Getting Started with Simventure: Apprentice 1-5

Starting Situation Having learnt to build computers and tested your talents by selling a few PCs to friends and family you are now considering your options for starting in business. You already have a full-time job and before you make the big decision to go it alone you need to assess what opportunities are open to you.

Background Information Within this activity you will simply commission some Market and Competition Research, run the month and then evaluate the information available to you before selecting a Target Segment. This activity introduces you to the cycle of making decisions, running the month and evaluating progress which is followed throughout the game. It also demonstrates the principle of making informed decisions rather than using guesswork.

Tips When you view the Competitor Research Report remember that you are looking at the market leader in each of the six segments within the game. So if you are assessing the Corporations segment, for instance, you need to consider only the information about Ping Computers.

Your Tasks Commission Market Research and Competition Research. Run the month to allow time for the information to be gathered. Consider the Market and Competition Research Reports to identify a market opportunity for your fledgling business. Select the Market Segment you will promote your product to.

ASSESSMENT Complete the Resource Sheet on the right hand side of the page. Use the reverse of this sheet to record which of the Target Segments you have chosen and why. There are no right or wrong answers. The only expectation is that you can justify your decision and maybe produce some facts and figures to support your judgement.

Starting Situation Your business is beginning to break into the Professional Services market. The Price and Selling Points for the product have already been selected so now you need to look carefully at the Product Design. A well planned marketing campaign will guarantee enquiries, so if you get the Product Design right then the sales will follow. Make sure that you consider the Market Research Report to identify your Target Segments’ preferences. You might also find the Competition Research Report useful to see how Parry Systems (the market leader for this Target Segment) are approaching the market.

Background Information This scenario already includes the Price, Selling Points and Marketing Promotions to ensure success within the Professional Services segment and these elements will ensure that it is fairly easy to generate orders and income. You only need to take charge of the Product Design element, using the Market & Competition Research reports to inform your choices and must look to generate enquiries which will convert into orders. You can boost demand substantially by providing a high specification product but may find that component costs will severely restrict their profit margins. The challenge is to find a design that is attractive to customers but still provides a margin.

Targets and Tips Targets Gross Margin > 20% R 4,000 profit per month (first 3 months) R 7,000 profit per month (Oct-Dec) Tips Commissioning Customer Research will help you to refine your product design. Each time you change the design of your product you should commission more Customer Research to assess the response to the changes you have made.

Your Tasks Change the Product Design, making sure that you set the hours appropriately to complete the design process as soon as possible. Once the new design is ready you will be able to see how well your product has been received in the market place. You can change the design as you move through the months, although each new design will take at least a month to complete and you have limited time available. You must also commission Customer Research to view your customers' perceptions of your product

ASSESSMENT Complete the Resource Sheet on the right hand side of the page. On the back of the page explain the approach that you took to designing your product. Was your product design successful or not? How do you know whether it was successful or not?

Starting Situation The decision has been made to sell to the Engineering Companies segment and your product has already been designed to be attractive and competitive within that target segment. You now need to focus your attention on the Price you will charge for the product. A recent bank loan of R 20,000, as well as a generous overdraft facility from your bank, will ensure that you have some time to get the right pricing point. But the sooner you start turning in a profit the better your financial situation will be!

Background Information A well designed product and substantial marketing campaign have already set up to produce a reasonable number of enquiries over the 4 months of the scenario. The price chosen will affect how many enquiries are converted into orders, the key however, is to focus on profitability rather than turnover. You will notice warnings about the financial status of the business which are due to the high levels of borrowing that this company has taken on. These can be ignored though they do demonstrate the effect of high levels of borrowing within SimVenture.

Targets and Tips Targets Tips Orders in excess of 60 per month. Gross Margin of at least 20%. Average > R 2,500 profit over the last 6 months of trading (Jul-Dec). Check progress by clicking Profit/Loss area of status bar, or view Performance Report. Tips View Market and Competition Research Reports to inform decisions. Low prices create demand but will not necessarily generate profit. Use a promotional discount to stimulate demand, but consider impacts on profitability carefully! If successful, your workload might increase and you are warned that you may not have time to complete all your tasks for the coming month. To resolve this, click on the green Time bar at the bottom of the screen.

Your Tasks Consider the information available in the Market & Competitor Research Reports, remembering to look ONLY at the Engineering Sector and Compuland (the market leader in this segment). Choose a Price that will be attractive to your Target Segment and still provide you with a reasonable profit margin. Run months to see the impact on Orders and Profit/Loss. Repeat this 3 times using a high, medium and low price.

Complete the Resource Sheet on the right hand side of the page. ASSESSMENT Complete the Resource Sheet on the right hand side of the page. On the back of the page explain which price proved to be most successful and explain why this was the most successful in detail. EXAMPLE HIGH PRICE MEDIUM PRICE LOW PRICE

Before you start Apprentice 4, let’s just go through what information the status bar gives us…

The Status Bar Explained Enquiries How many people enquired about your product last month. Enquiries are good, but they need ‘converting’ into orders. Orders Number of orders taken this month. (Brackets) show how many computers this amounts to & value of order when payment is settled. Sales Orders and (in brackets) units being shipped this month & value of those shipments. Profit/Loss Difference between income(revenue) and spending for last month. Click for Detailed Profit & Loss Report Bank balance Your current bank balance. Income Money coming into your business during the coming month. Costs Money you are spending this month. Time Indicates hours you have available to work this month. Effort Hours you need to complete your planned tasks this month. Efficiency Shows how efficient your business is overall. Click for breakdown of efficiency in different areas of work & what is causing any inefficiencies. Emoticon Indicates you are feeling at the moment. Click to change your hours or give yourself a pay rise to make you feel less stressed!

Sales are guaranteed if the customers are made aware of the product! Starting Situation Your business is doing fairly well and has a product that is beginning to break into the Engineering Companies market. Your Product Design and Price are well established and don’t need any adjustment. Sales are guaranteed if the customers are made aware of the product!

Background Information All elements covered in previous activities taken care of by the computer. Enquiries will remain in single figures in the absence of a sustained campaign of promotions. Currently, conversion rates are excellent in that every enquiry leads to an order. Current Product Design and Price present a very attractive offer to potential customers.

Targets and Tips Targets Tips 50 unit sales per month before the end of the year. Tips Keep an eye on your current promotions! (Marketing Strategy section of Overview screen). Which Promotions are most likely to succeed for the Engineering Companies market. Some sections (Eg. Advertising) include data to help you. Customer Research will tell you where people heard about your product – indicates how successful your marketing campaign has been.

Your Tasks Choose Selling Points that match your Product Design and will be attractive to the chosen Market Segment (Engineering Companies). Each month select Marketing Promotions before running the month to see if you have created any demand for your product. Look at the Enquiries figure to see how well you are doing. Commission some Customer Research to assess the effectiveness of your Marketing Promotions.

ASSESSMENT Complete the Resource Sheet on the right hand side of the page. On the back of the page explain which combination of Marketing Promotions worked best and explain why you believe this was the most effective combination.

Starting Situation Now you have the responsibility of managing the whole business! You are selling to Corporations Sector but as yet you have received no orders, so there is plenty of room for improvement. You already have R 16,000 in the bank and your overdraft facility has been set at R 40,000, so you have access to plenty of cash! The Product Design, Price & Selling Points have not been set very carefully, so spend some time getting these key elements right before spending too much money on marketing promotions.

Background Information The business advisor is activated in this scenario and will remind you if they are missing any of the key elements for success. Still stuck? Go to ‘How do I…?’ section. Here they will find guidance on dealing with specific issues that arise within the simulation.

Targets and Tips Targets Keep business running till year end (December 2011) and beyond that if possible. Maintaining monthly profits above R 3,000 Click Profit / Loss area on the status bar to keep an eye on your profit each month. Tips Keep an eye on your profitability - amend Price and/or Product Design accordingly. Commission some Customer Research to help you identify any alterations you need to make to your product offer. Read the Advisor advice carefully – they will put you in the right track. Click on Advisor button to get ‘latest advice’ at any time.

Tasks View the Market & Competition Research Reports and consider any changes you need to make to the attributes of your Product Design. Consider your Price and Selling Points making changes as appropriate. Maintain Marketing Promotions each month to attract a sufficient level of enquiries. Consider commissioning Customer Research to give you important feedback. Make sure that you are able to make a Profit... or the money will soon run out!

ASSESSMENT Run the simulation until December 2011. Access the notepad and record all of the decisions that you make along the way as well as explaining why you are making these decisions. At the end of the simulation, press ‘Copy To Clipboard’ and paste into a word document. Submit your work in the handin folder.