Markstrat Final Management Report

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FINAL MARKET CONDITIONS
Sonite Market has turned out to be a mature market from a growth market at the end of the simulation where there are 4 firms with 15 different brands. As shown below on chart 1 the profitability decreases in mature market. The same happened for Markstrat, price war took us low margins. Chart 1

Vodite Market has turned out to be a growth market from a new market in the last periods where all 4 Sonite firms could enter with totally 8 different brands.
Each firm’s market share is as below on Table 1 and trends in Graph 1; Table 1
FIRM
TOTAL P0 P1 P2 P3 P4 P5 P6 P7
A 25% 24% 18% 18% 24% 27% 33% 37%
E 25% 24% 32% 22% 27% 31% 25% 27%
I 25% 23% 21% 23% 23% 18% 15% 12%
O 25% 29% 29% 37% 27% 24% 27% 24%
SONITE P0 P1 P2 P3 P4 P5 P6 P7
A 25% 24% 18% 21% 25% 26% 29% 32%
E 25% 24% 32% 25% 25% 23% 27% 26%
I 25% 23% 21% 26% 25% 25% 23% 25%
O 25% 29% 29% 27% 25% 26% 22% 16%
VODITE P0 P1 P2 P3 P4 P5 P6 P7
A ‐ ‐ ‐ 0% 20% 28% 40% 41% E ‐ ‐ ‐ 0% 35% 51% 22% 28% I ‐ ‐ ‐ 0% 14% 3% 4% 1% O ‐ ‐ ‐ 100% 31% 19% 34% 30% MARKET SHARE
Graph 1
After 6th period results, the revenues and contribution margins of each firms are shown in Appendix 1. Firm A is the leader of the market in terms of overall market share, revenues and net contribution. SUCCESS IN ACHIEVING OBJECTIVES

Main objective of our Firm A in Sonite market was to create sustainable profit to satisfy sustainable growth with high margins, market share and enough budgets for Vodite Entry. In order to achieve our objective, inspired by Porter’s focusing on competition and Ohmae’s Consumer focus, our strategy was to differentiate our brand & upgrade our products based on our target segments’ needs. To achieve our objective, although we had a new market Vodite where there was a huge opportunity of being a market leader by spending considerable amount of budget, we allocated some of our reserves to Sonite market as it was a much bigger market compared to Vodite. Mainly, we focused on customer expectations. From conjoint analysis and semantic scales marketing research data, we analyzed the customer perceptions, ideal levels for product attributes, competitors’ product features and modified our existing products or developed new products. We tried to be the product leader by offering the best product to each segment targeted. We targeted SAMA for Others, SANA for Singles, SALT for Pros and Hi Earners and SALC for Buffs. Meanwhile we did cost reduction projects for all brands to use cost advantage and sell with higher margins. We set the price mostly again based on customer perceptions and tried to lower the price or keep price increase at feasible levels. Based on the distribution panel surveys, we allocated the sales force to sales channels according to the shopping habits of segments and total sales figures. First we decided on the total number of the sales force to be allocated to brands and then by weighted average, we divided them in between the distribution channels as shown on Appendix 2. We also continued to invest our budget on advertisement in Sonite, by not ignoring our penetration strategy with heavily advertisement and sales force for the new market Vodite. In our initial management report as our Vodite market strategy, we stated that our main objective was to be the market leader by being Pioneer comparing our R&D budgets with our competitors. But firm “O” with the highest budget and targeting lowest product features entered market in the 3th period. Because of our budget constraint and better product improvement target we were late but we did not give up. With other two firms we decided to use the advantages of being “Early Followers”; such as rather than being replacement or substitute for the pioneer, we choose to position ourselves as variety enhancers with different product features. Based on market...
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