Marketing Simulation Managing Segments Customers Heide Abelli and

Marketing Simulation Managing Segments & Customers Heide Abelli and Andrew Christensen

Description In this single-player online simulation, students face the real-world challenge of creating an effective marketing strategy. They make product design decisions by investing in product features, and must also set product prices across multiple segments and establish margins for distributors. In addition, students explore budgeting for market research, communications, and manufacturing efficiency. They manage customer expectations while exploring the relationship between customer satisfaction and the firm’s profitability. Performance is measured using qualitative and quantitative criteria. 2 Marketing Simulation: Managing Segments and Customers

Target Audience § Ideal setting: • First-year MBA, Marketing Course • Exec Ed or Undergraduate § Relevant courses: • Business Marketing • Buying Behavior • Marketing Strategy 3 Marketing Simulation: Managing Segments and Customers

Our Offering § Single player § Seat time = 90– 120 minutes for students to run, 150– 180 to complete with debrief session § Business-to-Business (NOT consumer marketing) § Set in a manufacturing environment § Different every time – no single solution § Dynamic customer videos – qualitative component § Academic Price = $12. 50 / Exec Ed = $37. 50 4 Marketing Simulation: Managing Segments and Customers

Competing Academic Products § Strat. X: Mark. Strat Online • The “original” from over 20 years ago • Team-based, students compete with each other • Pricing information hard to find § Interpretive Simulations: Strat. Sim Marketing • Team-based, consumer orientation • Set in the automobile industry • Has an “optional” B-to-B component. • $39. 95 academic price when bundled with a Pearson text. 5 Marketing Simulation: Managing Segments and Customers

Setting the Stage: Foreground Reading § Minnesota Micromotors § Makes “brushless” motors § Sells motors to companies who make drills for orthopedic surgery (OEMs) § Sell direct and through distributors § “Relationship” sale 6 Marketing Simulation: Managing Segments and Customers

Setting the Stage: Product Features § Thermal Resistance • Maximum operating temperature • Higher is better—less likely to burn out in high use situation § Power-to-Size Ratio • Ratio of torque delivered compared to motor size • Higher is better—smaller motor still delivers high power § Price • Higher/lower depends on price sensitivity • Powerful factor, but not always decisive in B-to-B sales 7 Marketing Simulation: Managing Segments and Customers

Setting the Stage: Segments Segment A Segment B Segment C Segment D Small Customers 8 • Power-to-Size most important • Loyal to Minnesota Micromotors (you) • Thermal Resistance most important • Loyal to the competition • Wants both Power-to-Size & Thermal Resistance • Will switch for better product (loyal to specs) • Low price is most important • Will switch for price (loyal to price) • Price sensitive, mostly buy from distributors Marketing Simulation: Managing Segments and Customers

Setting the Stage: Market Research Thermal Resistance B D C A Power-to-Size Ratio 9 Marketing Simulation: Managing Segments and Customers

Setting the Stage: Market Research Thermal Resistance B C Comp D MM A Power-to-Size Ratio 10 Marketing Simulation: Managing Segments and Customers

Many Decisions to Make § Pricing and Channel Strategy • List Price • Discount Rates for Segments and Distributors § Customer Relationship Management • Sales staff level and priorities • Spending level on large volume vs. small volume customers • Spending level on retaining vs. acquiring customers • Marketing communications § Product Development improvements 11 Marketing Simulation: Managing Segments and Customers

Setting the Stage: Goals and Scoring 1. Revenue 2. Profit 3. Market Share 4. Customer Satisfaction 5. Cumulative Trend-Performance Scores from 0 to 100 Professor can change the weight of each goal 12 Marketing Simulation: Managing Segments and Customers

Strategies From the Facilitator’s Guide: “Firing sales reps has a huge negative impact on revenues. ” 13 Marketing Simulation: Managing Segments and Customers

Ready to Play See the Sim 14 Marketing Simulation: Managing Segments and Customers

Five Things to Remember 1. Business-to-Business NOT consumer 2. Different every time – hard to “game” 3. Easy to set up, administer and play repeatedly in one class or a few classes 4. Dynamic perceptual maps and customer videos 5. Power. Point template for debrief 15 Marketing Simulation: Managing Segments and Customers