Reflective Report€¦ · Web viewThis report reflects on the success of the Krazy Kart stall in regards to marketing theory ... management styles as well ... the financial situation,

Reflective ReportKrazy Karts

Prue Hempel (n9455434) Word Count: 2,746

Prue Hempel n9455434 AMB240

1.0EXECUTIVE SUMMARY

This report reflects on the success of the Krazy Kart stall in regards to marketing

theory involving planning, implementation and action stages. Prior to the market

simulation Krazy Kart set out four objectives to satisfy and hence achieve success

within the interactive and entertainment industry. The four objectives are set out

below:

1. We will achieve 75% smiling customers.

2. By the second market day, we wish to have 70% market share within the

interactive games, entertainment and other recreational activities

industry.

3. We aim for 40% Customer Loyalty.

4. As a start up company, we aim to cover costs and achieve a slight profit.

After assessing the four original objectives, it is clear that whilst two of these,

customer loyalty and satisfaction, were achieved, two were not. These two

objectives focused on profitability and market share, ultimately the two

quantifiable measures. Hence, evaluation identified the reasons that may have

caused these issues and thus suggests solutions to eradicate these issues for the

future. The source of these issues stemmed from the financial situation, the

company cohesion and the perceived value by customers in comparison to the

competitors.

To eliminate the effects of these, suggestions included price increases, a change

in organisational management styles as well as possible reduction in wait times.

These solutions were essentially sort as result of the customer feedback that the

company received. These solutions are explained and evaluated to conclusively

decide the best course of action for future improvement.

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2.0 Table of Contents

1.0EXECUTIVE SUMMARY

3.0FACTUAL REFLECTION: SUMMARY OF MARKETING OUTCOMES

3.1 The marketing objectives in the original plan with the outcomes recorded against each objective

3.2 Sales and production outcomes3.2.1 Sales price (per unit)3.2.2 Total number of units produced3.2.3 Total number of units sold3.2.4 Stock on hand

3.3 Final Profit and Loss Statement3.4 Market share

4.0PROCEDURAL REFLECTION: KEY ISSUES ARISING FROM THE QUTOPIAN SIMULATION

Table 1: Summary of Marketing Management IssuesFigure 1: Image of the Instax Me StallFigure 2: Images of the Burself StallTable 2: Table of Market Share/profitability with competitors

5.0JUSTIFICATORY REFLECTION: PROBLEM IDENTIFICATION 5.1 Financial5.2 Company 5.3 Perceived value in comparison to competitors

6.0CRITICAL REFLECTION: STATEMENT AND EVALUATION OF ALTERNATIVES

Table 3: Summary of solutions6.1 Pricing6.2 Company cohesion6.3 Perceived value increase

7.0CRITICAL REFLECTION: RECOMMENDATIONS FOR THE FUTURE 7.1 Pricing7.2 Company 7.3 Competition

8.0REFERENCES

9.0APPENDICES

9.1 Appendices 19.2 Appendices 2

2.0

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3.0FACTUAL REFLECTION: SUMMARY OF MARKETING OUTCOMES

3.1 The marketing objectives in the original plan with the outcomes

recorded against each objective

Objective 1: We will achieve 75% smiling customers.

To achieve this first objective, smiles were counted. These smiles reflected the

happiness that the stall bought to participating customers but also those of

whom engaged with the stall in regards to the decoration and atmosphere. The

smile counter recorded 209 smiles; this was 76% of the citizens of QUTopia

hence achieving and far-reaching out objective of customer satisfaction by 1%.

Objective 2: By the second market day, we wish to have 70% market share within

the interactive games, entertainment and other recreational activities industry.

Unfortunately, the market share calculation found that the Krazy Kart stall only

achieved 35% market share within the Interactive industry of which included

Instax Me and Burself.

Objective 3: We aim for 40% Customer Loyalty.

Due to the limited target audience outlined in the original market plan repeat

purchases were necessary to ensure success. Subsequent to analysis of the total

customers to those of whom repeated it was found that 49% of participators

repeated the purchase and were customer loyal.

Objective 4: As a start up company, we aim to cover costs and achieve a slight

profit.

Our aim to break even fell short. The total earnings were 125QUTopian dollars

shy of the original, start up of 4000QUTopian.

3.2 Sales and production outcomes

3.2.1 Sales price (per unit)

On the first market day, prices were at 25 for single riders, and only 20 for repeat

solo riders, to enhance customer loyalty and 20 for those of whom came to play

in a group. However, on second market day the prices were slightly increased

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subsequent to comparison of the other stall prices, hence solo riders cost 30 and

then 25 for repeats and 25 for group riders. Whilst calculations suggest the

average was roughly 30 QUTopian, the company suggests that 25QUTopian is

more accurate as other stalls paid us for promotion of their stalls and customers

paid solely for donuts hence a reduction in the average.

3.2.2 Total number of units produced

68

3.2.3 Total number of units sold

68

3.2.4 Stock on hand (left-over inventory)

No stock on hand as the stall offered a service.

3.3 Final Profit and Loss statement

3.4 Market share

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*This average price is subject to adjustment due to the payment for Donuts and

payment by neighboring stalls, hence will be lower.

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4.0 PROCEDURAL REFLECTION: KEY ISSUES ARISING FROM THE QUTOPIAN SIMULATION

Table 1: Summary of Marketing Management Issues1. Financial Situation.

What happened?We did not achieve a profit and nor did we break even (as forecasted), with a total loss of -6.02.The original forecast assumed the operating of the Wii device was faster and easier to begin the next races consecutively however this was false (this is discussed further below).Our original budget was inaccurate as a senseless error was made when calculating the total time allocated to the market days, which hence skewed the forecast. I believe had the time had been correct the pricing would have been made higher which would have allowed the stall to break even.

Outcome

Negative

2.Company AnalysisWhat happenedIn the initial stages of planning and organizing the team encountered various issues in regards to an unbalanced input of effort. This definitely affected the efficiency and quality of the planning. However, subsequent to the original plan’s completion, when the stall was the next task to be done the whole team stepped up and worked together. I believe many members of the group were unhappy with the peer evaluation they received and this hence drove them to be of more assistance in the last stages of the assessment.As the marketing manager myself, I struggled to ensure tasks were completed equally in regards to the unspecified sections.Two members of the group completed those sections left unspecified, as despite allocation many become unwilling to commit to this subject more so than other individual subjects. However, all deadlines were met.

Negative

1. Marketing SystemWhat happened?The original objectives were specific however they were ambitious rather than realistic upon subsequent evaluation. These objectives were measurable as methods were chosen to ensure this was possible, such as the smile counting as a way to measure satisfaction.The timing of the game was under-estimated hence altering the effectiveness of the stall operation and thus hindering the ability to achieve costs.As an incentive for players, donuts were offered. These donuts were donated by Donut King in a sponsorship form.Planning fell short in regards to tasks throughout the day. Unfortunately, despite allocation, again the team did not follow this and tasks were left to three members. This was improved on the second market day.

Negative

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1. Financial Situation.It may have benefitted the stall to involved a pre-order system whereby QUTopian’s could book themselves into a timeslot hence decreasing wait and participation times. This was found to be an issue in the feedback (this can be found in Appendices).

2. Customer AnalysisWhat happened?The original plan specified targeting the young, gaming boys of which were within the QUTopian businesses. Whilst the stall attracted many of these, majority of the customers were younger children of whom management did not realize would be present in such high volumes. However, the stall marketing on the day reassessed and aimed to attract this younger crowd of whom loved the product. And the stall decoration and atmosphere seemed to attract their playful side. Aswell, the Mario Kart game is popular amongst the younger children.Management did not expect there to be a constant flow of players however for the two market days this was achieved. Thus had the timing of each game and the set up been reduced, profit would have been made more successfully.

Positive

3. Competitor AnalysisWhat happened?There were a few competitors of whom were not sourced prior to market day. These stalls were services however were not within the interactive market and hence have not been included in the market share analysis.Originally, Instax appeared to be the immediate threat as it was a stall of which emphasized the environment and atmosphere however it was clear that this stall was not infact a threat. This stall did not achieve the success they had anticipated.The other competitor, Burself appeared to be more of a threat in terms of profit. However, comparison of the stalls on the day was undertaken and they did not appear to me the threat. The stall was simple, pricing was not displayed and the service seemed rather overwhelming.(Images of the competitor stalls can be found below).The Krazy Kart stall was one of the most obvious and noticeable stalls within market day and this assisted with gaining attention. This stall was possibly more demanded than the competitors however time did not play in the stall’s favour. Also, the pricing could have been higher to allow for a higher market share with the competitors.The strength of our stall was the design and vibrancy. Also the incentive of the donuts and cash prize helped to draw in the customers. The other stalls did not have such incentive offerings.However, timing and price was our major weakness.

Positive

Negative

Figure 1: Image of the Instax Me Stall

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Figure 2: Images of the Burself stall

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Table 2: Table of Market Share/profitability with competitors

Business Market Share ProfitabilityKrazy Kart 35.20% -6.02%Instax Me 24.68% -88.86%Burself 40.12% 21.35

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5.0JUSTIFICATORY REFLECTION: PROBLEM IDENTIFICATION

There are multiple marketing management issues of which contributed to the

loss made within the two market days. Three of these issues are the financial

forecasts; the company in itself and the perceived value in comparison to

industry competitors, the effect of each of these elements has been outlined

below.

5.1 Financial

Upon comparison of the Krazy Kart stall prices to that of the industry

competitors it appears that the prices were too low. Originally, within the

calculations of the pricing strategy the timing of the market days was mistaken

by the pricing manager and this was then not adjusted by any other member.

This error meant that the prices allowed the stall to break even with more time

and hence could be lowered. However, with a shorter time this was not possible.

On the second market day, the team decided to increase the prices by 5QUTopian

for solo riders and the same increase for group riders. Whilst this increase

proved beneficial in achieving higher profit, the market share evaluation

comparison suggests that consumers would have been willing to pay a higher

price for a service. Burself was the most successful within the interactive

industry. Whilst this service was higher priced the number of units sold was also

higher than those within the industry just proving the above statement true.

Hence, the pricing strategy proved to be a detrimental factor leading to the

failure of the objective to break even. To eradicate this issue, theory of consumer

behaviour suggests that customers are willing to pay higher prices for quality

products and hence this higher price would not have proven detrimental to the

success on market days (Theory is in appendices) (Zeithaml, 1996).

5.2 Company

The group experienced initial issues as the groups were formed and tasks were

dispersed, with members proving to have limited commitment to the subject.

With a member also travelling for three weeks in the midst of the marketing plan

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construction. This stage of forming quickly moved to the following step in the

Tuckman theory of storming or intragroup conflict. Whilst theory suggests this

moves to the next stage of norming, it appears the Krazy Kart group did not

settle the differences as easily (Tuckman, 1965).

Subsequent to market testing, researchers concluded that planning is the

ultimate driver behind the success of a product (Shane & Scott, 2004). Hence, the

lack of in depth planning, due to a lack of commitment, meant ideas were limited

and questions that arose subsequent to decisions could have been asked prior to

thus reconsider the competence of the plan to avoid failures.

The next issues can be sourced within completion of the unspecified sections of

the report. Every member completed assigned tasks to the best of their abilities,

some subsequent to constant encouragement. However, the sections regarding

the company and the values were left to only two members of the group. This

again hinders the quality of the work as it placed unnecessary stress on the

participating members. Had this of been a group collaboration cohesion could

have occurred more readily within the market day.

Despite this, group cohesion did occur following the group evaluation results

being released as members became aware of their lack of assistance. Without

this solidarity the market day may have been more of a failure as the stall would

not have been as ambient nor the operations run as smoothly (despite needing

more control on subsequent evaluation).

5.3 Perceived value in comparison to competitors

Subsequent to reflection it is clear that the failure of objectives occurred as the

consumers did not perceive the value of the stall as highly as the other

competitors due to the high wait times and hence opportunity cost.

Subsequent to analysis of the customer feedback it was clear that many potential

customers were foregone, as they either did not want to wait nor did they want

to sit and race for 3 minutes as it would limit their time throughout the

remainder of the market. The competitors’ services as well as the other stalls

within market day did not incur these times and hence in comparison, the Krazy

Kart stall’s value proposition was lowered. Using Swan and Trawick research,

this hence suggests that the desired expectation amongst QUTopians was that

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the products were produced timely; thus detrimental to the turnover produced

by Krazy Kart (Ziethaml, 1993).

Each race followed the same track, and hence further wait times occurred when

resetting the console to be able to complete the same track, as the game follows a

set of races rather than being chosen on every race. This meant not only did wait

times occur during another consumer’s race but also roughly 30seconds to a

minute of waiting between races whilst set up occured. Hence, decreasing the

number of customers willing to play, decreasing total sales.

There were ultimately three contributory factors that played a dominant role in

the dissatisfaction of two of the four objectives. These included the financial

situation, prices being too low, the company cohesion or lack there of and the

lack of perceived value in comparison to the competitors. The next section

outlines potential solutions to these issues to thus improve the overall success of

the Krazy Kart stall.

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6 CRITICAL REFLECTION: STATEMENT AND EVALUATION OF ALTERNATIVES

Table 3: Summary of solutions

Problem Alternative solutions

Pricing Price increase

Larger quantity discount

Company Team work A Bureaucratic system of management

More authoritative corrective action taken

Competitor Price Increase

Extra Wii Console set up

6.1 Pricing

When distinguishing pricing strategies, companies should integrate the 5C’s,

company objectives, costs, customers, competition and channel members. Hence,

using these components, there are various solutions that the Krazy Kart team

could have put in place to alleviate the loss that was made.

As the foremost objective was to break even, this should have been made more

than possible by the pricing manager, however due to a mistake in calculations

this was not. Hence, the first solution was to increase the price to exceed the

break even as this would allow for fluctuations in the number of units sold.

Conversely, the pricing strategy that was chosen overestimated the time and

hence overestimated the number of paying customers.

It may have been an idea to introduce a quantity discount whereby playing three

games for example was one package deal and hence at a price of 60 or

70QUTopian for example, this may have been beneficial as it would guarantee

races rather than those wanting to play again having to wait for the next in line

to play. As this waiting was the reason for many lost customers.

Whilst the price was increased subsequent to the first market day in an attempt

to cover the objectives, as the first market day achieved 50% of the total

expenditure, the increase was not large enough. In comparison to industry

competitors and the market competitors, the average price of 25QUTopian was

far below. The highest price within the market was upwards of 100QUTopian,

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this company ‘Slats.’ Did also achieve a large profit. Hence, it appears the

QUTopian citizens were willing to pay higher price. It may have hence been

advantageous to assess the competitor prices on first market day to understand

that the increase for second market day could have been greater.

6.2 Company cohesion

The next issue that played a contributory role in the loss made by the Krazy Kart

team was the company in itself. Marketing theory understands that the success

of a product stems from the company environment and the internal factors. The

issues within the company stemmed from a lack of commitment to the task by a

few members. As the process of group work occurs there is a storming phases

however this group struggled to pass this stage into the norming stage, causing

disputes.

As marketing manager it was in fact my job to encourage and embed in the

members the necessity of their efforts.

Following the four functions of management, I believe I need to adjust either the

organizing and controlling stages to eradicate the issues.

The organisation function involves dividing and delegating work, arranging

resources and coordinating activities. I believe the issue stemmed from the

division of labour, as every member was headed a task, it was only the first

section of the report that was not delegated and hence left to those of whom

merely offered assistance. Hence, due to the lack of motivation amongst many

members, I believe I should have implemented at Bureaucratic management

system. This system involves a clear division of labour with a firm hierarchy for

authority. This would have been the best way to ensure all members worked

equally to minimise stress and workload but also would have ensured every

team member was involved in every process to guarantee that all questions were

asked and the planning stages were hence well-thought-out.

However, without this control the next option to eradicate the issues would

appear in the control function of management. As the issues began to arise,

whereby members were not performing as need be, as marketing manager I

should have been able to take action to achieve the desired results.

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Unfortunately, it was not until the after-action review of the tasks that I

understood the need for corrective control. Despite the negative effects for this,

in the future, I will be able to use these leanings to improve my management.

6.3 Perceived value increase

Ultimately the objective of this issue is to increase perceived value. Due to the

time each race took and the set up for each player, many QUTopians failed to see

the value of the Krazy Kart stall when compared to the competitors. Whilst the

competitor’s stalls took time and were more expensive, taking the time meant

gaining a tangible item at the end rather than just the experience offered by

Krazy Kart. Thus, customers walking away rather than waiting essentially means

less income, less satisfaction and hence a loss of market share.

There are multiple options to eliminate this opportunity cost for consumers.

The first option could be to merely increase price so those of whom could play

eliminate the loss in those who do not. However, the next section evaluates why

this may not be the best option.

The other option on reflection would be to have set up two consoles to prepare

for consecutive races and hence customers would not have to wait the extended

set-up intervals.

There are multiple explanations for the failure in 50% of the stall objectives

however there are also multiple options to improve theses outcomes. The next

section details which of the above options that would present the most beneficial

to the overall success of the Krazy Kart operation.

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7 CRITICAL REFLECTION: RECOMMENDATIONS FOR THE FUTURE

7.1 Pricing

As the major downfall of the Krazy Kart stall was the loss that was made

throughout market days, the most beneficial method to improve this is to

increase the price as suggested previously. The other options specified would not

improve the efficiency of the stall as much as a mere increase. The theory behind

the quantity discount does not allow for more customers to play. Whilst theory

encourages tactics such as price leading, mark downs and these quantity

discounts, due to the timing of the game and set up, this would have only been

detrimental as time restricted the amount of customers that could play

regardless. Hence, as there was only a specific amount of customers that could

play within the given time, increasing the price was the only way to achieve the

objective.

Whilst assessing the competitor prices would have been beneficial for the

second market day, ultimately a dramatic increase in price may have deterred

returning customers as the value ultimately decreased.

Conclusively, to assist in achieving the overall objectives the best way to improve

the issues that occurred in regards to the financial situation was to increase the

price from the beginning in an attempt to ensure there was no miscalculation nor

overestimation of customer participation. As there was a total of 68 customers,

and a loss of 125QUTopian, the price would only need be increased by

2QUTopian to breakeven. However, each customer was equipped with only

paying by the increment of 5QUTopian, hence increasing the price by 5QUTopian

would have leveled the price of Krazy Kart with the immediate competitors and

would also have allowed the stall to achieve profit let alone break even.

7.2 Company

The predominant issues that contributed the lack of objective satisfaction were

found internally. As the marketing manager, it was ultimately my task to ensure

the team worked as one, cohesive unit and hence it was my responsibility when

this was not the case. Throughout the weeks I had attempted to assert my

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authority and ensure everyone was contributing however this did not appear to

alter the actions of many members.

Upon reflection I believe the most advantageous change that could have been

made was to input a bureaucratic system of management whereby authority was

not lost and every task was delegated strictly and without question. Whilst the

other option presented merely improves the controlling phase, I believe it is

most advantageous to catch the issue early to have limited effects on the final

product. Hence, to eradicate the issues internally, the most beneficial

modification was to assert my authority and merely not give members an option,

this could thus improve all stages of the planning and implementation process to

increase value for customers to consequently achieve objectives.

7.3 Competition

The timing of the operation caused a major loss in perceived value for the service

in comparison to that offered by the competitors. This then had affects on the

number of customers playing, the customer satisfaction and hence the total

market share gained by Krazy Kart within the industry. Whilst increasing prices

would have counteracted the loss of customers, this only presents a short-term

and quantifiable result. This solution does not achieve the gain in customer

satisfaction. Whilst this satisfaction objective was reached, there is always room

for improvement as dissatisfied customers can multiply due to various forms of

communication such as word-of-mouth. Hence, the most viable option to allow

for more players, less wait times is to have, on hand, a second console to re-set

the game for the next race. This would make the stall more appealing hence

reducing the opportunity cost for consumers and ultimately increase income as

more customers are able to play within the given time, this would hence increase

the market share objective. This option does not only solve the quantifiable

failures but would also work to improve the success of the other objectives as

customers would be more satisfied with less wait times and this would also

allow for more customer repetition and loyalty.

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8.0 REFERENCES

Grewal, D. (2015). Marketing. (1st ed.). Australia: McGraw Hill Education.

Schermerhorn, J.R. (2014). Management: Foundations and Applications. (2nd ed.). Queensland: Wiley.

Shane, Scott (11/2004). "Planning for the market: business planning before

marketing and the continuation of organizing efforts". Journal of business

venturing (0883-9026), 19 (6), p. 767.

Tuckman, B. W. (1965). Developmental sequence in small groups.Psychological

Bulletin, 63(6), 384-399. doi:10.1037/h0022100

Ziethaml, V. A., Berry, L. L., & Parasuraman, A. (1993). The Nature and

Determinants of Customer Expectations of Service.Journal Of The Academy Of

Marketing Science, 21(1), 1.

Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1996). The Behavioral

Consequences of Service Quality. Journal Of Marketing, 60(2), 31-46.

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9.0 APPENDICES

9.1 Appendices 1Negative Feedback with the timing comments highlighted to support

Krazy Kart - Not interested- Availability.- Time poor. - Didn't want to be sitting around playing games when I could be shopping- Not interested - Not into video games - No interest - Lots of drama, complicated and bad customer service - Didn't have time to play games- I am not into playing video games - Didn’t have time to sit down and play - I only play Nintendo 64 - Did not really have the time - I wanted to play but it was too time consuming to wait for a turn - Didn't interest me - Wasn't interested in product - Not interested in product - Not appealing to me - Not enough participants - As stated earlier, I wanted to buy things I could take home with me, I just

didn't have enough time to shop on market day to justify paying to play a game

- Other things wanted to spend money on - Was not interested in product- Wasn’t interested - Had no time - I didn't have the time - That looked really kid-ish for me - Did not appeal to me - Didn’t see the value- Time/monetary constraints - Time/ Money/ Constraints - Not enough money - It didn't interest me - Didn't see a point

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9.2 Appendices 2Figure 1:

Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1996). The Behavioral Consequences of Service Quality. Journal Of Marketing, 60(2), 31-46.

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Documents

Reflective Report€¦ · Web viewThis report reflects on the success of the Krazy Kart stall in regards to marketing theory ... management styles as well ... the financial situation,