46

Silver Management Trainer

The Scenario

Table of contents
0.- INTRODUCTION.......................................................................................................................3
1.- COMPANIES.............................................................................................................................3
2.- THE ENVIRONMENT................................................................................................................4
3.- PRODUCTS..............................................................................................................................5
4.- MARKETS.................................................................................................................................6
5.- DEMOGRAPHIC PROFILES OF DAIRY PRODUCT BUYERS.................................................8
6.- BRANCHES..............................................................................................................................8
7.- WHOLESALERS.......................................................................................................................9
8.- SALES MANAGEMENT AND PHYSICAL DISTRIBUTION.....................................................10
9.- PHYSICAL DISTRIBUTION LOGISTICS................................................................................12
10.- TRANSPORTATION FROM FACTORY TO PLATFORMS.....................................................13
11.- PLATAFORMS MANAGED BY BRANCHES.........................................................................16
12.- TRANSPORTATION FROM PLATFORMS TO RETAILERS..................................................17
13.- SALES FORCE.....................................................................................................................18
14.- PRICES.................................................................................................................................19
15.- ADVERTISING......................................................................................................................19
16.- RATINGS...............................................................................................................................21
17.- MARKET POSITIONING.......................................................................................................21
18.- SALES PROMOTIONS.........................................................................................................22
19.- POINT-OF-PURCHASE ADVERTISING...............................................................................24
20.- RETAILERS...........................................................................................................................24
21.- MERCHANDISING................................................................................................................25
22.- PRODUCTION FACILITIES..................................................................................................29
23.- DIRECT PRODUCTION COSTS...........................................................................................30
24.- OVERHEAD COSTS.............................................................................................................30
25.- PERIODS - FISCAL YEAR....................................................................................................31
26.- OPERATING CASH NEEDED...............................................................................................33
27.- LOANS AND CASH & EQUIVALENTS (TREASURY)...........................................................34
28.- FINANCIAL INVESTMENTS.................................................................................................35
29.- CURRENCY EXCHANGE.....................................................................................................35
30.- INCOME STATEMENT AND BALANCE SHEET....................................................................36
31.- DEMAND...............................................................................................................................36
32.- MACROECONOMIC AND OTHER FACTORS......................................................................38
33.- MARKET RESEARCH...........................................................................................................39
34.- APPENDIX............................................................................................................................42

0.- INTRODUCTION.
You have been chosen to manage a dairy products company headquartered in the European
Union. The company can produce milk and/or yogurt. Your company has to draft a management
plan for a one-year period. This plan takes the explicit shape of a document known as Decision
Sheets". These Decision Sheets are processed by the Praxis MMT46 simulator, which
calculates the results achieved by each company and then sends them to the participants. Each
company is unaware of the decisions and results of the others, except for that information which
can be obtained through market research.

Based on these results, participants must draft a new management plan for another year that
will give rise to new Decision Sheets, which will follow the same procedure as described in the
previous paragraph.
The simulation Director stipulates the number of times (how many years) the management plan
decisions are to be repeated. The final results obtained by each company are compared with
those from its competitors, the goal being to maximize profits. The role of each company is to
apply the knowledge and criteria required to make the proper managerial decisions.

1.- COMPANIES.
Initially, the companies start from the same situation, and therefore have identical Balance
Sheets.
Initial Balance Sheet in thousand euros:

All numeric data appearing in this document use the convention of separating thousands by a
comma and decimals by a point. In decisions where decimals can be applied, the simulator
accepts up to two decimal places.

2.- THE ENVIRONMENT.

There are three markets, corresponding to three territories, referred to as A, B and Y. Markets A
and B are two areas within the European Union and therefore use a common currency, the euro.
Market Y is an area in a foreign country that can be associated with a U.S. region, whose
currency is the dollar. Consequently, before the decisions for each business year are made, the
simulation Director will provide the exchange rate between the dollar and the euro at that
particular moment for those companies that decide to export.
All the competing companies are geographically located somewhere between A and B, and are
subject to their countrys regulations. Therefore, their Income Statement and Balance Sheets
are presented in euros.
The demographic and geographical data of the three territories are as follows:

Each market has a different per capita income, subject to change every year. The simulation
Director will provide the participants with this information for A, B and Y before each plan.
Companies in markets A and B have no competition other than themselves. On the other hand,
in market Y, besides the possible performance of other participant companies, there are also
domestic companies competing with those companies that decide to export. These companies
are assumed to act as one in their decision-making strategy.

In market Y, all decisions involving money are to be expressed in euros on the Decision Sheets,
as the simulator applies the corresponding dollar exchange rate.

3.- PRODUCTS.
Each company can manufacture two products that we will call L and T. Both are
mass-consumption products from the food industry, and participants can identify them as UHT
(Ultra High Temperature) MiLk and YogurT respectively. In both cases, the sales unit is the Liter.
The model behaves just as real European markets would for these two particular products,
although this analogy is not intended to be absolutely accurate. Both are frequently used mass
consumer products, and L is considered a staple.
The approximate per capita consumption for each product at the beginning of the simulation is
as follows:

Obviously, demand will change according to the marketing strategy employed by each
company.
The international trend for companies that produce mass-consumption goods (food, cleaning,
toiletries, etc.) is for firms not to use the corporate brand name to push their individual product
brands. That is, they do not use a family brand to refer to their portfolio of products. The
simulator emulates this behavior, and the different products that the companies are able to
manufacture and sell have individual brands, perceived as independent by consumers. This
trend seems to be the most common, but it is not the only one.
Regarding brand positioning, if a company sells the same product in two or three markets, it can
either use the same positioning strategy for all of them, or use a different one for each market,
just like in the real world.

Both dairy products have a long shelf life and what is left as inventory at the end of a period is
what is first sold in the next one. In any case, inventories will not deteriorate and are not subject
to realization.s.

4.- MARKETS.
Consumer attitudes and behaviors are directly related to their wealth, as defined by each
markets per capita income.
With regard to the different markets, products L and T behave as follows:
L, at the beginning of the business activity, is a staple product and its market is fully mature in
all three territories: A, B and Y. This situation will continue for the duration of the simulation.
T, at the beginning, has already been launched in market A, and has considerable growth
potential. It is unknown in market B, so both the product and the brand should be launched
there.
Those participating companies willing to enter this market will have to drive it to maturity. This
can be achieved even in the first year, if they act properly, since local conditions are favorable
for such development.
In market Y, T is already in a mature stage at the beginning of the simulation, achieved by the
domestic companies.
In both markets A and B there are three distribution channels that we will call T, S and G. In
market Y, there is only one type of channel: G. The number of points of sale for each channel
are as specified in the following table:

Each territory is structured into areas that require the establishment of sales offices, in such a
way that 6 offices are needed for A, another 6 for B, and 12 offices for Y.
Participants can decide whether these intermediate distribution outlets are to be the companys
own sales branches or the property of independent food wholesalers. Of course, a mixed
solution is also possible; therefore, for each of the market-territory in which you want to
compete, the number of company-owned branch offices and/or wholesalers to establish must
be decided.
The territorial structure is homogeneous, so each element (office and retailers) within it is
equidistant from its adjacent elements.
The map of the territorial structure is as follows:

5.- DEMOGRAPHIC PROFILES OF DAIRY PRODUCT BUYERS.

Your company must decide in how many of the sales areas (6 in A, 6 in B and 12 in Y) to
establish Demographic profiles are very similar in the two European territories which, in turn,
differ from market Y. The following table specifies population and buyer percentages by age
group and sex.

All figures are stated as a percentage of the total population and are rounded up to the nearest
whole number.
The distribution of buyers by age and sex in Y is different from that in A and B, yet the
percentage of buyers in the total population, 25%, is the same for all three markets.
The population distribution by age is assumed to be equal for men and women, that is, 50% for
each gender.

6.- BRANCHES.
Your company must decide in how many of the sales areas (6 in A, 6 in B and 12 in Y) to
establish branches, assuming that independent wholesalers are used at the remaining points.
This is the same for the three markets-territories.

Branches are set up on rented premises. Own branch facilities consist of a warehouse, an office
and a team of sales representatives (reps) who deal with retailers. These branches have a fixed
annual cost of 143,700 euros, not including the remuneration of the above mentioned sales
force handling channels S and T. The Branch Manager is in charge of channel G negotiations,
and his cost is included in the fixed amount of 143,700 euros.
You must decide the cost for each rep for channels S and T and, at the same time, decide how
many people are needed for each of these channels (assuming company sales activities in
these channels).
The same happens in country Y, except that the set annual cost of the branch totals 300,000
dollars / year and no sales-force recruitment is necessary, as only channel G exists in Y and, as
mentioned above, this is handled by the Branch Manager.
The sales organization, whether handled by independent wholesalers or in-house, is identical
for products L and T, and the same reps and agents work with both products.

The number of sales representatives for each branch office must always be recorded on the
Decision Sheet, and is assumed to be identical for each branch established by the company in
that same market. Therefore, the total amount of sales reps is reached by multiplying the
number of reps for each branch by the total number of branches established by the company.

7.- WHOLESALERS.
The independent wholesalers used for the areas in each market charge 8% of the retail price for
normal items they sell, and 6.5% of the retail price for items sold through promotions.
These percentages are the same for A, B and Y and, as we will see later on, include the
transportation cost from wholesaler to retailer. In the case of market Y, customs duty is also
included.

8.- SALES MANAGEMENT AND PHYSICAL DISTRIBUTION.

Having the product physically available for buyers requires two separate kinds of actions: one
called sales and the other called physical distribution. Both should be properly coordinated
and planned.
Selling is done by representatives who negotiate with retailers and take orders, in addition to
assuring the presence of products in stores. In large areas, these reps (sales force) have to be
close enough to retailers, thus making it necessary to divide the territory into several areas
controlled by a sales office.
Markets A and B each require the establishment of 6 areas and their sales offices. Market Y
requires 12 areas and their respective sales offices. Participants can decide whether these sale
offices are to be independent food wholesalers or in-house sales branches belonging to the
manufacturing company. Of course, you can decide to use a mixed solution, in which case the
number of wholesalers and branches has to be determined for each territory in which you wish
to compete. Either way, the market areas in which the company decides to operate will have to
be covered.
The orders placed with each office, each in its own area, have to be distributed from platforms
(warehouses), there being one or more per area. These platforms should be located in such a
way that the sum of the costs of supplying them from the factory, keeping a certain inventory,
and distributing to retailers is minimal, while assuring on time delivery and avoiding stock-outs.
As a result of the above, then, the total number of platforms may or may not coincide with the
number of sales areas established. In our case the minimum number of platforms equals the
number of areas (i.e. one platform per area), there being a maximum of 6 platforms per area.
The sales office in each area (whether a wholesaler or a branch office) acts in such a way that
all the orders taken are filled from the platforms assigned to its area. That sales office is also
charged with placing the necessary orders with the factory so that the platforms are adequately
stocked as far as time and quantity.
All platforms, whether belonging to a wholesaler area or to a branch office, are supplied directly
from the factory; therefore, the cost of transportation from the factory to all the platforms is
charged to the manufacturer (FOB destination). The warehousing costs and the costs of
transportation from platforms to retailers, however, are charged either to the wholesaler or to the
manufacturer, depending on whether they are located in areas assigned to wholesalers or
branch offices.

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Participating companies should plan the sales activities (order taking) as well as the physical
distribution necessary for the correct and timely delivery of orders. To do this, bear in mind that
the 6 areas into which each territory is divided (12 areas in the case of Y) have the same sales
potential, and that each area therefore has the same number of retailers of the different types of
channels in each territory.
So as to have the average values needed for proper planning, it is assumed that in each area
the retailers are uniformly distributed over the territory to be covered.
It is necessary to keep in mind that sales management and physical distribution are intertwined,
and that the delivery of the products sold (whether through wholesalers or branches) requires
the existence of platforms, as without them the sales would be fruitless.
Participating companies can vary any of the logistics decisions in each business plan.
There are three alternatives for your company:
A) Having branches in each sales area of a market.
In this case, you must plan all the logistics.
B) Not having any branches in a market.
In this case, you must plan for vehicles (number and load capacity) to platforms and the number
of platforms.
C) Having between 1 and 5 branches in markets A and B and between 1 and 11 in market Y.
In this case you must plan all the logistics, although the platforms and distribution costs to
retailers are allocated to wholesalers in those areas operated by them. If your company has, for
example, 3 platforms per area, you will also have to deliver the products to the 3 platforms
managed by wholesalers.
Vehicles designated to operate from platforms to retailers only operate in areas controlled by
branches.
While most companies use the trial-error-new trial method to make decisions concerning the
number of vehicles and their load capacity, certain large companies apply geometric operational
research methods to arrive at optimal decisions.

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Participants may also apply the trial-error method since the results provide information on any
theoretical out-of-stock condition (the condition is theoretical since the logistics company
prevents an actual out-of-stock condition). The information tells us supplies are low, which will
prompt us to increase the transport resources being used.
Also provided are the unit transportation costs from the Factory to the Platform, 0.011 euros,
and from the Platform to the Dealer, 0.013 euros. These must be compared to the costs borne
by the company, and which are shown in the results. If the latter are greater, we can assume, in
general, that the transportation resources may be excessive and should be reduced.
Those participants who are so inclined may apply a geometric and time analysis to arrive at
optimal or near optimal decisions. Doing so requires using nearly all the data included below,
though there will always be some uncertainty since the solutions depend on the number of units
sold and require sales forecasts to be as accurate as possible.
The study of physical distribution systems has taken on great significance, given their relevance
to reducing costs, and the attendant improvement in price competitiveness, as well as their
close ties to the transaction channel.

9.- PHYSICAL DISTRIBUTION LOGISTICS.

Physical distribution always involves three phases in territories A and B, and six in market Y:

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Therefore, two kinds of administrative documents are issued at the platforms:

1. Orders from platform to factory.
2. Delivery notes to retailers, related to orders taken through sales offices, either wholesalers or
branches.
The cost of phase 1 in A and B are always charged to the manufacturer, independent of whether
the platform is located in areas managed by wholesalers or by branches.
In market Y, the cost of phases 1, 2, 3 and 4 are always charged to the manufacturer. Customs
duties are charged to the manufacturer if the products are sold in areas where it possesses
branches, whereas costs are charged to wholesalers if the products are sold in areas (areas)
they manage. The cost of phases 1, 2 and 3 is fixed, amounting to 0.024 euros per unit, and
includes freight, insurance, customs clearance and costs at the main platform. It does not
include the customs duty, set at 2% ad valorem, calculated after clearing customs and with the
merchandise ready to be delivered to the platforms.
(Standard cost + 0.024 euros) x 0.02 =
Unit cost of customs duty
Customs duty cost should only be taken into account when the cargo destination is platforms
that are managed by branches. When the cargo goes to platforms run by wholesalers, the
customs duty is included in the 8% charged by the wholesaler.
If your company decides to operate in market Y, the simulator will assign a main platform at the
port of entry.

10.- TRANSPORTATION FROM FACTORY TO PLATFORMS.

Transportation from factory to platforms involves a cost that depends on the participating
companies decisions; therefore, it may be different in each case. In Y, this cost is the cost of
transportation from the main platform (after clearing customs) to the other platforms.
First of all, the extension and configuration of each territory, as described on the territorial
structure map, should be taken into account.

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The following experimental data are provided:

The number of working hours per driver and vehicle is 2,000/year.

The mean time employed by every vehicle for each route should be taken into account and
includes, as expected, the loading at the factory and unloading at the platforms, plus the
distance in kilometers from the factory to the platforms and back to the factory. The average
transit time is 8 hours, though this may vary.
The vehicles used must all have the same load capacity in kilograms, which in this case directly
corresponds to liters, since a density of 1 Kg/liter is assumed for both L and T.
Participating companies do not buy the vehicles; rather, they are assumed to be rented from a
logistics company that provides all necessary services, including drivers and logistics
scheduling, except for planning. Hence, participating companies should plan at the beginning of
the year the number of vehicles they will require, as well as their load capacity, knowing that the
logistics services company charges the following for each vehicle, including all costs:
Annual cost per vehicle in euros = 24,000 + 1,2 x load capacity in kilograms.

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The same formula is used for Y, but considering the exchange rate (euro/dollar).
The load capacity of the vehicles can range between a maximum of 24,000 kilograms and a
minimum of 1,000 kilograms. Your company must decide on the most appropriate capacity to
contract.
In addition to the goal of minimizing transportation costs, it is essential that the total amount of
units sold (of both L and T) be transported from the factory to all of the platforms (to both those
run by wholesalers and to those in in-house branch areas). If this is not achieved, it will be
necessary to request additional vehicles from the logistics company, which, as they were
unplanned, will entail a higher cost than those previously rented. This will, however, avoid
out-of-stocks and their negative consequences.
If stocks-outs occur at some point in the chain, the affected market are reported to your
company on the Result Sheets. This will imply that your logistics supplier has been forced to
provide additional vehicles not anticipated in the planning.
Your company has to make the following decisions:
Total number of platforms to logistically cover each territory, with the following possibilities:
A and B: 6, 12, 18, 24, 30, 36.
Y: 12, 24, 36, 48, 60, 72.
Number of branches:
A and B: between 0 and 6.
Y: between 0 and 12.
Number of vehicles to be contracted from the logistics company in each market-territory.
Load capacity in Kilograms (=Liters) of the vehicle type rented in each market-territory.
As a guideline, a reasonable logistics transportation cost from factory to platforms is about 0.011
euros per unit transported.

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11.- PLATAFORMS MANAGED BY BRANCHES.

These costs are only incurred by the manufacturer if it has established branches.
Platform costs corresponding to areas managed by wholesalers are charged to them, and
therefore are included in the commissions charged by the wholesaler per unit sold (8% for
normal units and 6.5% for units sold during promotions).
The following experimental data are provided:
- Administrative costs (inventories, delivery notes, orders, etc.).
These are grouped and are directly proportional to the number of annual orders to the factory
by a platform, and are estimated at 0.65 euros per order for A and B, and 0.65 dollars for Y
(assuming 1:1 exchange). Therefore, the exchange rate should be taken into account at all
times.
Furthermore, these costs include the delivery notes issued by the platform to the retailers, this
being 0.15 euros per order delivered to the retailers. In Y this cost is 0.15 dollars (assuming 1:1
exchange)
- Storage costs (space, insurance, cleaning, electricity, etc.).
These costs are directly proportional to the average number of units in stock at the platform in
the course of a year, estimated at 2 euros per unit in A and B. In Y, the cost is 2 dollars
(assuming 1:1 exchange).
- Handling costs.
These costs account for moving cargo to, from and within the platform (including loading and
unloading), and are directly proportional to the number of units annually handled by the platform
(i.e. units sold by the office in its area, divided by its number of platforms) at 0.0027 euros per
unit in A, B and Y (assuming a 1:1 exchange rate in Y).
Platforms are assumed to be rented, which allows flexibility for modifications. Branch costs are
independent from platforms costs, and involve the sales and administrative costs of the area.

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12.- TRANSPORTATION FROM PLATFORMS TO RETAILERS.

The cost of transportation from platforms managed by wholesalers to retailers is charged to the
wholesaler, and is included in the commissions of 8% for normal units and 6.5% for units sold in
promotion.
To estimate the transportation cost form platforms to retailers in areas where branches are
being used, the following experimental data are provided:

The number of working hours per driver and vehicle is 2,000/year.

The average route duration does not have to be 8 hours as in the case of transportation from
factory to platforms. Given the proximity between platforms and retailers, the average route time
can be any value.
The participating company must decide on the number of vehicles and their load capacity, which
does not necessarily have to be the same as those planned for transportation from factory to
platform.
Services are contracted out to a logistics company that will cover, should a decision produce an
out-of-stock, the deficiencies in the companys planning by providing the necessary extra
resources, though at a higher cost.
The annual cost per vehicle is the same as for those used between the factory and platforms:
Annual cost per vehicle in euros = 24,000 + 1.2 x load capacity in kilograms.

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In Y the exchange rate (euro/dollar) should be taken into account.

The load capacity of the vehicles can range from a maximum of 24,000 kilograms to a minimum
of 500 kilograms.
Your company has to make the following decisions:
- Number of vehicles to be rented from the logistics company in each market-territory.
- Load capacity in Kilograms (=Liters) of the vehicles rented in each market-territory.
It must be stressed that not every retailer has to be served, only those located in areas managed
by branches and therefore served through platforms run by said branches.
It is important to consider that retailers make weekly orders for the average number of units sold
each week, assuming 52 weeks per year.
As a reference, a reasonable logistics transportation cost from platforms to retailers is around
0.013 euros per unit transported.

Values of zero may not be entered on the logistics Decision Sheets. If your company is not handling the transportation from platforms to retailers (because it does not have branches), no cost
will be allocated to this item.

13.- SALES FORCE.

The cost of the sales force employed at the branch offices is included in this category. The
Branch Managers salary is not included, as it is part of each branchs fixed expenses.
The company has to decide on the size of its sales force for channels S and T in each market.
The sales force salary policy must also be delineated, and may include both a fixed and a
variable component. These decisions may be different in each of the two markets. These two
components can vary according to the following range:

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The fixed portion of the salary is mandatory, whereas the variable portion is optional. However,
if you choose to pay a variable portion, it must be within the percentage range given above. The
variable portion of the salary will be determined by the normal units sold to retailers, therefore
excluding units sold through promotions.
Commissions are calculated based on the price given to the retailer, and not on the retail price.
Units sold through wholesalers sales forces are not subject to any payment of commissions to
their reps by your company.

14.- PRICES.
Each company has to set the prices for each product in every channel and market where it
decides to operate.
These prices are always the sales prices to the general public or final consumer (retail price),
and therefore each companys sales will equal these prices multiplied by the units sold in each
channel and market.
Prices can obviously be adjusted each year. Up to two decimal places may be used.

The simulator assumes that companies are operating in a channel with a product if a price is set
for said product. If no price is set, the simulator will not assign any actions.

15.- ADVERTISING.
Several types of mass media exist in the three markets. Media coverage is limited to the territory
itself, however, and does not extend to other markets.

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Rival companies can use either one or several advertising media in each market. The types of
advertising outlets, with their rates expressed in euros per insert, are given below:

Everything is identical, including rates, for markets A and B.

In Y, the available advertising media and their respective rates in dollars are:

You must specify the total annual ads on the Decision Sheets.

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16.- RATINGS.
The advertising media have the following ratings:

All figures are stated as percentages of the population that buys dairy products, rounded up to
the nearest whole number. This way, any number given in the table, for example 16, means that
the corresponding advertising media covers or reaches 16% of dairy product buyers, male or
female.
It is necessary to bear in mind that all dairy product purchases are made by 25% of the
population in every market. All advertising media overlap each other in one way or another. That
is to say, dairy product buyers in general do not receive information from only one advertising
source, but from two or more.

17.- MARKET POSITIONING.

Your advertising agency will present different alternatives as described in the Appendix, where
20 possible campaigns can be found for product L and 20 for product T. Each ad/campaign
includes the description of a visual setting plus a text, the essence of the message to be
conveyed, which can be used with either audio-visual or printed media. Your company must
choose one of them for each market and product that you want to sell.
The ad or ads chosen are used with TV, press and radio, assuming that you wish to use all three
types of media. The advertising campaign and budget can change each year.

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There are three major consumer segments, each resulting in different buying and
brand-choosing behaviors. The weight of each is of 40, 40 and 20%. It is up to the companies
to locate these consumer segments and reach them according to their strategic plans.
If you request the market research studies that give the positioning maps of the competing
brands, you will see two unlabeled axes that have to be interpreted. They are drawn up using
the most advanced statistical techniques -more specifically- the Kyst computer version of the
non-metric multi-dimensional scale method, NMMS. The axes represent those attributes or
groups of attributes most valued by consumers. Their meanings require interpretation, much as
they do in the real world.
A brands image attributes usually cannot be changed in the span of one year, but due to the fact
that the number of simulated years is reduced, the simulator allows the positioning to be
modified every year, so as to maximize training value. If this were not the case, the trial and error
process would not be possible with this particular feature of brand image. Therefore, your
company can change its positioning from one year to the next if you wish to do so, not needing
to make additional marketing efforts.
There are three major domestic brands in market Y that appear on the positioning map. They
are dubbed H, I and J. These brands are located in the three key strategic spaces of market Y,
corresponding to the three largest consumer segments. In every other marketing aspect, the
three brands, along with those having an insignificant market share, behave like a single
company, as if these domestic brands were in close cooperation with each other.

If your company does not specify an advertising campaign on the Decision Sheets, the
simulator will assign you an undefined, neutral stance.

18.- SALES PROMOTIONS.

Every year rival companies may carry out specific promotional sales campaigns. To do so, they
must decide what products, and in which channels and markets, they want to promote. In each
of the cases the number of annual promotions must be decided, bearing in mind that every year
a maximum of 4 promotions can be implemented in each channel for each product.

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The next decision is the type of promotion that your company prefers. In a given year, you can
only select one type of promotion for each channel. For example, if a company decides to do 3
promotions of the 3x2 type in market B, channel S supermarkets, all three promotions are of that
type. Different decisions can be made for other channels.
It is possible and allowed by the simulator for two or more participating companies to have
promotions of the same type for a product in the same channel and market, but the simulator
prevents these promotions from being carried out simultaneously, just as in real life. In
assessing the sales that may result from any promotion, keep in mind that its effect lasts two
weeks and that the simulation assumes 52 weeks. It should be clear that the promotion may not
be accepted or that, on the other hand, it may be so successful that it exceeds all estimates.
Experience and market knowledge will provide the necessary information for making these
decisions.
There are eight different types of promotions:
1. Price reduction: This consists of a discount on the retail
price that the company sets for a certain market, channel
and product. The amount to be discounted must be stated
on the Decision Sheet, in euros per unit. If the promotion is
in Y, the discount should be specified in euros which the
simulator converts to dollars according to the exchange rate
in effect.
2. 3x2: The retailer will give the end consumer three liters of
milk or yogurt for the price of two at the time of purchase.
3. Drawing: In this type of promotion the participating company must specify the budget
dedicated to each drawing. This amount, stated in euros, is for a single promotion and the
simulator will multiply this budget by the number of promotions to be carried out in the channel.
4. Discount on next purchase: Upon purchasing one liter of product, the consumer receives a
discount coupon that can be used on the next purchase. You must record on the Decision Sheet
how many euros are discounted on the retail price when the coupon is exchanged at the
moment of the second purchase.
5. Direct promotional bonus: Instant gift of a set of mugs when purchasing X liters. This gift costs
the company 1.20 euros. On the Decision Sheet you should state the number of liters that the
consumer needs to buy in a single purchase in order to receive the gift.

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Indirect promotional bonus: A gift obtained by accumulating points on different purchases. The
decision to be made is the number of liters that the consumer has to buy in order to claim the
gift. The cost to the company is of 3.60 euros per gift. If you opt for this type of promotion, you
must choose from three different alternatives (gifts):
6. A magazine subscription.
7. A set of place mats.
8. A compact disk.
The simulator (which behaves just like the market) will only accept sufficiently attractive
promotions; so, on the Result Sheets, the participating company can see which promotions
have been accepted. Any rejected promotions generate no cost whatsoever, with the exception
of drawings.

On the Decision Sheets, where your company materializes its plan, only the decisions
necessary to carry out the selected promotions should be inserted. For example, in the case of
a 3x2 promotion it is not necessary to insert anything else. In the case of a discount on next
purchase, the amount of euros to be discounted has to be stated. In the case of a Direct or
Indirect promotional Bonus, the amount of liters that the consumer has to buy to obtain the gift
should be inserted. The only case in which the amount to be budgeted is necessary is for the
drawings.

19.- POINT-OF-PURCHASE ADVERTISING.

The company must decide the budget to be allocated to posters, display stands, etc., to be
placed in stores carrying their products. The budgets for products L and T must be specified
separately.
The budget on POP advertising should be similar to a real world case, just like all the other
decisions.

20.- RETAILERS.
The participating company must set the margin given to retailers (its clients). This has to be
done for each channel, market and product; that is to say, in all cases where prices have been
set.

24

The margin for each unit sold should be stated on the Decision Sheet in euros, and not as a
percentage.
Although obvious, you should take into account that the difference between the selling price to
the final consumer (retail price) and the margin represents the selling price to your clients.

If your company does not specify a retailers margin on the Decision Sheets, it is assumed that
you do not wish to operate in that channel, hence no sales will occur.

21.- MERCHANDISING.
The one-liter carton container used to package
product L measures 10x6x17 cm. This is the
same for all territories and channels.
Product L, in channel G (both in A and B as well as in Y) is handled by using pallets measuring
120x90 cm, with the longer side facing outward on the shelf:

25

Channel S (supermarkets) operates with regular shelves, and each point of sale has 5 meters
of shelf space, with the cartons shelved three deep and a maximum of two high, as shown
below:

Product T is handled in plastic packs holding eight 125-gram cartons. For this product the
program works with a unit of one liter (in fact it would be one kilogram).

The carton holding 8 cartons measures 25x12.5x5 cm, with the longest side facing outward on
the shelf. The product is placed in refrigerators and kept permanently chilled. These
refrigerators have 4 heights. Each shelf has a depth of 50 cm, therefore holding four rows of
cartons.

26

Product T is placed in each G point of purchase in the following way:

This is the same for channel S (supermarkets) but there is only one height of shelf, with a depth
of 25 cm (therefore holding two rows of cartons):

27

Under these conditions the participating company should study what shelf space it wishes to
occupy with its products, and take into account all those factors that can cause that figure to
increase or decrease.

If your company does not specify a percentage of shelf space on the Decision Sheets, it is
assumed that you do not wish to operate in that channel, hence no sales will occur.
These decisions, made for each market, channel and product, are assumed as the companys
objectives and shall be subject to negotiation with the managers of the different points of sale.
Such negotiations are simulated by the program, so that the percentage of shelf space actually
achieved will possibly be different from that stated by the company as its objective.
In channel T, both for products L and T, the arrangements are quite varied and the information
provided by the retailer to the consumer is not the same as in G and S, which involves displaying
the product using shelf space, but rather entails the stores sales assistants in recommending
specific products to the consumer. Therefore we do not talk about product location or shelf
space, but instead of degree of retailer acceptance and endorsement of your product.
In this sense the participating company should write down on the Decision Sheet, in the same
way as for the G and S channels, a percentage for the T channels. But here this percentage will
express the degree of collaboration at each point of sale. As with the G and S channels, the
percentage actually achieved will depend on the sales negotiations and does not necessarily
have to coincide with stated objective.

The objective should be stated on the Decision Sheet as a percentage of shelf space.
Therefore, there are two shelf spaces: one at the beginning and the one at the end of the year.
The one at the beginning is the one your company has set as an objective, and is stated on the
Decision Sheets. Then the simulator intervenes, emulating the corrections that the retailer
makes throughout the year, according to the performance of your product and those of your
competitors. After these changes, a shelf space at the end of the year is reached. This final
value is the one expressed on a market survey.
It is advisable not to insert illogical shelf space figures on the Decision Sheets, as the retailer's
reaction would be counterproductive. Set realistic objectives with feasible growth.

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22.- PRODUCTION FACILITIES.

Each company starts with 29,900,000 euros in fixed assets. This amount of fixed assets allows
for a production capacity of 200 millions liters per year, that can be distributed between products
L and T following the criterium of the participating company. Therefore, regarding production
capacity the liters of L are equivalent to the liters of T.
It is not mandatory for the company, to saturate the production capacity, nor to manufacture both
products.
Once they are fabricated, it is obvious that the liters of L and T are not interchangeable and
inventory is separated and differentiated.
The company can increase its production capacity, but that will require a new investment in fixed
assets of 6,000,000 euros.
Therefore, it is established that each year new investments in fixed assets can be made in the
amount of 6,000,000 euros, or there could be no investment at all. The obtained increase in
production capacity as a result of new investments can be used the same year and it is
expressed in the following chart:

29

On the Decisions sheet the participating company will check the Investment in fixed assets
box if it wants to increase its production capacity. That could be done if its treasury (Cash &
equivalents) is equal or superior to that figure, or if its not, by requesting a bank loan. If this is
the case, it should fill in the Bank loan requested box with the right amount.
In the same way, the quantity of liters of L and T to be produced should be stated. The sum of
these figures should not exceed the production capacity. If new investments in fixed assets are
made, the new capacity obtained can be used in the same year of the investment.
The amount of products put on sale, and therefore that can be sold, will be the produced units
plus the existing inventory, if there is one.
The company has an annual depreciation cost of 10% of the fixed assets.

23.- DIRECT PRODUCTION COSTS

These costs are the ones that vary directly with the amount of units
produced, and that do not vary when they are expressed per unit. In this
simulator they are called Standard Cost (SC), and the simulation Director
will always give its unit value. They will always be expressed by liter
produced and in the case of product T correspond to the pack holding 8
cups.
This can vary from year to year, by decision of the simulation Director, and
this assumes that on the income statement and balance sheet a weighted
average of the standard cost of inventory existing for the previous year and
a standard cost from the current year will be used.
Stock-out of finished goods produces a reduction in sales. In addition,
prestige and loyal customers are lost.
Storage costs and the cost of product loss in the transportation process are
understood as being covered by the general overhead account.

24.- OVERHEAD COSTS.

The company has a fixed overhead cost of 3,000,000 euros/year. The previous figure does not
account for commercial expenses of advertising, promotions, point-of-sale advertising, nor for
physical distribution, sales reps or customs tariffs, etc., it is only the cost of personnel staff,
purchasing and production departments, and commercial management plus the general
managers office.

30

The overhead cost mentioned above corresponds to a production capacity of up to 200 million
liters/year. When production capacity is increased, the overhead costs suffer variations shown
on the following chart although you neednt reach maximum capacity:

25.- PERIODS - FISCAL YEAR.

In order to handle the time variable, the fiscal year has been set equal to the calendar year. This
is just a convention and is of no further importance except that the majority of companies
management plans also entail one-year periods that coincide with the fiscal year.
One could consider 3 month periods, or one month, or any length of time desired. It is merely a
question of choice. The important thing is to experience the 4 steps of business performance
(analysis, planning, implementation and control), which is what the simulator is for.
Having established a virtual period of one year, it is assumed that the management plans are
presented on January 2nd and the agreements with personnel, customers, suppliers and
financial entities are also made on that date. Results are given on December 31st, and that is
the date of the Balance Sheet and the Income Statement.

31

Therefore, the plan stated in the Decision Sheets goes into the execution phase on January
2nd. The results stated on the Result Sheets go into the control phase on December 31st.
Bank loans and credit repayment plus recovery of fixed term deposits are made on January 2nd,
that is to say, on the next working day after having received the Balance Sheet. The simulator
will have frozen the amounts necessary to cover the outgoing funds for financial operations
planned for January 2nd.
In case the company has a cash shortage the simulator will try to prevent an overdraft, since the
highest interest rates charged by banks are those for overdrafts (remember this is an in
extremis loan). In order to do so, it will resort the first place to financial investments. If the
company holds any financial investment, this will be canceled to see whether the overdraft can
be covered (this implies an early withdrawal fee). Although obvious, it is necessary to point out
that the company is not obliged to carry out the above mentioned financial operations.

Interest rates are annual and internally the simulator uses monthly periods to calculate the
interest rates applicable to financial operations. That is to say, each fiscal year is divided into 12
equal months.
Related to the above is the problem of lack of available Cash, which the simulator assumes is
detected and suffered by the company in the first month of activity in that fiscal year, just as the
relationship between income and expenses becomes apparent. Let us not forget that the
months are supposedly equal, as the market is not seasonal. Therefore, if the company made
a financial investment, this would have been carried out during the first month of the period and.

32

26.- OPERATING CASH NEEDED.

The operating cash needed OCN is the amount of money the company must have in cash at
the beginning of a period in order to be able to implement the plan for the coming period.
The simulator considers your plan and estimates accounts payable and receivable. This
valuation can be done a priori by the company by following this rule:
1. 80% of the new investment in fixed assets.
2. 50% of the total of the following expenses:
- Total Advertising and POS Display expenses.
- Total of the Branch expenses and Sales Reps fixed salaries.
- Overhead expenses.
- Market research expenses.
3. 5% of the direct production costs.
These percentages can be changed by the Simulation Director and if so, participants will be
informed about it.
The total of 1, 2 and 3 must be equal to or less than the available Cash (Treasury account). If
such total amount is greater than the Cash, the company has two options:
A. Request a loan for the difference.
B. Reduce one or several of items 1, 2 and/or 3 or eliminate any or several of them in order to
make the total conform to the existing Cash.
The cash amount to be considered is at January 2nd, that is, the one received on December
31st, minus:
- Loan amortizations to be paid on January 2nd.
and adding:
- Financial investments.

33

If the amount of OCN is higher than the theoretical cash on January 2nd, the simulator will
request a loan for the company (since these are the additional funds needed) in an amount
equal to the difference. If the amount of OCN is lower, the company can use the Cash Surplus
(CS) in financial investments and/or loan prepayment.

27.- LOANS AND CASH & EQUIVALENTS (TREASURY).

Companies will receive, together with market research results, their Financial Statements
(Income Statement and Balance Sheet) for each year.
The Cash and Equivalents account (Treasury) can be negative, in which case it is obligatory to
request a Bank loan for that negative amount. This loan is granted in order to zero the account.
Apart from this mandatory loan, the company can decide to request loans at any time, even if
the Cash and Equivalents (Treasury) balance is positive. Usually, such loans would be used for
investing in fixed assets.
Companies should request loans (if needed) to comply with the OCN. If the company does not
make a request, the simulator will do it.
The simulation Director will set the maturity of the bank loans as well as the applicable interest
rate.
Loan amortization will always be carried out so that
each year, except the year in which the loan is
requested (see Balance Sheet and Income
Statement), the company returns a proportion of the
total amount owed at the beginning of the year. The
maturity of the loan and the applicable interest rate
are set by the simulation Director.
If a new term or rate is set, it is applied to the new
loans and to the debt that the companies owe at that
moment.

34

The established amortization is done automatically by the simulator and is not specified on the
Decision Sheets.
You can settle the debt, in part or in whole, before the set maturity date. Should you wish to do
so, you must specify the debt to settle on the field labeled Advanced settlement of loan. To do
this, the company must have Cash Surplus (CS) in the Cash and Equivalents Account. The
surplus amount can be used to settle any outstanding loans.

28.- FINANCIAL INVESTMENTS.

If you have a Cash Surplus (CS), this amount can be used to bankroll fixed term financial
investments for a period of one year. The rate of return will depend on the amount
invested/deposited and on the applicable interest rate, to be provided by the simulation Director.
The amount invested will appear in the Assets side of the Balance Sheet and can be cashed on
the first day of the following year.

If Cash problems arise and liquidity is needed, the simulator will cancel the investment and the
bank will charge the corresponding early withdrawal fee for this type of operation.

29.- CURRENCY EXCHANGE.

On the Decision Sheets, amounts will always be expressed in euros. In Y you should proceed
in the same way and the amounts handled in dollars should also be expressed in euros,
applying the corresponding exchange rate. The simulation Director will inform exporting
companies of the exchange rate as needed.
As the participating companies (whether they export or not) are considered to be European, the
Income Statement, the Balance Sheet and the Company Results in general will always be
expressed in euros. It is therefore necessary to pay special attention when making your
estimates and calculations since, for example, the advertising tariffs expressed in dollars do not
vary but their value in euros does, according to the exchange rate. The same applies to the cost
of branch facilities, internal transportation within Y, etc.

35

30.- INCOME STATEMENT AND BALANCE SHEET.

In order to correctly analyze the Income Statement, it is necessary to understand that the
invoicing or sales are expressed by considering the retail price (to the end consumer).
Expenses, the retailers margin and that of the wholesaler plus promotional expenses are
deducted from this. These sales are the total units sold at retail price.
If your company requests a bank loan you will see on the Balance Sheet that no repayment
whatsoever is made that same year. The amount owed will be withdrawn from your Cash and
Equivalents the following year, on January 2nd,. Pay special attention to this fact when checking
your Cash if you have outstanding loans or credits.
Therefore, when you are preparing your management plan for
the following year, the simulator has already foreseen and
frozen the funds payable on January 2nd.
The companys position regarding its competitors is indicated
on the Result Sheets, after the Balance Sheet. This position is
determined by the highest accumulated profit and its
importance will be decided upon by the simulation Director. The
simulation Director could give more importance to other issues,
and you are informed accordingly if that is the case.

31.- DEMAND.
At the end of each fiscal year, Result Sheets are given to the participants. The first two are the
results of L and T sales. The last three entries indicate:
A. Total units sold.
B. Demand for units of your brand.
C. Units of finished goods in inventory.

The units sold figure does not necessarily have to match the demand. There are two cases in
which they do not: the first is when the companys production is smaller than the demand it has
achieved; the second is when the opposite occurs: the company has a stock that will cover
unsatisfied demand generated and not supplied by other companies. Therefore, the comparison
of the two figures provides information that is of utmost interest to participants.

36

Market behavior is such that it tries to satisfy the demand generated by companies. Frequently,
to achieve this, it will satisfy the demand generated by companies that have run out of stock by
turning to those companies having a stock.
It could be that, in an exceptional case, one of the participating companies does not even have
sufficient production available to satisfy demands generated by their promotions. In this case
the market rejects those promotions that cannot be satisfied and only leaves those that can be
supplied.
In addition to the total units sold by the company and the demand obtained by your brand, the
amount of finished goods in inventory at the end of the period is given.

37

32.- MACROECONOMIC AND OTHER FACTORS.

Throughout this document the scenario in which the company will operate has been described.
It has also been stated that the simulation Director will provide certain information. These are
the figures you will receive and which should be kept in mind:

This economic and financial

data are provided in the
simulation web and are shown
in the General Information
menu. It is very important to
check
this
information
whenever you access the
simulation web as it may vary
from year to year.

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33.- MARKET RESEARCH.

Companies can carry out market research by commissioning this from a specialized institute.
The type of information obtained, and the corresponding cost, expressed in euros, are as
follows:

39

Information given in surveys 1, 2, 3, 4, 5, 6, 18 and 19 is expressed in units.

Information provided in surveys 1, 2 and 23 is obtained from secondary sources.

40

Co-ordinates of positioning charts of surveys 7 and 8 are obtained using the non-metric
multidimensional scale method NMMS.
Survey 21 indicates the advertising campaign by the number assigned in these Instructions.
Information provided in survey 22 indicates the type of promotion by the number assigned in
these Instructions.

Praxis MMT. Experts in simulation. All rights reserved.

Simulations MMT is a registered trademark of Praxis Hispania.

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34.- APPENDIX.
ADVERTISING CAMPAIGNS
MILK
Campaign 1.
The grandson has stayed overnight at his grandparents' home. The grandmother lovingly
prepares his breakfast, but the boy does not like the milk because it is not the brand he drinks
at home.
The grandmother (who is about 65) gives a glass of milk to the 5 year-old boy in the kitchen.
- Bobby come on, here you are. Enjoy your breakfast!
The boy tries it and frowns:
- Granny, this isnt the milk Mommy buys.
- Oh, it isnt? How do you know that?
- Mommy buys XXX. Have you tried XXX?
- No, I havent.
- Well you dont know what youre missing, Granny. You don't know what youre missing.
Voice over + Pack shot: XXX try it and see for yourself.
Campaign 2.
A farmer, with a green mountain landscape in the background, is leading a cow along by the
reins and speaking to the camera.
There are only two ways of getting the freshest milk at home. Either keep a cow in your garden,
which is complicated and not particularly healthy, or buy XXX milk that is processed to take the
best from the cow, eliminating impurities and reinforcing all the natural goodness of milk.
XXX, the natural goodness of milk.
Campaign 3.
Shot of a persons head and shoulders.
Since we couldnt improve on whats inside, we improved the container. Same quality, more
convenient. XXX milk.
Campaign 4.
40 calories, 3 grams of protein, 5 grams of carbohydrates, 130 milligrams of calcium and only
1.3 grams of fat makes XXX the most balanced milk on the market. Because everything in XXX
is just right, with nothing extra added or left out, leaving only the perfect balance. XXX milk, taste
and health in equal parts.

42

Campaign 5.
The girls (3 and 5 years-old) arrive with their mom at their grandparents' home. As they are
getting out of the car they can see their grandfather unloading milk from his 4-wheel drive
vehicle and taking it into the house. They run over to him. Jumping about, greetings, happiness.
The mother arrives and lends a hand.
First girl: Look Mom, XXX. Grandma and Grandpa drink the same milk as us.
Second girl: Do they need to grow too?
Grandfather: Well, we dont actually need to grow anymore, but we do have to drink the
healthiest thing to keep us fit and healthy, says the grandfather as he quickly picks up one of
the girls.
Voice over + Pack shot with the family scene in the background: XXX, in the best families.
Campaign 6.
Image of microorganisms through a microscope.
Voice over: The essential thing is the proportion of all the properties contained in milk. At our
laboratory
Fade-in of the female scientist in a white-coat who is looking through the microscope.
We study and monitor the composition with absolute precision.
Fade-in of a laboratory where technicians are working.
Providing the community with what it demands from food
Fade-in of the factory exterior surrounded by fields.
The best guarantee of XXX dairy products.
Campaign 7.
A father is about to pour himself a glass of milk for
breakfast and he hears how a chorus of voices coming
from the milk welcome him.
Good morning, good morning, a very good morning to
you, have a good day
Surprised, he stops pouring the milk and listens. But when
he stops, so do the voices. He pours once more and the
same thing happens:
Good morning, good morning, a very good morning to
you, have a good day
A white-coated technician bursts into the kitchen and tells
us:
Maybe you don't realize it, but behind each glass of XXX
there are veterinarians, biochemists, biologists, farmers,
logistics and transport personnel and a vast team of
professional experts who work so that you can have a
good day.

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Campaign 8.
A journalist, holding a mike, is walking up a hillside.
We are on the slopes of the Rockies in Colorado. We have come here to find out about
something fundamental for our health. We all know the importance of milk in our diet and we are
going to ask someone who knows so MOOOOOCH about milk.
- Good morning, Mrs. Cow! Would you mind answering a few questions?
(Use the cows head movements and use them as replies; sometimes she seems to agree or
disagree, sometimes she mulls it over...)
-In the first place, is milk a complete, balanced food?
A short moo, affirmative head movement
- Does the milk from a cow like you, living here, taste the same as that from another cow who
hasnt set foot in a field?
The cow lifts her head; she looks haughtily and turns her face away with scorn.
The interviewer moves the mike over to continue getting a response while he tells us:
- She is annoyed but we just had to ask her... Lets see if we can get a reply... Excuse me,
excuse me Mrs. Cow, your milk is incomparably better, isnt it?
The cow flatly agrees. I wont bother you any more then. You have been most helpful; youve
made it quite clear.
The cow continues to nod in her role as a true authority on the subject.
- And lastly, just one more question, do you like the container your milk is kept in?
Approval from the cow.
Campaign 9.
XXX Milk. Natural selection. At XXX were predisposed to natural things. Thats why our milk
goes through a selection process similar to natures, one that leaves only the best and gets rid
of the rest. Searching for the perfect balance. Searching for the natural selection. Drink XXX,
because nature is wise.
Campaign 10.
Image of milk container. It has clock hands. Rock Around the Clock starts
to play, which is the audio throughout the duration of the spot.
The images are made up of a very dynamic composition of brief shots
showing young people playing sports and using means of transport that
require a certain amount of effort: bicycles, skates, skateboards. The characters attitudes are positive and cheerful.
Product shot: XXX milk container with moving clock hands.
Voice over: XXX milk. Energy round the clock.

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Campaign 11.
A mountainous, green area with snowy peaks.
Safe, because our milk undergoes the most modern industrial procedures guaranteeing the
absence of unwanted bacteria and keeping it fresh longer. Flavorful, because our milk maintains
all the pureness of the best milk from grassy mountainous regions. Healthy, because it
preserves the same nutritional value of milk from freshly-milked cows. This is how we achieve
the balance that makes XXX the milk preferred by consumers. XXX milk, safe, flavorful and
healthy.
Campaign 12.
Every time we have a meeting with an advertising agency they tell us to change the container.
And we ask ourselves why, when weve been the market leader for 25 years?
After all, isnt it whats inside that really matters?
XXX milk, 25 years maintaining quality, 25 years leading the market (25 years with the same
container).
Campaign 13.
Mommy, why don't you buy what Grandma
buys?
The mother gives the boy a glass of milk. The
boy looks at her with Oliver Twist eyes and
asks: Is this the cheapest, Mommy? Why
didnt you buy the same milk as Granny? She
gives me XXX. Shes so good.
Yes, Grandma is very good.
Granny and XXX, Mommy.
XXX. Very good.
XXX.
Campaign 14.
A smiling, 45 year-old middle-class woman talks into the camera. She is at home and dressed
casually: You have already discovered the characteristic taste of XXX milk. You also know that
the processes it undergoes keep its purity and nutritious value intact. And it doesnt cost you
more. So why keep your family waiting? XXX milk, great taste and great price.

45

Campaign 15.
Series of ads in which someone says to the camera:
For a balanced diet. Health. Purity. Energy. XXX, the right balance.
Product shot: XXX milk, the right balance.
The characters are a cafeteria waitress, a hospital assistant, a schoolteacher, and a newsstand
salesgirl.
Campaign 16.
Image of the bottom of a glass with a sunrise (trick photography),
image of the bottom of a glass with a moonlit night sky.
A good way to start the day. A good way to end it. XXX milk, the
best choice every day.
Campaign 17.
Music: Spring by Vivaldi or a waltz.
Images: How green is my valley, soft grass swaying in the early morning breeze, cows grazing
happily, carte blanche for the photographic editor specializing in wildlife documentaries.
Voice over: X hours of sun a year, X liters of rain a year and the best test-tube (you see the cows
udder). These cows are happy and give good milk.
Campaign 18.
Using the cows mooing.
A cow grazing in the field, taken from different angles and varying shots.
The voice over says: There are some lucky cows, cows that graze in abundant green fields, the
best in the world, in the open air. Extremely healthy cows that produce the best milk.
Biology laboratory.
Voice over continues to say: And there are specialists in nutrition who analyze and work with
milk and with human nutritional needs.
XXX milk. Moo.
Campaign 19.
The national female rhythmic gymnastics team. We see them training and having breakfast.
In order to perform our daily activities and get even better scores, we have to be in very good
shape. And we are. We train 8 hours a day and we drink XXX milk. XXX, the milk that provides
you with all the necessary vitamins and energy.

46

Campaign 20.
House in a steep highland area with green pastures.
Young married couple with their children who are spending the weekend at a rural hotel in the
country.
At breakfast, the father looks out of the window at a typical hilly landscape, (fields-cows) he says
to the women serving them:
This is really good. From here, isnt it?
Of course, the lady replies, with a typical highland accent, its from here but well looked after,
not like some others. You have to be serious with milk. She gets out the carton, adding: We
dont use any other brand here.
YOGURT
Campaign 1.
A girl at home in her apartment, sitting on the floor reading a magazine.
A bicycle, where can I ride a bicycle?
Running up and down stairs. How boring! When theres an elevator...
Swimming. Uh, I dont like this, its too wet.
Doing exercises. I prefer to go shopping or watching TV.
Eat a yogurt a day. Thats good! [picking up the yogurt] And if its XXX, thats even better.
Campaign 2.
Scene with a happy couple, each going about their
own business. They live and let live. They know
what they want. The images are synchronized with
the voice over: He brushes his horse and then saddles it up. She is walking around carrying boutique
bags, etc. At the end, they eat breakfast together
dressed in white bathrobes, then there is a product
shot.
Audio voice over:
He likes to live in the country. She adores the city.
He waits for the weekend to ride his horse. She
looks forward to the weekend to go shopping and
tour exhibits. Shes delighted he doesnt make
sacrifices to accompany her. He loves the fact that
she doesnt insist on accompanying him. They both
enjoy eating breakfast together.
They have a full and well-balanced life. They both
choose XXX.

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Campaign 3.
A self-sufficient 5 year-old girl is alone preparing a snack for herself and for her teddy bear.
She sits the teddy bear down at the kitchen table and puts his bib on. Then she sits down. She
eats her yogurt and pretends to give her teddy bear some although she eats it herself (just like
little girls do when they are playing this game). In the meantime, she is talking to him:
Here you are Teddy, its XXX yogurt. Grandma says its very good for your bones. The doctor
told her.
Patricia, the baby-sitter, eats it because she says its very healthy. (And she whispers: And
she also says that if she doesnt, she cant go to the bathroom... And that is a very bad thing.
Your tummy swells up like this and you can explode.)
Im coming, hold on. Dont be impatient.
You like this, dont you? I love it. Anyway, I want to be a model and to be a model you have to
eat yogurt. Its what they all eat, didn't you know that? And I think youre putting on a few
pounds.
Campaign 4.
The different characters start going to the refrigerator and helping
themselves to cartons of yogurt and continue with their healthy, happy and
lively existence.
Audio voice over:
He wants to be as tall as Daddy. Daddy wants to have the same energy as
his son. She wants to be as attractive as Mommy. Mommy wants to be as
healthy as her daughter. Grandpa wants to continue being the head of the
clan. Grandma wants to keep enjoying life.
XXX yogurt for a healthy, happy and lively existence.
Campaign 5.
In the kitchen, grandmother, daughter and granddaughter. They are sitting at the kitchen
counter. The grandmother and the granddaughter are sitting side by side. The daughter, sitting
in the middle, says:
Do you know what my mother and daughter have in common? Well, yes, me obviously, and the
same nose and ... the same passion for XXX yogurt!
Campaign 6.
When I sign up for the gym, I go.
When I buy myself a bikini, I wear it.
And when I eat a yogurt, I want to enjoy it.
Thats why I choose XXX. That, and the fact that I want to feel good. (She runs her hand over
her waist and hips to make it obvious she has a good figure because she takes care of herself.)
XXX yogurt, enjoy it.

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Campaign 7.
An endocrinologist talks to the camera from his very white-looking consulting room. Subtitle
below with the name and profession of the person speaking. Leaning against his desk, to give
a little more movement, he says:
One of the most important and healthiest foods you can eat is yogurt.
Due to its fermentation process, yogurt is even better than milk.
Among its qualities is the fact that its an excellent source of calcium, with a big advantage: its
easily digested and that means the nutrients are quickly absorbed by the body.
Another advantage is that it is very balanced: x proteins, x vitamins, x calcium...
And lets not forget its texture. Its great in helping children with the transition to solid foods and
also for any adults who have dental problems.
The careful preparation process, as well as the origin of the milk, make XXX yogurt the best ally
for a healthy diet.
As the character is talking, superimposed to one side is: CALCIUM, DIGESTIBILITY,
BALANCE, TEXTURE.
Campaign 8.
Camera shot of a female model. Charming, young, wearing a figure-hugging dress, but shes
not pretentious.
If you want to take care of your figure
If you want to take care of your health
And if you want to enjoy the taste
Say yes to XXX, the real yogurt.
Campaign 9.
Very pretty girl, very bright, the type who looks attractive even when she has just woken up.
She is at her loft-style home; there is a futon and little else. The house is very uncluttered too.
Luminous and very milky.
She is wearing her casual home gear, just a T-shirt or extra-large sweater and some thick,
white, wrinkled socks.
She has a message on her machine (a woman's voice) for an audition.
Laura, you have an audition at 11 Wednesday. Come looking natural.
She walks round and round the loft, saying:
Natural means... no make-up. She washes her face, splashing the water with her hands. Next
she dries herself gently with a white towel and goes on talking.
Natural is... She lets down her hair. She starts to brush it a couple of times and it is perfect, of
course. She gives herself an approving once-over in the mirror. She goes to the refrigerator,
picks up a yogurt and says:
Natural is eating when youre hungry... and enjoying something as good and natural as XXX
yogurt.

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Campaign 10.
Girl or boy model, better if they are famous. He/she talks to the camera.
Do you have any idea what it costs to keep your figure in this business?
Youre constantly changing your timetable. Restaurant food doesnt help and Mommy isnt
waiting for you with dinner ready. Thats why you have to learn how to look after yourself (eating
the yogurt.) Protein, calcium, vitamins and delicious too! XXX YOGURT
Campaign 11.
Image of microorganisms through a microscope.
Voice over: Whats important is the balance of all the components in yogurt. At our
laboratory
Fade-in of a female scientist in a white-coat who is looking through the microscope.
We study and monitor the composition with absolute precision
Fade-in of a laboratory where technicians are working.
Providing the community with what it demands from food
Fade-in of the factory exterior surrounded by fields.
The best guarantee of XXX yogurt.
Campaign 12.
A parade of attractive food, featuring the
product.
Voice over: Your most sophisticated salads,
your most exquisite desserts or your most
delicious puddings can be even more so if
you add XXX yogurt. For its creaminess, its
taste, for everything you expect from a great
yogurt.
With the ending words, someone can be
seen stirring with a spoon, tasting from the
spoon and making a sign of approval.
Campaign 13.
A series of ads in which someone says to the camera:
For a balanced diet. Health. Purity. Energy. XXX, the right balance.
Product shot: XXX yogurt, the right balance.
The characters are a cafeteria waitress, a hospital assistant, a school teacher, and a newsstand
salesgirl.

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Campaign 14.
At XXX we call things by their name. Thats why when you eat an XXX yogurt you know it
contains no preservatives or colorings. Thats why XXX is the best on the market. XXX is
balanced and has a unique flavor. XXX, the right balance, naturally.
Campaign 15.
A good-looking young man with a muscular physique is eating a yogurt.
He talks to the camera while eating a yogurt.
It takes me one minute to eat my XXX yogurt and it takes the XXX technicians one hour to get
this carton to pass the quality control tests.
You could call it fast food, and really well tested.
Fast, yet healthy. He picks up his backpack and leaves. And they say youngsters like us don't
know how to eat right.
XXX yogurt, fast, healthy and prepared for you.
Campaign 16.
A 35 year-old man appears. The background is out of focus so it could either be his office or his
home:
Voice over: Does retirement worry you? If you already have a pension plan, make a point of
enjoying it to the fullest. Eat XXX yogurt and get the most profitable investment. XXX yogurt is
enriched with vitamins and helps regulate cholesterol. XXX yogurt, enjoy tomorrow without
forgetting today.
Campaign 17.
Because of their delicious taste, because of
their careful preparation process, XXX
yogurts are the ones children like most and
the ones mothers feel best about. XXX
yogurts, peace of mind and body.

Campaign 18.
A kitchen at night-time. Footsteps can be heard in the darkness. The refrigerator door opens. An
arm stretches out to pick up a carton of yogurt.
Product shot: already empty tub of yogurt and teaspoon. Voice over: XXX yogurt, the
temptation.

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Campaign 19.
Image of planet Earth seen from space. Blue, the dominant color, starts turning white as it melts.
While becoming liquid, the shot widens and the white liquid can be seen filling the yogurt carton.
Voice over: Our yogurts are the tastiest in the world.
Campaign 20.
Utensils strewn everywhere in an ample restaurant kitchen. The loud noise of activity can be
heard; cooks and waiters moving nervously with symptoms of fatigue and tension. The camera
approaches one of the waiters, seated quietly among the chaos, slowly tasting a spoonful of
yogurt and showing an evident satisfaction while swallowing it.
Voice over: If you want to feel calm and relaxed, have yourself a XXX yogurt.

Praxis MMT. Experts in simulation. All rights reserved.

Simulations MMT is a registered trademark of Praxis Hispania.

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Copyright Praxis MMT. All rights reserved.

www.praxismmt.com
MMT Simulations is a registered trademark of Praxis MMT Corp.
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28280 El Escorial (Madrid)
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