Markstrat Simulation Participant Handbook 2016 PDF

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Riassunto Libro ben fatto. Tutto quello che c'è da sapere sulla markstrat simulation in modo dettagliato ma non dispersivo....

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PARTICIPANT HANDBOOK STRATEGIC MARKETING – CONSUMER GOODS

Jean-Claude Larréché The Alfred H. Heineken Chaired Professor of Marketing

INSEAD

Hubert Gatignon The Claude Janssen Chaired Professor of Business Administration and Professor of Marketing

INSEAD

How you can save paper. Please refer to page 2 before printing this document.

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TABLE OF CONTENT I.

Introduction to the Markstrat Challenge ________________________________________________ 1 1. 2. 3. 4. 5.

Understand your role ________________________________________________________________________________ 1 Your objective ______________________________________________________________________________________ 1 Your team _________________________________________________________________________________________ 1 Getting prepared ___________________________________________________________________________________ 2 How to print the PDF version of this handbook ___________________________________________________________ 2

6. Questions & Technical Support _______________________________________________________________________ 2

II.

Overview of the Markstrat World ______________________________________________________ 4 1. Clinite Products _____________________________________________________________________________________ 4 2. Nutrite Products ____________________________________________________________________________________ 5 3. 4. 5. 6. 7.

Naming Conventions ________________________________________________________________________________ 6 Clinite Customers ___________________________________________________________________________________ 6 Nutrite Customers __________________________________________________________________________________ 7 Distribution Channels ________________________________________________________________________________ 7 Private Label Brands _________________________________________________________________________________ 8

8. Economic Environment ______________________________________________________________________________ 8

III. Managing Your Firm _________________________________________________________________ 9 1. Decision rounds ____________________________________________________________________________________ 9 2. 3. 4. 5. 6.

Product, Brand and Base Project _______________________________________________________________________ 9 Production ________________________________________________________________________________________ 10 Pricing ___________________________________________________________________________________________ 11 Advertising _______________________________________________________________________________________ 11 Commercial Team __________________________________________________________________________________ 12

7. Market Research Studies ____________________________________________________________________________ 13 8. Research & Development ___________________________________________________________________________ 13 9. Productivity Gains__________________________________________________________________________________ 15 10. Marketing as a Profit Center _________________________________________________________________________ 16

IV. Understanding Your Annual Report ___________________________________________________ 18 1. 2. 3. 4.

V.

Market & Competitive News _________________________________________________________________________ 18 Company Results __________________________________________________________________________________ 20 Market Research Studies ____________________________________________________________________________ 25 Tools ____________________________________________________________________________________________ 37

User’s Guide to the Software ________________________________________________________ 40 1. Organizing working sessions _________________________________________________________________________ 40 2. Starting a working session (log in) _____________________________________________________________________ 40 3. Closing a working session (log out) ____________________________________________________________________ 41 4. 5. 6. 7.

Markstrat Layout & Navigation _______________________________________________________________________ 41 Decision Home ____________________________________________________________________________________ 42 Team Identity Decision _____________________________________________________________________________ 43 Making Brand Portfolio Decisions _____________________________________________________________________ 43

8. Making Marketing Mix Decisions _____________________________________________________________________ 46 9. Ordering Market Research Studies ____________________________________________________________________ 47 10. Making Commercial Decisions ________________________________________________________________________ 48 11. Making Research & Development Decisions ____________________________________________________________ 49 12. Initial decisions ____________________________________________________________________________________ 54 13. Checking your decisions _____________________________________________________________________________ 55

VI. Positioning and Research & Development ______________________________________________ 57 Copyright © StratX

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1. 2. 3. 4.

Assessing Perceptions and Preferences ________________________________________________________________ 57 Prediction of Ideal Points ____________________________________________________________________________ 58 Matching product attributes with position _____________________________________________________________ 59 Situations where repositioning is required _____________________________________________________________ 62

5. Repositioning strategies _____________________________________________________________________________ 62 6. Research & Development ___________________________________________________________________________ 63

VII. Users’s Guide to the Marketing Plan Tool ______________________________________________ 67 1. 2. 3. 4. 5.

Step 1 – Segment size estimates ______________________________________________________________________ 67 Step 2 – Market share estimates ______________________________________________________________________ 68 Step 3 – Brand sales ________________________________________________________________________________ 69 Step 4 – Brand contribution __________________________________________________________________________ 69 Step 5 – Firm Profit and Loss statement ________________________________________________________________ 71

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TABLE OF FIGURES Figure 1 – How to print two pages per sheet __________________________________________________ 3 Figure 2 – Clinite main physical characteristics ________________________________________________ 5 Figure 3 – Nutrite main physical characteristics _______________________________________________ 6 Figure 4 – Inventory and production plan versus market demand ________________________________ 10 Figure 5 – From retail price to unit contribution ______________________________________________ 11 Figure 6 – Available market research studies_________________________________________________ 13 Figure 7 – Productivity gains _____________________________________________________________ 16 Figure 8 – Sample Loan Schedule __________________________________________________________ 17 Figure 9 – Market & Competitive News – Industry dashboard (part 1) _____________________________ 19 Figure 10 – Market & Competitive News – Industry dashboard (part 2) ____________________________ 19 Figure 11 – Market & Competitive News – Brand Characteristics _________________________________ 20 Figure 12 – Company dashboard __________________________________________________________ 21 Figure 13 –Financial Report – P&L statement ________________________________________________ 22 Figure 14 – Financial Report – Brand contribution ____________________________________________ 22 Figure 15 – Production report – Sales, production & inventory __________________________________ 23 Figure 16 – R&D report – Sample chart & explanations ________________________________________ 24 Figure 17 – Market Research – Industry Benchmarking ________________________________________ 26 Figure 18 – Market Research – Consumer Survey – Average Awareness ___________________________ 27 Figure 19 – Market Research – Consumer Survey – Purchase intentions by segment _________________ 27 Figure 20 – Market Research – Consumer Survey – Shopping habits ______________________________ 27 Figure 21 – Market Research – Consumer Panel – Market shares ________________________________ 28 Figure 22 – Market Research – Consumer Panel – Market shares ________________________________ 28 Figure 23 – Market Research – Distribution Panel – Channel sales ________________________________ 28 Figure 24 – Market Research – Distribution Panel – Distribution coverage _________________________ 29 Figure 25 – Market Research – Distribution Panel – Share of Shelf Space __________________________ 29 Figure 26 – Market Research – Semantic Scales – Brand perceptions______________________________ 30 Figure 27 – Market Research – Semantic Scales – Ideal values ___________________________________ 30 Figure 28 – Market Research – Semantic Scales – Importance of characteristics _____________________ 30 Figure 29 – Market Research – MDS Study – Perceptual map (Economy X Performance) ______________ 31 Figure 30 – Market Research – MDS Study – Influence of Product Characteristics____________________ 32 Figure 31 – Market Research – Competitive Advertising – Brand expenditures ______________________ 33 Figure 32 – Market Research – Competitive Commercial Team – Size by firm and channel _____________ 33 Figure 33 – Market Research – Commercial Team Experiment ___________________________________ 34 Figure 34 – Market Forecast – Market Size broken down by Consumer Segment ____________________ 34 Figure 35 – Conjoint Analysis – Relative importance of attributes ________________________________ 35 Figure 36 – Conjoint Analysis – Utility charts _________________________________________________ 35 Figure 37 – Tools – Charting tool __________________________________________________________ 38 Figure 38 – Tools – Charting tool __________________________________________________________ 39 Figure 39 – Starting a working session ______________________________________________________ 41 Figure 40 – Markstrat home ______________________________________________________________ 42 Figure 41 – Markstrat decision home_______________________________________________________ 43 Figure 42 – Team Identity decision ________________________________________________________ 43 Figure 43 – Brand portfolio decisions – Home ________________________________________________ 44 Figure 44 – Brand portfolio decisions – New brand launch ______________________________________ 45 Figure 45 – Brand portfolio decisions – Brand modification or withdrawal _________________________ 46 Figure 46 – Marketing mix decision home ___________________________________________________ 46 Figure 47 – Marketing mix decision screen __________________________________________________ 47 Copyright © StratX

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Figure 48 – Market research study decision form _____________________________________________ 48 Figure 49 – Commercial decision __________________________________________________________ 49 Figure 50 – Commercial Team decision screen _______________________________________________ 49 Figure 51 – R&D decisions – Home ________________________________________________________ 50 Figure 52 – R&D decisions – Project name & description _______________________________________ 51 Figure 53 – R&D decisions – Project characteristics & base cost __________________________________ 52 Figure 54 – R&D decisions – Project allocated budget__________________________________________ 53 Figure 55 – R&D decisions – Project home __________________________________________________ 54 Figure 56 – Decision tools – Budget overview ________________________________________________ 56 Figure 57 – Decisions – Errors & Warnings __________________________________________________ 56 Figure 58 – MDS Study – Ideal value evolution – Table _________________________________________ 58 Figure 59 – Semantic Scales Study – Ideal value evolution – Graph _______________________________ 59 Figure 60 – Relationship between attributes and perceptions – Semantic scales_____________________ 60 Figure 61 – Relationship between attributes and perceptions – MD scaling ________________________ 61 Figure 62 – Interface with R&D department _________________________________________________ 65 Figure 63 – Marketing Plan – Segment size estimates __________________________________________ 68 Figure 64 – Marketing Plan – Market shares estimates _________________________________________ 68 Figure 65 – Marketing Plan – Market sales estimates __________________________________________ 69 Figure 66 – Marketing Plan – Brand contribution statement ____________________________________ 71 Figure 67 – Marketing Plan – Company P&L statement ________________________________________ 72

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I. INTRODUCTION TO THE MARKSTRAT CHALLENGE Welcome to Markstrat and congratulations on your new position! You and the other members of your team have just been recruited by a large corporation to manage the marketing department of one of its divisions. Coming from a different industry, your team has no experience in the Markstrat world. You will compete with several other firms to market two types of fastmoving consumer goods to consumers.

1. Understand your role During this exercise, you will be responsible for formulating and implementing the long-term marketing strategy of your division. In particular, you and your team members will have to: 

Work in a highly competitive market;



Target selected consumer segments and position your products;

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Interface with the R&D department to design and develop new products;

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Prepare the launch of new products, improve, maintain or withdraw existing ones;

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Interface with the production department to specify production planning;

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Make marketing mix decisions (pricing, advertising, …) for each of your brands;

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Decide on the size and priorities of your commercial team;



Order market research studies to get up-to-date information for decision making.

2. Your objective Your objective over the next years is to maximize the Share Price Index (SPI) of your division. The SPI takes into account several indicators including net contribution generated, product market share, your ability to grow the organization’s revenues and the quality of projects successfully completed.

3. Your team An important aspect of the Markstrat Challenge is that you will be part of a team. It is helpful to establish a good working relationship with your teammates and to organize your work with them. Here are a number of questions to take into consideration: 

Will you work non-stop on your Markstrat exercise for 3 hours from start to finish or will you spread your work over several days?



Will all team members meet when they make decisions or are you geographically dispersed?

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Will all team members be involved in all decisions? Or will you assign responsibilities (R&D, Production, Finance, etc.) to team members, each making decisions on his or her own?

Regarding the last point, try to avoid letting each member concentrate solely on his/her area of professional expertise. Initially, we strongly recommend that each team member be involved in all discussions in order for everyone to have the same understanding of the business situation. As the simulation evolves, your team will develop a common understanding of the strategic issues. In parallel, the management of the organization will become increasingly complex. At some point, the members of the team can begin focusing on a specific area of responsibility. By following this process, not only will you maximize your internal resources, but also ensure that everyone benefits equally from the Markstrat experience.

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4. Getting prepared Preparation includes reading the handbook and trying out the Markstrat software with the Preview data. A. Pre-Reading It is highly recommended to read this handbook carefully prior to the beginning of the Markstrat Challenge. If you do not do it, you may put your team at a disadvantage. Unless otherwise instructed by your professor, you should read the following four chapters prior to Decision Round 1: 

Introduction to the Markstrat Challenge



Overview of the Markstrat World



Managing Your Firm



Understanding Your Annual Report

In these four chapters, you will discover what your new challenge and objective is, what the Markstrat world looks like in term of products, consumers, distribution channels, competitors, etc.; how your company operates and what decisions you will have to make in order to run it through the next 5 to 10 years, and what information will be made available to you in your annual report. You are then advised to read the last two chapters prior to Decision Round 2: 

Positioning and Research & Development



Users’s Guide to the Marketing Plan Tool

There, you will learn in more detail: how to use the semantic scales and the multidimensional studies to reposition brands; how and when to reposition brands or to launch new ones; and how the R&D and Marketing departments work together. B. Previewing Markstrat Unless otherwise instructed by your professor, you are invited to preview a Markstrat Team to test your knowledge of the Markstrat environment. All registered users have access to the Preview Markstrat data. Refer to section V.2 for instructions on how to access them. The Preview Markstrat data have been obtained during a past Markstrat course with real students making the decisions. You will be allowed to browse through all charts and graphs and to open decision screens. Please note that you will be able to preview the content of decision screens but will not be allowed to enter decisions and run the mathematical model on this preview data.

5. How to print the PDF version of this handbook Paper is too valuable to waste. We advise you to think twice before printing this handbook. The full text is available within the simulation with a search-engine to help you find the information you need. In addition, context-sensitive help is available on all important forms, such as decision forms. Should you decide to print this handbook, we advise you to print two pages per sheet and, if your printer allows it, to print double-sided. Figure 1 shows how to print two pages per sheet. Select “Multiple pages per sheet” in the “Page scaling” choice box and enter 2 in the cell below. To print double-sided, please refer to your printer documentation.

6. Questions & Technical Support We have done our best to make this guide as clear and complete as possible but the Markstrat simulation is fairly complex and we know from experience that some topics will require additional explanation. If you have questions regarding this handbook or the simulation we suggest that you review the F...