions #ercenta!e !iven in customer surveys$ 5e increased the #revious amount by Eurchase (ntentions #ercenta!e to !et the ne" #eriodDs amount:
3;0@;B 3B0C?A

5e introduced a ne" R. #ro&ect E,3R,II to modify R,Z+ for the <lderly se!ment and E(3R( J to start a #roduct to tar!et the Affluent se!ment$ Ehysical attributes values "ere derived from semantic scales and re!ression tools$ Results: B

%ur SE( fell to 2;9C$ This "as une/#ected since our reasonin! to sell off our brands in the do!sD 7uadrant "as to increase our SE( but instead it fell$ 5e still held onto Ath #osition$ R,Z+ for <lderly "ent into #roduction and did mildly "ell$ %ur share for R(%G for sin!les increased to B$?6 "hich "as a !ood si!n$

Period 6:
ecisions: 5e used re!ression analysis to fi!ure out future ideal values for each se!ment and decided to modify our #roducts accordin!ly for the ne/t #eriod$ 5e launched a ne" brand R(+G tar!eted at the affluent se!ment$ 5e also started an R. #ro&ect E,3R,SZ to a!ain modify R,Z+ in order to meet the chan!in! demands of the elderly se!ment as sho"n by the semantic scales and re!ression$ Accordin! to our calculations i$e$ market share 6 / se!ment !ro"th 6 / #revious #roduction levels0 "e decided to kee# #roduction units at the follo"in! levels:
RUXX A99 RUZL 209;F RUKD 20;?9 RIOV ;09?A RILV 20999

5e decreased R(%G and R,Z+ #roduction substantially from :9?A units in the #revious #eriod because "e had leftover inventory for these t"o brands$ The #roduction for R,> and R,HH "as increased since these #roducts "ere flyin! off the shelf$ 5e ad&usted our #rices as sho"n belo": R<*%MM<' <
RUKD C?$@F RIOV @$99

R<TA(+ ER(*<
RUXX C?$99 RUZL CC$99 RILV ;2$99

These #rices "ere obtained usin! ideal values from semantic scales and re!ression$ 5e increased advertisin! e/#enditure from around 290999 to 2B0;BB$ Advertisin! e/#enditure "as increased by 123 Brand A"areness 64$ *ommercial team si-e and merchandisin! "ere increased by Eurchase (ntentions #ercenta!e$ *ommercial team si-e RUXX RUZL #eriod B 2:B 2BF #reviou s 299 299 chan!e :B BF RUKD AF A9 F RIOV ;29 229 299 RILV 229 229 9

5e ordered the follo"in! re#orts for *+('(T<S: consumer survey0 consumer #anel0 semantic scales0 M S and market forecast$ For ',TR(T<S: *onsumer survey0 consumer #anel0 semantic scales0 M S and market forecast$ Result: <ndin! inventory for R(+G 1AF;4 and R,> 1B2B4 "ere hi!h "hich meant that our #roduct did not meet customer e/#ectations$ *onversely0 our other three brands R,HH0 R,Z+ and R(%G "ere si!nificantly under #roduced "ith a total of ?2ABk units of #otential sales bein! lost$ %ur #roduction calculations "ere insufficient because our #roducts #erfectly met the ideal values of the se!ments "e "ere tar!etin!$ R,Z+ ca#tured a si!nificant #ortion of market share u#on its introduction$ %ur cash co"0 R,> shrank due to shrinkin! !ro"th of )ealth conscious se!ment$ R,HH for Families se!ment also sho"ed si!nificant im#rovement as it "ent from do!s to cash co" as sho"n "hen com#ared to #revious #eriodDs !ro"th3share matri/$ R(+G for Affluent se!ment failed to !ain si!nificant market share and ended u# as a do!$ :

%ur total market share 1in dollars4 dro##ed very sli!htly from 226 to 296$ %ur share in *linites s#lit from B6 to C6 and in 'utrites0 dro##ed sli!htly from ;:6 to ;?6$ Althou!h our revenue increased from FA02:; to @;0::F0 our #rofit dro##ed shar#ly from 2A9BC to ;FBA due to lost #otential sales$ As a result0 our SE( also dro##ed to 29:: from 2;9C and "e ended u# in ?th #osition$

Period 7:
ecisions: (n #eriod : Brand R(+G "as shelved since "e "ere unable to !rab sufficient market share and the costs out"ei!hed the benefits of #roducin! that brand$ %ur #roduction #er brand "as
RUZL 2?0:2; RIOV B0B99 RUXX 20CC? RUKD 299

,sin! re!ression analysis0 "e "ere able to !et the ideal values for #rice$ 5e converted the ideal value #rice out of : to that out of 299 by usin! re!ression based tools3 Semantic$ Erices "ere set at:

Advertisin! e/#enditure "as ke#t as follo"s:


Result: (n #eriod :0 SE( of Rockets increased to 2;:90 the revenues increased by =;C0;?C$ The 'et *ontribution "as as follo"s:
C i!i"e# &6'6(1 $%"ri"e# 4'367

The market share "as 29$F6$ Sales increased by ;?6 to =22B09C2$ *ommercial e/#enditure for 'utrites and *linites increased by ??6 1=B$: million4 and 2A6 1=;$2 million4$There "as an increase of :F6 1=F million4 and ;;6 1=2$B million4 of advertisin! e/#enditures in 'utrites and *linites as com#are to #eriod B$ Seein! the !ro"th3share matri/0 R(%G for sin!les im#roved in #erformance since it moved out of do!sD 7uadrant and into 7uestion mark 7uadrant as its market share and market F

!ro"th im#roved si!nificantly$ Althou!h the simulation ended after this0 "e "ould have #referred if it had run a cou#le of more #eriods so that "e could see "hat our strate!y "ould brin! about in the fast !ro"in! <lderly se!ment$