Results:
The A-team slipped this period to 3rd place with a stock price of $1393, and the leaders were at $1926. Team E and U had released Vodites this period which put us behind and meant we had to finish our R&D on VAXY if we wanted to stay only one period behind. SALT was still our breadwinner with no inventory and a contribution of $33 million. SAMA was tanking slowly and only had a contribution of $700,000 this round and an inventory of 26,000. SACK was improving, only losing $110,000 this round and inventory decreased to 33,000.
Decisions:
Advertising had to drop from $7.05 million the last two rounds to $4.5 million so we could afford our Vodite R&D. We reduced the price of all of our products by a couple of dollars each to keep competitive, especially with Vodites on the market. We dropped SAMA's sale force by 10, upped SALT by 11, and upped SACK by 4 people. This period in addition to buying the Sonite market research studies, we decided to buy the Vodite ones too to ensure a successful product launch. Our R&D this round pretty much took up our whole budget, as we spent $8.4 million to complete VAXY for the next round.
We hoped that VAXY would be our saving grace because we had to slash spending in so many areas, and our Sonite products were slipping up. Also, the leading stock market team was $600 ahead of us so we had a large amount of ground to make up!
The blog of our experience in using Markstrat for our Commerce 363 class at UBC!
Period 5
Results:
We got FIRST!! Our stock price went up to $1444 with second place having $1382. Somehow we managed to come from dead last so far to get into first, our team was pumped! But now how to keep it that way? Our SALTS were the only thing doing well this round with $32 million in contribution, while SAMA had $4 million and SACK lost $2 million. As well, our inventory for SAMA, SALT, and SACK was 19,000, 60, and 49,463 respectively.
Decisions:
We decided to drop SAMA's price by $4 to create more sales in a market where price was falling, and then dramatically cut SACK's price to $469 as Hi-earners had a lower willingness to pay than Pros. As well we only increased SALT's production by 4000 units, we cut SAMA's production in half, and we cut SACK's production by about 40,000 units. This was to address our growing inventory costs. We also knew that other teams had Vodites in the mix and we needed to keep up so we couldn't waste money on inventory. With this vodite knowledge we also went for a 2 round vodite implementation, paying half this period and finishing the other half next period. This cost us $3.5 million. Our sales force in this decision stayed relatively the same as period 4.
We got FIRST!! Our stock price went up to $1444 with second place having $1382. Somehow we managed to come from dead last so far to get into first, our team was pumped! But now how to keep it that way? Our SALTS were the only thing doing well this round with $32 million in contribution, while SAMA had $4 million and SACK lost $2 million. As well, our inventory for SAMA, SALT, and SACK was 19,000, 60, and 49,463 respectively.
Decisions:
We decided to drop SAMA's price by $4 to create more sales in a market where price was falling, and then dramatically cut SACK's price to $469 as Hi-earners had a lower willingness to pay than Pros. As well we only increased SALT's production by 4000 units, we cut SAMA's production in half, and we cut SACK's production by about 40,000 units. This was to address our growing inventory costs. We also knew that other teams had Vodites in the mix and we needed to keep up so we couldn't waste money on inventory. With this vodite knowledge we also went for a 2 round vodite implementation, paying half this period and finishing the other half next period. This cost us $3.5 million. Our sales force in this decision stayed relatively the same as period 4.
Period 4
Results:
We kept a hold on fourth place this round and distanced ourselves from fifth place. Our products did unbelievably well this round as SALT sold over 144,000 and we had 0 inventory, and our SAMA sold over 97,000 and we had 51 units in inventory. SAMA made $6 million in contribution, while SALT pulled all of our company's weight with over $24 million in sales. We also found that team E and O had both released new Sonites last round!
Decisions:
This round we had our first R&D project available, SACK. We decided to target Hi-earners with this product and priced it quite high at $526. We kept SAMA's production the same, bumped SALT's by 35,000 units due to its success, and produced 64,000 SACK's for this round. We kept all pricing and sales forces the same, but introduced 35 SACK salespeople. Our advertising budget also shot up by 2 million for the new SACK promotion and research. Finally, we sunk in $900,000 into our VAXY project and another $100,000 into VAJO.
We were really excited to see how SACK could do in the new market!
We kept a hold on fourth place this round and distanced ourselves from fifth place. Our products did unbelievably well this round as SALT sold over 144,000 and we had 0 inventory, and our SAMA sold over 97,000 and we had 51 units in inventory. SAMA made $6 million in contribution, while SALT pulled all of our company's weight with over $24 million in sales. We also found that team E and O had both released new Sonites last round!
Decisions:
This round we had our first R&D project available, SACK. We decided to target Hi-earners with this product and priced it quite high at $526. We kept SAMA's production the same, bumped SALT's by 35,000 units due to its success, and produced 64,000 SACK's for this round. We kept all pricing and sales forces the same, but introduced 35 SACK salespeople. Our advertising budget also shot up by 2 million for the new SACK promotion and research. Finally, we sunk in $900,000 into our VAXY project and another $100,000 into VAJO.
We were really excited to see how SACK could do in the new market!
Period 3
Results:
We took off this round! Our team moved into 4th place in the stock market and we hit a stock price of $1149, with the leaders at only $1424. We saw our market shares go up this round and finally things were looking positively for our team!
Decisions:
While we were happy to be moving up we were still not nearly satisfied with our standing of 4th place. We needed to keep improving. Our sales in the last period were perfect as we had only 61 units of SAMA and 77 of SALT in inventory. Our selling price stayed the same except for a $2 increase in SALT. The contribution of SAMA was 6 million, while SALT made an astounding 16 million for us this quarter.
After looking at the sales forecast for the following periods we decided to slow SAMA production by 6,000 units, and increase SALT production by about 40,000 units. We increased the sales force this round to 49 for SAMA and 47 for SALT. Advertising increased by $600,000 this round too to increase sales.
As well we focused heavily on R&D this period. We felt that it was important to get another new Sonite on the market a few rounds before we got into the Vodite market. We decided to sink $1.45 million into our PSACK project so that we could release it the next period. We also put $350,000 into PVAXY and $100,000 into PVAJO.
We submitted our decisions and hoped for the best again.
We took off this round! Our team moved into 4th place in the stock market and we hit a stock price of $1149, with the leaders at only $1424. We saw our market shares go up this round and finally things were looking positively for our team!
Decisions:
While we were happy to be moving up we were still not nearly satisfied with our standing of 4th place. We needed to keep improving. Our sales in the last period were perfect as we had only 61 units of SAMA and 77 of SALT in inventory. Our selling price stayed the same except for a $2 increase in SALT. The contribution of SAMA was 6 million, while SALT made an astounding 16 million for us this quarter.
After looking at the sales forecast for the following periods we decided to slow SAMA production by 6,000 units, and increase SALT production by about 40,000 units. We increased the sales force this round to 49 for SAMA and 47 for SALT. Advertising increased by $600,000 this round too to increase sales.
As well we focused heavily on R&D this period. We felt that it was important to get another new Sonite on the market a few rounds before we got into the Vodite market. We decided to sink $1.45 million into our PSACK project so that we could release it the next period. We also put $350,000 into PVAXY and $100,000 into PVAJO.
We submitted our decisions and hoped for the best again.
Period 2
Results:
The game did not start off very well for us. We did just as well as in the practice rounds, dead last. Our stock price was only $925 and we were the only team to have our price drop from the starting point of $1000. We desperately needed to do something different we felt, but much of our research had told us not to panic, so we didn't.
Decisions:
Our SAMA's were flying off the shelf, but our SALT's were taking off slowly despite more advertising money being put into them. We had no inventory for SAMA and only 7,000 units for SALT which was a good sign. We also possessed 20% of the market which was not too far off of third highest, and first was only at 24%.
Our decisions this round varied slightly in pricing, salesforce, advertising and R&D. In pricing we decided to keep our SAMA price the same and lower SALT's price to $486 to attract more customers. We upped production levels 20,000 units for each brand as we had little inventory and the market forecast was strong, and upped the salesforce by 10 people for each brand, while focusing on department stores and mass merchandisers for SAMA while working on specialty and department stores for SALT. We only increased advertising by $100,000 this round as we sunk money into R&D. We put $100,000 into PSACK, $350,000 in PVAXY and $100,000 into PVAJO.
We submitted our decisions hoping that all would go well for this round and we would finally move out of last place!
The game did not start off very well for us. We did just as well as in the practice rounds, dead last. Our stock price was only $925 and we were the only team to have our price drop from the starting point of $1000. We desperately needed to do something different we felt, but much of our research had told us not to panic, so we didn't.
Decisions:
Our SAMA's were flying off the shelf, but our SALT's were taking off slowly despite more advertising money being put into them. We had no inventory for SAMA and only 7,000 units for SALT which was a good sign. We also possessed 20% of the market which was not too far off of third highest, and first was only at 24%.
Our decisions this round varied slightly in pricing, salesforce, advertising and R&D. In pricing we decided to keep our SAMA price the same and lower SALT's price to $486 to attract more customers. We upped production levels 20,000 units for each brand as we had little inventory and the market forecast was strong, and upped the salesforce by 10 people for each brand, while focusing on department stores and mass merchandisers for SAMA while working on specialty and department stores for SALT. We only increased advertising by $100,000 this round as we sunk money into R&D. We put $100,000 into PSACK, $350,000 in PVAXY and $100,000 into PVAJO.
We submitted our decisions hoping that all would go well for this round and we would finally move out of last place!
Period 1
Going into period 1 we were worried because of how poorly we had done in the practice rounds. We hoped that we could have a miracle happen and that our company would take off.
After learning from our misttakes in the practice rounds we thought we had a better plan of attack in actually knowing how to target our consumers. Our team set out several objectives in the first round:
- Be the first mover into Vodites
- Target one segment per product
- Look closely into production forecast to figure out production numbers
- Utilize advertising
These were our basic goals and were our main takeaways after some research and the practice rounds.
For the first round we decided to target others with SAMA and professionals for SALT, and produced 95,000 and 100,000 units respectively. As others preferred a lower price to pros, we set our prices at two very opposite ends of the spectrum; SAMA was at $215 and SALT at $545. To sell all of those units we used our salesforce expertise from the practice rounds and went big using 34 people for SAMA and 36 for SALT. Finally, after spending all of our money on salespeople, advertising, and market studies as we still didn't know which ones were that important, we didn't get to invest in R&D this period.
After learning from our misttakes in the practice rounds we thought we had a better plan of attack in actually knowing how to target our consumers. Our team set out several objectives in the first round:
- Be the first mover into Vodites
- Target one segment per product
- Look closely into production forecast to figure out production numbers
- Utilize advertising
These were our basic goals and were our main takeaways after some research and the practice rounds.
For the first round we decided to target others with SAMA and professionals for SALT, and produced 95,000 and 100,000 units respectively. As others preferred a lower price to pros, we set our prices at two very opposite ends of the spectrum; SAMA was at $215 and SALT at $545. To sell all of those units we used our salesforce expertise from the practice rounds and went big using 34 people for SAMA and 36 for SALT. Finally, after spending all of our money on salespeople, advertising, and market studies as we still didn't know which ones were that important, we didn't get to invest in R&D this period.
Practice Rounds
Going into the practice rounds our group was quite nervous. We had all crammed, researched, and interrogated our friends for any potential research that we could find to help us with our strategy in the game.
We sat down at our first team meeting as complete strangers to somehow try and figure out a strategy to win the game. We started our first practice round (not knowing there would be a second) feeling like lost children. Without knowing what really to attempt, or where to even start for that matter we started clicking the surveys that were given to us.
Completely overwhelmed by the amount of information that was given to us, and having absolutely no idea how to interpret and convert that data into our company's decisions, we set out into the abyss that is the Markstrat world.
In the first practice round we kept it simple and just tried to figure out our sales strategy on how to succeed in the game. By using the rough information that our professor Juliet Zhu gave us in our first markstrat class we decided to focus on production and only really look at the marketing mix decision area (we really had no clue what else to do). Our two products SAMA and SALT were targeted at others and professionals respectively, along with SAMA's price being low and SALT's being high to keep aligned with those markets. After deciding pricing we did some rough math to calculate our production level using the consumer's willingness to buy and consumer brand awareness surveys. WE allocated our sales people lightly to save on costs and sparingly used our money on marketing, research and spent nothing on R&D (it wasn't available). Not really knowing what else to do we submitted our decisions and crossed our fingers.
We Sucked. Last Place, and the only team to lose money.
We went to class that next Tuesday baffled and thinking we were all going to fail.
That class cleared up the game for us a tonne, as well as relieved us as we got another practice round. We learned all about perceptual maps (Paul's favorite thing in the world), branding, R&D, base costs and MDS studies. After that class our team was so much more confident and we felt that we could improve our results tenfold. So we met the next day at 3pm.
We sat down again, and picked up the shambles of SAMA and SALT and tried to rebuild them. Actually looking at all of our information and understanding it more, we were able to make more educated decisions. This time we re-aligned our products and used the studies to align our sales people, marketing efforts, and production values. We also found out that our money did not carry over this round and we should spend it all (foolish of us the first practice round). We submitted these decisions expecting a HUGE improvement in our stock price and a skyrocket into first place.
Didn't happen. We were still last.
Thinking we were all going to fail still, and scrambling to figure it all out we left the practice rounds and prepared for the first round of the real Markstrat simulation.
We sat down at our first team meeting as complete strangers to somehow try and figure out a strategy to win the game. We started our first practice round (not knowing there would be a second) feeling like lost children. Without knowing what really to attempt, or where to even start for that matter we started clicking the surveys that were given to us.
Completely overwhelmed by the amount of information that was given to us, and having absolutely no idea how to interpret and convert that data into our company's decisions, we set out into the abyss that is the Markstrat world.
In the first practice round we kept it simple and just tried to figure out our sales strategy on how to succeed in the game. By using the rough information that our professor Juliet Zhu gave us in our first markstrat class we decided to focus on production and only really look at the marketing mix decision area (we really had no clue what else to do). Our two products SAMA and SALT were targeted at others and professionals respectively, along with SAMA's price being low and SALT's being high to keep aligned with those markets. After deciding pricing we did some rough math to calculate our production level using the consumer's willingness to buy and consumer brand awareness surveys. WE allocated our sales people lightly to save on costs and sparingly used our money on marketing, research and spent nothing on R&D (it wasn't available). Not really knowing what else to do we submitted our decisions and crossed our fingers.
We Sucked. Last Place, and the only team to lose money.
We went to class that next Tuesday baffled and thinking we were all going to fail.
That class cleared up the game for us a tonne, as well as relieved us as we got another practice round. We learned all about perceptual maps (Paul's favorite thing in the world), branding, R&D, base costs and MDS studies. After that class our team was so much more confident and we felt that we could improve our results tenfold. So we met the next day at 3pm.
We sat down again, and picked up the shambles of SAMA and SALT and tried to rebuild them. Actually looking at all of our information and understanding it more, we were able to make more educated decisions. This time we re-aligned our products and used the studies to align our sales people, marketing efforts, and production values. We also found out that our money did not carry over this round and we should spend it all (foolish of us the first practice round). We submitted these decisions expecting a HUGE improvement in our stock price and a skyrocket into first place.
Didn't happen. We were still last.
Thinking we were all going to fail still, and scrambling to figure it all out we left the practice rounds and prepared for the first round of the real Markstrat simulation.
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