Jack five sales people for the Shanghai office

Jack
Pelosi
Professor Eaton

MKT
300

December
3, 2017

 

Marketplace
Simulation Analysis

Quarter
1 and Quarter 2

Initially, I selected Goat as my company name because I
thought it was a simple name that people would remember, like Apple.  

I selected President as my primary responsibility because
it is the most important leadership role in the company. And I selected VP of
Finance as my secondary responsibility because managing company finances is
also important for a start-up company.

I selected Workhorse as the first target market because it
was the largest of the three markets, larger than Mercedes and Travelers. And I
wanted access to the most potential customers for my brand.

I selected to open my first sales office in Shanghai because
it had the largest potential demand over a 12-month period for my first target
market Workhorse.

In quarter 2, I selected a laptop as my first brand for the
Workhorse market and named it GoatPad. I selected the following components
based on the priority of the needs and wants of the Workhorse customer market:

·        
Base components

·        
Office software

·        
Database software

·        
Standard (laptop) case

·        
High capacity hard drive

·        
14″ standard (laptop) monitor

·        
High speed computing power

·        
Standard keyboard

·        
Standard networking

In quarter 2, I created my first advertisement and included
nine items in the ad, again based on the priority of the needs and wants of the
Workhorse customer. And I inserted 12 ads in the local media of Shanghai
because I wanted more ads than my two main Workhorse competitors, Galileo
Computers and Constellation PC.

To determine the price of my brand, I considered the price
that the Workhorse customer was would pay, the customer need and want for a
low-cost brand, and the Workhorse brand prices of my two main competitors. My
strategy was to set the price a little lower than my competitors. I set the price
at $2,500 with a $200 rebate because the marketplace simulation recommended
including a rebate.   

I hired five sales people for the Shanghai office based on
the number recommended in the marketplace simulation. I included four sales
people for Workhorse and one technical support person because technical support
was important to the Workhorse customer.

I opened my second sales office in Chicago. Even though the
Paris market size was slightly larger than Chicago for Workhorse, I selected
Chicago to keep operating costs down because the quarterly lease cost in Paris
was $20,000 more than in Chicago.

Quarter
3

In quarter 3, the quarter 2 balanced scorecard results for Goat
were reported as follows:

·        
Total performance: 8.801

·        
Financial performance: -1.597

·        
Market performance: 0.000

·        
Marketing effectiveness: 28.000

For quarter 2, the brand judgment was 6. After analyzing
the results, I realized that I made a mistake in selecting laptop for my first brand
because desktop was the brand in demand for the Workhorse market. I also
realized that I overlooked the application needs and wants of the Workhorse
customer. As a result, Goat had 0% share of the market for Workhorse tied with
Shark computers.

In quarter 3, I changed my first brand to desktop and named
it GoatPC. And I selected components based on the needs and wants of the
Workhorse customer including Presentation and Bookkeeping software. Even though
fast and powerful was rated 110, I did not think that the rating was high
enough to justify the cost of this low-end brand.

For quarter 2, the ad judgment was 50. When I analyzed my two
main competitor’s ads in the Workhorse market, I decided to make some changes
to my first ad in quarter 3. First, I reduced the number of items from nine to
seven because too many items in the ad take attention away from the main items
in the ad. Second, I moved “Mention brand name” to priority 1 because I thought
establishing the brand was the most important item to advertise. Third, I added
“Lowest price in town” to the ad and made it priority 2 because low cost was
rated high as a need and want for the Workhorse customer. Fourth, I made “easy
to use” priority 3 because it was rated high. Fourth, I listed all the
applications rated high by the customer. Finally, I made “Local service and
support,” priority 7 because it rated high.

For quarter 2, the price judgment was 100, which tied my two
main competitors in the Workhorse market. In quarter 3, I decided to lower the price
of GoatPC because low cost was rated high as a need and want for the Workhorse
customer. Also, I could continue to advertise “Lowest price in town” by setting my price at $2,199, which was $1 less than
the lowest price of my competitors.

In quarter 3, I took the opportunity to add a high-end desktop
brand targeted to the Workhorse market to improve my performance. For the
second desktop brand, GoatPC Pro, I set the retail price to $2,599 with $100
rebate for a net price of $2,499 because the Workhorse customer would pay
$2,500 for the brand. I included the same components in the low-end GoatPC but added
high speed computing power and an expanded keyboard to justify the higher price
and set it apart from GoatPC.

For the high-end GoatPC Pro ad, I made the brand name priority
1 because I thought establishing the brand was important. Second, I made “Rebate
– special price deal” priority 2 because low cost was rated high for the
Workhorse customer. Third, I made “Easy to use” priority 3 because of it was
rated high. Fourth, I added the most important applications. Finally, I added
“Fastest processor on the market” and “Efficient keyboard – extra keys” because
these components differentiate the GoatPC Pro from the GoatPC.

In quarter 3, I hired five sales people for the Chicago
office because this city did not have as large a demand for the brand as in
Shanghai. I hired four sales people for Workhorse and one technical support
person because technical support was important to the Workhorse customer. 

In quarter 3, I increased the number of ads to 15 in
Shanghai and 5 in Chicago for each brand for a total of 40 inserts. My strategy
was to have more ads than my main competitors.  

In quarter 3, I opened a sales office in Paris, which had
the third largest market, to expand my market outside the U.S.

Quarter 4

In quarter 4, the quarter 3 balanced scorecard results for
Goat were reported as follows:  

·        
Total performance: 43.384

·        
Financial performance: 6.153

·        
Market performance: 49.000

·        
Marketing effectiveness: 75.00

For quarter 3, Goat had a total performance and market
performance score that was in the middle of the competition. Goat had a financial
performance and marketing effectiveness score that was better than the competition.
 

For quarter 3, the brand judgment for GoatPC was 69 and for
GoatPC Pro was 58, which tied the competitors’ brands Orion II and Callisto,
and led the other competitors’ brands in the Workhorse market.

For quarter 3, the ad judgment for GoatPC was 81, which led
the competition. The ad judgment for GoatPC Pro was 65, the fifth position in
the Workhorse market. The ad judgment was low because the ad was targeted to
the Workhorse customer instead of the Mercedes market. In quarter 4, I changed
the name of GoatPC Pro to GoatPC M and targeted the Mercedes market.

For quarter 3, the price judgment for GoatPC and GoatPC Pro
was 100. Although this rating indicates that customers might pay more for my
brands, my strategy was to set my price a little lower than my competitors to
achieve the greatest market share.

In quarter 4, my strategy was to develop two new brands,
GoatPC M and GoatPC T, to meet the needs of the Mercedes and Traveler markets. When creating the Mercedes brand, I set
the price according to the willing-to-pay price because the cost of the brand
did not rank high as a need and want for the Mercedes customer. For the Mercedes
and Traveler brands, my strategy was to hire more sales people and insert more
ads than my competitors in the cities with the highest demand and less in the cities
with the lowest demand.

In quarter 4, I hired more salespeople in the other sales
offices to lead the competition. Then, I changed my sales priorities. I made
Mercedes priority 1, Workhorse priority 2, and Travelers priority 3. I made Mercedes
priority 1 because my new brand was targeted to the Mercedes customers, and I
thought I could make the most money from the higher priced GoatPC M. I made
Workhorse priority 2 because it had the largest customer demand and Travelers priority
3 because it had the lowest demand. I also opened a sales office in San Pablo
to expand my international market. 

Quarter
5

In quarter 5, the quarter 4 balanced scorecard results for
Goat were reported as follows:

·        
Total performance: 77.324

·        
Financial performance: 56.473

·        
Market performance: 98.000

·        
Marketing effectiveness: 77.500

For quarter 4, Goat had the highest total performance
compared to the competition. The next closest competitor was Synergy
Technologies with a total performance of 48. And Goat led the competition in
market share.

The average brand judgment was 75, slightly lower than a
good score of 80. However, GoatPC W was the highest rated brand in the
Workhorse market. GoatPC M tied two competitor brands, Great White and Nadamo, for
the highest rated brand in the Mercedes market. And GoatBook T led Tiger Shark
for the highest rated brand in the Traveler market. Therefore, I thought no
changes were necessary to my low-end brands.

For quarter 4, the average ad judgment was 82, which
indicates the quality of my ads was good. GoatPC W tied with Valema for the
highest rated ad in the Workhorse market. GoatPC M had the highest rated ad in
the Mercedes market. And GoatPC T was a close second with a 75 to Tiger Shark with
a 77 for the highest rated ad in the Traveler market. In quarter 5, I included
a picture of the business traveler in the ad because pictures have a stronger
effect than words.

For quarter 4, the price judgment was 100 for all the
brands in their target market. But, in quarter 5, I changed the prices of the
existing brands. I added a $300 rebate to increase the net profit based on the
idea that many customers do not redeem their rebates. In quarter 5, my pricing strategy
for the Workhorse and Traveler markets was to set the net price (after the
rebate) of the low-end brand $200 below the willing-to-pay price. And I set the
net price of the high-end brands $200 above the willing-to-pay price. My
strategy for the Mercedes market was to set the net price of the low-end brand
$100 below the willing-to-pay price. And I set the net price of the high-end
brand $300 above the willing-to-pay price.

In quarter 5, my strategy was to develop three new high-end
brands, GoatPC W2, GoatPC M2, and GoatBook T2 to create interest among customers
who want more innovative brands. As in previous quarters, I selected new
components and designed ads based on the priority of the needs and wants of the
customer for the market.

When creating the
new brands, I continued my strategy to hire more sales people and insert more
ads than my competitors in the cities with the highest demand and less in the cities
with the lowest demand. And, I hired sales people based on the potential
customer demand in a 12-month brand.  

For sales priorities, I set GoatPC W2 priority 1, GoatPC M2
priority 2, and GoatPC T2 priority 3. And I copied the sales priorities of my
high-end brands to the low-end brands. AI also hired 11 sales people in Sao
Paulo.  

 

Quarter
6

In quarter 6, the quarter 5 balanced scorecard results for
Goat were reported as follows:

·        
Total performance: 109.422

·        
Financial performance: 139.766

·        
Market performance: 99.000

·        
Marketing effectiveness: 89.500

For quarter 5, Goat had the highest total performance among
the competition. The average brand judgment was 90, 87 for the primary Workhorse
segment and 93 for the secondary Mercedes segment. GoatPC W2 was rated very
good and GoatPC W was rated acceptable for Workhorse customers. GoatPC M was
rated acceptable and GoatPC M2 was rated as very good for Mercedes customers. GoatBook
T2 was rated very good and GoatBook T was rated acceptable for Traveler
customers.

For quarter 5, the average ad judgment was 89, 90 for the
primary Workhorse segment and 88 for the secondary Mercedes segment.

For quarter 5, the price judgment for the brands targeted
to the Workhorse market was 100 for GoatPC W and 98 for GoatPC W2. The price
judgment for the brands targeted to the Mercedes market was 100 for GoatPC M
and 93 for GoatPC M2. The price judgment for the brands targeted to the
Traveler market was 100 for GoatBook T and 89 for GoatBook T2. Based on the
price judgment, I did not think any changes were necessary.

In quarter 6, my strategy was to improve my total market
performance rating. I changed the sales priority and target segment priorities
because I noticed that in quarter 5 my market share was the highest for
Traveler and Workhorse. I made Traveler priority 1, Workhorse priority 2, and
Mercedes priority 3. And I copied the sales priorities of my high-end brands to
the low-end brands.

In quarter 6, I improved my high-end brands to keep up with
my competitors, the constant changing demands of the market, and the customer
needs and wants. To upgrade the components, I changed the names from GoatPC W2
to GoatPC W3, GoatPC M2 to GoatPC M3, and GoatBook T2 to GoatBook T3. For
GoatPC W3, I upgraded the 17″ standard monitor to a 19″ standard monitor. For
GoatPC M3, I changed the high comfort keyboard to an expanded keyboard. For
GoatPC T3, I changed the standard keyboard to a high-comfort keyboard. And for
all high-end brands, I improved the case because a distinct look was important
to customers in all markets. In quarter 6, the strategy for the low-end brands
that were generally accepted by customers was to keep them in the market, but
eliminate their ads to save money according to the recommendation in the
quarter 6 story pricing video.

In quarter 6, I did not make any changes to the ad for the high-end
Workhorse brand because it had the highest ad copy judgment in quarter 5. But, I
changed the high-end Mercedes and Traveler brand ads because my competitor’s
high-end Mercedes and Traveler brands had a higher ad copy judgment. Furthermore,
I replaced Link PCs with network/internet to High speed network/internet because
fast and powerful was important to these customers. And for Traveler, I
replaced Rebate with Fastest processor. Also, I kept the same number of ads and
the same number of sales people for the high-end brands because I already had
more than my competitors.  

Quarter
7

In quarter 7, the quarter 6 balanced scorecard results for
Goat were reported as follows:

·        
Total performance: 105.670

·        
Financial performance: 127.761

·        
Market performance: 101.000

·        
Marketing effectiveness: 88.250

For quarter 6, Goat had the best total performance (105.670)
compared to the competition. However, the total performance for Goat was slightly
less than the previous quarter (109.422). Market performance was the only area
that improved slightly.

For quarter 6, the average brand judgment was 92 and the average
ad judgment was 85. The price judgment was 100 for all the low-end brands in
their target markets. The price judgment for the high-end brands varied for
their target markets: GoatPC W3 was 98, GoatPC M3 was 93, and GoatPC T3 was 89.

Goat had the largest market share in all brands with 45%.
The next closest competitors were Constellation PC with 19% and Synergy
Technologies with 18%.

After analyzing the sales in quarters 5 and 6, I noticed a large
decrease of $2,803,474 in the gross margin for the low-end brands. I think this
occurred because I dropped all their ads. I regret that I did not keep some ads,
a little more than the competition, for the low-end brands rather than
eliminating all of them.

Reflecting on my overall strategy for the marketplace simulation,
I regret selecting a laptop instead of a desktop for my first brand in quarter
2. And in quarter 3, I regret having two Workhorse brands; I should have had
one Workhorse brand and one Mercedes brand.