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

2. 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.

3. 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

4. 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

5. 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.

6. 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

7. 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

8. 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

9. 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

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

11. 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

12. 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

13. “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.”

14. Ready to Play
See the Sim

15. 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