SALES MIX This simulation challenges your ability to make business decisions affecting the sales for several periods. The group is divided into teams,

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Presentation transcript:

SALES MIX This simulation challenges your ability to make business decisions affecting the sales for several periods. The group is divided into teams, each of which form a sales and marketing team. You will be responsible for selling two products into two sales areas. To keep all then numbers manageable, all prices, costs and profits are measured in a universal currency - the Account Unit (AU)

The Products The products that you sell are imaginatively called Product A and Product B Product A is well established but has considerable competition. It has been sold at 20 AUs per unit. Product B is new but has few competitors. It should sell for between 25 and 30 AUs/unit Both products sell to the same types of customer but for different use. A B

THE SALES AREAS The two sales areas are called Area 1 & Area 2. Currently, you only sell into Area 1 but are about the enter Area 2. Both areas are believed to be similar in terms of potential and mix of customers. Promotion for Area 1 is currently 40,000 AUs

COSTS Product A costs 13 AUs. Product B costs 16 AUs Fixed Overheads are 20,000 AUs each period Promotion is decided by you for each area separately. AUs

USING THE COMPUTER Enter team name (up to six letters) Enter decisions price for each product promotion for each area Period Results Unit Sales for each product, area and totals Sales Revenue for each product, area and totals Income Statement for period and cumulatively Unit Sales Forecast for next period Go away to review, think and make next decisions.

ROLES & TASKS Product Managers authority to set prices for the products responsible for unit sales volumes Sales Managers authority to set promotion expenditures responsible for area revenues Marketing Manager co-ordination of the team responsible for profit

OBJECTIVES Discover how to successfully set prices and promotion to meet your goals. Work as a team. Have fun!