A recommendation and rationale of what we should do in the future if we were to continue playing the game...
Make less conservative estimates for vodite production
During the four periods that our vodite was out in the market, there was never a time where we accurately predicted production requirements; in other words, we always under produced. Our conservative production estimates made us to incur high opportunity costs of potential sales, in addition to being unable to see the advertising and commercial team experiments. Increasing allocations of our advertising budget to followers and adopters can be attributed to our problem. For future game play, we would use less conservative production estimates because incurred inventory costs are more detrimental than the loss of potential sales. The fact that followers have the highest growth rate and will become the largest segment within the next five periods justifies our future strategy.
Google’s Nexus 6 is a good example of an industry application where a firm has failed to meet demand. Google recently announced that its’ revenue’s growth was slowing down, most likely due to the production problems. “Out of stock” signs became common, especially in India, where many tech-savvy consumers flock to stores to be one of the first purchasers.
Investing in R&D to better target our preferred segment and reduce base costs
If the game continued, we would recommend altering the product characteristics for each sonite so that it fits the ideal values of each consumer segment. Consumer preferences change over time and we would have to accommodate this change. In the Markstrat world, these changes occurred only in one direction. To illustrate our point, we’re going to be using the example of the “high-earners” consumer segment. As you can see, ideal values for each characteristic changed over the course of the game, but they either decreased or increased constantly; in other words, there were no fluctuations. As a reference, brand perceptions of SOAR (targeting high earners) at period 9 are listed at the bottom of the table.
Before you start reading our recommendations for doing well in Markstrat, the first piece of advice we would give would be to READ THE MANUAL. Yes, it’s long and tedious, and no, it’s not going to be a fun read. But, we guarantee you that a thorough read and some brief notes on each section should help you make effective decisions. One of the most detrimental mistakes we made was not reading the manual cover to cover, which meant that when we needed information on shelving a product or launching a vodite, we would have to go back and look for the information. Learn from our mistake.
Taking this into account, we would predict the ideal values for each characteristic and R&D in new projects that would better appeal to the segment we would be targeting. Keep in mind that setting accurate perceptual objectives is essential. If our product is offering more than what consumers want, then an R&D project could help reduce base costs and increase our margin. If our product is not offering what consumers expect, then modifying characteristics could be what increases purchase intentions. If the game is to be played indefinitely, then we would create a product for each of the five consumer segments.
One of our biggest regrets is the fact that the performance of SOFT (targeting savers) was subpar. We lost a lot of market share to team R, and we were never able to recover from it. Despite the fact that SOLO (targeting professionals) and SOAR (targeting high earners) did relatively well, the consumer segment size of both products are predicted to decline every period. On the other hand, shoppers and savers are growing at an exponential rate. (See diagram below) Our strategy if we were to continue playing would be, as partly mentioned above, to create a product for both savers and shoppers. Although the market is saturated, we believe that the profits gained from these segments would outweigh the costs associated with manufacturing, distributing, and promoting them.
One of our biggest regrets is the fact that the performance of SOFT (targeting savers) was subpar. We lost a lot of market share to team R, and we were never able to recover from it. Despite the fact that SOLO (targeting professionals) and SOAR (targeting high earners) did relatively well, the consumer segment size of both products are predicted to decline every period. On the other hand, shoppers and savers are growing at an exponential rate. (See diagram below) Our strategy if we were to continue playing would be, as partly mentioned above, to create a product for both savers and shoppers. Although the market is saturated, we believe that the profits gained from these segments would outweigh the costs associated with manufacturing, distributing, and promoting them.
Many products in today’s world are high-end or target niche segments; however, many firms have been successful targeting the “mass class”. From H&M and Zara to Samsung, these companies have chosen to pursue the shoppers and savers of the real world.