Introduction
Team Terrific is a group recruited by an electronics division of a large corporation to help develop and promote new and existing products in the market. The primary tasks for our team included devising a targeted marketing mix, an advertising program, pricing estimation, and features, as well as assisting in the product category growth. Although the company initially featured only two products, titled TOUR and TOLD, it eventually released a third one, called GREAT, in order to appeal to the premium segment of the market.
TOUR is a cheap product aimed at the general populace, prioritizing Savers and Shoppers. TOLD, on the other hand, focused High Earners and Professional Users. TEGREAT is a popular framework tool used by Innovators to develop products of their own. The goal of the proposed strategy was to facilitate brand growth while maintaining stable positions in the market. It involved maintaining parity with the competition while keeping the margins favorable.
Main body
The advertising campaign during each period had an approximately equal budget of circa 5000-6000 units, with a small decrease during Periods 0 and 2. However, marketing expenditures did not seem to affect the sales as much as it was hoped. The products had a positive initial start of circa 14,000 units during the first period. Earnings have been experiencing growth until Period 4, where they have achieved a maximum of 34,000 units.
However, after reaching that peak, there was a steady decline in customer interest in the product. However, at the end of the 8th Period, sales fell to the point where they have started, at circa 16,000 units. Nevertheless, the initial spike could be explained by the novelty of the product, which then passed as the users and the markets have adjusted to it. The results at the end of the 8th Period could be considered fair for TOUR, TEGREAT, and TOLD products.
The objectives set up by the first report were partially met, as the product did not fall off below the initial starting line. The market shares of about 4-5% were reached and even surpassed at certain points. The competition proved a bit stiffer than expected. Nevertheless, the data shows that there is a market for all three products and that the estimations about the target markets among shoppers, savers, and innovators were correct. Over 70% of users for each product fell into the target category.
Conclusion
There are several important learnings to be acknowledged from the simulation. First, it must be noted that the effectiveness of marketing campaigns is the most prominent during the first four periods, as it was when the sales experienced continuous growth. Second, marketing should be focused to generate as much profit and interest during the first days of the campaign. Therefore, the existing marketing expenditures should be changed to reflect that. Third, although the target market for all three products was estimated correctly, they should be capable of accommodating customers from other groups. Fourth, using prices below the recommended margins during the first periods would allow for better market penetration.
Lastly, since the company already features a multitude of products with some of the features similar to the ones promoted by Team Terrific, the company should consider cannibalizing some of its brands. It would help streamline the production as well as customer support and deliver a better quality of service. These are the key takeaways from this Market Simulation exercise.