2. 2
The Marketing Game: What is It?
A “living” case, where you learn about a situation,
evaluate opportunities, develop a strategy, and make
marketing plan decisions.
In which you get regular feedback, in a report that
summarizes your marketing outcomes and related
financial results, based on both your plan and
competitors’ decisions.
Where you analyze what you’ve learned by doing …
to figure out answers to what you do not know (and
could not know!) at the beginning.
That challenges you to improve your strategy in light
of the learning...
3. 3
A Little Background
Originally developed as the first PC-based
marketing strategy simulation in 1985 …
Routinely revised and updated since that time.
Now one of the most widely used teaching
simulations in the world.
Used in hundreds of universities, exec programs and
companies, international competitions, etc.
We’ll be using the third edition
You’ll need the student manual and accompanying CD-
Rom (which has Windows software):
The Marketing Game!, by Charlotte H. Mason and
William D. Perreault, Jr., 3rd
edition, published by
McGraw-Hill/Irwin, Burr Ridge, Illinois, 2001.
4. 4
Special Objectives Served by TMG
To develop skills in identifying marketing
opportunities. This encompasses knowledge of and
the ability to apply key marketing frameworks and
tools for analyzing customers, competition, and
marketing strengths and weaknesses.
To develop insights about creative selection of target
markets and making integrative strategy decisions
concerning product, price, promotion, place and the
needs of a target market.
To develop skills in marketing analysis.
To provide meaningful, practical experience in
translating qualitative and quantitative analysis into
conclusions about profitable marketing strategies and
programs.
5. 5
The Role of the Marketing Game
The Game offers unique learning advantages,
compared to other learning approaches (like reading
texts and articles, lectures, guest speakers, case
analysis and presentation, projects) because it:
Is dynamic, like most business situations.
Brings the competitive aspects of marketing to life.
Highlights the need for integrative planning based on
qualitative and quantitative analysis of the market
environment.
6. 6
The Marketing Game is Integrative … and Covers All Aspects of theThe Marketing Game is Integrative … and Covers All Aspects of the
Marketing Strategy Planning ProcessMarketing Strategy Planning Process
Technology Political & Legal Social & Cultural Economic
CompanyCompany
Mission, Objectives,Mission, Objectives,
& Resources& Resources
CompetitorsCompetitors
Current &Current &
ProspectiveProspective
S.S.
W.W.
O.O.
T.T.
Target
Market
ProductProduct PricePrice
PromotionPromotion
External Market EnvironmentExternal Market Environment
Targeting &Targeting &
SegmentationSegmentation
Positioning &Positioning &
DifferentiationDifferentiation
NarrowingNarrowing downdown to focused strategyto focused strategy with quantitative and qualitativewith quantitative and qualitative screening criteriascreening criteria
PlacePlace
CustomersCustomers
Needs and otherNeeds and other
SegmentingSegmenting
DimensionsDimensions
7. 7
Overview
You take over marketing management
responsibilities for your firm.
Must satisfy customers and earn profits
Focus is on marketing strategy planning.
Requires integration of all strategy decisions.
Requires attention to competitive environment.
Considers short term and long term perspectives.
Features ongoing, rapid feedback.
8. 8
The Process
Analysis of market situation/opportunities
Planning and budgeting
Make marketing plan DECISIONS!!!
Submit plan decisions
The marketing game! simulation
Company reports returned to firms
Next
Decision
period
9. 9
Industry Environment
Market growth
Technological environment
No major innovations expected
Yearly revision cycle
Competitive environment
Type of competition depends on firms’ decisions
10. 10
Six Key Product-Market Segments
Harried
Assistants
Home
Users
High-tech
Managers
Modern
Students Professional
Creators
Concerned
Parents
Segments have different needs, preferences,
situations, sizes, growth rates.
11. 11
Past Sales By Market Segment
0
5000
10000
15000
20000
25000
0 1 2 3
Year
Assist ant s
Managers
St udent s
Home
Creat ors
Parent s
For Voice Recognition Device
13. 13
Product 1: Voice Recognition Device (VRD)
Key
Product
Features
Error Protection (1-10)
Number of Special Commands (5-20)
Ability to Customize (1-10)
14. 14
R&D for Product Modifications: Computing Costs
Feature Cost to Decrease Cost to Increase
Special Commands (5-20) $0 $8,000*(change)2
Error Protection (1-10) $0 $5,000*(change)2
Ease of Learning (1-10) $3,000*change $3,000*(change)2
Example
Feature
Last
period’s
product
This
period’s
product Change Cost to Change
Special Commands 6 8 +2 $8,000*2*2=$32,000
Error Protection 4 3 -1 $0
Ease of Learning 3 5 +2 $3,000*2*2=$12,000
Total modification costs: $44,000
Note: R&D for product changes is more expensive
if you have to make big changes in a short period of time…
15. 15
Product 2: Digital Vocal Communicator (DVC)
Key
Product
Features
Similarity of Commands (1-10)
Number of Tasks (1-10)
Ease of Learning (1-10)
Level 3
16. 16
Types of Advertising
Pioneering
Direct competitive
Indirect competitive
Reminder
Corporate (Institutional)
17. 17
Marketing Decision Responsibilities (Level 1)
PRODUCT Features
(and R&D for product modifications)
PRICE Wholesale price
PLACE Distribution intensity in each channel
PROMOTION
-Advertising $ Spending
-Personal selling Number of sales reps in each channel
CUSTOMER SERVICE $ Spending
MARKET RESEARCH 6 reports may be purchased
Demand forecast/
production order Number of units
18. 18
Expanded Marketing Responsibilities (Level 2)
PRODUCT Features (and R&D for product modifications)
PRICE Wholesale price in each channel
PLACE Distribution intensity in each channel
PROMOTION
-Advertising $ Spending
Type
-Personal selling Number of sales reps in each channel
Percent non-selling time
Commission rate
-Sales promotion $ Spending per Channel
CUSTOMER SERVICE $ Spending
MARKET RESEARCH 7 Reports May be Purchased
Demand Forecast/
Production order Number of Units
19. 19
Expanded Marketing Responsibilities (Level 3)
2 PRODUCTs Features (and R&D for product modifications)
PRICE Wholesale price in each channel
for each product
PLACE Distribution intensity by channel, product
PROMOTION
-Advertising $ Spending for each product
Type for each product
-Personal selling Number of sales reps in each channel
Percent non-selling time in each channel
Commission rate
-Sales promotion $ Spending per channel, product
CUSTOMER SERVICE $ Spending
MARKET RESEARCH 7 reports may be purchased
Demand forecast/
production order Number of units for each product
20. 20
Production Economies of Scale
If the president decides to invest in new equipment,
unit production costs will decline as cumulative production
increases:
72
75
78
81
84
87
90
93
96
99
102
0 100,000 200,000 300,000 400,000 500,000
Cumulative Units Produced
PercentofBaseUnitCost
21. 21
Response Functions and Marketing Spending
Sales
Marketing Spending
Threshold
Level
Saturation
Level
Spending too little may have little effect, but
spending too much just increases costs
and reduces profit.
22. 22
Marketing Budget Items (Level 1)
R&D product modification costs
Sales force salaries and severance pay
Advertising expense
Customer service expense
Market research reports expense
BUDGET FOR FIRST PERIOD: $984k
23. 23
Marketing Budget Items (Level 2 and 3)
R&D product modification costs
Sales force salaries and severance pay
Advertising expense
Customer service expense
Sales Promotion Expense
Market research reports expense
BUDGET FOR FIRST PERIOD: $984k
24. 24
Discretionary Budget
Policy on initial discretionary budget.
Unspent money carries to future periods and
earns interest.
“When it’s gone, it’s gone.”
Policy on special budget requests.
26. 26
Retail Prices Charged Final Consumers
The retail price set by a dealer depends on:
The wholesale price in the dealer’s channel.
The customary markup used in the channel.
The portion of any sales promotion “deals” that the
dealer passes along to consumers as a price
reduction.
27. 27
A “Good” Wholesale Price
Should cover the unit cost of the product
(given its features).
Should result in a retail price that will appeal
to target consumers.
Should result in a profit margin that will
contribute to other expenses and profit.
28. 28
Competitor Analysis
Estimate competitor’s net contribution
Analyze past strategies & likely changes.
Evaluate positioning and target segments.
? X
X
X
?
?
X
1 2 3 4
Firms
1
2
3
4
5
6
Segments
32. 32
Market Research Reports (Level 1)
1. Market share by segment (all brands)
2. Market share by channel (all brands)
3. Consumer preference study
4. Marketing effectiveness report
5. Sales by segment by channel (own brand)
6. Consumer shopping habits study
33. 33
Market Research Reports (Level 2)
1. Market share by segment (all brands)
2. Market share by channel (all brands)
3. Consumer preference study
4. Marketing effectiveness report
5. Sales by segment by channel (own brand)
6. Consumer shopping habits study
7. Product positioning report
34. 34
Market Research Reports (Level 3)
1. Market share by segment (all brands)
2. Market share by channel (all brands)
3. Consumer preference study
4. Marketing effectiveness report
5. Sales by segment by channel (own brand)
6. Consumer shopping habits study
7. Product positioning report
Note: separate reports are available for each product,
Except for the consumer shopping habits study
35. 35
TMGPlan Software
Easy to use for preparing and
evaluating plans, managing reports
Select
directory
Select
directory
Enter
Plan
Decisions
Enter
Plan
Decisions
Evaluate
spending
and profit
forecast
Evaluate
spending
and profit
forecast
View, print, and
manage
password
protected reports
View, print, and
manage
password
protected reports
36. 36
Submitting Marketing Plans
Submitting marketing plans decisions
Policy on paper form
Policy on electronic file
Each firm has a distinct industry and firm
identification
Need to keep it straight!
Passwords and the TMGPlan software
Remember password used to create Plan
It is case sensitive (upper and lower case make a difference)
Best to stick to one password!
37. 37
Overview of Market Research Reports
Market share by segment (all brands)
Market share by channel (all brands)
Consumer preference study
Marketing effectiveness report
Sales by segment by channel (own brand)
Consumer shopping habits study
Product positioning report (Level 2 & 3)
38. 38
Market Share by Segment Report
Brand
Firm 1
Firm 2
Firm 3
Firm 4
Total
Sales
(units)
1
0.250
0.250
0.250
0.250
20,028
2
0.250
0.250
0.250
0.250
15,084
3
0.250
0.250
0.250
0.250
25,104
4
0.250
0.250
0.250
0.250
10,240
5
0.250
0.250
0.250
0.250
22,056
6
0.250
0.250
0.250
0.250
8,092
Segment
Who’s selling to whom?
Who’s buying what?
What is each firm achieving?
Which segments are buying?
44. 44
Product Positioning Report
Brand
Firm 1
Firm 2
Firm 3
Firm 4
1
?
?
?
?
2
?
?
?
?
3
?
?
?
?
4
?
?
?
?
5
?
?
?
?
6
?
?
?
?
Segment
Which brands are closest to which segments?
Which segments have no close brands?
45. 45
Recommendations
Analyze the reports as you would analyze a
case.
Make intentional changes.
Find a balance in marketing research
spending.
Be integrative--think carefully about how each
decision impacts each of the others.
Have some fun!
47. 47
List of All Slides (with Hyperlinks)
1. Title slide
2. The Marketing Game: What Is It
3. A Little Background
4. Special Objectives Served by TMG
The Role of the Marketing Game
6. Integrative Marketing Strategy Planning Process
7. Overview
8. The Process
9. Industry Environment
10. Six Key Product-Market Segments
11. Past Sales by Market Segment (VRD)
12. Distribution Channels
13. Product Features – Voice Recognition Device
14. Computing Costs of R&D for Product Mods
15. Product Features – Digital Vocal Communicator
16. Types of Advertising
17. Marketing Decision Responsibilities – Level 1
18. Expanded Marketing Responsibilities – Level 2
19. Expanded Marketing Responsibilities – Level 3
20. Production Economies of Scale
21. Response Functions
22. Budget Items – Level 1
23. Budget Items – Levels 2 and 3
24. Discretionary Budget
25. Computing Prices
26. Retail Prices Charged Final Consumers
27. A “Good” Wholesale Price
28. Competitor Analysis
29. Industry Sales Report
30. Product Features and Prices Report
31. Marketing Activity Report (Sample)
32. Market Research Reports – Level 1
33. Market Research Reports – Level 2
34. Market Research Reports – Level 3
35. TMG Software
36. Submitting Marketing Plans / Policies
37. Overview of Market Research Reports
38. Market Share by Segment
39. Market Share by Channel
40. Average Customer Preferences
41. Marketing Effectiveness Report
42. Detailed Sales Analysis
43. Customer Shopping Habits
44. Product Positioning Report
45. Recommendations
46. Blank side (end of show)
47. This list
