Strategic Marketing Simulation - Durable Goods
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Questions and Answers

What aspect is NOT related to the product aesthetic?

  • Type of raw materials used
  • Market demand assessment (correct)
  • Number of components
  • Size of various components

Which statement best describes the relationship between the design scale and product usability?

  • Higher design scale ratings guarantee better usability.
  • Usability improves linearly with design scale ratings.
  • Design scale ratings do not indicate usability differences. (correct)
  • Lower design scale ratings are always less aesthetically pleasing.

Which of the following is a factor impacting battery life?

  • The number of features
  • The color of the product
  • The shape of the product casing
  • Power consumption of the product (correct)

What should consumers consider when evaluating features of Sonite products?

<p>High features may increase complexity for some users. (A)</p> Signup and view all the answers

What is the significance of the base cost in product production?

<p>It reflects initial production batch decisions. (B)</p> Signup and view all the answers

What is one benefit of developing a common understanding of the strategic issues within a team?

<p>It maximizes internal resources and ensures equal benefits. (D)</p> Signup and view all the answers

Why is it important to read the handbook before starting the Markstrat Challenge?

<p>It helps to avoid putting your team at a disadvantage. (D)</p> Signup and view all the answers

What is a common trade-off for high processing power in products?

<p>Higher weight and volume due to cooling systems. (A)</p> Signup and view all the answers

Which chapters are recommended for reading before Round 1?

<p>Introduction to the Markstrat Challenge and Overview of the Markstrat World (D)</p> Signup and view all the answers

Which of the following is a possible drawback of having a large screen on a product?

<p>Increased power consumption along with bulkiness. (A)</p> Signup and view all the answers

Which departmental concern primarily influences the base cost of a product?

<p>Margin and profitability considerations (D)</p> Signup and view all the answers

What can team members begin focusing on as the simulation evolves?

<p>Specific areas of responsibility. (A)</p> Signup and view all the answers

What information will be available in the annual report?

<p>Company operations and decision-making outcomes. (A)</p> Signup and view all the answers

What is the purpose of previewing Markstrat with the PREVIEW data?

<p>To understand past decisions made by real students. (C)</p> Signup and view all the answers

Which chapters should be read before Round 2?

<p>Positioning and Research &amp; Development (B)</p> Signup and view all the answers

Which tool should teams use to test their knowledge about the Markstrat environment?

<p>Markstrat Team Preview (A)</p> Signup and view all the answers

What is one of the objectives of advertising in relation to consumer understanding?

<p>To increase familiarity with products (D)</p> Signup and view all the answers

What does a higher advertising spend influence regarding distributors?

<p>It increases distribution coverage (C)</p> Signup and view all the answers

What is the purpose of calculating the share of voice in advertising?

<p>To compare advertising investments against competitors (C)</p> Signup and view all the answers

How should the advertising budget be allocated if the goal is to maintain awareness?

<p>Primarily in media space purchase with a small percentage in research (C)</p> Signup and view all the answers

What percentage of the total advertising budget is typically devoted to advertising research?

<p>4% on average (A)</p> Signup and view all the answers

When repositioning a brand, what percentage of the total advertising budget should generally go to advertising research?

<p>10% to 15% (C)</p> Signup and view all the answers

What is a key factor in the success of an advertising campaign?

<p>The absolute amount of advertising spent on a brand (B)</p> Signup and view all the answers

Which decision must align with the marketing strategy when creating an advertising campaign?

<p>Identifying targeted consumer segments (B)</p> Signup and view all the answers

What is the main advantage of feasibility studies?

<p>They are low cost and accurate. (B)</p> Signup and view all the answers

What is a drawback of online queries?

<p>They require the project to be fully specified. (B)</p> Signup and view all the answers

How can manufacturing costs decrease over time?

<p>Through better labor efficiency and improved methodologies. (D)</p> Signup and view all the answers

What happens if you change the project's specifications after an online query?

<p>You will need to run a new query for adjusted decisions. (A)</p> Signup and view all the answers

What factor is not considered a cause of productivity gains?

<p>Economies of scale. (C)</p> Signup and view all the answers

What is a limitation on online queries for budgeting?

<p>Results may overestimate required budgets by a significant percentage. (A)</p> Signup and view all the answers

Which of the following statements about the experience effect is true?

<p>It influences cost reduction through various factors including efficiency. (D)</p> Signup and view all the answers

Which statement about the Marketing department's responsibilities is correct?

<p>They do not manage production capacity. (B)</p> Signup and view all the answers

Which situation would lead to being notified at the firm level?

<p>A large proportion of your contribution is generated by a unique brand. (C)</p> Signup and view all the answers

What might indicate a need for corrective actions at the brand level?

<p>You have lost sales due to a production shortage. (D)</p> Signup and view all the answers

What does the industry benchmarking study provide?

<p>General information from annual reports about each competitor. (B)</p> Signup and view all the answers

What could be a consequence of having too few leading brands?

<p>You may market a small number of offerings compared to competitors. (C)</p> Signup and view all the answers

What action may help if your brand's perceptions do not align with market expectations?

<p>Conduct market research to better understand consumer expectations. (B)</p> Signup and view all the answers

Which factor could lead to being notified of poor performance in your marketing strategy?

<p>Your commercial efforts are not aligned with consumer shopping habits. (B)</p> Signup and view all the answers

What may result from failing to act on lost sales due to poor distribution?

<p>Continued decline in sales performance. (A)</p> Signup and view all the answers

What could indicate a benefit from a cost-reduction R&D project?

<p>High operational costs without corresponding revenue growth. (A)</p> Signup and view all the answers

What does the consumer panel study primarily measure?

<p>Representative buying behavior of consumers. (C)</p> Signup and view all the answers

How many consumers are involved in the consumer panel study?

<p>500 consumers (C)</p> Signup and view all the answers

What information does the distribution panel provide?

<p>Sales data based on retail point-of-sale information. (A)</p> Signup and view all the answers

What is tracked by the semantic scales study?

<p>Physical attributes of products. (C)</p> Signup and view all the answers

What does the distribution coverage figure represent?

<p>The percentage of stores that sell a particular brand. (D)</p> Signup and view all the answers

What sample size is used in the semantic scales study?

<p>600 individuals (A)</p> Signup and view all the answers

Which aspect is NOT included in the consumer panel report?

<p>Retail audit results. (D)</p> Signup and view all the answers

How many retail outlets' sales are represented in the distribution panel?

<p>17,000 outlets (C)</p> Signup and view all the answers

Flashcards

Preview Data

The ability to access and utilize pre-existing Markstrat data from past courses.

Common Understanding

Developing a shared understanding of the strategic challenges within the simulated market environment.

Area of Responsibility

The process of dividing responsibilities within the team to focus on specific areas of the simulated business.

Pre-Reading

The initial step in preparing for the Markstrat challenge, involving the thorough study of the provided handbook.

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Handbook

A detailed guide that explains all aspects of the Markstrat simulation, including game mechanics, decision-making processes, and reporting tools.

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Introduction, Overview, Managing Your Firm, and Understanding Your Annual Report Chapters

The initial sections of the handbook that introduce the Markstrat challenge, the simulated environment, and the core management concepts.

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Positioning, Research & Development, and User's Guide to the Marketing Plan Tool Chapters

Sections in the handbook that delve deeper into strategic positioning, research and development, and utilizing the Markstrat marketing plan tool.

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Markstrat Software

The software used to simulate the Markstrat challenge, allowing users to make decisions and analyze data.

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Advertising & Market Demand

Advertising can increase the overall demand for products in a market.

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Advertising & Market Size

The amount of advertising spent by an entire industry influences the size and growth rate of consumer segments.

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Advertising & Distribution

Advertising can encourage distributors to carry your products, increasing your market reach.

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Advertising & Barriers to Entry

Spending more on advertising can make it harder for competitors to enter the market.

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Share of Voice

The share of voice is the percentage of your advertising budget compared to the total industry advertising budget.

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Share of Voice & New Brands

A higher share of voice is crucial when launching a new brand or repositioning an existing one.

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Advertising Budget Categories

Advertising budgets are divided into two categories: media and research.

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Advertising Research

Advertising research focuses on improving the effectiveness of your message through creative work, media selection, and other activities.

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Product Form

The physical characteristics of a product, such as the materials used, number of components, and their arrangement.

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Battery Life

The length of time a product can operate without needing to be plugged in.

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Features

The total number of features and capabilities offered by a product.

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Base Cost

The cost of manufacturing a single unit of a product based on a large production run.

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Feature Tradeoffs

Having more of a feature doesn't always mean it's better. Sometimes, additional features can increase complexity or decrease other qualities like weight or power consumption.

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Base Cost Determination

The balance between making money on a product and making sure it's feasible to produce. Involves marketing and R&D.

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Product Esthetic

The look and feel of a product's design, which doesn't directly influence its functionality or usability.

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Design Scale and Usability

A product rated higher on a design scale may not be easier to use than one with a lower rating if the design scale measures features and functionality.

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Feasibility Study

A study that determines the costs of producing a new product and the feasibility of completing the project at a given cost.

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Online Query

A cost-effective and quick tool for estimating project budget, but prone to overestimations, especially for new technologies. Limited to five queries per period.

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Experience Effect

The trend of manufacturing costs decreasing over time due to improved efficiency and processes.

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Economies of Scale

Measures the cost reduction achieved by producing larger volumes of a product, driven by factors like economies of scale, larger plant size, and higher bargaining power.

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Factors Contributing to the Experience Effect

An increase in labor efficiency, improvement of methodologies and processes, use of new and cheaper materials/technologies, and product redesign.

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Decreasing Manufacturing Costs

Manufacturing costs tend to decrease over time thanks to the experience effect.

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Drawback of Feasibility Studies

The time it takes to get the information needed for a feasibility study is a full period.

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Why is share of voice important?

A crucial factor in the success of your brand. Maintaining a strong share of voice ensures that your marketing messages reach potential customers effectively.

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What is share of voice?

Measure of the proportion of advertising expenditure by a particular brand relative to the total industry spending.

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What is brand awareness?

A measure of the percentage of customers who are aware of your brand. Higher awareness should translate to increased sales.

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What is cost-reduction R&D?

A marketing strategy aimed at reducing unnecessary costs associated with R&D processes. This can lead to more profitable production and potentially improve your brand's competitive advantage.

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What is industry benchmarking?

A benchmark study provides a comprehensive snapshot of competitors' financial performance, including sales, production costs, marketing expenditures, and R&D investments.

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What is product form?

The physical characteristics of a product, encompassing the materials used, the number of components, and their arrangement.

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Why should revenue growth be prioritized?

A company's revenue growth should outpace its cost growth to ensure profitability and sustainability.

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What is advertising research?

The process of evaluating and comparing the effectiveness of different marketing activities to maximize the return on investment.

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Consumer Panel

A method of gathering market data by tracking the buying behavior of a representative sample of consumers.

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Distribution Panel

A panel study that focuses on tracking product sales at the retail level, using information directly from cash registers and store audits.

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Semantic Scales

A research method that gathers consumer opinions and preferences through a questionnaire with multiple semantic scales, each representing different product attributes.

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Market Share (Consumer Panel)

The percentage of individuals who have purchased a specific brand during a set period, as measured by a consumer panel study.

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Distribution Coverage

The percentage of retail outlets that carry a specific brand, as measured by a distribution panel study.

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Market Share (Distribution Panel)

The market share of a brand based on unit sales by channel, as determined through a distribution panel study.

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Relative Sizes

Data on the relative size of different consumer segments and distribution channels, often presented visually.

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Unit Sales by Segment/Channel

Figures representing the total unit sales of a product category, broken down by consumer segment or distribution channel.

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Study Notes

Participant Handbook - Strategic Marketing - Durable Consumer Goods

  • This handbook is for a business simulation (MarkSTRAT)
  • The simulation involves managing a marketing department for a company producing durable goods (Sonite and Vodite products)
  • Participants compete against other teams
  • The simulation covers several periods (years)
  • Outcomes are measured by a Share Price Index (SPI)
  • Key responsibilities include strategy formulation, product development, production, pricing and market research
  • A commercial team is needed to support distributors across channels
  • Data is provided in an annual report that contains Market & Competitive News, Company Results and Market Research Studies.
  • Decisions are made on various aspects of the business across functional areas (R&D, Production, Marketing, Finance)
  • Software (Markstrat) is used for the simulation, participants will need a password and activation key.
  • There are specific aspects to the Markstrat software, including charts and graphs, and decision forms.
  • A pre-reading section in the handbook is recommended to familiarize participants with the simulation before starting.

Table of Contents

  • The handbook contains sections introducing the simulation, an overview of the marketplace, strategies for managing the company, steps for using the software and a table of figures.
  • The handbooks includes topics on managing your firm, understanding your annual report, user's guide, positioning and product development, a marketing plan tool and situations requiring positioning change.
  • Specific aspects of Sonite and Vodite products are described
  • Multiple figures referenced (e.g., Figure 1, Figure 2, Figure 3 etc.) are in the handbook for greater detail of concepts

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Related Documents

Participant Handbook for Strategic Marketing - Durable Consumer Goods - PDF

Description

This quiz focuses on the strategic marketing principles used in the Markstrat simulation for durable consumer goods. Participants compete by managing various marketing functions, such as product development and pricing strategies, to maximize their Share Price Index. Key insights for success will be derived from annual reports and market research.

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