Markstrat Group Paper

MARKSTRAT GROUP PAPER

Industry: ROME

Team Name: SNOOPY

Tianlong Li (Max)   tli78@uic.edu

Chunyan Shi (Nancy)   cshi23@uic.edu

Xue Wang (Ellie)   xwnag290@uic.edu

Executive Summary

Strategy:

Initial: We tried to make Solo target to High-Earner and Professional segments and make Soft to target to Shopper and Saver segments. And we can launch a new Sonite according to the market and our budget. We planned to launch our first Vodite around period 5. We thought it would be enough to have three Sonite and two Vodite.

Second: Since period 4, we knew it’s impossible to take care two segments with one brand. We set our Soft to target saver and Solo to target high earner. We made a new product Soar to target explore. And we want to launch our Vodite as soon as possible.

Final: Since period 7, because of the failure of our Vodite and our minimum budget, we decided to give up the Vodite market and do our best to take as much market share as we can in the Sonite market.

Final result:

We have 5 Sonite and no Vodite. ^[1]Soar took 69.2% segment share in explorer by unit. Solo took 61.4% in high earner. Soft took 48.2% in saver. Sold took 15.5% in professional. Solar took 8.7% in shopper. At the end of this game, we finally get the maximum budget. Our SPI is 1618^[2]. It’s the fourth place in our industry.

Mistake:

1. Our initial strategy turns out to be a total mistake. Because you can’t use one product take care two segments when there are other products target each of them in the market.
2. We lost a “0” in the production plan of Solo in period 2.^[3]
3. We did R&D for our first Vodite without any market research study. Because we thought if people never see a Vodite in the market, there would be no semantic scales. Apparently, we were totally wrong.
4. We put 9313k in the R&D for the first Vodite which is a total failure in two periods (4,5) with not high budget and didn’t order any market research study to save money^[4]. As a result, our Sonite situation is terrible.^[5]
5. We didn’t modify Soft and Solo from period 4 to period 6. Both of them lost much shares in their segment.
6. Our loss sale on distribution is high^[6]. We should add more people in commercial team.

Success:

1. We launched the brand Soar to target explorer since period 5. It’s the first one and the only one in the market and it brought us much revenue and market segment share.
2. We changed our strategy in time to give up the Vodite market and focus on Sonite and we did it well. Our SPI, revenue and market share kept grow in the last four periods.^[7]
3. We have three Brands took the first place in each segment market share and two brands that launched in period 8 kept grow for the last three periods.^[8]

Suggestion of the letter grade: A

We kept growth in the last 3 periods which proves we have learned a lot and got the point of marketing strategy.

At the beginning of the game, every team competing from the same level in terms of the 4Ps of the marketing mix. And we were thinking about where to go as well as what our competitors will do in the next period. Obviously, it would be hard to compete with each other if everybody went to the same place as well as doing the same thing in the same time. And then several questions came to our mind. Firstly, which segment we should target and which segment would bring returns to us? Secondly, when would we develop and launch our first Vodite product? Thirdly, how many Sonite and Vodite products did we need to possess? Fourthly, what our competitor would do in the next?

We learned that four of the five segments would grow in the future, especially in High Earners and Shoppers segments which will contribute 49.90% market growth together in the next five periods, we considered that these two segments were the most important segments which we should target. The other two segments which were professionals and savers segments, it would bring 34.6% market growth together in the next five periods. It would not grow as much as above two segments, but it still be considered as a great contribution to the total market growth. The Explorers segment seems like less attractive, since it shows negative growth in the next five periods. From the above analysis, our initial segmentation strategy was that we would target to four segments in the Sonite which were High Earners, Professionals, Shoppers and Savers, we would get market share and revenues from those four segments in terms of the market forecast. If we could market those four segments well, we would earn money in the next five periods which would provide budget for us to develop the Vodite product. Speak of the Vodite, we didn’t expect to be the first one to launch a Vodite. We scheduled that we would step into that market around period five. The reason was we thought it was too much uncertainty to provide a new product in the new market. We learned from the lecture that the innovators segment would be the first generation buyer, this segment just represented a small portion of the total potential consumers. Otherwise, the other two segments represented a greater portion of the total consumers whom would influenced by the innovators, and then they would follow up one after another once there were more and more Vodite became available. In addition, the follower segment presented risk- sensitive characteristic, most of them would buy the product after the first Vodite launched. We assuming that most of our competitors would launch their first Vodite as soon as possible in order to get the high profits and the market share. But the first Vodite won’t be excellent as long as they launch it too early, because of every team would not afford the cost in the short run. So We thought it was better for us to see how the market was and we would launch our Vodite base on the market data, the more information the lower the risk. We would like to use two brand to cover the whole market of the Vodite. The product would be designed more close to the Early Adopters and Followers throughout the game, because of they were the majority of the three segments as well as increasing fast.