Final Thoughts & Goodbyes

All good things come to an end.
We finished the game up coming in 3rd, which we were very proud of accomplishing. It has been quite an adventure, we treated the game as if we truly existed in this world, in this company, stressing over sales and stock prices of our Sonites and Vodites more than focusing on our actual lives.

Since you have already journeyed with us through our learning venture and seen what we learned, liked, disliked, and our mistakes, this final post will now explain what we will do if we did have a future, and summarize the the main points we want to get across about the game. We hope our words of wisdom will help generations yet to come to conquer the Markstrat world.

What we should do if we had a chance to continue the game:
Though we were proud of our accomplishments from our hard efforts put into the game, we did also learn a lot from our mistakes as we moved from period to period. To be completely honest, we have made some big mistakes or overlooked some important areas. We are not ashamed to admit this since we started off knowing nothing at all about the game and being complete idiots in the first two practice rounds. We came a long way.

If God gave us another chance to take over the Markstrat world from where we ended off, we would definitely have became number 1 (true leaders always have confidence in themselves).

In our last decision period, because of our high market share domination in the Vodite period after just one period of releasing our first Vodite Vaxy, we were a bit greedy and decided to create Vajo to take over the rest of the Vodite market because we had the money and ability to do so. However, since we were on our last period, we had no time to do any further R&D so we released Vajo based off Vaxy. We made sure to target a different segment, specifically Adopters because we realized the rest of the Vodites from other companies have not been targeting (or successfully targeting) Adopters. We researched and made tests on our target segment, prices, salespeople, and distribution. However, when we released Vajo, our Vaxy sales dropped and our Vajo sales were not high either. We believe this happened because we did not do R&D and we based our Vajo off of Vaxy, thus confusing the public of our products. No matter what else we did, if the two products are not differentiated well, even if the price/service/location are great, customers will not be motivated to buy an undetermined product. If we had the chance to continue with our Vodite market, we would re-brand our Vajo product, still targeting Adopters as they are a market that has not been dominated yet, but we would try to differentiate our Vajo product separately from our Vaxy. We need the clear differentiation to regain our power from our Vaxy with Followers and create a separate dominance in Adopters for Vajo.

As for our Sonites, if we had the chance to continue the game, we would definitely think of re-positioning and improving our Sonite market. Our Sonites were strong in general before the last periods kicked in and companies started to introduce Vodites. Our SAMA were always stable and our SALT was our money-maker. We pinpointed our target market and brand characteristics so well that SALT always did very well in each period, we even had excess demand for a few periods even after we generously increased our production. When we introduced SACK, it was also stable and attracted our target market of Hi-Earners. However, SAMA started to slip not long after we introduced SACK, then all three of them dropped in sales when Vodites started appearing everywhere. SAMA especially, we believe because it was in its declining stage after remaining so long in the market with a more unstable target market (Others), it started doing terrible. With SALT and SACK, even though they also dropped in sales, it wasn't in the extremes and we felt we could have regained our market shares from them once we stabilized our Vodites. So we feel that if we continued the game, since SAMA wasn't improving at all even after we tried different tactics of increasing its sales, we would probably stop the production of SAMA, sell off the inventory, and take it off the market. The opportunity cost of keeping SAMA does not outweigh just stopping the product altogether. For SALT and SACK, we feel that they are not yet at their declining stages, especially with SACK since we introduced the product not too long ago and with SALT, even if its at the maturity stage, with a little re-positioning, we feel that they could do well again. We probably will not change the target segments for the two brands as we don't want to tamper with the possibility of capturing no market at all, but we will probably differentiate the two brands better as their target segments are similar (Pros and Hi-Earners). We will equally split the time between analyzing our Vodites and Sonites so we won't be favouring one over the other and losing sales.

The most important points we learned playing the game:

• Do not just guess production, study trends and market predictions carefully before you make a decision. Over producing causes huge costs in inventory, under producing lets you lose a lot in sales
  
• R&D is very important in determining the success of a product (yes, before it's even released)
• Advertising expenditure is needed, no point in having a perfect product if no one knows about it
• Budget allocation is very important, it's very easy to go over budget if you don't plan properly where you're spending and why you're spending. Don't run out of money and not be able to release those Vodites!
• We felt Brand Awareness and Brand Purchase Intentions did not help much in determining if a product will do well in the next periods. It's useful to look at, but much more research needs to be done for production and targeting decisions (e.g. perceptual maps, market forecast, competitors' information...etc)
  
• Changing anything dramatically in the middle of the game will not work. Try to do as much research and be firm in your choices (e.g. target segments, product prices, distribution...etc) in the beginning. Big changes will tend to confuse or turn away potential customers.
• Spend time on some trial-and-error decisions, like explained below, sometimes Markstrat responds irrationally to strategic decisions. Trial and error will help you become more comfortable and familiar with the game and balance and stabilize decisions.
  
• No matter how strategic you and your team are, how much planning you put into your decisions, some things we believe still purely happen by chance and will surprise us and we have no control over. (Don't take this point for granted! Strategy is very very important, we're just saying that just like in real life, you can't predict everything.

How we feel the Markstrat Simulation can be improved:
Our team gained a lot of insight through the game, we personally feel that this one game alone has taught us how marketers in the real world make decisions in a company. The simulation was realistic, and we knew it did actually follow how a real industry would work and how companies would operate and react to competitors.
However, there are areas in the simulation we felt could be improved on. So if any Markstrat engineers are reading this, this section is for you!

• It was troublesome for some to not be able to view more than one screen at a time. It was frustrating especially when we wanted to look at the different studies we bought and compare them side by side, or compare different period decisions with each other.

• Also, we felt that more guidance either in the manual, or in the help section could be provided for Markstrat, especially in the beginning. Not knowing what to do compromised our position a lot, we understand that everyone started off not knowing what to do, but that just wasted valuable periods where we could have been more confident with our decisions and could have been learning more if we knew what we were actually doing.

• Since this simulation is more a marketing course, we felt more creative options for advertising could have been helpful. It would have been very fun and informative if we could have somehow created advertisements or been able to use different tactics to market our products instead of just typing in numbers.

Again, our team would just like to once again commend the game to end our post. Markstrat has been a great adventure and excellent learning tool. It provides a hands-on experience that no lectures can teach. We hope we will be able to use what we learned from the game and apply the strategies and concepts to our future careers.

Likes and Dislikes

Overall, Markstrat was an amazing experience! We learned a lot of new things about the marketing world and hopefully we will be able to use this knowledge in future situations. What we liked about the experience is that we enjoyed going through the simulation and making decisions as a group. Individually we all had different views on what we believed was the most likeable and interesting part of the analysis, but overall we worked well as a group and were able to maintain a fun environment while making decisions. We were all very interested in everyones opinion and mutually decided what was the best approach to get the best outcomes. We did like this experience, but there were some aspects that we did not like.

We had a hard time understanding the pamphlet at the beginning of the game. We all made an attempt to read it and understand exactly what we had to do, but trying to understand the game before actually playing did not make the process easier. We felt that we learned more during the games because we were able to actually look at the surveys and try to interpret what they meant. Another thing we did not like was that it was difficult to understand and find all the relevant surveys. The point is to figure out what decisions to make, but we felt that it took us longer to figure out what results or surveys to use. We think that the pamphlet should give more in depth detail about each survey rather than us having to do external research to understand them. The game is also supposed to be how the real life market looks like, but we had no vision of this and therefore we recommend that more visual aspects should be incorporated into the game.

Although we did not make it to first place, we improved substantially in the game. We were able to even make it to 1st place at one point in the game and we ended in 3rd place, which we believe was a perfect way to end the game. We did not do so well at the beginning but we made up for it at the end of the game!

Period 8

Results:

This is our final decision of the semester. We were feeling pumped about finally entering the Vodite market and hoped that it would be our key to success, so we could regain some more market share. This period we hooped up into third and made a substantial stock gain of $300 to put us at $1550. We were pumped as we were finally moving up again!!

After looking at our sales we were a little less excited though. We were carrying 34k SAMA's, 44k SALT's, 6k SACK's, and 13k VAXY's in inventory. These costs were hurting us big time and none of our sonites were improving.

Decisions:

We decided to focus our attention into the Vodite market this period, slash prices on vodites and production in Sonite, and then cut all costs. We produced 0 SAMA's, 64k SALT's, 40K SACK's, 80K VAXY's and we introduced VAJO this round based off of PVAXY and produced 80K of them too. We priced VAJO at $1361 which was $100 cheaper than that of VAXY. We also hired on 52 sales people for VAJO, and had a total marketing budget of 4000 this round.

FINAL RESULTS!:

After our new brand and huge sales forces we still dropped in stock value. We had third place under lock but our price was $1282. Our sonites continued their downward spiral, and our vodites were just picking up steam as they were the most highly sophisticated in the market. This was an amazing result for us given all of our original plans went out the window because we kept finishing so poorly in the practice round!

Period 7

Results:

This round we slipped even further to fourth place and our stock price was at $1234. It wasn't a good feeling dropping from first to fourth, but we knew it was because we had axed so many of our programs to implement our vodites this round. SAMA and SALT purchases were decreasing still, and SACK was slightly increasing, but we were still only making money off of SALT and its high margin.

Decisions:

This period we launched VAXY. We didn't anticipate the costs that we would incur having to hire another sales force and doing the marketing for another launch so we had to cut back a little more on our Sonites. We dropped the price on all sonites by about $20, and produced 48K SAMA's, 120K SALT's, 40K SACK's and 80K VAXY's. We set VAXY's price at $1471 to stay competitive in the market. We also hired 50 VAXY salespeople, but only spent $3500 total in marketing this period!

Period 6

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!

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.

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!

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.

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!

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.

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.