S I M U L A T I O N M A R K E T I N G M G T. University of Alaska-Anchorage * College of Business & Public Policy * Marketing Management Simulation * Course Intro & Overview

S I M U L A T I O N M A R K E T I N G M G T. Professor Ed Forrest Telephone: (cell) uaa.alaska.edu W ebsite:

Marketing Management Simulation

S I M U L A T I O N M A R K E T I N G M G T. Course Format

S I M U L A T I O N M A R K E T I N G M G T. Lecture-Learning

S I M U L A T I O N M A R K E T I N G M G T.

S I M U L A T I O N M A R K E T I N G M G T. Ultimately- Real Learning Occurs Not from parroting information gleaned from books & lectures! ….But from the consequences of your own actions

S I M U L A T I O N M A R K E T I N G M G T.

S I M U L A T I O N M A R K E T I N G M G T. your “study” of business … piece-meal and in isolation!

S I M U L A T I O N M A R K E T I N G M G T. Finance Production HR R&D Marketing

YOUR JOB: Take on every key Mgt. position in your CompanyTake on every key Mgt. position in your Company Make 100+ intertwined decisions necessary to create, produce & successfully market your products…Make 100+ intertwined decisions necessary to create, produce & successfully market your products…

Analyze the market, consumer, your company & competitive situationAnalyze the market, consumer, your company & competitive situation Discern & implement your corp. growth & competitive strategiesDiscern & implement your corp. growth & competitive strategies Must make & integrate decisions in & across all functional areas (Marketing, Research & Development, Production, Human Resources & Finance).Must make & integrate decisions in & across all functional areas (Marketing, Research & Development, Production, Human Resources & Finance). YOU…

S I M U L A T I O N M A R K E T I N G M G T. the ten big ideas Strategic Thinking the ten big ideas Strategic Thinking the ten big ideas Strategic Thinking the ten big ideas Strategic Thinking Simulation proffers you opportunity to experience every key dimension of strategic thinking developed to date:

THE CAPSTONE SIMULATION Adopted by major Fortune 500 companiesAdopted by major Fortune 500 companies..General Motors, General Electric, Honeywell, Dell, John Deere, Citibank, Alcoa, BP, Allstate, Samsung, Goldman Sachs, Microsoft… Most widely used Business – Simulation Program in the World

You Da’ Boss … run a $100M business ….

Your Product Line: SENSORS:

You will Compete against other members of this class –running 5 other Corp’s …. AndrewsAndrews BaldwinBaldwin ChesterChester DigbyDigby ErieErie FerrisFerris

Plus… your decisions & business performance will be compared against other teams competing at other universities… around the world

& How –to date-- have we fared in this World-Wide Competition??

2001 Top Ten Teams, World-Wide, for Round 8 Top Ten Teams, World-Wide, for Round 8 by success measurement There are currently 940 active teams that have played Round 8. For a team to make this list: Cumulative Profits above 0 Overall Market Share (in dollars) greater then 5.0% Asset Turnover less then 8.0 Profit for Round 8 Round 8 - Mean - $ 25,324,003 Top Ten Teams, World-Wide, for Round 8 by success measurement There are currently 940 active teams that have played Round 8. For a team to make this list: Cumulative Profits above 0 Overall Market Share (in dollars) greater then 5.0% Asset Turnover less then 8.0 Profit for Round 8 Round 8 - Mean - $ 25,324,003 Top Ten Active Teams Professor School/Course Simid Team Value Top Ten Active Teams Professor School/Course Simid Team Value 1 Dr. Minu Afza College of Business - Bloomsburg University Business Policy & Strategy CAP1742 Digby $ 238,235,245 2 Mr. Bill Gardner Penn State University -Fayette Campus Contemporary Business Seminar CAP1513 Andrews $ 193,853,427 3 Dawn DeTienne University of Colorado at Boulder Senior Seminar CAP1656 Andrews $ 184,258,599 4 Prof. Howard Feldman University of Portland Managerial Decisions and Policy-Undergrad B CAP1787 Erie $ 181,422,390 5 Dr. Ed Forrest University of Alaska Marketing Management CAP1611 Baldwin $ 163,281,864 6 Dr. Eric Wiseman University of Colorado at Boulder Business Senior Seminar CAP1818 Chester $ 157,930,382 7 Dr. Murrow Drury College Strategy and Policy Formulation CAP1838 Erie $ 149,235,238 8 Dr. Pettus Millikin University Business Policy CAP1748 Baldwin $ 147,967,873 9 Doug Mayer Hartwick College Management VII-secA CAP1811 Digby $ 137,339, Dr. Bruce A. Schooling Point Loma Nazarene University Strategic Management CAP1794 Digby $ 121,2891 Dr. Minu Afza College of Business - Bloomsburg University Business Policy & Strategy CAP1742 Digby $ 238,235,245 2 Mr. Bill Gardner Penn State University -Fayette Campus Contemporary Business Seminar CAP1513 Andrews $ 193,853,427 3 Dawn DeTienne University of Colorado at Boulder Senior Seminar CAP1656 Andrews $ 184,258,599 4 Prof. Howard Feldman University of Portland Managerial Decisions and Policy-Undergrad B CAP1787 Erie $ 181,422,390 5 Dr. Ed Forrest University of Alaska Marketing Management CAP1611 Baldwin $ 163,281,864 6 Dr. Eric Wiseman University of Colorado at Boulder Business Senior Seminar CAP1818 Chester $ 157,930,382 7 Dr. Murrow Drury College Strategy and Policy Formulation CAP1838 Erie $ 149,235,238 8 Dr. Pettus Millikin University Business Policy CAP1748 Baldwin $ 147,967,873 9 Doug Mayer Hartwick College Management VII-secA CAP1811 Digby $ 137,339, Dr. Bruce A. Schooling Point Loma Nazarene University Strategic Management CAP1794 Digby $ 121,289 5 th

2003 Top Ten Teams, World-Wide, for Round 8 For a team to make this list: Cumulative Profits above 0 Overall Market Share (in dollars) greater than 6% Asset Turnover less then 8.0 Your class was ranked: with 711 Capstone ® teams completing round 8 by Apr 12, teams per game of 6 Category: AllFor a team to make this list: Cumulative Profits above 0 Overall Market Share (in dollars) greater than 6% Asset Turnover less then 8.0 Your class was ranked: with 711 Capstone ® teams completing round 8 by Apr 12, teams per game of 6 Category: All URL: Date/Time: 04/12/ :07:35 eNote:URL: Date/Time: 04/12/ :07:35 eNote: Text: Cumulative Profit for Round 8 - Mean - $ 125,355,000 Top Ten Active Teams Professor School/Course Simid Team Value 1 natalie marsh Strayer University Business Policy & Strategic Planning C4779 Baldwin $ 459,411,986 2 John Hall University of Florida Global Strategic Management I2MBA 2002 C4923 Baldwin $ 386,472,583 3 natalie marsh Strayer University Senior Seminar - Business Administration C4778 Erie $ 382,697,422 4 Peter Stanwick Auburn University Strategic Management C5095 Chester $ 353,185,127 5 John Pearce Villanova University Policy Administration C5033 Ferris $ 348,535,130 6 Gavin Fox Georgia Southern University BUSINESS SIMULATION C5041 Digby $ 343,761,703 7 Shirley Schooley Birmingham-Southern College Strategic Management Senior Project Course Sec B C5356 Digby $ 341,865,002 8 natalie marsh Strayer University Senior Seminar - Business Administration C4778 Ferris $ 339,568,171 9 Edward Forrest University of Alaska Marketing Management C4806 Chester $ 333,620, Donald Kreps Kutztown University mba capstone C4797 Digby $ 327,188,363Text: Cumulative Profit for Round 8 - Mean - $ 125,355,000 Top Ten Active Teams Professor School/Course Simid Team Value 1 natalie marsh Strayer University Business Policy & Strategic Planning C4779 Baldwin $ 459,411,986 2 John Hall University of Florida Global Strategic Management I2MBA 2002 C4923 Baldwin $ 386,472,583 3 natalie marsh Strayer University Senior Seminar - Business Administration C4778 Erie $ 382,697,422 4 Peter Stanwick Auburn University Strategic Management C5095 Chester $ 353,185,127 5 John Pearce Villanova University Policy Administration C5033 Ferris $ 348,535,130 6 Gavin Fox Georgia Southern University BUSINESS SIMULATION C5041 Digby $ 343,761,703 7 Shirley Schooley Birmingham-Southern College Strategic Management Senior Project Course Sec B C5356 Digby $ 341,865,002 8 natalie marsh Strayer University Senior Seminar - Business Administration C4778 Ferris $ 339,568,171 9 Edward Forrest University of Alaska Marketing Management C4806 Chester $ 333,620, Donald Kreps Kutztown University mba capstone C4797 Digby $ 327,188,363 9 th

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Fall 2009 #1 in th e world!

Fall #1 in the world…

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SHAKE UP IN SENSOR INDUSTRY Management Teams Fired “After poor results, lackluster sales and angry customer reports……….. New dynamic leadership teams needed to take industry into the future!”

S I M U L A T I O N M A N A G E M E N T YOUR HIRED!

S I M U L A T I O N M A N A G E M E N T You are now the C aptain…

Today- we will begin analysis of “your situation…” 1 st -Step back & take a look at the “Big Picture”

The Big Picture C ompanyC ompany C onsumersC onsumers C ompetitorsC ompetitors C onditionsC onditions PEST PEST Growth & Competitive Strategies Finance HR Production R&D Marketing Functional Integration  Profits  Mrkt Share  ROA  ROS  ROE  Asset T/O  Stock  Mrkt Cap Situation/SWOT Analysis Strategic Planning Functional Integration Performance Assessment

BUSINESS PLAN GUIDELINE 1.Where are we now? 2.Where do we want to go 3.How do we get there? = Situation Analysis

The Capstone Courier

Org. goals & objectives encapsulated in Mission & Vision Statements: Answers Question # 2: 2. Where do we want to go? – What business(es) should be in – Market positions to stake out? – Consumer needs & segments serve? – Outcomes to achieve ?

Final Question answered by Strategic Planning: 1.Where are we now? 2.Where do we want to go? 3.How do we get there? *Growth, Competitive & Functional Strategies

…success contingent on decisions you make as- manager of every functional domain

M A N A G E M E N T S I M U L A T I O N You’re will be responsible for: Planning, implementing & controlling your marketing strategy Target & Position ProductPlace Promotion Price As MARKETING MANAGER

M A N A G E M E N T S I M U L A T I O N Marketing Managers become one-w/ Relationships betw Price & demand Price & margin Promotion budget & awareness Sales budget & accessibility A/R policy & demand Price & demand Price & margin Promotion budget & awareness Sales budget & accessibility A/R policy & demand

MARKETING MANAGER SIMULATION SPREADSHEET

Build customer awareness through promotion Establish a sales force and distribution channels Set price of your products in the marketplace Set Credit Policies AR/AP Set the sales forecast for our products

Marketing also selects media vehicles & message weights AND determines composition of sales/distribution staff..and allocation of their efforts by segment & Brand

M A N A G E M E N T S I M U L A T I O N As Production Mgr: Set automation levels Set automation levels Buy or sell capacity Buy or sell capacity Schedule production Schedule production Work overtime or automate Work overtime or automate

PRODUCTION MANAGER SIMULATION SPREADSHEET

Establish your workforce complement Buy or sell capacity of product lines Purchase machinery to automate our facilities Schedule production for each line

M A N A G E M E N T S I M U L A T I O N Responsible for: Product Position Product Position Age & Quality Age & Quality New product development New product development As R&D Mgr Quality Age Prdt Line High High Eight Low Low One < < < SIZE A B Performance

R&D MANAGER SIMULATION SPREADSHEET

Establish product positioning to meet customer demand Build quality & reliability (MTBF) into products Ensure age of product meets customer demands Create new products Drift

M A R K E T I N G M A N A G E M E N T As Human Resource Manager--Responsible for: Recruitment, Hiring, Training & Firing of all labor Recruitment, Hiring, Training & Firing of all labor 2 groups: 2 groups: – Assemblers – Technicians Wages Wages Benefits Benefits

SIMULATION SPREADSHEET

M A N A G E M E N T S I M U L A T I O N Acquire Capital Acquire Capital –Issue Stock –Short Term Debt –Issue Long Term Bonds Set Dividend Set Dividend Retire Long Term Bonds Retire Long Term Bonds Retire Stock Retire Stock Responsible for Emergency LoansResponsible for Emergency Loans Big AL The Loan Shark As FINANCIAL MANAGER

FINANCIAL MANAGER SIMULATION SPREADSHEET

S I M U L A T I O N M A R K E T I N G M G T.

1 st Reorganize Companies

S I M U L A T I O N M A R K E T I N G M G T. Strategic Thinking- the ten big ideas Strategic Thinking- the ten big ideas Strategic Thinking Strategic Thinking Strategic Thinking- the ten big ideas Strategic Thinking- the ten big ideas Strategic Thinking Strategic Thinking 7. Corporate culture- corporate behavior, and in particular the resistance of the organization to change, is inevitably a function of its culture (Prof Thomas/ Penn St. able to predict final standings w/in 1 place 90% of time –after observing initial group interaction) 8. Leadership craft- Leaders responsible for assuring strategy links values of firm with its vision & that firm can successfully implement strategy thru effective HR mgt.

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S I M U L A T I O N M A R K E T I N G M G T. C onsumer C ompany C ompetitors C onditions Begin Situation-Analysis EXTERNAL ENVIRONMENT Opportunities & Threats INTERNAL ENVIRONMENT Your Company's Strengths & Weaknesses:

Environmental Scanning 1 st part Situation Analysis is Environmental Scanning Environmental Scanning= The process of identifying the nature & magnitude of Uncontrollable forces in the external (macro) environment exerting significant influence on your strategies…

Social Technological Political Economic Competitors Demographic Psychographic trends EXTERNAL-UNCONTROLLABLE FORCES: EXTERNAL-UNCONTROLLABLE FORCES: Impacting Strategies Regulatory Technological Consumers

Strategic Thinking- the ten big ideas Strategic Thinking- the ten big ideas Strategic Thinking Strategic Thinking Strategic Thinking- the ten big ideas Strategic Thinking- the ten big ideas Strategic Thinking Strategic Thinking 1.Long-range planning- considers the external factors that affect success & integrates the various functional strategies. 2.Strategic analysis Market segmentation The lifecycle. SWOT analysis. Industry structure

Ascertain how the market is organized, operates, influenced & evolving YOUR 1 st ASSIGNMENT Opportunities & Threats:

The Consumer: How market is segmented….factors that influence consumer demand & purchasing decisions

The Competition Your competitors situation… strength & weaknesses… and relative market positions…

The Market: Conditions Macro-E considerations especially technological trends

Economic environment = moderate growth, low inflation, historically-averaged interest rates There no outside competitors or product substitutes. No economic downturns or other surprises expected. Your sim-environment a bit more benign than real world

- whatever happens as market evolves will be driven by your-tactical execution of strategies… not by external factors. Sim designed this way for one reason

S I M U L A T I O N M A R K E T I N G M G T. Questions ?

S I M U L A T I O N M A R K E T I N G M G T. Can I be excused my brain is full..