The initial condition was the firm having two goods: SOON and SORT. The overall performance was good. The firm S Class was ranked: first in the share price index, third in volume market share in value market share and first in net contribution. Most of the contribution after marketing is generated by SORT (91%). The firm was allocated a budget of 8.8 million dollars for period three. Prudence in decision making was essential especially on matters pertaining forecasting the future needs and perceptions of the targeted segments. In other words, research and development were key in determining our overall performance. The firm needed to forecast the evaluation of the needs of the segments in the upcoming periods. Defining the firm's competitors, evaluating the performance on their investments and advertising budgets for each of the brands.
At the end of the eighth period,SESUPER had the highest brand revenue of $66 million followed by SOOON $53 million, SORT and SOON $14million each respectively. The brand contribution was highest in SESUPER $32 million, SOOON, SORT and SOON had $27 million, $6 million, and $5 million respectively. Away from that, the firm registered a progressive increase in earnings before tax from period four through to period eight with $41 million and $56 million respectively. At the end of the seventh period, 71% of Professionals are aware of SORT, this was one of the highest awareness levels amongst relative to that of other firms. Firm S class, therefore, had an option of lowering the advertising on SORT or maintaining a strong adverting budget which in turn would cause a barrier to entry for new competitors in the specific segment.
Strategic Analysis Prices
There are two markets in Marskstrat world, Sonite and Vodite. These markets are divided into several segments and each segment has different characteristics, needs, purchasing power and decision-making criterion. In order to make decisions on which customer segment to focus on, we used the market forecast for the segment's growth rates percentages in units. The market was segmented into Explorers, Shoppers, Professionals, High earners and Savers. Product attribution was tailored to meet the demand of the category of consumers that was expected to rise, this was done using data obtained from the Market Forecast segment.
Commercial and advertisement TeamsDecisions on the number of sale force were obtained from the Sales Force Experiment number of brands in the market. The examination was carried out on the contribution effect of incrementing the sales force for each brand. The Consumer Survey Shopping Habits was used to make decisions on the distribution of sales force. The allocation was done on a number of sales forces for each brand in each distribution channel by examining consumer survey and competitor's sales force distribution. At the end of period seven, 47% of Savers were aware of product SOOON. This awareness level was on the lower end compared to other offerings by firms targeting Savers. It was prudent for firm S class to keep on advertising strongly on SOOON because it was leading in Savers despite the fact that it had low awareness levels relatively.
Research and development decisionWith regards to the decision formulation, planning and implementation, the semantic scales ideal values were used. The targeted segments ideal semantic scale values are adjusted using regression analysis and visualizations provided. The study monitors the evolution of consumer needs over time. The preferred values on each scale over the past (3 years maximum) are recorded in the table below, for each consumer segment. At the end of period seven, SOON is was well perceived by Savers along the product dimensions of the Brand Maps. This, in turn, negates the necessity to do any research and development on product SOON. The production plan set for SOON was also efficient at 220k units so there were no pending units in our inventory.
The company used market research reports to predict and identify moves of the competitors. From commencement to the end of period three the firms had equal resources for research and development. Research and development expense section of the simulation was used to predict the future projects of the competitors. Market forecast section was used to deduce that market size will grow significantly next five periods. Competitive intelligence report was used to predict which segments were being targeted by our competitor's brands. If the strategy is to steal market share then our brand would need to have significantly higher marketing expenditure relative to our competitors. If the strategy is to keep hold of market share, then the marketing expenditure would need to be relatively equal with that of the competitors. Our competitors were identified based on the firms which allocated the highest amounts of resources (or second highest if firm S class was the first) to the marketing segments of our previous periods.
Overall Learning Experience
During the initial states of a firm, the company experiences high profits and growth rates up to a certain point where growth stagnates and the firm starts to make losses. This is called the theory of diminishing marginal rate of return. After the growth period, competitors start to enter the Vodites market and the price wars start to happen. The firm S Class realized the importance of portfolio differentiation in order to reduce exposure to various kinds of risks. We used Research and Development query instead of feasibility report in the early stages. The firm failed to realize that being a pioneer does not mean we will dominate the market eventually as completion was later tough in the Vodites market. The teams which were endowed competent manpower with research and development skills won. Entering the Vodites market with the correct price, product segmentation and attributes of the specific target groups win the simulation. At the initial stages of the simulation, there was an urgent need to expand the line of goods and continuously increase the qualities(attributes) of the goods to satisfy the demands of the target segments. Furthermore, product diversification will help the firm shield against future risk such as intense competitions. Multidimensional scales important when making choices regarding product attributes. During the end of period eight, we lost a significant amount of sales volume because we were not able to fulfil all the orders for SORT and SESUPER in that period despite efforts from the production department.
The firm made a mistake by misallocating the commercial team to SESUPER such that it did not align perfectly with sales made in each channel. The firm allocated too many people to Mass March and not enough to Specialty stores. At this point, it was wise to review the shopping habits of our target segments
markstrat (n.d.). [online] Markstrat.stratxsimulations.com. Available at: http://markstrat.stratxsimulations.com/ReportsLayout/CompanyResults.aspx [Accessed 4 Dec. 2018].
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