markstrat simulation reflection and gaming strategy

1. MarkStrat Performance
Reflection
MMBA8017 Strategic Marketing, Term 2, 2020
Amit Sati
Student ID: 45692386
Team: Spirit
Industry: Buffalo

2. Table of Contents
1. Simulation Objective & Summary............................................................................ 2
2. Situational Analysis .................................................................................................. 2
2.1 Context .................................................................................................................. 2
2.2 Customers ............................................................................................................. 3
2.3 Company ............................................................................................................... 4
2.3.1 Team Structure ............................................................................................... 4
2.3.2 Segmentation, Targeting and Positioning ....................................................... 5
2.4 Competition............................................................................................................ 6
3. Challenges Faced, Marketing Strategies used & Outcomes ................................. 8
3.1 Competitive Frontal Attacks on our Segment Leadership Position in Sonite Market
..................................................................................................................................... 8
3.1.1 Marketing Strategies Used.............................................................................. 8
3.1.2 Growth Opportunities Explored ...................................................................... 9
3.1.3 Outcomes........................................................................................................ 9
3.2 Constantly Changing Consumer Preference ....................................................... 11
3.2.1 Marketing Strategies Used............................................................................ 11
3.2.2 Outcomes...................................................................................................... 12
3.3 Competitive Attacks on our Segment Leadership Position in Vodite Market ....... 13
3.3.1 Marketing Strategies Used............................................................................ 13
3.3.2 Outcomes...................................................................................................... 13
4. Learnings................................................................................................................. 14
5. Appendices.............................................................................................................. 16

3. 1. Simulation Objective & Summary
The objective of MarkStrat simulation was to increase market share, profitability and
share price index for our company in the industry. Examining external factors, company
capabilities, product portfolio and impact of decisions made were vital to frame strategies.
Annual marketing decisions had to be aligned with the company's targeted future
positioning in the market, carefully observing evolving market expectations and
competitive positionings.
MarkStrat simulation was a great learning experience for me, it provided many
opportunities to learn about developing sustainable marketing strategies. Working in a
group environment helped in gaining knowledge from the shared pool of expertise vreated
by each member’s diverse professional experiences. The biggest challenge faced during
this simulation was to coordinate virtually within the team because of COVID-19 breakout,
which was addressed by our team through constant flow of communication using
technology such as emails, group video calls and online shared journal.
2. Situational Analysis
2.1 Context
a. Opportunities and Key Trends for Growth: Industry is well supported by Socio-
Cultural, economic and political factors, but technological evolution remained the
most important factor. Product innovation to serve unique customer needs was
crucial to drive growth for businesses. Using effective marketing strategies to
encash customer confidence was imperative for businesses to survive the
competitive market (PESTEL - Appendix 5.1, Industry Lifecycle - Appendix 5.3).
b. Industry Dynamics: Because of High Buyer power, businesses had to create
unique & sustainable competitive positioning in the fairly evolved Sonite market.
Research & Development to find out and address specific segment needs were

4. valued by customers and investors, especially in the Vodite market. (Using Porter 5
Forces - Appendix 5.2, Industry Lifecycle - Appendix 5.3)
2.2 Customers
Customers are medium to high technologically evolved and keenly evaluated products
for their needs to get maximum value for money (Segment needs - Appendix 5.12).
Customer needs and income levels influenced the buying decisions in the market, price
remained highest in relative importance of product characteristics. Proactive product
improvements for the changing customer needs (Figure 1 & Figure 2) were expected to
achieve success in the market.
Figure 1: Sonite Perceptual Map – Economy X Performance Evolution

5. Figure 2: Vodite Perceptual Map – Economy X Autonomy Evolution
2.3 Company
2.3.1 Team Structure
Within our team we bring in the expertise in specific areas to take few decisions
individually and some collectively (Figure 3). Our objective was to utilise our existing
positioning in the Sonite market and grow rapidly in the new Vodite market. Taking risks
and exploring unique ideas were most valuable assets of our team. Decisions such as,
borrowing loan higher than our total budget in period 2 to venture in the new market was
unanimously accepted, which eventually become our most fruitful investment.

6. Figure 3: Team Structure
2.3.2 Segmentation, Targeting and Positioning
Market is divided into two categories; Sonite & Vodite. Customer Segments in both
categories possess different need levels for important attributes, such as Performance,
Spending capability, Price sensitivity & growth potential (Appendix 5.12). We approached
different segments with different products and positioning considering individual segment
requirements (Figure 4).

7. Figure 4: Company Segmentation, Targeting and Positioning Chart
2.4 Competition
At the start of simulation, all four companies had equal opportunities to lead the market
by gaining consumer confidence. Our company had the highest share of units sold in the
market at the start of simulation but concentrated to only two segments. All competitors
evolved in the market according to strengths and weaknesses (Figure 5). Our team’s

8. ability to evolve with the market resulted early mover advantage in Vodite categor. This
also helped us to increase net contribution because of uncontested Vodite market,
recapture Sonite market and sustain share price index growth.
Figure 5: Competitive Landscape Evolution

9. 3. Challenges Faced, Marketing Strategies used & Outcomes
3.1 Competitive Frontal Attacks on our Segment Leadership Position in Sonite
Market
At the start of simulation, we were segment leaders in Savers and Shoppers customers
with our products SOFT & SOLO in respective segments. We faced aggressive attacks
by competitors in the Sonite market at different stages of simulation as they launched
new products and improved existing products. Competitive product attributes were closer
to optimum customer requirements, whereas the lack of proactive R&D investment in our
existing products made our products irrelevant to customer needs.
3.1.1 Marketing Strategies Used
a. Reactive Confrontation Strategy
To defend our leadership position (using GE-Mckinsey Matrix - Appendix 5.9), the
strategy to focus on product Improvement in “attractive segments with higher
internal expertise” was selected. Our Company had high expertise in SOFT &
SOLO products within the Sonite market. Both of these segments presented
medium to high market attractiveness as segment growth forecasts were constant
for next 5 years (slightly higher for Savers segment). New R&D projects were
launched (SOFT- Period 4, SOLO – Period 5) to improve the attributes of these
products. Commercial team members were also increased simultaneously to
improve distribution (Product Evolution in Sonite Market - Appendix 5.10.1).
b. Strategic Withdrawal
As part of “Flanker Strategy” we launched SOLT product for Shoppers segment
with higher attributes in Period 4. This product was launched using a research
project earlier made for other segments. However, this product failed to gain
market traction. (Using GE-Mckinsey Matrix - Appendix 5.9) This product was in a
medium attractive market but with lower internal expertise, eventually in Period 6
we decided to withdraw this product.

10. 3.1.2 Growth Opportunities Explored
Using ANSOFF Matrix & SWOT analysis (Appendix 5.7.1 & 5.8.1), following opportunities
were presented in Period 2 as “Market Expansion Strategy” to increase market share and
profitability simultaneously.
- Challenger position in new target Sonite segments: In period three, we
launched SORT product to High Earners & Professionals segments to increase
profitability. We used this product as a challenger in these segments. (Product
Evolution in Sonite Market, Appendix 5.10.1).
- R&D investment in Vodite products and launch before competitors: Research
& Development opportunity for a new product market (Vodite) was available after
the first period. We invested in Vodite product R&D to gain early mover advantage
by targeting high market share. (Product Evolution in Vodite Market - Appendix
5.10.2).
3.1.3 Outcomes
a. Re-establishing Segment Leadership for existing products
As we adopted reactive strategies in the Sonite market, our unit sales market
share declined initially, but we managed to increase our unit sales share by end
of simulation with the growth of the market (Figure 6).
Figure 6: Retail Sales Sonite Market

11. Both our segment leader products, SOFT & SOLO were able to regain the
revenue market share position by the end of simulation (Figure 7).
Figure 7: Market Share Firm by Product - Sonite
b. Market Leadership in New Market
Exploring a unique opportunity to launch a new product in a new market worked
as “Blue Ocean Strategy” for us. While competitors were focused to gain higher
market share in the Sonite market, we became first to launch in the Vodite Market
without competition for 3 consecutive years (Figure 8). This helped us maximise
profits from the new market by adopting the “Skimming Pricing” strategy.
Figure 8: Retail Sales Vodite Market by Firm

12. c. Sustainable Share Price Index Growth
By securing high market share in the profitable new Vodite market and regaining
market share in the Sonite market helped us to achieve constantly growing Share
Price Market Index in the industry (Figure 9).
Figure 9: Share Price Index Industry Performance
3.2 Constantly Changing Consumer Preference
Semantic Scale Ideal Value and Shopping Channel preference for both market and their
segments evolved very rapidly (Appendix 5.11). Investing frequently in R&D projects with
the change of ideal values wasn’t feasible because of budget restrictions.
3.2.1 Marketing Strategies Used
a. Perceptual Positioning Optimisation: Using Multidimensional Scaling &
Semantic Scales reports, we optimised Semantic scales perceptual objectives to
effectively target evolving customers. Increase in Advertising Research spends
were made to accommodate the effectiveness of advertising.

13. b. Distribution Optimisation: Using distribution panel data, commercial team
members were increased and optimised for effectiveness & increased
accessibility.
3.2.2 Outcomes
Perceptual Positioning of products improved and we were able to effectively target the
customer segments without additional research and development investments every year
(Example: Figure 10).
Figure 10: Brand Perception Improvement using Perceptual Targeting - Period 7
With the help of distribution optimisation we were able to improve efficiency of our
distribution channels (Figure 11). The lost sales share because of distribution
continuously declined after period 4.
Figure 11: Units Sold VS Lost sales due to Distribution

14. 3.3 Competitive Attacks on our Segment Leadership Position in Vodite Market
After we launched SEVO product in the Vodite market in Period 3, we enjoyed a market
leader position without competition till Period 5. Product attributes of SEVO were to target
Innovators & Adopters segments. Competitors launched products in Period 6 using
Frontal & Flanker Attacks strategies. This impacted our market share negatively.
3.3.1 Marketing Strategies Used
a) Proactive Confrontation
We noticed that competitors were investing in Vodite market R&D starting from
Period 4. We also anticipated a huge growth in the Followers segment after Period
5. To reduce the impact of competitive attacks, we invested in Vodite Followers
Product R&D in Period 5 and launched “SEVN” product in Period 6 (Appendix -
5.10.2 Product Evolution - Vodite).
3.3.2 Outcomes
Effective Fortress defense strategy helped us to maintain the highest market share in the
Vodite market even after competitors challenged our position. As SEVO market share
declined because of declining share of the Innovator segment in the Vodite market, we
were able to achieve growth in SEVN market share. At the end of Period 8, we managed
to achieve market share leadership in Vodite market by implementing Innovation S-Curve
strategy (Figure 12).
Figure 12: Vodite Retail Sales (Company) & Market Share by competition

15. 4. Learnings
a) Invest to improve “Star products” proactively: In Growth markets, one of the most
important strategy to achieve sustainable competitive advantage is to proactively invest
in existing best seller products before competitors challenge your position. If we have to
play the simulation again, in the second year, I would invest in R&D of SOFT along with
Vodite R&D. Then, invest in SOLO & new product R&D for other segments in the third
year. Lack of R&D in Sonite before Period 4 made our star products become question
mark (Figure 13).
Figure 13: Company BCG Portfolio Analysis
b) Invest in Market Intelligence: We missed many opportunities to improve our
marketing strategies because of not ordering right market research studies in advance.
Learning the behavioral changes in customer segments before it impacts our product
Lack of R&D caused
market share loss
R&D investment
increased
market share

16. attractiveness could help in formulating long term strategies, and create customer centric
products or services. Understanding how competitors are changing in the market using
market research reports (investing their budget in R&D, advertising, channels etc.) also
helps in creating marketing strategies that could give us sustainable competitive
advantage.
For example, we launched the Vodite R&D project without ordering Conjoint Analysis, the
research project was simply based on guess work and approximation of attributes. SEVO
lacked in Autonomy perceptual map because of difference in optimum requirements and
R&D features (Figure 14).
Figure 14: Perceptual Map Vodite Period 7
We also missed many opportunities to effectively target perceptual objectives in
marketing mix because we didn’t order Sonite Conjoint Analysis, Semantic Scale report
& Multidimensional scaling reports.
We are 10 points away in autonomy, at the
time of launch we were 8 points away

17. 5. Appendices
5.1 PESTEL Analysis

18. 5.2 Porter 5 Forces
5.3 Industry Life Cycle - Period 0

19. 5.4 Conjoint Analysis
5.4.1 Conjoint Analysis Period 1
Optimum
attribute levels
Year 1
Design Display Power
Price
(important for
all) Battery Features
Explorers 4-5 34-40 100 327 not available not available
High Earners 10 16-22 75 373
Professionals 9 28 67 335
Shoppers 8 20-26 61 305
SOLO 6 11 38 315
Savers 7 15 21 177
SOFT 4 8 15 220
5.5 Perceptual Map
5.5.1 Perceptual Map Sonite Period 1

20. 5.5.2 Perceptual Map - Sonite Period 6

21. 5.6 Competitive Perceptual Map
5.6.1 Competitive Perceptual Map Period - 1

22. 5.7 ANSOFF Matrix
5.7.1 ANSOFF Matrix Period 1

23. 5.8 SWOT - Strategic Options
5.8.1 SWOT - Period 1

24. 5.9 GE-Mckensey Matrix

25. 5.10 Product Evolution
5.10.1 Product Evolution - Sonite

26. 5.10.2 Product Evolution – Vodite

27. 5.11 Semantic Scales Evolution
A) Sonite
B) Vodite

28. 5.12 Segment Needs