Marketing Simulation

[knawlejj]

I'm in a marketing management class and we are running a simulation selling a product. My group did well the first practice quarter (used a strategy of medium quantity and a mid-range price) and ended up doing the best out of the class. Second quarter was a different story as we had to decide between a push or pull strategy. We went with high price/low volume product and incorporated sales people (who were in training Q1 so they didnt affect sales). We ended up making a Net Loss because we spent so much money on Research and Sales Promotion. We also had 89 lost sales, which is 89*600 = 53,400.

Does anyone have any tips on how we can catch back up to the groups who played it safe and used a low cost / high volume technique? We cut down our research and promotions but there has to be something else I'm not seeing.

Our rough spreadsheet so far

Some notes:

• The practice quarter is using the lowest amounts possible in the top section of expenses.

• Inventory Expense is a static 9,000 + (20* Ending Inventory)

• Price cannot be below 400 or higher than 650.

• Inventory ordered has a shinkage rate of 5.4%

• Total Overhead Expense is a Static 210,000 (+ Market research such as the business index, what price each group used, avg advertising/promotions, avg sales)...this comes out to be 231,000 if everything is bought.

• Our strategy revolves around salespeople, we don't know how much this affects sales exactly because we had 5 intially, but added 3 more and they were in training for Q1. So we're not sure how much they will add to sales.

--Thanks for those that want to wrap their heads around this, my group and I have been struggling for 3 hours trying to come up with a formula that actually works well.

 

[richardycc]

3 words...cook the book! for crying out loud, this is for a class...jack up the price to $650 and lower your expenses, play with the numbers until its black.

 

[Slew Foot]

Change name to "Monster <product>", charge $10000, profit.