Managing Segments & Customers Marketing Simulation Managing Segments & Customers Heide Abelli and Andrew Christensen

Description In this single-player online simulation, students face the real-world challenge of creating an effective marketing strategy. They make product design decisions by investing in product features, and must also set product prices across multiple segments and establish margins for distributors. In addition, students explore budgeting for market research, communications, and manufacturing efficiency. They manage customer expectations while exploring the relationship between customer satisfaction and the firm’s profitability.  Performance is measured using qualitative and quantitative criteria.

First-year MBA, Marketing Course Exec Ed or Undergraduate Target Audience Ideal setting: First-year MBA, Marketing Course Exec Ed or Undergraduate Relevant courses: Business Marketing Buying Behavior Marketing Strategy

Our Offering Single player Seat time = 90–120 minutes for students to run, 150–180 to complete with debrief session Business-to-Business (NOT consumer marketing) Set in a manufacturing environment Different every time – no single solution Dynamic customer videos – qualitative component Academic Price = $12.50 / Exec Ed = $37.50

Competing Academic Products StratX: MarkStrat Online The “original” from over 20 years ago Team-based, students compete with each other Pricing information hard to find Interpretive Simulations: StratSim Marketing Team-based, consumer orientation Set in the automobile industry Has an “optional” B-to-B component. $39.95 academic price when bundled with a Pearson text.

Setting the Stage: Foreground Reading Minnesota Micromotors Makes “brushless” motors Sells motors to companies who make drills for orthopedic surgery (OEMs) Sell direct and through distributors “Relationship” sale

Setting the Stage: Product Features Thermal Resistance Maximum operating temperature Higher is better—less likely to burn out in high use situation Power-to-Size Ratio Ratio of torque delivered compared to motor size Higher is better—smaller motor still delivers high power Price Higher/lower depends on price sensitivity Powerful factor, but not always decisive in B-to-B sales

Setting the Stage: Segments Segment A Power-to-Size most important Loyal to Minnesota Micromotors (you) Segment B Thermal Resistance most important Loyal to the competition Segment C Wants both Power-to-Size & Thermal Resistance Will switch for better product (loyal to specs) Segment D Low price is most important Will switch for price (loyal to price) Small Customers Price sensitive, mostly buy from distributors

Setting the Stage: Market Research Thermal Resistance B C A D Thermal Resistance and Power-to-Size are inversely related. You can’t get to both easily. Power-to-Size Ratio

Setting the Stage: Market Research B C Comp Thermal Resistance MM A D Explain how competition works on the graph. Power-to-Size Ratio

Pricing and Channel Strategy Many Decisions to Make Pricing and Channel Strategy List Price Discount Rates for Segments and Distributors Customer Relationship Management Sales staff level and priorities Spending level on large volume vs. small volume customers Spending level on retaining vs. acquiring customers Marketing communications Product Development improvements

Setting the Stage: Goals and Scoring Revenue Profit Market Share Customer Satisfaction Cumulative Trend-Performance Scores from 0 to 100 Professor can change the weight of each goal

“Firing sales reps has a huge negative impact on revenues.” Strategies From the Facilitator’s Guide: “Firing sales reps has a huge negative impact on revenues.”

Ready to Play See the Sim

Five Things to Remember Business-to-Business NOT consumer Different every time – hard to “game” Easy to set up, administer and play repeatedly in one class or a few classes Dynamic perceptual maps and customer videos PowerPoint template for debrief