The Markstrat Challenge

PARIS – BOSTON
www.stratxsimulations.com
 The
Markstrat
World
Managing
your firm
Getting
started
The Markstrat World: A large
territory with a highly developed
economy

The Markstrat World

Population: 250 million
Currency: Markstrat Dollar ($)
Each firm can compete in TWO
product markets

Maximum: 5 brands/firms marketed at a time

• independent
• not substitutes
• not complements

SONITES VODITES
The Sonite market is already
developed, each product has 6
product characteristics
Weight Design Volume
(10 – 20) (3-10) (20-100)

Kg Index

dm3

Max. Frequency Power Base Cost

(5 – 50) (5-100) (min. 10)

kHz W
Vodites will also have 6 physical
characteristics, but the market is yet
untapped
Autonomy Max. Frequency Diameter
(5-100) (5-20) (10-100)

m kHz
mm

Design Weight Base Cost

(3-10) (10-100) (min. 10)

Index
Kg
It is easy to recognize the origin of
the brands from their names

S I B I
Product Company Freely chosen
Type: marketing letters or numbers
the brand:
S=Sonite
A, E, I, ...
V=Vodite
Sonite customers have traditionally
been classified into 5
segments……
...whereas initial studies for Vodites
have pointed to a different
segmentation scheme

Typical segment size evolution over time

Sales

Time
Sonite & Vodite customers can choose to
purchase through 3 distinct distribution
channels
 The
Markstrat
World
Managing
your firm
Getting
started
Your objective in managing your
company is to maximize your Stock Price
Index

You will have to optimize:

• Market share
• Sales growth
• Net contribution
• Cumulative net contribution
• R & D investments
You will need to do a certain amount of
analysis, before setting a strategic
direction for your firm
Research studies provide market data,
it is up to you to prioritize, digest &
interpret them

Consumer survey Industry benchmarking

Consumer panel Market forecast
Distribution panel Competitive advertising
Semantic scales Competitive sales force
Multi-dimensional Advertising experiment
scaling (MDS) Sales force experiment
Conjoint analysis
Once your strategy is clear, you
should make a number of tactical
decisions each year

Production planning
Pricing
Mass communication
Sales force & distribution
Market research
Pricing in Markstrat is fixed once a year

Recommended Retail Price =

$100
Each firm receives a marketing budget
for the coming period

The budget amount is based on the previous period’s performance

Advertising expenditures
Advertisin for
for
Advertising research
g expenditures
each
each
brand
brand

Operating cost

Sales force Hiring & training cost

Firing cost

for
for
R&D Development budget each
each
project
project

Market Sonite and Vodite

Research study costs
Brand results
Company performance
Organize yourselves and manage
the group process

Time
pressure
Information
overload

Conflicting
opinions