MarkStrat Individual Report

Shahan Arshad 20130026

My Markstrat experience

What I learned from the course and the Markstrat simulation was very helpful in terms of learning objectives. I acquired useful skills and gained an understanding of the world of marketing decision-making. Through the course, I learned about the various types of decisions that have to be made in the course of brand management. I treated the game as reality, I stressed over sales and prices of our brands and it was quite an adventure.

I realized that marketing is not just selling and advertising. Instead marketing starts with needs of people; needs which give rise to wants; wants which are backed by demands and in order to cater to those demands, products are made. I learned that to increase value we have to raise benefits for same costs, reduce costs for same benefits, or raise benefits by more than raise in costs, or lower benefits by less than reduction in costs. In order to give satisfaction, a product’s perceived performance has to match a buyer’s expectations. As good marketers, we have to focus on creating, maintaining, and enhancing strong value-laden relations with customers and other stakeholders. Marketing rests on four pillars: target market, customer needs, integrated marketing and finally profitability.

I learned that the key to customer retention is customer satisfaction. Customer retention is more important than customer attraction. A company can build customer relationships by simply selling (basic marketing), encouraging the customer to contact for any complaints, suggestion etc. (reactive marketing), doing after sales calls (accountable marketing), proactively contacting the customer for future product improvements, and partnership marketing.

During our course, I learned that the 4 P’s of marketing are very important to the marketing mix: Product strategy, Place strategy, Price strategy, and Promotion strategy. I learned that marketers require different types of information such as market forecasts, product information, promotion information, distribution information, price information, and environment information. I also learned that consumers can have several roles in the buying process such as initiator, influencer, decider, buyer, and user. Buyers first become aware of new products, then they develop an interest in them, then they try out the product and if it meets their demands, they adopt it.

In target marketing we have to see market segments and decide our product positioning in accordance to which segment we want to target and what are their needs. There are different ways of segmentation such as geographic, demographic, psychographic and behavioral.

As well as positioning, we also need to differentiate our products from competitors. A key marketing strategy is to have a unique selling proposition (USP) for a brand. I also learned of positioning errors such as under-positioning, over-positioning, confused positioning. These are traps to be avoided. After choosing a position we have to communicate that position effectively. This is where advertising and commercial team comes into play. Pricing is also an important part of the marketing mix especially when catering to price sensitive segments.

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In the simulation, Markstrat, I learned about the various decisions I had to take such as ordering consumer surveys, semantic scales, multidimensional scales, market forecasts etc. Then, after reading the market research and evaluating, I had to form a strategy with my group, which segment I wanted to cater, which segment I wanted to be first mover in, what R&D I had to make. R&D attributes decisions were made based on ideal values presented by semantic scales. And then with the present brands, I had to decide what production levels should be and what should be the price and advertising costs that I wanted to allocate. Production levels were easy to decide in accordance with purchase intentions as given by consumer surveys. Pricing came from semantic scales which showed each target segment’s ideal price and product attributes. Advertising allocation was made in accordance to brand awareness as showed by consumer surveys.

Semantic scales were used to design R&D projects i.e. to determine the ideal level in each physical characteristic. MDS were used to decide strategy and Conjoint Analysis was used to validate the findings of the other two studies.

I also made the decisions regarding merchandising budget and commercial team size. Merchandising budget helped decide shelf space and placement given to our brands and commercial team decided how much of our product will sell to willing customers. In all parts, R&D decisions, marketing mix, ordering market research and commercial team allocation, I was involved and formed the strategy in consensus with my team. During the later stages, I also learned how to use the tools, especially regression and growth-share matrix to see how to maximize our product’s positioning and to get a helicopter view of our brands performance.

I learned a lot as I moved from period to period as I was involved in all processes and stages and made all the key decisions based on manual, calculations and discussions. I made some big mistakes and overlooked some areas. I am not ashamed to admit this I started off knowing nothing about Markstrat. All in all, I have enough confidence to say that if I were to play Markstrat again, I would come first (true leaders always have confidence in their abilities). Since I was central to all the processes, including decision making, interpreting market research and making calculations based on ratios of Purchase Intentions, Brand Awareness, market shares and growth segments, I seem to have learned the game very well, how to form strategy and make decisions and I enjoyed it thoroughly.

The most important things I learned from Markstrat:

Read the manual. It helps a lot. Have a well thought out production plan, study market research especially forecast, consumer

surveys, semantic scales and MDS. Under-producing will cause lost potential sales while overproducing will cause extra expenses.

Use R&D extensively and produce products with physical attributes according to semantic scales ideal values after reading them carefully. It is crucial to the success of a product.

Advertising expenditure is important, no use having a good product if no one knows about it. Budget allocation is needed, plan properly and allocate budgets accordingly because they add

up in costs if you spend too much money.

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Use Purchase Intentions to determine commercial team size and Brand Awareness to determine advertising expenditure. But don’t forget to look at perception maps, regressions and semantic scales.

Do not change anything dramatically in the middle. Be resolute in your choices in the beginning. Use trial and error on decisions because Markstrat sometimes behaves irrationally to strategic

decisions. This will help you get comfortable using your own judgment calls in real life. Although strategy is important, it is not 100% reliable. Some things happen purely by chance

and we have no control over them.

Ways that Markstrat could be improved: If there was one thing that could be improved, it’s that Markstrat should have run for more than 7 periods because the Elderly segment in Nutrites market had started to grow quite late and first movers in that segment would have to fight with new competitors and that would be an interesting scenario since the rest of the segments were slowly decreasing but Elderly segment was growing exponentially. Another thing that could have been implemented was that 3 rounds should have been played on the first day and the majority 4 on the next day. This is because most of us did not have enough time during the first day to completely grasp what was going on and it was only in the interval between day 1 and day 2 that we were able to take a more comprehensive view of what was going on, how to efficiently use the data we were provided and so on because we did not get enough time during the decision making process. There was a distinct lack of multiple decision making forms because we wanted each group member to be in charge of their own brand, however a single decision form was impeding us because it could only be filled by one user at a time. It was irritating to not to be able to see more than one screen at a time especially since I wanted to look at different studies and compare them side by side.

What I liked about the experience was that I enjoyed the game and made decisions in crunch-time just like in real life. Separately all group members had own views on what was the most interesting part of analysis but overall we worked together as a group and achieved consensus on the best course of action. We referred back to the manual time after time to consult on various things such as base cost, pricing, whether we should introduce multiple products in a new market to create barriers to entry, how to use semantic scales and MDS etc. I learned more during the game than from the handbook because I was able to read market research and interpret them and use ratios to figure out advertising, commercial team and production numbers.

Again I’d like to comment that Markstrat was an amazing learning experience. It provided with hands-on experience that lectures cannot teach. I hope to be able to use what I learned in the simulation and apply the strategies to my future career.

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