Course Intro & Overview

S I M U L A T I O N

M A R K E T I N G M G T.University of Alaska-Anchorage * College of Business & Public Policy

* Marketing Management Simulation *Course Intro &

Overview

S I M U L A T I O N

M A R K E T I N G M G T.

Professor Ed Forrest

• Telephone: (cell) 854-8784• Email: afejf1@ uaa.alaska.edu

• Website: http://faculty.cbpp.uaa.alaska.edu/afef/

Marketing Management Simulation

S I M U L A T I O N

M A R K E T I N G M G T.

Course Format

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M A R K E T I N G M G T.

Lecture-Learning

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http://americanradioworks.publicradio.org/features/tomorrows-college/lectures/

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M A R K E T I N G M G T. Ultimately- Real Learning

OccursNot from parroting

information gleaned from

books & lectures! ….But from the

consequences of your own actions

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M A R K E T I N G M G T.

S I M U L A T I O N

M A R K E T I N G M G T.

your “study” of business … piece-meal and in isolation!

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M A R K E T I N G M G T.

FinanceFinance

ProductionProduction

HRHRR&DR&D

MarketingMarketing

YOUR JOB:• Take on every Take on every

key Mgt. position key Mgt. position in your Companyin your Company

• Make 100+ Make 100+ intertwined intertwined decisions decisions necessary to necessary to create, produce create, produce & successfully & successfully market your market your products… products…

• Analyze the market, Analyze the market, consumer, your consumer, your company & company & competitive situationcompetitive situation

• Discern & implement Discern & implement your corp. growth & your corp. growth & competitive strategies competitive strategies

• Must Must make & integratemake & integrate decisions in & across decisions in & across all functional areasall functional areas (Marketing, Research & (Marketing, Research & Development, Production, Development, Production, Human Resources & Finance).Human Resources & Finance).

YOU…

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Strategic Thinking

the ten big the ten big ideasideas

•Simulation proffers you opportunity to experience

every key dimension of strategic thinking developed to

date:

THE CAPSTONE SIMULATION

• Adopted by major Adopted by major FortuneFortune 500500 companies companies

..General Motors, General ..General Motors, General Electric, Honeywell, Dell, Electric, Honeywell, Dell,

John Deere, Citibank, John Deere, Citibank, Alcoa, BP, Allstate, Alcoa, BP, Allstate, Samsung, Goldman Samsung, Goldman Sachs, Microsoft…Sachs, Microsoft…

Most widely used Business – Most widely used Business – Simulation Program in the WorldSimulation Program in the World

You Da’

Boss

…… run a run a $100M $100M business ….business ….

Your Product Line:SENSORS:

You will Compete against other members of this class –running 5 other Corp’s ….

• AndrewsAndrews• BaldwinBaldwin• Chester Chester • DigbyDigby• ErieErie• FerrisFerris

TargetTargetMarketMarket

Product Place

PromotionPrice

TargetTargetMarketMarket

Product Place

PromotionPrice

TargetTargetMarketMarket

Product Place

PromotionPrice

Plus… your decisions & business performance will be compared against 1000+ other teams competing at other universities… around the world

& How –to date--& How –to date--have we fared in have we fared in this World-Wide this World-Wide Competition??Competition??

 2001 Top Ten Teams, World-Wide, for Round 8

• Top Ten Teams, World-Wide, for Round 8 Top Ten Teams, World-Wide, for Round 8 by success measurement by success measurement There are currently There are currently 940 940 active teams that have played Round 8. active teams that have played Round 8. For a team to make this list: Cumulative Profits above 0 Overall Market Share (in dollars) greater then 5.0% Asset Turnover For a team to make this list: Cumulative Profits above 0 Overall Market Share (in dollars) greater then 5.0% Asset Turnover less then 8.0 less then 8.0 Profit for Round 8 Round 8 - Mean - $ 25,324,003 Profit for Round 8 Round 8 - Mean - $ 25,324,003

• Top Ten Active Teams Professor School/Course Simid Team Value Top Ten Active Teams Professor School/Course Simid Team Value

• 11 Dr. Minu Afza College of Business - Bloomsburg University Dr. Minu Afza College of Business - Bloomsburg University93 481 Business Policy & Strategy CAP1742 Digby $ 238,235,245 93 481 Business Policy & Strategy CAP1742 Digby $ 238,235,245 2 2 Mr. Bill Gardner Penn State University -Fayette CampusMr. Bill Gardner Penn State University -Fayette CampusContemporary Business Seminar CAP1513 Andrews $ 193,853,427 Contemporary Business Seminar CAP1513 Andrews $ 193,853,427 33 Dawn DeTienne University of Colorado at Boulder Dawn DeTienne University of Colorado at BoulderSenior Seminar CAP1656 Andrews $ 184,258,599 Senior Seminar CAP1656 Andrews $ 184,258,599 4 4 Prof. Howard Feldman University of PortlandProf. Howard Feldman University of PortlandManagerial Decisions and Policy-Undergrad B CAP1787 Erie $ 181,422,390 Managerial Decisions and Policy-Undergrad B CAP1787 Erie $ 181,422,390

55 Dr. Ed ForrestDr. Ed Forrest University of AlaskaUniversity of AlaskaMarketing Management CAP1611 Baldwin $ 163,281,864 Marketing Management CAP1611 Baldwin $ 163,281,864 6 6 Dr. Eric Wiseman University of Colorado at BoulderDr. Eric Wiseman University of Colorado at BoulderBusiness Senior Seminar CAP1818 Chester $ 157,930,382 Business Senior Seminar CAP1818 Chester $ 157,930,382 77 Dr. Murrow Drury College Dr. Murrow Drury CollegeStrategy and Policy Formulation CAP1838 Erie $ 149,235,238 Strategy and Policy Formulation CAP1838 Erie $ 149,235,238 8 8 Dr. Pettus Millikin UniversityDr. Pettus Millikin UniversityBusiness Policy CAP1748 Baldwin $ 147,967,873 Business Policy CAP1748 Baldwin $ 147,967,873 9 9 Doug Mayer Hartwick CollegeDoug Mayer Hartwick CollegeManagement VII-secA CAP1811 Digby $ 137,339,216 Management VII-secA CAP1811 Digby $ 137,339,216 1010 Dr. Bruce A. Schooling Point Loma Nazarene University Dr. Bruce A. Schooling Point Loma Nazarene UniversityStrategic Management CAP1794 Digby $ 121,289Strategic Management CAP1794 Digby $ 121,289

5th

 2003 Top Ten Teams, World-Wide, for Round 8

• For a team to make this list: Cumulative Profits above 0 Overall Market Share (in dollars) greater than 6% Asset Turnover less then 8.0 For a team to make this list: Cumulative Profits above 0 Overall Market Share (in dollars) greater than 6% Asset Turnover less then 8.0 Your class was ranked: with 711 Capstone ® teams completing round 8 by Apr 12, 2003. teams per game of 6 Category: All Your class was ranked: with 711 Capstone ® teams completing round 8 by Apr 12, 2003. teams per game of 6 Category: All

• URL: URL: http://www.capsim.com/prof/viewtopten.cfm?round=8&simid=C4806&version=KDate/Time: 04/12/2003 10:07:35Date/Time: 04/12/2003 10:07:35eNote:eNote:

• Text:Text:Cumulative Profit for Round 8 - Mean - $ 125,355,000 Cumulative Profit for Round 8 - Mean - $ 125,355,000 Top Ten Active Teams Professor School/Course Simid Team Value Top Ten Active Teams Professor School/Course Simid Team Value 1 natalie marsh Strayer University1 natalie marsh Strayer UniversityBusiness Policy & Strategic Planning C4779 Baldwin $ 459,411,986 Business Policy & Strategic Planning C4779 Baldwin $ 459,411,986 2 John Hall University of Florida2 John Hall University of FloridaGlobal Strategic Management I2MBA 2002 C4923 Baldwin $ 386,472,583 Global Strategic Management I2MBA 2002 C4923 Baldwin $ 386,472,583 3 natalie marsh Strayer University3 natalie marsh Strayer UniversitySenior Seminar - Business Administration C4778 Erie $ 382,697,422 Senior Seminar - Business Administration C4778 Erie $ 382,697,422 4 Peter Stanwick Auburn University4 Peter Stanwick Auburn UniversityStrategic Management C5095 Chester $ 353,185,127 Strategic Management C5095 Chester $ 353,185,127 5 John Pearce Villanova University5 John Pearce Villanova UniversityPolicy Administration C5033 Ferris $ 348,535,130 Policy Administration C5033 Ferris $ 348,535,130 6 Gavin Fox Georgia Southern University6 Gavin Fox Georgia Southern UniversityBUSINESS SIMULATION C5041 Digby $ 343,761,703 BUSINESS SIMULATION C5041 Digby $ 343,761,703 7 Shirley Schooley Birmingham-Southern College7 Shirley Schooley Birmingham-Southern CollegeStrategic Management Senior Project Course Sec B C5356 Digby $ 341,865,002 Strategic Management Senior Project Course Sec B C5356 Digby $ 341,865,002 8 natalie marsh Strayer University8 natalie marsh Strayer UniversitySenior Seminar - Business Administration C4778 Ferris $ 339,568,171 Senior Seminar - Business Administration C4778 Ferris $ 339,568,171

99 Edward ForrestEdward Forrest University of AlaskaUniversity of AlaskaMarketing Management C4806 Chester $ 333,620,198Marketing Management C4806 Chester $ 333,620,198 10 Donald Kreps Kutztown University10 Donald Kreps Kutztown Universitymba capstone C4797 Digby $ 327,188,363 mba capstone C4797 Digby $ 327,188,363

9th

2005 - #1

2006-5th

and 8th

2007 3rd

Fall 2009#1 in the world!

Fall- 2009

#1 in the world…

v

SHAKE UP IN SENSOR INDUSTRYManagement Teams Fired

“After poor results, lackluster sales and angry customer reports……….. New dynamic leadership teams needed to take industry into the future!”

S I M U L A T I O N

M A N A G E M E N T

YOUR HIRED!

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M A N A G E M E N T You are now the Captain…

Today- we will begin analysis of “your situation…”11stst-Step back & -Step back &

take a look at take a look at the “Big the “Big Picture” Picture”

The Big Picture

•CCompanyompany

•CConsumersonsumers

•CCompetitorsompetitors

•CConditionsonditions• PESTPEST

Growth &Growth & Competitive Competitive StrategiesStrategies

FinanceFinance

HRHR

ProductionProduction

R&DR&D

MarketingMarketing

Functional Functional IntegrationIntegration

Profits Mrkt Share ROA ROS ROE Asset T/O Stock Mrkt Cap

Situation/SWOT Situation/SWOT AnalysisAnalysis

Strategic Strategic PlanningPlanning

Functional Functional IntegrationIntegration

Performance Performance AssessmentAssessment

BUSINESS PLAN GUIDELINE

1.Where are 1.Where are we now? we now?

2.Where do we 2.Where do we want to gowant to go

3.How do we 3.How do we get there?get there?

= Situation Analysis

The Capstone Courier

Org. goals & objectives encapsulated in Mission & Vision Statements:

Answers Question # 2:2. Where do we

want to go?– What business(es) should

be in – Market positions to stake

out?– Consumer needs &

segments serve?– Outcomes to achieve?

Final Question answered by Strategic Planning: 1.Where are we now? 2.Where do we want

to go?3.How do we

get there?*Growth, Competitive &

Functional Strategies

…success contingent

on decisions you make as-manager of

every functional

domain

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You’re will be responsible for:Planning, implementing & controlling your marketing

strategy

TargetTarget& &

PositionPosition

Product Place

PromotionPrice

As MARKETING MANAGER

M A N A G E M E N T

S I M U L A T I O N

Marketing Managers

become one-w/ Relationships

betw• Price & demand• Price & margin • Promotion budget &

awareness • Sales budget &

accessibility • A/R policy & demand

MARKETING MANAGERSIMULATION SPREADSHEET

Build customer awareness through promotion

Establish a sales force and distribution channels

Set price of your products in the marketplace

Set Credit Policies AR/AP

Set the sales forecast for our products

•Marketing also selects

media vehicles & message

weights• AND

determines composition of sales/distributi

on staff ..and allocation of

their efforts by segment &

Brand

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S I M U L A T I O N

As Production Mgr:

Set automation levelsSet automation levels

Buy or sell capacityBuy or sell capacity

Schedule productionSchedule production

Work overtime or automateWork overtime or automate

PRODUCTION MANAGERSIMULATION

SPREADSHEET

Establish your workforce complement

Buy or sell capacity of product lines

Purchase machinery to automate our facilities

Schedule production for each line

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S I M U L A T I O N

Responsible for:Responsible for:Product PositionProduct PositionAge & Quality Age & Quality New product New product

developmentdevelopment

As R&D Mgr

Quality Age Prdt Line

High High Eight

Low Low One

<<

<

SIZEA

B

Performance

R&D MANAGER SIMULATION SPREADSHEET

Establish product positioning to meet customer demand

Build quality & reliability (MTBF) into products

Ensure age of product meets customer demands

Create new products

Drift

M A R K E T I N G

M A N A G E M E N T

As Human Resource Manager--Responsible for:

• Recruitment, Recruitment, Hiring, Training & Hiring, Training & Firing of all laborFiring of all labor

• 2 groups:2 groups:– AssemblersAssemblers– TechniciansTechnicians

WagesWagesBenefitsBenefits

SIMULATION SPREADSHEET

M A N A G E M E N T

S I M U L A T I O NAcquire CapitalAcquire Capital– Issue StockIssue Stock–Short Term DebtShort Term Debt– Issue Long Term BondsIssue Long Term Bonds

Set DividendSet DividendRetire Long Term BondsRetire Long Term BondsRetire StockRetire Stock• Responsible for Emergency Responsible for Emergency

LoansLoansBig AL

The Loan Shark

As FINANCIAL MANAGER

FINANCIAL MANAGERSIMULATION SPREADSHEET

S I M U L A T I O N

M A R K E T I N G M G T.

1st Reorganize Companies

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M A R K E T I N G M G T.

Strategic Thinking- the ten big ideas - the ten big ideas

7. Corporate culture- corporate behavior, and in particular the resistance of the organization to change, is inevitably a function of its culture

(Prof Thomas/ Penn St. able to predict final standings w/in 1 place 90% of time –after observing initial group interaction)

8. Leadership craft- Leaders responsible for assuring strategy links values of firm with its vision & that firm can successfully implement strategy thru effective HR mgt.

Now- Register Go to www.capsim.com

S I M U L A T I O N

M A R K E T I N G M G T.

Consumer

Company

Competitors

Conditions

Begin Situation-Analysis

EXTERNAL ENVIRONMENTOpportunities & Threats

INTERNAL ENVIRONMENTYour Company's

Strengths & Weaknesses:

1st part Situation Analysis is Environmental ScanningEnvironmental Scanning

Environmental Scanning=The process of identifying the nature &

magnitude of Uncontrollable forces in the external (macro) environment exerting significant influence on your strategies…

Social

TechnologicalPolitical

Economic

Competitors

Demographic Psychographic

trends

EXTERNAL-UNCONTROLLABLE FORCESEXTERNAL-UNCONTROLLABLE FORCES: : Impacting Strategies

RegulatoryTechnological

Consumers

Strategic Thinking- the ten big ideas - the ten big ideas

1. Long-range planning- considers the external factors that affect success & integrates the various functional strategies.

2. Strategic analysisMarket segmentation The lifecycle. SWOT analysis. Industry structure

Ascertain how the market is organized, operates, influenced & evolving

YOUR 1st ASSIGNMENT

Opportunities & Threats:

The Consumer:How market is segmented….factors that influence consumer demand & purchasing decisions

The Competition

Your competitors situation… strength & weaknesses… and relative market positions…

The Market: Conditions

Macro-E considerations especially technological trends

Economic environment = moderate growth, low inflation,

historically-averaged interest rates

•There no outside competitors or product substitutes. •No economic downturns or other surprises expected.

Your sim-environment a bit more benign

than real world

- whatever happens as market evolves will be driven by

your-tactical execution of

strategies… not by external factors.

Sim designed this way for one reason

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M A R K E T I N G M G T.

Questions?

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M A R K E T I N G M G T.

Can I be excused my brain is full..