Transcript Product - College of Business and Public Policy

M A R KE T I N G
University of Alaska-Anchorage
M A N A G E M E N T
College of Business & Public Policy
Marketing ManagementSemester 1 * 2008
Course Overview
The Capstone Simulation
 Structure & Assignments
 Expectations & Grading
M A R KE T I N G
Professor Ed Forrest
M A N A G E M E N T
• Telephone:
– (O)786-4161
– (H) 694-4674
• Email:
– [email protected]
• W3site: http://www.cbpp.uaa.alaska.edu/afef/
M A R KE T I N G
M A N A G E M E N T
After
Graduation?
M A R KE T I N G
M A N A G E M E N T
What JOB?
M A R KE T I N G
M A N A G E M E N T
Do
Poorly
in this
course
and ….
Research
A
BA460
c
History
B
Gerbil Studies
A
Philosophy
A
“Yeah- she’s
the one who
got a C
in BA460”
M A R KE T I N G
M A N A G E M E N T
M A R KE T I N G
M A N A G E M E N T
To date -your
“study” of
marketing
has been
piece-meal
and in
isolation!
M A R KE T I N G
M A N A G E M E N T
OVERARCHING
COURSE OBJECTIVE
To “call-upon,”
integrate & apply
all the marketing,
finance &
business
knowledge you
have accrued to
date!
M A R KE T I N G
Course Format
M A N A G E M E N T
Lecture-Learning
M A R KE T I N G
M A N A G E M E N T
Find-Facts
Store Facts
Spit facts
‘
Superficial
short-term
knowledge
M A R KE T I N G
M A N A G E M E N T
UltimatelyReal Learning Occurs
Not from parroting
information gleaned
from books &
lectures!
….But from the
consequences of your
own actions
M A R KE T I N G
M A N A G E M E N T
M A R KE T I N G
Course Format
M A N A G E M E N T
Capstone
Business
Simulation
M A R KE T I N G
M A N A G E M E N T
THE CAPSTONE SIMULATION
Most widely used Business –
Simulation Program in the
World
• Adopted by major Fortune
500 companies - General
Motors, General Electric,
Honeywell, Dell, John Deere,
Citibank, Microsoft, Alcoa, BP,
Allstate, Samsung, Goldman
Sachs…
• Used by 100’s of colleges
around the world
• w/ ~50,000
students/semester
M A R KE T I N G
M A N A G E M E N T
And How Have
We Fared in
this WorldWide
Competition?
M A R KE T I N G
M A N A G E M E N T
•
2001 Top Ten Teams,
World-Wide, for Round 8
Top Ten Teams, World-Wide, for Round 8
by success measurement
There are currently 940 active teams that have played Round 8.
For a team to make this list: Cumulative Profits above 0 Overall Market Share (in dollars) greater then
5.0% Asset Turnover less then 8.0
Profit for Round 8
Round 8 - Mean - $ 25,324,003
•
Top Ten Active Teams Professor School/Course Simid Team Value
•
1 Dr. Minu Afza College of Business - Bloomsburg University
93 481 Business Policy & Strategy CAP1742 Digby $ 238,235,245
2 Mr. Bill Gardner Penn State University -Fayette Campus
Contemporary Business Seminar CAP1513 Andrews $ 193,853,427
3 Dawn DeTienne University of Colorado at Boulder
Senior Seminar CAP1656 Andrews $ 184,258,599
4 Prof. Howard Feldman University of Portland
Managerial Decisions and Policy-Undergrad B CAP1787 Erie $ 181,422,390
Dr. Ed Forrest University of Alaska
5
Marketing Management CAP1611 Baldwin $ 163,281,864
6 Dr. Eric Wiseman University of Colorado at Boulder
Business Senior Seminar CAP1818 Chester $ 157,930,382
7 Dr. Murrow Drury College
Strategy and Policy Formulation CAP1838 Erie $ 149,235,238
8 Dr. Pettus Millikin University
Business Policy CAP1748 Baldwin $ 147,967,873
9 Doug Mayer Hartwick College
Management VII-secA CAP1811 Digby $ 137,339,216
10 Dr. Bruce A. Schooling Point Loma Nazarene University
Strategic Management CAP1794 Digby $ 121,289
th
5
M A R KE T I N G
M A N A G E M E N T
2003 Top Ten Teams,
World-Wide, for Round 8
•
For a team to make this list: Cumulative Profits above 0 Overall Market Share (in dollars) greater than 6% Asset Turnover less then 8.0
Your class was ranked: with 711 Capstone ® teams completing round 8 by Apr 12, 2003. teams per game of 6 Category: All
•
URL: http://www.capsim.com/prof/viewtopten.cfm?round=8&simid=C4806&version=K
Date/Time: 04/12/2003 10:07:35
eNote:
Text:
Cumulative Profit for Round 8 - Mean - $ 125,355,000
Top Ten Active Teams Professor School/Course Simid Team Value
1 natalie marsh Strayer University
Business Policy & Strategic Planning C4779 Baldwin $ 459,411,986
2 John Hall University of Florida
Global Strategic Management I2MBA 2002 C4923 Baldwin $ 386,472,583
3 natalie marsh Strayer University
Senior Seminar - Business Administration C4778 Erie $ 382,697,422
4 Peter Stanwick Auburn University
Strategic Management C5095 Chester $ 353,185,127
5 John Pearce Villanova University
Policy Administration C5033 Ferris $ 348,535,130
6 Gavin Fox Georgia Southern University
BUSINESS SIMULATION C5041 Digby $ 343,761,703
7 Shirley Schooley Birmingham-Southern College
Strategic Management Senior Project Course Sec B C5356 Digby $ 341,865,002
8 natalie marsh Strayer University
Senior Seminar - Business Administration C4778 Ferris $ 339,568,171
•
th
9
9 Edward Forrest University of Alaska
Marketing Management C4806 Chester $ 333,620,198
10 Donald Kreps Kutztown University
mba capstone C4797 Digby $ 327,188,363
M A R KE T I N G
2005 M A N A G E M E N T
#1
M A R KE T I N G
M A N A G E M E N T
2006-
5th
M A R KE T I N G
M A N A G E M E N T
and
th
8
M A R KE T I N G
M A N A G E M E N T
Last Year 3rd
M A R KE T I N G
M A N A G E M E N T
SHAKE UP IN SENSOR INDUSTRY
Management Teams Fired
“After poor results, lackluster sales
and angry customer reports………..
New dynamic leadership teams
needed to take industry into the
future!”
M A R KE T I N G
M A N A G E M E N T
M A R KE T I N G
M A N A G E M E N T
You Da’
Boss
of
~ $100m
Corporation
M A R KE T I N G
Your Product Line:
M A N A G E M E N T
SENSORS:
SENSOR INDUSTRY ANALYST PROJECT
ONGOING GROWTH
Sees the next 8 years as consistent growth. All market
segments increase at a nice “clip,” according to market
analyst.
“I see the entire
market growing at
around 14% or 15%
per year. The High
Tech market alone will
be growing at a
whopping 16%.”
70000
60000
50000
40000
30000
20000
10000
I hope those
companies out there
are ready for that kind
of expansion!”
0
Year Year Year Year Year Year Year Year
1
2
3
4
5
6
7
8
M A R KE T I N G
M A N A G E M E N T
YOUR JOB
• Take on key
management
positions w/in your
corporation
• Make the myriad of
intertwined
decisions
necessary to
create, produce &
successfully
market your
products…
M A R KE T I N G
You will engage in:
M A N A G E M E N T
• Marketplace analysis
– incl: situation analysis, competitor
analysis, SWOT analysis & performance
assessment.
• Strategic planning
– develop your corp. mission, vision, core
competencies & competitive advantage
• Cross functional integration
– of Marketing w/ R&D, Production, HR &
Finance
• Tactical execution of your decisions
- measured against competitors– in class &
worldwide…
M A R KE T I N G
The Big Picture
Situation/SWOT
Analysis
M A N A G E M E N T
Strategic
Planning
•Company
•Consumers
•Competitors
•Conditions
• PEST
Growth &
Competitive
Strategies
Functional
Integration
Functional
Integration
Marketing
Performance
Assessment
 Profits
 Mrkt Share
 ROA
R&D
 ROS
Production  ROE
 Asset T/O
 Stock
HR
 Mrkt Cap
Finance
M A R KE T I N G
M A N A G E M E N T
You are completely
responsible for:
Planning, implementing & controlling
your marketing strategy
Product
Place
Target
&
Position
Price
Promotion
M A R KE T I N G
M A N A G E M E N T
The Key Lesson for
Marketing Majors
In order to
successfully execute
your marketing
decisions/strategy…
you must be in
alignment w/ every
decision made in every
other contributing
component of the
corp./organization
M A R KE T I N G
M A N A G E M E N T
Must Coordinate Decisions w/
all Functional Areas
R&D
Production
Marketing
Finance
HR
Marketing Must
Coordinate w/:
Production
R&D
Marketing
Finance
R&D-re:
 Product
Development
 Quality
 Positioning
HR
Marketing Must
Coordinate w/:
Production
R&D
Marketing
Finance
Production- re:
 Market segment
growth- Buy or
sell capacity
 Sales forecastsSchedule
production
HR
Marketing Must
Coordinate w/:
HR- re:
 Levels of
personnel
training &
support
Production
R&D
Marketing
Finance
HR
Marketing Must
Coordinate w/:
Production
R&D
Marketing
Finance
Finance-re:
 Overall
projections
of sales,
margins &
profits
HR
Marketing Manager
must become onew/ Relationships betw





Price & demand
Price & margin
Promotion budget &
awareness
Sales budget &
accessibility
A/R policy & demand
MARKETING MANAGERS
SIMULATION SPREADSHEET

Set price of your products
in the marketplace



Set the sales forecast
for our products
Set Credit Policies AR/AP
Build customer awareness
through promotion

Establish a sales force and
distribution channels
•Marketing also
selects media
vehicles &
message weights
• AND
determines
composition of
sales/distribution
staff ..and
allocation of
their efforts by
segment & Brand
R&D MANAGERS
SIMULATION SPREADSHEET

Establish product positioning to meet customer demand



Build quality & reliability (MTBF)
into products
Create new products
Ensure age of product meets customer demands
PRODUCTION MANAGERS
SIMULATION SPREADSHEET


Schedule production for each line
Buy or sell capacity of product lines


Purchase machinery to automate our facilities
Establish your workforce complement
M A R KE T I N G
Human Resource
Managers Responsible for:
M A N A G E M E N T
• Recruitment,
Hiring, Training &
Firing of all labor
• 2 groups:
– Assemblers
– Technicians
Wages
Benefits
SIMULATION SPREADSHEET
M A R KE T I N G
Finance Managers Responsibilities:
Acquire Capital
M A N A G E M E N T
–Issue Stock
–Short Term Debt
–Issue Long Term Bonds
Set Dividend
Retire Long Term Bonds
Retire Stock
• Responsible for Emergency
Big AL
Loans
The Loan Shark
M A R KE T I N G
FINANCIAL MANAGERS
M A N A G E M E N T
SIMULATION SPREADSHEET
BA460 Marketing Management
Spring 2008
st
1 Reorganize
Company:
& Re-allocate
responsibilities:





Marketing
Production
R&D
Finance
HR
M A R KE T I N G
M A N A G E M E N T
3 CoCEO’s
M A R KE T I N G
M A N A G E M E N T
Incorporate- register w/ your assigned
Capstone:
Sim ID#’s:
C23256
or
C23257
M A R KE T I N G
M A N A G E M E N T
Begin
Business Plan R&D
 Capstone-Developing a Business Plan
 SBA-Writing a Business Plan
 Business Plan Software, Samples, and Strategy
 Center for Business Planning
M A R KE T I N G
M A N A G E M E N T
(I) Mission & Vision Statement
(II) Situation Analysis
Market Structure:
•Consumer Segments & Product
Attribute Preferences
•Consumer Pricing & Positioning
Expectations
•Consumer Demand
Company Situation
•Financials
•Production
•Marketing
(III) SWOT Analysis
(IV) Strategic Planning
Growth & Competitive Strategies
Functional Strategy – Objectives & Tactics
• Marketing
• Production
• Financial
(V) Tactical Decisions FY2009 ……….
Situation & SWOT Analysis
Company
Initial
Situation
Consumer
Competitors
Conditions
Situation Analysis
Team Member Guide- Chapter 4
Help > Managers Guide > Situation Analysis
Situation Analysis Goals:
1. Discern marketplace
dynamics
2. Calculate base info
necessary for strategy
development
3. Become familiar w/ The
Capstone Courier
To Do List:

Download starting
conditions …

Open Capstone.xls -- print
Capstone Courier &
Annual Report.

Begin your Analysis of the
Situation
Situation Analysis
Strategic
Planning
Marketing Strategy
P’s
The Marketing Mix:
•Company
•Consumers
•Competitors
•Conditions
• PEST
Growth &
Competitive
Strategies
Product Place
Target
Market
Price Promotion
•Political
•Economic
•Socio-cultural
•Technological
Conditions
•Market Potential
(size, growth rate)
•Customer
Behavior (needs &
Customers
wants/ segmentation,
price sensitivity)
•Industry
Structure
Analysis
(entry/exit barriers,
buyers, sellers,
substitutes)
Company
•Economic
Analysis
•Competitor
Response
Profiles
(capabilities,
current and future
actions)
Competitors
(margins,,
profitability, Fin.
Structure)
•Company,
goals, resourcesproduction, HR…)
M A R K E T I N G
SWOT Analysis Identifies:
M A N A G E M E N T
S
W
O
T
Things the company does well.
Internal
External
Things the company does not do well.
Conditions in the external environment
that favor strengths.
Conditions in the external environment
that do not relate to existing strengths or
favor©South-Western
areas ofCollege
current
Publishingweakness.
Specifically…determine
Company
Consumer
Competitors
Conditions




Strengths & weaknesses w/in & across all
functional areas; Profile of current product
portfolio…
How market is segmented; relevant factors
that influence consumer demand &
purchasing decisions
Your competitors relative market
positions..
Macro-E considerations especially
technological trends …
Portfolio Analysis
Which Brands should
receive more/ less/
no investment-Based
on:



Product Position/
Potential
Profitability/ Margins
MarketGrowth/MarketShare Matrix
Boston Consulting Group’s
Growth-Share Matrix
STARS
Product-Market
Growth (%)
High
Low
PROBLEM
CHILD
CASH COWS
10x
4x
High
DOGS
2x 1.5x 1x
Relative
Market Share
.5x
Low
.2x .1x
Situation Analysis
- Resources
Capstone
Exercises
Perceptual
Map
Demand &
Capacity
Analysis
Consumer
Report
Key Questions Answered
How technology will reshape
customer expectations over
next eight years
How demand will increase &
impact your investments in
Capacity
How customers perceive
you …and your competitors
Situation
Analysis Guides:
•Margins
•Working Capital
•Financial
Structure
•Wealth Creation
•Productivity
•Customer
Satisfaction
Capstone
Exercises
Key Questions
Answered
Perceptual
Map
How technology will
reshape customer
expectations over next
eight years
Demand &
Capacity
Analysis
How demand will increase
& impact your investments
in Capacity
Consumer
Report
How customers perceive
you …and your
competitors
P E R C E P T U A L
M A P
Size
19
18
2
17
4
16
15
1
14
13
3
5
12
11
10
9
8
7
Drift Demonstration
PERCEPTUAL
MAP
6
5
4
3
2
1
0
1
2
3
4
5
6
7
8
9
10
11
12
13 14
15
16
Performance
Cheaper too-$.50 drop
in price/year
Plot the drift of
each segment
MAP
circle as
simulation
proceeds thru 8
rounds
 ("Fine Cut"
circles have a
radius of 2.5
units,
 "Rough Cut"
circles have a
radius of 4 units)

PERCEPTUAL
Capstone
Exercises
Key Questions
Answered
Perceptual
Map
How technology will
reshape customer
expectations over next
eight years
Demand &
Capacity
Analysis
How demand will increase
& impact your investments
in Capacity
Consumer
Report
How customers perceive
you …and your
competitors
Key Demand
Consideration:


Overall market
growing @ ~
14%/yr
“Average” company
should/could double sales in 6 years
Key Capacity
Consideration:
DEMAND ANALYSIS
This analysis examines growth of customer
demand as simulation proceeds thru 8 rounds.
For this exercise you need the Market
Segment Analysis pages (pages 5 - 9) of
The Capstone Courier- Round 0
W/in Segment Statistics-Use the
Industry Unit Demand - top left corner
Traditional Statistics
Total Industry Unit Demand 7,387
Actual Industry Unit Sales 7,387
Segment % of Total Industry 32.4%
Growth Rate 9.2%
Page 5
capstone
Courier
7387 X 1.092=8067
7387
Demand Analysis
Page 30 TMG
CAPACITY ANALYSIS



This exercise requires the Production
Analysis (page 4) of The Capstone
Courier.
The analysis asks:
What Would it Cost to Double Capacity;
What Would it Cost to Maximize
Automation?
CAPACITY ANALYSIS
To successfully manage your company-need to know the cost of increasing the
number-of- units you can manufacture.
Need to decide how best to increase
output:
1. Increase manufacturing capacity; or
2. Increase automation (which allows you
to profitably run a line on overtime).
CAPACITY ANALYSIS
CostDC= (# unitsDC) * ($6
Floor
+ $4 autopt*Auto-level)
Capacity/Plant & Equipment Analysis (all capacities and dollars in 1000’s)
Segment
Trad
Low
High
Perf
Size
Product
Your Industry
Name
Capacity Capacity
1,800
(X 6)
Overtime
Capacity
Firm
3,600
Automation
Level
Cost to
Add
Capacity
New
Capacity
Level
4
3.0
$16,200
$39.6m
2,700
Cost to
Increase
Automation
Industry
(X 6)
$43.2m
$54,000
#units * ($4 *(10 - Current Auto-level)= Cost
INTERNAL
W
S
O
T
EXTERNAL
What are the S & W’s
w/ respect to your
company’s production
lines capacities &
efficiencies
•
•What are the O & T’s
w/ respect the nature,
direction and
magnitude of
consumer demand
Capstone
Exercises
Key Questions
Answered
Perceptual
Map
How technology will
reshape customer
expectations over next
eight years
Demand &
Capacity
Analysis
How demand will increase
& impact your investments
in Capacity
Consumer
Report
How customers perceive
you …and your
competitors
Your Consumers
Consumer Buying Criteria
Determinant Attributes
KEY
POINT
Strive to meet
customers
preferences on
top two criteria
Don’t spend
limited
resources
(time & $)
meeting
lesser
concerns
•Low End customers seek old, simple & cheap tech.
•Performance customers seek advanced
tech., w/ high reliability & performance
•Traditional customers seek proven
products using current technology
•Size customers seek
advanced sensors that
focus on small size
•High End customers seek
cutting-edge sensors in
both size & performance
INTERNAL
S
W
O
T
EXTERNAL
Customer Satisfaction
Evaluation Scheme:
Attribute
Poor
Price
Top1/3
Reliability Bttm1/3
Age
+1yr
Position
+1.5 units
Awarenes <50%
s
Access
<50%
Overall
How Rate
Fair
Mid1/3
Mid1/3
.6-1yr
.6-1.5
50-80%
Good
Bttm1/3
Top1/3
~.5yrs
w/in .5
80%+
50-80%
80%+
On Top 2
Attributes
INTERNAL
W
S
From results… can
determine Strengths &
Weaknesses of current
marketing mix:
Product - Positioning; age &
quality (reliability)--
O
T
EXTERNAL
Current levels of support w/
respect to:
• Promotion
• Distribution (accessibility)
• Pricing - policy/competitiveness
Evaluation results
Classifications:

Compare your results w/ the
December Survey…
Wherein:
 <25 = Poor
 26-50= Fair
 50+ = Good
 = good
 = fair
 = poor
Finally-evaluate your Current
Financial Structure and levels of
success
Key Measures
 Cumulative Profits
 Market Share
 ROA
 ROS
 ROE
 Asset Turnover
 Stock Price
 Market Capitalization
M A R KE T I N G
M A N A G E M E N T
Questions?