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MarkStrat Simulation

Group Assignment -1
“Marketing Strategy”

Team - Natkhat

Submitted by: Submitted to:

Group Members: Prof. Jayesh Aagja
Kush Shah 191232
Prachi Garg 191237
Raj Mahor 191242
Shashwat Shrivastava 191248
Shiyuli Saxena 191251

Batch: MBA – FT (2019-2021)

Institute of Management, Nirma University

Date of Submission: 15th January 2020
Introduction

MarkStrat is a world of simulation that works on developing several marketing strategies and plans
for various consumer products. There are basically two types of products: Sonite and Vodite . As a
brand, our goal is to maximize the stock price index (SPI) of our company.
The SPI is influenced by several factors:
• Net contribution
• Market share of the product (value and volume).
• Advertising effectiveness
• Future growth opportunities.

There are several key factors that must be considered in each strategic decision, such as:
• Target customers segment
• Distribution network
• Product innovation (R & D).
• Marketing and advertising strategies.
• Product performance
• Production costs
• Customer base

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 Customer Segment
One of the important factors in marketing any product is the customer segmentation and their
targeting. There are five kinds of customers: Explorers, Shoppers, Professionals, High Earners and
Savers. We have observed that Professionals and High earners have more inclination towards the
brand NOVA and the quality of the product whereas Savers and Explorers are price sensitive and
prefer NOON. By analysing the market segmentation, we have observed that consumer segment
growth rate over the next five years is as follows:

Distribution Channel
We have a total of 3 distribution channels at our disposal:
1. Speciality Stores
2. Mass Merchandisers
3. Online Stores.
This is an important factor in our strategy as this is the medium by which our products will reach to
the customers. For NOVA, the major distribution is done through speciality stores and online stores,
which cater to the vast market. Further, NOON is sold more through Mass Merchandisers who focus
more on high volume and low price, keeping the specifications constant within the market.

Research and Development

R&D will be an important part of our marketing strategy. Since it is a perfectly competitive market,
so to create a competitive advantage, our focus will be on innovation and research to bring the cost
down and increase quality. The R&D department will also work on building new products in the
Sonite Segment which will be launched in the market in upcoming rounds.
R&D would play a key role in launching new products early and gaining the first mover advantage
in the market. This will thus help us in gaining the market share and building upon our SPI.

Advertising
Advertising helps in making customer aware about the benefits of the products and generating
awareness. It not only enhances the visibility of new products, but also reminds customers of existing
products. Advertising also includes innovative strategies for promoting the product and changing the
mind-set of the customer. Thus our focus has been to build a strong advertising budget to increase the
revenue and thus maximizing advertising ROI.
We have focused on advertising the high-end product NOVA and have played on gaining the
competitive pricing in NOON to increase the market share.

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Objectives for next 10 years
1. To obtain the major market share in the Sonites segment and thereby becoming the market
leader.
2. Launch new Vodites & Sonites product in the market.
3. Brand Leadership status for NOVA in terms of retail sales unit & volume.
4. Enhance the brand awareness of all products.
5. Launch different product to target every segment of Sonites

General Strategies to be Implemented

1. To increase the brand awareness among customers so as to capture major market share by
launching new products in the Sonites & Vodites category.
2. To come out with major changes in the NOVA product category, so that the premium product
segment can be attracted.
3. To make minimum changes in the NOON product category, so as to put the product as a best
cost provider rather than a low cost provider
4. To invest more into marketing, so to create more brand awareness among the customers.
5. Make the commercial team/distribution network more productive in the coming years.
6. Concentrate more on speciality stores and mass merchandise rather than online stores, based
on the consumer buying preference.

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Segmentation, Targeting, and Positioning (STP)

Regarding any business, STP is something really important, and we are trying to apply that framework
in the coming years.
For the purposes of segmentation, we have the following five segments, which will be maintained
based on their previous purchase behavior:
• Explorers
• Shoppers
• Professionals
• High Earners
• Savers

The focus (for the NOON brand) will focus mainly on savers and shoppers, and they are also
buying the similar strategy we followed in the previous period, and we ended up receiving the
number of units sold NOON for the period.

For the NOVA brand, we have raised prices and directed professionals and high earners. We will
follow the similar strategy, but with lower prices and too much price increase, it will fail. Although
we have a knowledge of the brand above the average in the professional segment and in the high-
income segment, we will work on the functional component and address it specifically.

For the positioning, we will take care of the design (in the NOVA brand), we will add more to power
and we will design our product according to the requirements. Currently, we do not plan any
significant changes in the other brands.

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Product Price Place Promotion (4Ps)
The 4 P’s of marketing are essential to analyse before launching any product in the market.
Our assessment is asfollows:
 Product: For NOON we are planning to make few significant changes in product design (as
we will try to be the best cost provider) but for NOVA brand we will design the product
design as per the consumer requirements and major changes in the design can be expected
from this product. Research and Design reports will play a major role for our NOON brand
and a Vodite brand product can be expected soon.
 Price: The price game worked for us in NOON’s market as well as for NOVA’s market.
Although the prices are subject to changes as per the market grows. In NOVA you will see a
significant price change based on our added up features.
 Place: As per the market segment savers and shoppers are the largest consumer base and their
buying behaviour tells that form the three online stores are not very significant distribution
channel so we will limit our stores online and increase the same in speciality stores and
mass merchandisers.
 Promotion: We are planning to increase brand value among the customers. We are
definitely going to do aggressive advertising to increase the brand awareness.

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Decisions Made by Company Natkhat
1. Production Decision:
On the basis of demand forecasts, our planned production for NOON was 130000 units and
90000 units for NOVA during Period 1.

We prefer to rely on similar calculations for further projections of demand for further periods.

2. Advertising Expense Decision:

For NOON, we kept the advertising budget for media at $1650 and for research at
$178. We allocated maximum advertising budget to savers and shoppers because these
categories of buyers had higher purchase intentions for the product NOON.

For NOVA, our advertising budget for media was $2400 and for research it was $250.
We allocated all advertising budget to professionals and high earners because these categories
of buyers had higher purchase intentions for the product NOVA.

Allocation of budgets will be on a similar basis of calculations of the upcoming periods.

3. Commercial Team Decisions

Our commercial team decisions for NOON were as given below
1) Specialty Stores - 10%
2) Mass Merchandisers - 30%
3) Online Stores - 10%

Our commercial team decisions for NOVA were as given below

1) Specialty Stores - 33%
2) Mass Merchandisers - 11%
3) Online Stores - 11%

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This decision was made as per the consumer panel reports which indicated that savers and shoppers
use mass merchandisers the most to buy their products while professionals and high earners used
specialty stores. The target market for the product NOVA is professionals and high earners hence
maximum resources are invested in specialty stores and online stores while on the other hand NOON
is targeted to savers and shoppers hence mass merchandisers have been heavily invested in for this
segment.
Similar base of allocation will be used as per the percentage margin allocation in terms of stores for
further periods.

4. Market Research Decisions

The market research reports that were ordered for Sonite brand are:
Consumer Panel
Distribution Panel
Semantic Scales
Multidimensional Scaling
Market Forecast

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KEY LEARNINGS FROM PERIOD I

 We have come to know the importance of research reports and thus bought 5 of them for
Sonite brand for making better decisions.
 We have been taking the decision about how many units to be produced for both NOON and
NOVA which has helped us understanding the importance of forecasting.
 We have learned how to chose our commercial team strategically by keeping in mind the
channel used by different segment of customers for different products.
 We have been successfully able to talk amongst us continuously and prepare a marketing
plan with the consensus of all the members.
 We learned importance of team derived actions and how it impacts our performance.

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