TheMarkstratChallengeII

Markstrat2012(fortheweb)
B2C DurableGoods

PARIS BOSTON
www.stratxsimulations.com
Yoursuccesswilldependonyourabilityto
develop&positionbrands

Perceptual
Map

Positioning
throughAdvertising

Positioning
throughR&D

Modifying&
LaunchingBrands

Newdecisions
inPeriod2

20/01/2016 IntroductiontotheMarkstratChallenge PartII 2

Consumersmakepurchasedecisionsbasedon
theirperceptionofyourbrands
Yourperceptionofbrands
Brand Brand Brand Brand
A B C D
Attribute1
Brand Brand Brand Brand
A D C B
Attribute2
Brand Brand Brand Brand
C A B D
AttributeN

Theirperceptionofbrands
?
Brand
D
Brand
Brand B
C ?

Brand
A

20/01/2016 IntroductiontotheMarkstratChallenge PartII 3

R&Dsuccessdemandslongtermthinkingandthe
abilitytoidentifyevolvingopportunities

New target
Sh segment
Hi

Changing
segment
needs

Pressure on
Pr
margins

Competitor
entry
Sa

20/01/2016 IntroductiontotheMarkstratChallenge PartII 4

TheBrandMap plotsperceived physical
characteristics rather than consumerneeds

Segment
idealpoint

PerceivedPrice
and#Featuresof
SOLO

20/01/2016 IntroductiontotheMarkstratChallenge PartI 5

ThePerceptualMap isavaluabletoolfor
visualizingbrandpositioning

Need 2
Segment
idealpoint

Need 1
Perceived
positionofSOLO

20/01/2016 IntroductiontotheMarkstratChallenge PartII 6

PositioningwithR&Dinvolvesmatchingbrand
characteristicstocustomerneeds

CUSTOMERNEEDS
Economy Performance Convenience

ProcessingPower

No.ofFeatures
DisplaySize

BatteryLife
Design
Price

SOLO

BRANDCHARACTERISTICS
20/01/2016 IntroductiontotheMarkstratChallenge PartII 7
Therearetwokeywaystorepositionbrandsin
Markstrat
Perceived
Performance

Advertising

Perceived
Economy
R&D

20/01/2016 IntroductiontotheMarkstratChallenge PartII 8

Yoursuccesswilldependonyourabilityto
develop&positionbrands

Perceptual
Map

Positioning
throughAdvertising

Positioning
throughR&D

Modifying&
LaunchingBrands

Newdecisions
inPeriod2

20/01/2016 IntroductiontotheMarkstratChallenge PartII 9

Positioningwithadvertisingrequiressetting
"PerceptualObjectives"
Perceived
Performance
20

Sh
11
Target 10
Position
5
Current Perceived
Position 0
Economy

10

20
20 10 0 5 10 12 20
20/01/2016 IntroductiontotheMarkstratChallenge PartII 10
SettingperceptualobjectivesinMarkstrat

1
Enterasignificant
advertisingbudgetand
spend10%to15%in
advertisingresearch
1

2
Decidewhichscales
(semanticorMDS)you
wanttocommunicateon

3
Selectthedimensions 2
whichyouwantto
communicateon

3 4 3 4
4
Inputthecoordinates
ofthepointthatyou
wanttoreachonthemap

20/01/2016 IntroductiontotheMarkstratChallenge PartII 11

Yoursuccesswilldependonyourabilityto
develop&positionbrands

Perceptual
Map

Positioning
throughAdvertising

Positioning
throughR&D

Modifying&
LaunchingBrands

Newdecisions
inPeriod2

20/01/2016 IntroductiontotheMarkstratChallenge PartII 12

ItalsorequiresworkingeffectivelywithyourR&D
department

R&D = Profit Center Number

of Projects

Experience

Provide sufficient budgets Similarity

Set realistic unit base costs of Projects

20/01/2016 IntroductiontotheMarkstratChallenge PartII 13

WhendoingR&D,keepinmindbothpositioning
andeconomicfactors

POSITIONING ECONOMIC
FACTORS FACTORS
Marketneeds Targetmargin

Competitivebrands Costofotherprojects

Feasiblerange Developmentbudget

Developmentbudget Impactofphysicalcharacteristics

Battery No.of Display Proces.

Design Size BaseCost
Life Features Power

20/01/2016 IntroductiontotheMarkstrat Challenge PartII 14

Impactofphysicalcharacteristicsonbasecostand
developmentbudget

Complexity
TheLOWERthe
requested
characteristic
CarbonFootprint
theHIGHER the
basecost&
developmentbudget Requestedcharacteristic

Complexity
TheHIGHER the
requested Allotherphysical
characteristics:
characteristic
processingpower,
theHIGHER the displaysize,no.of
basecost& features,
developmentbudget Requestedcharacteristic

20/01/2016 IntroductiontotheMarkstratChallenge PartII 15

ThebudgetrequiredtocompleteanR&Dproject
isafunctionofseveralfactors

Physical
characteristics

R&D Requested
Experience base cost

Tofindoutmore:
Budget
Feasibility
required Accuracy study
for
completion vs.
Online
Speed query

20/01/2016 IntroductiontotheMarkstratChallenge PartII 16

 TherearetwopossibleoutcomesofanyR&D
project
CASEA1 CASEA2 CASEB1 CASEB2
Physical Characteristics 17features;designindex6;
Project 84hours ofbattery life;displaysizeof35";
processing power of70gflops
submitted
toR&D Desired BaseCost $80 $130
Budgetallocatedbyteam $1,000k $300k $1,000k $300k

Step1 Theminimumbasecostiscalculated,basedontheprojectcharacteristics
R&D Step2 Ifnecessary,thedesiredbasedcostisadjustedautomatically
Internal
Process Step3 Thebudgetrequiredtodeveloptheprojectiscalculated

Step4 Iftheallocatedbudgetissufficient,theprojectisdeveloped

CASEA1 CASEA2 CASEB1 CASEB2

MinimumBaseCost $110
Response
Adjusted Desired BaseCost $110 $130
fromR&D
Budgetrequiredforcompletion $800k $550k
Project successfully developed? YES NO YES NO
20/01/2016 TheMarkstratChallenge PartII BtoB 17
AcompletedR&Dprojectmaybeusedtomodify
existingbrandsorintroducenewbrands

Performance

Ex

Sh
Pr
Hi

Economy
NewBrand Sa
MOKA
NewMOVE
higherperformance

OldMOVE

20/01/2016 IntroductiontotheMarkstratChallenge PartII 18

BringingsuccessfulR&Dprojectsontothemarket
mayresultinobsoleteinventory

I'll buy any inventory

at a given % of its
cost
Brand
modification

Obsolete
inventory

Brand
TRADING COMPANY
withdrawal

20/01/2016 IntroductiontotheMarkstratChallenge PartII 19

Costreductionprojectsshouldbeweighedagainst
experiencecurveeffects

Transfer cost

Base cost A A
Current product
(initial experience curve)

Base cost B
B
A1
Current
transfer cost A1
Cost reduced product
(new experience curve)

100 KU 200 KU
Cumulative production

20
YoucaninitiateuptofiveR&Dprojectsperperiod
andperproductcategory
Clickheretomodify,
delete,orshelvean
existingproject

Launch a new brand targeted at Highs

Clickheretoinitiate
anewproject,and
followtheassistant

20/01/2016 IntroductiontotheMarkstratChallenge PartII 21

Selectanameforyournewproject

20/01/2016 IntroductiontotheMarkstratChallenge PartI 22

Entertheattributesandbasecostdesired

20/01/2016 IntroductiontotheMarkstratChallenge PartI 23

R&DBudgetdecision

20/01/2016 IntroductiontotheMarkstratChallenge PartI 24

R&DBudgetdecision

The query updates the budget

required at the desired cost or
minimum cost whichever is higher

20/01/2016 IntroductiontotheMarkstratChallenge PartI 25

OnlyafternextyourR&Dprojectdecision
willbefinalized,andupdatedifnecessary

20/01/2016 IntroductiontotheMarkstratChallenge PartI 26

Yoursuccesswilldependonyourabilityto
develop&positionbrands

Perceptual
Map

Positioning
throughAdvertising

Positioning
throughR&D

Modifying&
LaunchingBrands

Newdecisions
inPeriod2

20/01/2016 IntroductiontotheMarkstratChallenge PartII 27

Youcannowextendyourportfoliobyintroducing
newbrands...

Clickheretolaunch
anewbrand

Chooseaname

entertheroleof
thenewbrand

andchoosethe
baseR&Dproject

20/01/2016 IntroductiontotheMarkstratChallenge PartII 28

...youcanalsomodifyexistingbrands

Youkeep
thesame
name

Choosethe
newR&D
project

20/01/2016 IntroductiontotheMarkstratChallenge PartII 29

Yoursuccesswilldependonyourabilityto
develop&positionbrands

Perceptual
Map

Positioning
throughAdvertising

Positioning
throughR&D

Modifying&
LaunchingBrands

Newdecisions
inPeriod2

20/01/2016 IntroductiontotheMarkstratChallenge PartII 30

NewdecisionsintroducedinPeriod2

R&D
Initiatingnewprojects
Continuingorshelvinguncompletedprojects

BrandPortfolio
Launchingnewbrands
Upgradingorwithdrawingexistingbrands

MarketingMix
Productionplanning,Pricing,Communication&
segmentationstrategy
SettingPerceptualObjectives

CommercialTeam
Sizeofcommercialteam
Allocationacrossdistributionchannelsandbrands

MarketResearch
Orderingindustrywidemarketstudies
Orderingmarketspecificmarketstudies

20/01/2016 IntroductiontotheMarkstratChallenge PartII 31

Younowknoweverything.

From here on, it's down to your strategy...

20/01/2016 IntroductiontotheMarkstratChallenge PartII 32