Marketers Simulation Report Analysis for Firm A Market: SONNIES Brand Names: SAKE and SAFE Presented by: Jessie Bake Emmanuel Knobby Phillips Memories TO George Kirk Applied Marketing Instructor Southern University Baton Rouge May, 2013 Marketers Simulation Report Analysis When our team assumed the control, we here given two products SAFE and SAKE in the SONNIES market. The physical characteristics of the two products were already fixed. We were given the task of managing the two products in the SONNIES market and come up with a marketing strategy that would lead to better performance by the reduces.
In period 1 the two products were different from each other in terms of Weight, Design, Volume, Frequency and Power. The Base cost for developing SAKE and SAFE were almost the same: $184 and $189 respectively. And the retail price of SAKE was far higher than for SAFE The market share of our team A was about 24. 2% in the SONNIES market. Brand SAKE ‘s market share stood at 17% while brand SAFE 7. 2% The distribution coverage was more focused on Specialty stores and little attention was relatively given to Mass merchandise.
Hi earners and Pros were SAKE’s customer segments of preference while Buffs and Pros were most important to SAFE. In period 1, the SAKE brand had a better performance than the SAFE brand. Its base cost was relatively low at $188 while SAFE base cost was $193. SAKE was retailing at a higher price than SAFE and SAKE had a market share of 17. 9% almost twice the value of SAFE which was 10%. The market share of SAKE was highest than that of other firms. Contribution by brand reveals that the SAKE brand sold more than what it produced, that is with its inventory included .
Its revenue was $41662 and its nutrition before marketing is $22,104 and contribution after marketing stood at $19,586. The SAFE brand was in bad shape and needed to be revived. First, units of production is low(96,OHO), transfer cost is higher than the SAKE, contribution before marketing falls at 1871 and contribution after marketing experienced high negative figure. The poor performance of the SAFE brand generally affected the total contribution of the firm A. The market share of both brands experienced a timid unused budget of $7450 and the firm invested in five marketing research studies.
At he end of period 1, the general report of firm A revealed that despite efforts made by the production department, they were not able to fulfill all the orders of brand SAFE, as a consequence, some of the potential sales of this brand were lost. In period 2, the company increased the use of its budget and purchased more marketing research studies but SAKE continued to perform better than SAFE and the firm’s Stock Price Index stood at 1187, with a net contribution of $22,309. The units of production for both brands increased but transfer cost for SAFE remained high. Base cost was bout the same for both brands.
The difference between the sales force of both brands was less than 100. Even though the sales force slightly increased by 10 for both brands, revenues from sales of brand SAFE increased as compared to period 1 but the revenue obtained in period 2 for the SAKE brand remained almost constant as compared to period 1 . The market share for both brands dropped. The SAFE brand instead concentrated its coverage distribution on mass merchandise, while Cafe’s priority was specialty stores. Inventory cost for the SAFE brand increased three times he inventory cost of the SAKE brand.
The retail price for the SAFE brand already in difficulty at this period even though it’s advertising budget and advertising research budget was higher than that of SAKE. The budget for the next period stood at $9,000 which meaner that it increased by $1,850 from the last period. The Stock price index increased to $1187. At the end of period 2, the general report of firm A revealed that despite efforts made by the production department, they were not able to fulfill all the orders of brand SAFE, as a consequence, some of the potential sales of this brand ere lost.
In period 3 the market share was lowest than it had ever been before (19. 1%), net contribution became higher than in the previous years and the stock price index dropped. Looking at the sale force management, the SAKE brand concentrated most of its sales force on mass merchandise and the SAFE brand gave more attention to the departmental stores. Seven marketing research studies were purchased, the base cost for both brands increased than before, more sales persons were hired and trained than in the previous periods. Following the multidimensional calling, the brand performance for SAFE was pretty high on a scale of 16/20.
But at the level of convenience it was poor with a negative scale of 15. The influence of the product characteristics on MEDS dimensions were generally not impressive but the performance for power was very strong, convenience in terms of design was strong, but the performance of the weight, design and volume were average. The firm A fell behind other firms in terms competitive advertisement and in spite of all the investment on marketing research to boost purchase, consumer interest was still not impressive. For three periods, the SAKE brand was performing a lot better than t SAFE.
In penned 4 Period: 6 Budget available: Aims and Objectives: 1 . While sales for SAKE were good there, it was competing mainly in the high quality/ characteristics and high price segments. The objective of this period is use industry. 2. On the other hand revenues for SAFE were low with only 5500 units sold yielding inventory cost. The aim of this period is to rearrange our product portfolio to take advantage of the high demand for products with the characteristics of SAKE and remove the inventory cost associated with SAFE. 3.
The aim was that rearranging our portfolio based on SAKE’s characteristics will increase sales and give us market share advantage over company I who dominated shares in this category. Actions taken: * We introduced a new Brand SAVE into the market which had similar and slightly better characteristics than SAKE but sold it at a slightly lower price (at $400) in other to exploit the perceived high demand for products with the characteristics of SAKE. * For advertisement, we spent $12000, the bulk of which was spent on SAKE and SAVE, 5500 and 5000 respectively to maximize on the demand for these brands.