JackPelosiProfessor EatonMKT300December3, 2017 MarketplaceSimulation AnalysisQuarter1 and Quarter 2Initially, I selected Goat as my company name because Ithought it was a simple name that people would remember, like Apple. I selected President as my primary responsibility becauseit is the most important leadership role in the company.
And I selected VP ofFinance as my secondary responsibility because managing company finances isalso important for a start-up company. I selected Workhorse as the first target market because itwas the largest of the three markets, larger than Mercedes and Travelers. And Iwanted access to the most potential customers for my brand. I selected to open my first sales office in Shanghai becauseit had the largest potential demand over a 12-month period for my first targetmarket Workhorse. In quarter 2, I selected a laptop as my first brand for theWorkhorse market and named it GoatPad. I selected the following componentsbased 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 networkingIn quarter 2, I created my first advertisement and includednine items in the ad, again based on the priority of the needs and wants of theWorkhorse customer. And I inserted 12 ads in the local media of Shanghaibecause I wanted more ads than my two main Workhorse competitors, GalileoComputers and Constellation PC.
To determine the price of my brand, I considered the pricethat the Workhorse customer was would pay, the customer need and want for alow-cost brand, and the Workhorse brand prices of my two main competitors. Mystrategy was to set the price a little lower than my competitors. I set the priceat $2,500 with a $200 rebate because the marketplace simulation recommendedincluding a rebate.
I hired five sales people for the Shanghai office based onthe number recommended in the marketplace simulation. I included four salespeople for Workhorse and one technical support person because technical supportwas important to the Workhorse customer. I opened my second sales office in Chicago. Even though theParis market size was slightly larger than Chicago for Workhorse, I selectedChicago to keep operating costs down because the quarterly lease cost in Pariswas $20,000 more than in Chicago.Quarter3In quarter 3, the quarter 2 balanced scorecard results for Goatwere reported as follows: · Total performance: 8.801· Financial performance: -1.
597· Market performance: 0.000· Marketing effectiveness: 28.000For quarter 2, the brand judgment was 6. After analyzingthe results, I realized that I made a mistake in selecting laptop for my first brandbecause desktop was the brand in demand for the Workhorse market.
I alsorealized that I overlooked the application needs and wants of the Workhorsecustomer. As a result, Goat had 0% share of the market for Workhorse tied withShark computers. In quarter 3, I changed my first brand to desktop and namedit GoatPC.
And I selected components based on the needs and wants of theWorkhorse customer including Presentation and Bookkeeping software. Even thoughfast and powerful was rated 110, I did not think that the rating was highenough to justify the cost of this low-end brand. For quarter 2, the ad judgment was 50. When I analyzed my twomain competitor’s ads in the Workhorse market, I decided to make some changesto my first ad in quarter 3. First, I reduced the number of items from nine toseven because too many items in the ad take attention away from the main itemsin the ad. Second, I moved “Mention brand name” to priority 1 because I thoughtestablishing 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 wasrated high as a need and want for the Workhorse customer. Fourth, I made “easyto use” priority 3 because it was rated high. Fourth, I listed all theapplications rated high by the customer. Finally, I made “Local service andsupport,” priority 7 because it rated high. For quarter 2, the price judgment was 100, which tied my twomain competitors in the Workhorse market.
In quarter 3, I decided to lower the priceof GoatPC because low cost was rated high as a need and want for the Workhorsecustomer. Also, I could continue to advertise “Lowest price in town” by setting my price at $2,199, which was $1 less thanthe lowest price of my competitors. In quarter 3, I took the opportunity to add a high-end desktopbrand targeted to the Workhorse market to improve my performance. For thesecond desktop brand, GoatPC Pro, I set the retail price to $2,599 with $100rebate 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 addedhigh speed computing power and an expanded keyboard to justify the higher priceand set it apart from GoatPC. For the high-end GoatPC Pro ad, I made the brand name priority1 because I thought establishing the brand was important. Second, I made “Rebate– special price deal” priority 2 because low cost was rated high for theWorkhorse customer. Third, I made “Easy to use” priority 3 because of it wasrated high. Fourth, I added the most important applications.
Finally, I added”Fastest processor on the market” and “Efficient keyboard – extra keys” becausethese components differentiate the GoatPC Pro from the GoatPC. In quarter 3, I hired five sales people for the Chicagooffice because this city did not have as large a demand for the brand as inShanghai. I hired four sales people for Workhorse and one technical supportperson because technical support was important to the Workhorse customer. In quarter 3, I increased the number of ads to 15 inShanghai and 5 in Chicago for each brand for a total of 40 inserts.
My strategywas to have more ads than my main competitors. In quarter 3, I opened a sales office in Paris, which hadthe third largest market, to expand my market outside the U.S. Quarter 4In quarter 4, the quarter 3 balanced scorecard results forGoat 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 marketperformance score that was in the middle of the competition. Goat had a financialperformance and marketing effectiveness score that was better than the competition. For quarter 3, the brand judgment for GoatPC was 69 and forGoatPC 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 ledthe competition. The ad judgment for GoatPC Pro was 65, the fifth position inthe Workhorse market. The ad judgment was low because the ad was targeted tothe Workhorse customer instead of the Mercedes market.
In quarter 4, I changedthe name of GoatPC Pro to GoatPC M and targeted the Mercedes market.For quarter 3, the price judgment for GoatPC and GoatPC Prowas 100. Although this rating indicates that customers might pay more for mybrands, my strategy was to set my price a little lower than my competitors toachieve 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 setthe price according to the willing-to-pay price because the cost of the branddid not rank high as a need and want for the Mercedes customer. For the Mercedesand Traveler brands, my strategy was to hire more sales people and insert moreads than my competitors in the cities with the highest demand and less in the citieswith the lowest demand. In quarter 4, I hired more salespeople in the other salesoffices to lead the competition. Then, I changed my sales priorities. I madeMercedes priority 1, Workhorse priority 2, and Travelers priority 3. I made Mercedespriority 1 because my new brand was targeted to the Mercedes customers, and Ithought I could make the most money from the higher priced GoatPC M.
I madeWorkhorse priority 2 because it had the largest customer demand and Travelers priority3 because it had the lowest demand. I also opened a sales office in San Pabloto expand my international market. Quarter5In quarter 5, the quarter 4 balanced scorecard results forGoat were reported as follows: · Total performance: 77.324 · Financial performance: 56.473· Market performance: 98.000· Marketing effectiveness: 77.500For quarter 4, Goat had the highest total performancecompared to the competition. The next closest competitor was SynergyTechnologies with a total performance of 48.
And Goat led the competition inmarket share. The average brand judgment was 75, slightly lower than agood score of 80. However, GoatPC W was the highest rated brand in theWorkhorse market. GoatPC M tied two competitor brands, Great White and Nadamo, forthe highest rated brand in the Mercedes market.
And GoatBook T led Tiger Sharkfor the highest rated brand in the Traveler market. Therefore, I thought nochanges were necessary to my low-end brands.For quarter 4, the average ad judgment was 82, whichindicates the quality of my ads was good.
GoatPC W tied with Valema for thehighest rated ad in the Workhorse market. GoatPC M had the highest rated ad inthe Mercedes market. And GoatPC T was a close second with a 75 to Tiger Shark witha 77 for the highest rated ad in the Traveler market. In quarter 5, I includeda picture of the business traveler in the ad because pictures have a strongereffect than words. For quarter 4, the price judgment was 100 for all thebrands in their target market. But, in quarter 5, I changed the prices of theexisting brands.
I added a $300 rebate to increase the net profit based on theidea that many customers do not redeem their rebates. In quarter 5, my pricing strategyfor the Workhorse and Traveler markets was to set the net price (after therebate) of the low-end brand $200 below the willing-to-pay price. And I set thenet price of the high-end brands $200 above the willing-to-pay price. Mystrategy 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-endbrand $300 above the willing-to-pay price.
In quarter 5, my strategy was to develop three new high-endbrands, GoatPC W2, GoatPC M2, and GoatBook T2 to create interest among customerswho want more innovative brands. As in previous quarters, I selected newcomponents and designed ads based on the priority of the needs and wants of thecustomer for the market. When creating thenew brands, I continued my strategy to hire more sales people and insert moreads than my competitors in the cities with the highest demand and less in the citieswith the lowest demand. And, I hired sales people based on the potentialcustomer demand in a 12-month brand. For sales priorities, I set GoatPC W2 priority 1, GoatPC M2priority 2, and GoatPC T2 priority 3. And I copied the sales priorities of myhigh-end brands to the low-end brands. AI also hired 11 sales people in SaoPaulo. Quarter6In quarter 6, the quarter 5 balanced scorecard results forGoat were reported as follows: · Total performance: 109.
422· Financial performance: 139.766· Market performance: 99.000· Marketing effectiveness: 89.
500For quarter 5, Goat had the highest total performance amongthe competition. The average brand judgment was 90, 87 for the primary Workhorsesegment and 93 for the secondary Mercedes segment. GoatPC W2 was rated verygood and GoatPC W was rated acceptable for Workhorse customers. GoatPC M wasrated acceptable and GoatPC M2 was rated as very good for Mercedes customers. GoatBookT2 was rated very good and GoatBook T was rated acceptable for Travelercustomers. For quarter 5, the average ad judgment was 89, 90 for theprimary Workhorse segment and 88 for the secondary Mercedes segment.
For quarter 5, the price judgment for the brands targetedto the Workhorse market was 100 for GoatPC W and 98 for GoatPC W2. The pricejudgment for the brands targeted to the Mercedes market was 100 for GoatPC Mand 93 for GoatPC M2. The price judgment for the brands targeted to theTraveler market was 100 for GoatBook T and 89 for GoatBook T2.
Based on theprice judgment, I did not think any changes were necessary. In quarter 6, my strategy was to improve my total marketperformance rating. I changed the sales priority and target segment prioritiesbecause I noticed that in quarter 5 my market share was the highest forTraveler and Workhorse. I made Traveler priority 1, Workhorse priority 2, andMercedes priority 3. And I copied the sales priorities of my high-end brands tothe low-end brands.In quarter 6, I improved my high-end brands to keep up withmy competitors, the constant changing demands of the market, and the customerneeds and wants. To upgrade the components, I changed the names from GoatPC W2to GoatPC W3, GoatPC M2 to GoatPC M3, and GoatBook T2 to GoatBook T3.
ForGoatPC W3, I upgraded the 17″ standard monitor to a 19″ standard monitor. ForGoatPC M3, I changed the high comfort keyboard to an expanded keyboard. ForGoatPC T3, I changed the standard keyboard to a high-comfort keyboard. And forall high-end brands, I improved the case because a distinct look was importantto customers in all markets. In quarter 6, the strategy for the low-end brandsthat were generally accepted by customers was to keep them in the market, buteliminate their ads to save money according to the recommendation in thequarter 6 story pricing video.In quarter 6, I did not make any changes to the ad for the high-endWorkhorse brand because it had the highest ad copy judgment in quarter 5.
But, Ichanged the high-end Mercedes and Traveler brand ads because my competitor’shigh-end Mercedes and Traveler brands had a higher ad copy judgment. Furthermore,I replaced Link PCs with network/internet to High speed network/internet becausefast and powerful was important to these customers. And for Traveler, Ireplaced Rebate with Fastest processor.
Also, I kept the same number of ads andthe same number of sales people for the high-end brands because I already hadmore than my competitors. Quarter7In quarter 7, the quarter 6 balanced scorecard results forGoat were reported as follows: · Total performance: 105.670· Financial performance: 127.761· Market performance: 101.000· Marketing effectiveness: 88.250For quarter 6, Goat had the best total performance (105.670)compared to the competition. However, the total performance for Goat was slightlyless than the previous quarter (109.
422). Market performance was the only areathat improved slightly. For quarter 6, the average brand judgment was 92 and the averagead judgment was 85. The price judgment was 100 for all the low-end brands intheir target markets.
The price judgment for the high-end brands varied fortheir 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 SynergyTechnologies with 18%. After analyzing the sales in quarters 5 and 6, I noticed a largedecrease of $2,803,474 in the gross margin for the low-end brands. I think thisoccurred 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 thaneliminating 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 quarter2. And in quarter 3, I regret having two Workhorse brands; I should have hadone Workhorse brand and one Mercedes brand.