Table of Contents - MHPractice

Table of Contents - MHPractice

Table  of  Contents   Introduction  ...

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Table  of  Contents   Introduction  .............................................................................................................................................................  2   Game  Description  ..........................................................................................................................................................................  2   System  Requirements  ...................................................................................................................................................................  2   Potential  Learning  Objectives  ..................................................................................................................................................  3   Game  Setup  ...............................................................................................................................................................  3   Instructor  Account  ........................................................................................................................................................................  3   How  to  Log  In  ..................................................................................................................................................................................  3   Getting  Started  ...............................................................................................................................................................................  4   Setting  Up  and  Using  Practice  Marketing  ..........................................................................................................................  5   Students  .............................................................................................................................................................................................  6   Teams  ..................................................................................................................................................................................................  6   Creating  an  Assignment  ..............................................................................................................................................................  8   Step  One:  Name  and  Describe  the  Assignment  ......................................................................................................  8   Step  Two:  Select  the  Number  of  Individuals  or  Teams  per  Game  .................................................................  9   Step  Three:  Schedule  How  You  Want  the  Turns  to  End  and  How  Many  Turns  are  in  this  Game  ....  9   Step  Four:  Special  Settings  for  the  Game  ...............................................................................................................  12   Step  Five:  Establishing  the  Score  Card  ...................................................................................................................  14   Step  Six:  Review  the  Assignment  ..............................................................................................................................  14   Synchronous  and  Asynchronous  Team  Play  ...................................................................................................................  15   Classroom  Introduction  .....................................................................................................................................  17   The  Game  World:  A  3D  Conceptual  Map  ..........................................................................................................................  17   Target  Market  Segment  ...........................................................................................................................................................  18   Product  Development  ...............................................................................................................................................................  19   Pricing  System  ..............................................................................................................................................................................  23   Distribution  System  ...................................................................................................................................................................  24   Integrated  Communications:  Positioning,  Promotions  and  Product  Awareness  ...........................................  26   Support/FAQs  .......................................................................................................................................................  29   Glossary  ...................................................................................................................................................................  29   Appendix  .................................................................................................................................................................  30   Buy  Calculation  ...........................................................................................................................................................................  30   Matrix  of  Values  ..........................................................................................................................................................................  33  

    1    

Introduction  

   

Game  Description     Practice  Marketing  puts  players  in  the  role  of  a  marketing  decision  maker  for  a  small  backpack   company.    Players  research  the  market  for  backpacks  and  choose  a  promising  market  segment   to  target.    Then  they  design  a  backpack  with  the  goal  of  matching  its  style,  attributes  and  special   features  to  the  preferences  of  that  market  segment.  After  setting  an  initial  price  for  their   backpacks,  players  select  distribution  channels,  and  coordinate  an  integrated  communications   strategy  to  build  awareness  for  their  products.    The  game  includes  a  realistic  marketplace  in   which  individual  players  ,  or  teams,  acting  as  companies  compete  against  other  player,  team,  or   computer-­‐controlled  backpack  companies.    Players  analyze  sales  results,  collect  information  on   competitors,  and  refine  their  product,  price,  place,  and  promotions  strategies  in  order  to   maximize  profits  and  become  a  market  leader.    

System  Requirements   In  order  to  use  the  simulation  you  must  have  the  latest  Sandstone  Player  for  Windows  installed   on  your  computer.    You  can  download  that  from  the  link  at  the  bottom  of  the  Practice   Marketing  website  at  www.mhpractice.com.     The  computer  must  also  meet  the  Technical  Requirements  listed  below.   1. Operating  systems:  Windows  XP  with  Service  Pack  3  /  Windows  Vista  SP2  /  Windows  7  /   Windows  8?????  

2    

2. Internet  Browser:  Firefox  version  3.6  or  above  OR  Internet  Explorer  7  or  above  OR   Google  Chrome  version  8.0  or  above   3. Memory:  512MB  RAM   4. Processor:  Intel  Pentium  3-­‐4  processor  or  equivalent/better   5. Video:  NVIDIA  GeForce  6600  or  better  OR  ATI  Radeon  8500,  9250  or  better  OR  Intel  945   chipset  or  better,  1024  x  768  resolution  minimum   6. Internet:  128kbit/s  Cable/DSL/LAN  connection  per  computer   7. Hard  Disk  Space:  500MB  free   8. Direct  X:  DirectX  9.0c    

Potential  Learning  Objectives   §

Provide  a  lively,  interactive  experience  that  focuses  on  student  learning  through  trial   and  error  within  holistic  game  play,  where  students  see  how  the  elements  of  marketing   come  together.      

§

Support  online,  out-­‐of-­‐class  play,  and  multiplayer  competition  among  students.    

§

Stress  financial  results  as  the  key  success  metric.  

§

Focus  on  the  4  P’s  of  marketing.  

§

Provide  reporting  features  that  make  it  easy  for  instructors  to  assess  player   performance  and  decision-­‐making.  

§

Feature  game  world  data  and  situations  that  reflect  real  world  marketing  issues  

 

Game  Setup   Instructor  Account   Instructor  details  will  be  provided  on  request  from  your  local  McGraw-­‐Hill  Education  Sales   Representative.  To  contact  McGraw-­‐Hill  Education,  please  select  the  nearest  office  from  the  list   on  these  pages:  http://www.mcgraw-­‐hill.com/site/about-­‐us/office-­‐locations    

How  to  Log  In   Once,  you  have  received  your  unique  user  name  and  password  from  your  designated  McGraw-­‐ Hill  Education  Sales  Representative,  you  are  able  to  log  in  to  the  simulation  in  a  number  of  ways,   including:   §

Directly  through  the  McGraw-­‐Hill  Practice  website  at:  http://mhpractice.com.  

3    

§

If  you  are  using  McGraw-­‐Hill  Connect  you  will  be  able  to  access  the  simulation  through   the  Practice  Marketing  link  located  in  the  lower  right  side  of  your  McGraw-­‐Hill  Connect   account.  

§

If  your  Connect  Account  is  synchronized  with  Blackboard  or  XXX  you  will  be  able  to   access  Connect,  and  thus  Practice  Marketing,  while  logged  into  your  Blackboard  course.  

If  you  set  up  Practice  Marketing  to  go  directly  through  the  website,  you  will  give  your  students  a   URL  to  use  to  log  in.  If  you  set  up  Practice  Marketing  to  be  accessed  through  Connect,  the   Practice  Marketing  link  will  appear  in  the  lower  right  of  Connect  when  your  student  is  logged  in.    

Getting  Started     Once  you  log  in,  you  will  see  all  of  your  courses  in  which  you  plan  to  play  Practice  Marketing.   [Practice  Marketing  is  so  versatile  it  can  be  used  as  easily  for  a  survey  of  marketing  course,  as  a   capstone  marketing  course]        

    Note:  Once  a  course  end  date  has  passed,  you  may  delete  that  course  if  you  wish.   Click  on  the  course  number  that  you  would  like  to  set  up.    

4    

Setting  Up  and  Using  Practice  Marketing  

    Recommendation:  To  introduce  Practice  Marketing  to  your  students,  use  the  Demo  Game:   Practice  Marketing  and  plug  in  your  computer  to  project  the  game  and  help  students  discuss   and  ask  questions  on  how  it  will  be  played.  Simply  click  on  the  Demo  Game  button.     Be  sure  to  have  the  Sandstone  player  installed,  and  tested,  on  the  computer  you  will  be  using   for  your  presentation  in  advance.     Setting  Up  -­‐  Students,  Teams  and  Assignments   In  general  you  will  be  setting  up  game  Assignments,  you  will  be  reviewing  Students’   performances,  and  you  will  create  Teams  one  time.    

  5    

Students   When  you  click  on  Students,  you  will  see  all  your  students  who  have  registered  for  Practice   Marketing  for  this  course.    As  the  semester  progresses,  you  can  click  on  any  student  name  to   review  their  assignment  status  and  scores.    

     

Teams   To  create  teams,  first  click  on  ‘Teams’  then  click  on  ‘Manage  Teams’.  At  this  point  you  can  select   whether  or  not  you  want  to  create  teams  manually  or  automatically.    

   

6    

Of  course,  all  the  students  must  be  enrolled  in  the  Practice  Marketing  course  to  automate  team   creation  for  the  entire  course.     Alternatively  you  may  choose  to  create  teams  manually  and  then  drag  and  drop  students  into   each  team.     Note:  In  this  version  of  the  software,  Teams  cannot  be  edited  once  the  first  team  assignment   has  been  created  and  the  teams  have  been  assigned.    

    Note:  If  you  click  on  ‘Hide  teams  in  assignments’  then  teams  will  not  know  who  the  teams  are   playing  against  them  in  a  game.   If  you  want,  you  can  customize  each  team  name  by  clicking  on  the  pencil  to  edit  the  name.   You  can  continue  to  add  teams,  if  new  students  join,  as  long  as  you  have  not  yet  begun  the  first   team  assignment.   Once  students  have  been  placed  in  teams,  and  the  teams  have  been  given  an  assignment,  teams   cannot  be  edited  for  the  remainder  of  the  course.  [this  will  be  modified  in  a  future  release]   Every  game  has  six  teams;  if  you  do  not  assign  six  teams  to  a  game,  the  system  will  add  the   missing  teams  which  will  be  played  by  the  software.  So  if  you  choose  to  assign  3  teams  to  a   game  in  a  particular  assignment,  then  three  of  the  game  backpack  companies  will  be  played  by   the  class  teams,  and  three  of  the  companies  will  be  computer  played  teams.    

7    

Creating  an  Assignment   Click  on  ‘Assignment’,  then  click  on  the  Create  Assignment:  Practice  Marketing  button.  

  Creating  an  Assignment  is  easy;  there  are  six  simple  steps:    

Step  One:  Name  and  Describe  the  Assignment   In  this  screen  enter  a  name  for  the  Assignment  and  an  Assignment  description.  Once  you  have   entered  the  name  and  description  click  on  the  button  ‘next’.  

  8    

Step  Two:  Select  the  Number  of  Individuals  or  Teams  per  Game   Question:  Do  you  want  this  assignment  to  be  played  by  individual  students  or  by  teams?   Recommendation:  For  the  first  assignment,  set  up  a  Tutorial  Game  [the  Tutorial  mode  is   selected  as  a  choice  in  the  fourth  step]  and  then  set  the  Assign  Mode  to  individuals.     The  Tutorial  Mode  consists  of  6  turns  that  walk  the  student  through  each  of  the  six  decision   areas:  Target  Segment,  Product,  Price,  Marketing  Channels,  Positioning  and  Advertising,  and   then  Competitive  Analysis.  You  can  have  that  Tutorial  Game  last  longer  than  those  six  turns,  to   allow  the  students  to  take  over  control  and  try  decisions.  This  mode  does  not,  however,  save   scores.   With  ‘Assign  Individuals’,  and  1  student  selected  per  game,  each  student  will  have  a  chance  to   experience  the  game  in  a  non-­‐competitive,  paced,  fashion.  

  For  any  Assignment  you  can  choose  between  individual  play  or  team  play.  If  you  select  Assign   Teams,  you  will  be  able  to  select  the  number  of  teams  per  game.     Again,  every  game  has  six  teams;  if  you  do  not  assign  six  teams  to  a  game,  the  system  will  add   the  missing  teams  to  be  played  by  the  software.      

Step  Three:  Schedule  How  You  Want  the  Turns  to  End  and  How  Many  Turns  are  in  this   Game   There  are  four  choices  for  Scheduling  how  the  turns  of  the  game  end:   §

Scheduled  

§

Manual    

§

Instructor  Controlled  

§

Turn  Duration  

Each  choice  offers  a  different  approach  and  some  benefits  and  disadvantages.  Each  choice   includes  an  option  to  set  the  total  Number  of  Turns  for  the  Game/Assignment.  

9    

Question:  Do  you  want  to  automate  the  way  that  Turns  end?  Do  you  want  to  manually  end   Turns?  or  Do  you  want  the  speed  at  which  the  student  teams  finalize  their  decisions  to  end  the   turns?     IMPORTANT:  The  Time  of  Day  used  by  the  system  is  in  UTC,  which  means  that  you  must  make   the  mathematical  adjustment  to  correct  for  your  local  time  zone,  which  could  be  up  to  11   hours  difference.  Students  should  also  be  made  aware  of  this  in  case  the  time  appears  in  any   context.  [this  issue  is  currently  being  addressed  for  the  next  release]    

    Recommendation:  For  your  first  competitive  game,  you  might  want  to  use  Scheduled  mode  and   set  up  specific  days  of  the  week  and  a  consistent  time  for  Turns  to  end.   Note:  Being  consistent  in  when  Turns  are  Ended  could  enhance  the  student  experience.    

10    

    Manual  scheduling  means  that  Turns  will  end  when  all  students  or  teams  in  a  game  click’  End   Turn’.  Clearly  the  potential  issue  is  that,  if  there  are  multiple  games,  turns  will  become  out  of   synch  if  one  individual  or  team  is  slower  at  making  decisions.    

    Instructor  Controlled  scheduling  is  where  the  instructor  will  end  Turns  by  clicking  ‘End  Turn’  on   the  Assignment  page.  This  will  keep  the  game  Turns  in  synch.     One  of  the  advantages  of  using  Instructor  Controlled  scheduling  is  that  Turns  could  be  ended  in   class  at  a  time  that  makes  sense  in  the  day’s  presentation.   11    

  Turn  Duration  scheduling  is  where  the  Turns  will  end  at  a  set  time  duration,  such  as  every  24   hours.  This  will  keep  the  game  Turns  in  synch,  however,  it  is  difficult  with  this  scheduling  to  be   consistent  on  days  per  week.    

Step  Four:  Special  Settings  for  the  Game   There  are  three  game  Parameters  that  you  have  control  over:   §

Questions    

§

Market  Events    

§

Tutorial  Mode      

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If  you  turn  Questions  ON,  you  will  have  three  options:  each  listed  questions  will  appear  at  the   end  of  the  Turn  indicated,  you  can  set  a  default  question  that  will  appear  every  turn,  or  you  can   edit/customize  each  question.     With  Questions  OFF,  there  will  be  no  questions  asked.  

  Market  Events  ON  means  that  you  have  the  option  to  set  certain  events  to  happen  in  the  game   in  a  specific  Turn,  to  create  more  real-­‐life  issues  and  conflict.     Recommendation:  For  the  first  game  assigned  it  would  be  simpler  to  keep  Events  OFF,  however,   as  you  have  time,  reviewing  the  options  so  that  during  the  course  of  the  game  you  can  give   thought  to  how  you  might  use  the  Event  options.  

13    

    Tutorial  ON  means  that  six  Turns  will  be  controlled  by  the  software,  and  that  the  game  score   will  not  be  saved.    

Step  Five:  Establishing  the  Score  Card   The  Scoring  is  under  your  control:   Hover  over  each  criteria  to  see  how  it  is  calculated,  for   example:   Return  On  Marketing   [Net Profit - (Marketing Costs + Distribution Costs)] / (Marketing Costs + Distribution Costs) Product  Satisfaction  and  Customer  Satisfaction  are  very   similar,  so  you  may  want  to  only  use  one  of  the.   In  any  case,  the  Score  total  must  add  up  to  be  100.    

Step  Six:  Review  the  Assignment   This  final  step  allows  you  to  review  how  you  have  set  up  the  entire  Assignment,  and  to  go  back   and  make  changes  if  need  be.    

14    

Once  you  have  reviewed  this  Assignment,  and  are  satisfied,  click  on  the  ‘Create  Assignment’   button.   At  this  point  the  Assignment  will  show  up  on  the  home  panel,  and  as  soon  as  the  system  has   completed  the  setup  it  will  be  displayed  as:  Ready.   That  screen  also  shows  the  number  of  games  being  played  in  that  Assignment.   When  reviewing  that  Assignment,  the  Current  Turn  displayed  is  the  lowest  Turn  of  all  the  games   being  played  in  that  Assignment.   Click  on  Score  to  have  access  to  data  on  each  game  in  the  Assignment,  and  to  be  able  download   scores.    

   

Synchronous  and  Asynchronous  Team  Play   Students  can  play  as  a  team  either  while  online  together,  passing  the  decision  control  amongst   themselves,  or  separately  in  both  cased  needing  agreement  with  each  other  on  their  final   decisions.  

15    

   

    Now  Get  Started   Now  that  you  have  the  basics  of  how  to  set  up  and  use  Practice  Marketing,  let’s  move  into  how   you  can  present  and  turn  Practice  Marketing  into  a  great  classroom  experience.      

16    

Classroom  Introduction     Walk  through  of  Game  Elements    

The  Game  World:  A  3D  Conceptual  Map   The  game  world  is  a  3D  interface  that  connects  the  principles  and  practices  of  marketing.    We   call  this  a  3D  Conceptual  Map.    It's  an  interactive,  animated  view  of  the  elements  of  marketing:   Market  Segments,  Product,  Price,  Place,  Positioning,  and  Competitors.    Each  element  occupies   its  own  area  of  the  world.  Elements  connect  by  swooshing  along  animated  paths.    Players  travel   around  the  map,  zooming  in  on  different  elements  to  examine  data  and  information,  or  clicking   to  bring  up  controls  and  other  panels.        

   

17    

   

Target  Market  Segment     In  each  game,  individual  players  or  teams  together  analyze  market  segments  and  select  one  to   target.    The  various  market  segments  have  different  demographic  characteristics,  product  use   demands,  price  sensitivity,  and  other  preferences.      These  characteristics  determine  the  product   offerings  that  target  market  segments  will  prefer  and  buy.          

  18    

In  the  game,  there  are  five  market  segments:   §

School  Children  

§

University  Students  

§

Urban  Commuters  

§

Outdoor  Enthusiasts  

§

Luxury  Trend-­‐followers  

  The  following  factors  differentiate  the  market  segments:       §

General  characteristics:    size,  growth  rate,  purchase  frequency,  etc.  

§

Attribute  preferences:    How  important  certain  backpack  characteristics  are  to  the   market  segments,  based  on  their  desired  use  and  other  factors.  

§

Price  sensitivity  /  preference:    Are  they  cost  conscious?    Looking  for  a  luxury  item?  

§

Special  features  desired  by  each  segment  

 

Product  Development   Once  students  have  identified  a  market  segment  to  target,  they  must  design  a  backpack  to  meet   that  segment’s  needs.    The  3D  Backpack  builder  lets  students  see  the  characteristics  and   differentiating  features  of  the  pack  they  create.  Players  design  a  backpack  by  choosing  its  shape,   straps,  material,  color,  and  special  features.      Each  choice  they  make  affects  one  or  more  of  the   backpack’s  characteristics.    For  example,  changing  the  fabric  may  affect  the  backpack’s   durability,  cost,  and  weight.  A  3D  model  of  the  backpack  changes  before  the  player’s  eyes  as  the   players  selects  attributes  and  features.  The  characteristics  of  each  pack  update  2D  data   readouts.    

19    

    Backpack  characteristics   The  backpack  building  system  links  tightly  with  the  market  segment  system.  Players  craft  their   packs  from  a  base  set  of  designs  and  variations,  choosing  materials  and  equipping  their  packs   with  special  features.  Different  backpacks  will  appeal  to  different  market  segments.  All  six   backpacks  display  in  a  3D  competitor  hub,  as  shown  below,  allowing  players  to  make  quick   visual  as  well  as  numerical  comparisons.    

  Each  backpack  has  five  key  characteristics.    These  characteristics  are  a  part  of  the  criteria   consumers  use  to  evaluate  the  backpacks  when  making  a  purchase  decision  (in  addition  to  price,   special  features,  etc.)    The  characteristics  include:   §

Capacity  –  How  much  can  the  backpack  hold?    This  factors  in  both  overall  size  of  the   backpack  and  number  of  pockets/special  compartments  and  add-­‐ons.    The  base  design   and  variations  determine  capacity.      

20    

§

Durability  –  This  is  a  performance  measure.    How  tough  is  the  backpack?    How  reliable?     The  type  of  fabric/material  used  and  the  special  features  chosen  for  the  backpack   determine  its  durability.      

§

Comfort  –  A  measure  of  how  comfortable  the  backpack  is  for  users.    Type  of  fabric  and   special  features  determine  comfort.  

§

Weather  Resistance  –  A  measure  of  a  backpack’s  resilience  to  the  elements.  Determined   by  fabric  and  special  features.  

§

Eco-­‐Friendliness  –  Each  material  has  an  environmental-­‐friendliness  characteristic  that  is   desired  by  some  target  markets.      

  Backpack  Selection  Options   The  five  key  characteristics  are  a  roll-­‐up  of  the  Backpack  options  players  can  choose.    The   options  players  have  include:       Backpack  Shape  Options       The  shape  options  determine  the  base  size  and  look  of  the  pack.    The  backpack  shape  chosen   will  affect  the  cost,  capacity,  and  comfort  level  of  the   backpack  created.    Shape  options  include:     §

Teardrop  Rucksack      

§

Rounded  Top  

§

Square  

§

Large  Rectangular  

    Backpack  Strap  Options       The  strap  options  determine  the  type  of  straps  of  the  pack.    The  backpack  straps  chosen  will   affect  the  cost,  comfort,  and  durability  of  the  backpack.    Strap   options  include:     §

Thin  Spaghetti  

§

Basic  

§

Wide  Padded  

§

Wide  +  Chest  

§

Advanced  Support  

  21    

  Backpack  Material  Options   The  backpack  materials  chosen  will  affect  the  cost,  comfort,  durability,  weather  resistance,  and   eco-­‐friendliness  of  the  backpack.    Materials  include:     §

Cheap  Synthetic    

§

Eco-­‐Friendly  Hemp    

§

Advanced  Synthetic    

§

Luxury  Leather    

  Colors   Players  will  be  able  to  choose  from  a  small  number  of  color  options  for  each  main  style  of   backpack.    The  color  system  will  be  simple.    Target  markets  will  have  preferences  for  color.    For   each  possible  color  of  backpack,  each  target  market  will  either:   §

Prefer  that  Color  (adds  a  bonus  to  your  backpack’s  attractiveness  to  the  segment)  

§

No  opinion  (Does  not  factor  into  your  score.    Your  backpack  will  be  rated  on  other   features.)  

A  market  segment’s  color  preferences  can  change  over  time  (see  market  events),  so  that  colors   can  go  in  or  out  of  style,  making  it  worthwhile  to  watch  trends.         Special  Features   Special  features  are  additional  desirable  add-­‐ons  and  improvements  to  base  materials  and   designs.    Special  features  can  affect  the  characteristics  (Capacity,  Durability,  Comfort,  Weather   Resistance.)    Special  features  may  also  be  specifically  looked  for  by  a  target  market,  and  thus  can   provide  a  competitive  advantage  for  the  backpack  in  the  market  place.    The  list  of  special   features  include:     §

Water  Bottle  

§

Cartoon  Graphic  

§

Solar  Device  

§

Waterproofing  

§

University  Logo  

§

Audio  Bundle  

§

Designer  Tag  

§

Laptop  Sleeve  

§

Integrated  GPS  

  22    

Production  Cost  of  Backpacks   Backpack  design  options  and  special  features  all  have  associated  production  costs.  Players  will   see  the  additional  cost  of  each  selected  option  or  feature,  and  see  a  display  of  the  total   production  cost  for  their  pack.      

Pricing  System   Pricing  in  the  real  world  is  a  multifaceted  and  complex  decision.  For  Practice  Marketing,  we   developed  a  simplified  model  for  Price  Sensitivity  based  on  the  Van  Westendorp  Price  Sensitivity   Meter  (PSM.)  PSM  is  a  market  technique  for  determining  consumer  price  preferences  that  has   been  a  staple  technique  for  addressing  pricing  issues  for  the  past  20  years,  and  continues  to  be   used  widely  throughout  the  market  research  industry.    We  built  a  price  sensitivity  model  that   supports  luxury  as  well  as  low-­‐cost  price  preferences.          

    Here's  how  it  works:     1. Each  target  segment  has  a  price-­‐sensitivity  curve  with  four  key  price  points.   i.

Too  expensive:  the  price  at  which  the  segment  considers  the  backpack  so  expensive   that  they  would  not  consider  buying  it.  

ii.

Too  cheap:  the  price  at  which  the  segment  considers  the  price  so  low  that  the   quality  can't  be  very  good,  and  also  will  not  buy  it.  

iii.

Expensive/high  side:    the  price  at  which  the  segment  feels  a  backpack  is  starting  to   get  expensive;  not  out  of  the  question,  but  requires  thought.  

iv.

Cheap/good  value:  the  price  at  which  the  segment  considers  a  backpack  a  great   buy.   23  

 

2. Each  segment  will  score  a  backpack's  price  based  on  a  curve  developed  from  these   points,  and  that  Price  Score  will  be  used  in  the  buy  calculation  (see  appendix.)   3. The  four  points  can  be  adjusted  to  create  luxury  or  low-­‐cost  (highly  price-­‐sensitive)   buyers.    For  a  luxury  buyer,  the  “too  cheap”  price  point  is  relatively  high  because  the   buyer  wants  to  pay  a  higher  price,  and  will  also  be  looking  for  luxury  attributes  and   features.           We  chose  this  model  because  rather  than  just  saying  lower  is  better,  we  thought  that  the  idea  of   having  levels  where  a  price  could  be  subjectively  seen  along  a  gradient  as  too  cheap  or  too   expensive  was  interesting.    We  borrowed  this  idea  from  the  Van  Westendorp  Price  Sensitivity   Meter  approach  that  companies  could  use  to  determine  a  price  that  meets  their  strategy.    

Distribution  System   In  addition  to  selling  products  directly  to  consumers,  players  have  the  option  to  work  with   channel  intermediaries.    Players  can  review  distribution  channel  options,  looking  at  terms,   demographics,  and  other  factors,  and  make  deals  with  retailers  to  develop  a  profitable  channel   management  strategy  tailored  to  their  product  and  target  market  segment.    

    Distribution  Channel  Options   Direct  Distribution     Companies  can  sell  to  consumers  directly.  There  is  a  pool  of  consumers  in  the  world  available  to   the  player’s  company.  Players  receive  100%  of  the  proceeds  of  those  sales  (no   retailer/wholesaler  cut).  We  have  abstracted  out  shipping,  transport,  and  overhead  costs.     Direct  distribution  is  one  of  the  sub-­‐hubs  found  in  the  Place  hub.       24    

  Distribution  Channels  –  Companies  can  also  establish  distribution  deals  with  retailers  of  varying   sizes,  opening  them  up  to  a  greater  universe  of  consumers.    There  are  six  distribution  channels   in  the  world.    The  channels  include:     §

University  Store  

§

Online  Discount  Retailer  

§

Supermarket  

§

Department  Store  

§

Fashion  Boutique  

§

High  End  Outdoor  

  Retailer  channels  have  the  following  key  properties:   §

Customer  Reach  –  How  many  customers  served  each  turn  

§

Customer  Mix  –  Breakdown  of  distributor’s  customers  across  target  markets  

§

%  MSRP  the  channel  will  pay  for  a  pack  –  affects  margin  

§

Price  Discount  to  Consumers  –  Amount  retailer  will  discount  your  MSRP.    Each  Channel   will  set  its  own  price  for  your  pack.  

§

Sales  Dedication  –  How  much  effort  will  the  retailer  put  into  pushing  the  player’s   product?    Lower  at  large  chains,  higher  at  specialty  goods  stores.    Players  can  increase   sales  dedication  by  investing  in  market  development  funds  (MDF).        

§

Preferred  Price  Range  –  Some  channels  have  price  points  above  or  below  which  they   won’t  want  to  carry  a  product.    A  Supermarket  won’t  carry  a  very  expensive  luxury   product.  A  Luxury  store  won’t  carry  a  cheap  children’s  backpack.  

  How  Distribution  Channels  Affect  Game  Play     Distribution  channel  management  adds  a  new  layer  of  complexity  to  decision-­‐making  in  the   game.   Players  must  carefully  evaluate  each  retailer,  looking  for  the  optimal  places  to  sell  their   products.       Types  of  questions  players  might  ask:   Where  does  my  primary  target  buyer  typically  shop?  Where  will  my  pack  attract  customers  at   the  price  point  I  have  set?  What  channels  will  broaden  my  pack’s  appeal  to  secondary  market   segments,  thus  expanding  my  product’s  market  reach?    Where  are  my  key  competitors’  products   sold?     Players  also  have  the  option  of  making  concessions  to  get  into  specific  retail  stores.    For   example,  a  big  box  retailer  might  not  carry  your  pack  above  a  certain  price.    So  you  must  weigh   the  cost  (in  lost  margin)  of  lowering  your  price  to  get  into  that  store  vs.  the  benefits  of   25    

continuing  to  charge  a  premium  price  for  your  pack,  and  perhaps  limiting  its  distribution  to   higher-­‐end  stores.       Sales  calculations  run  for  each  distribution  channel.    As  the  player,  how  you  do  depends  on  a   number  of  factors,  including  how  well  your  pack  meets  the  needs  of  consumers,  how  consumers   feel  about  your  pack’s  price,  what  other  competitors  are  selling  in  that  retail  outlet,  and  overall   product  awareness.    (See  Buy  Calculation.)         Market  Development  Funds  (MDF)   Each  channel  partner  responds  positively  to  market  development  funds.    An  investment  in  MDF   increases  the  sales  force  dedication  in  that  channel.  The  partner  will  push  your  product  harder,   thus  improving  sales.  But  by  how  much  exactly?  You  sacrifice  some  margin  to  boost  sales,  so  it’s   important  to  keep  a  close  eye  on  whether  the  sales  increase  warrants  this  ongoing  investment.     Channel  Promotion  Discount  (Sales  Promotion)   Within  each  Channel,  players  also  can  offer  a  Promotional  Discount  Program  that  works  like  a   5.00  rebate.    This  is  an  optional  program  to  improve  buyers’  opinion  of  the  pack’s  price  in  that   channel.    The  cost  of  the  program  will  be  the  revenue  that  the  player  does  not  get  (5.00  off  the   price  x  #  sold)  because  of  the  discounted  price.        

Integrated  Communications:  Positioning,  Promotions  and  Product   Awareness   The  integrated  communications  system  has  two  main  components:  choosing  a  positioning   message  and  purchasing  a  promotional  campaign.    Your  positioning  message  spreads  across   the  chosen  promotional  vehicles,  raising  product  awareness  levels/desire  for  the  backpack,   which  in  turn  contributes  to  more  sales.        

26    

    Two  Components  of  Integrated  Communications   Integrated  communications  consists  of  two  main  components:   §

Message  –  Core  positioning  message(s)  or  unique  value  propositions  for  the  pack  

§

Promotional  Campaign  –  The  specific  campaigns  and  promotional  tools  used  reach   consumers.  

These  two  components  work  in  tandem.    Setting  a  positioning  message  does  nothing  without  a   promotional  campaign  to  get  that  message  out  to  the  public.    Together,  a  company’s  Message   and  Promotional  Campaign  work  to  increase  consumer  segment’s  Product  Interest  Level.       Product  Interest  Level  (AIDA):  Effects  of  Integrated  Communications   The  player’s  integrated  communications/promotional  decisions  aggregate  into  a  single  value,  a   product  interest  level  based  on  the  AIDA  (Awareness,  Interest,  Desire,  Acquisition)  concept.   Imagine  Product  Interest  Level  represented  on  a  scale  from  1-­‐10.    Effective  integrated   communications  will  move  market  segments  further  along  that  scale,  as  they  go  from  being   Aware  of,  Interested  in,  and  ultimately  Desiring  and  Buying  a  product.  Product  Interest  Level  in   itself  is  not  enough  to  determine  purchase.    The  actual  purchase  decision  also  factors  into  all  of   the  other  systems  (target  market  desires,  product  characteristics,  features,  price,  competition,   etc.)  working  together.  

Aware 1

2

Interest 3

4

Desire

5

6

27    

7

Acquisition 8

9

10

Each  market  segment  will  have  a  “Product  Interest”  score  that  is  determined  by  a  combination   of  the  power  of  the  positioning  message  and  the  effectiveness  of  the  advertising  campaign.     This  product  interest  store  will  change  overtime,  increasing  with  well-­‐targeted  messaging  and   advertising,  or  decreasing  due  to  ineffective  messaging  and  advertising.       Raising  a  consumer  from  Aware,  to  Interested,  to  Desires  (your  product)  will  greatly  increase   sales.    Choosing  a  positioning  message  with  a  strong  appeal  and  a  promotional  mix  that  will  be   well  received  by  a  specific  target  market  will  raise  Product  Interest  Level.       A  Segment’s  Product  Interest  Level  will  decrease  over  time  if  player  (a)  stops  promoting;  (b)   switches  to  a  campaign  that  does  not  reach  the  target  segment  effectively,  or  (c)  switches  to  a   Message  that  resonates  less  well  with  the  intended  buyer.       Product  Interest  Determines  Product  Visibility   Product  Interest  Level  determines  the  percentage  of  total  consumers  in  each  distribution   channel  who  will  consider  purchasing  your  product.    The  game  designates  a  predetermined  mix   of  consumers  who  shop  in  each  distribution  channel.    Your  promotions  campaign  builds   awareness  and  interest  among  consumers  over  time.    Early  on  in  the  game,  when  you  are  doing   virtually  no  promotion  and  your  only  distribution  channel  is  direct  selling  (in  your  own  store  and   online),  your  pool  of  potential  consumers  is  quite  small  and  your  product  is  largely  invisible.    An   integrated  communications  campaign  will  raise  the  visibility  of  your  product  in  each  distribution   channel,  increasing  the  number  of  consumers  with  the  potential  to  purchase  your  product.     Selecting  a  Positioning  Message   In  the  positioning  hub,  players  choose  from  a  menu  of  positioning  messages.    The  challenge  is  to   determine  which  messages  appeal  to  their  target  market  and  to  decide  how  many  messages  to   choose.       Players  can  choose  any  number  of  positioning  messages.  However,  the  more  messages  a  player   chooses,  the  less  clear  the  overall  message  becomes.  Piling  on  descriptors  lowers  the  message’s   credibility,  as  multi-­‐part  messages  tend  to  contradict  each  other.  Compare  the  high/low  Clarity   of  the  two  messages  below.    

    28    

Support/FAQs   Should  you  experience  any  problems  in  running  the  simulator,  your  first  point  of  contact  should   be  your  regional  office  who  will  be  able  to  assist  you.  You  can  contact  them  by  using  the   ‘Contact  Us’  link  at  the  top  of  every  page.   How  do  I  export  game  data?   You  can  export  game  data  to  a  spreadsheet  by  clicking  on  the  spreadsheet  icon  on  the  Score   page  to  allow  you  to  create  separate  reports  and  manipulate  the  data.   How  do  I  change  my  password?   To  change  your  own  password  click  on  the  ‘Change  Password’  link  at  the  top  of  the  page.  You   will  be  asked  for  both  your  old  password  and  your  new  password,  which  you  will  have  to  repeat   to  ensure  it  is  correct.  In  order  to  ensure  passwords  are  secure  there  are  some  rules  that  must   be  followed.  These  are  detailed  on  the  change  password  page.   Support   Visit:  www.mhhe.com/support   Call:(800)  331‐5094.   Monday  –  Thursday  l  8AM  –  11PM   Friday  l  8AM  –  6PM   Sunday  l  6PM  –  11PM   (Alltimes  Central)    

Glossary   Definitions   Player:    There  are  six  companies  active  in  any  instance  of  the  Marketing  simulation.  Each   company  is  controlled  by  a  single  participant  or  a  team  of  participants.  If  there  are  not  enough   participants/teams  to  run  6  different  companies,  an  AI  (Artificial  Intelligence)  will  run  the   remaining  companies  in  competition  with  each  other  and  the  other  human  participants.   Student:  A  student  is  a  user  who  has  a  login  to  the  simulator.  They  may  participate  in  games   either  as  a  single  player  or  as  a  member  of  the  team.   Team:  Teams  are  collections  of  participants  that  jointly  decide  on  the  actions  of  their  company   in  the  simulator.  Only  one  member  of  the  team  may  be  active  in  the  simulation  at  any  time.  Our   testing  indicates  that  this  is  the  style  of  usage  that  encourages  the  most  discussion  between   team  members  and  therefore  the  most  learning.   Game:  A  Game  is  a  specific  instance  of  the  simulation  created  by  the  Instructor  which  players   will  use  to  practice  their  Marketing  skills.  Multiple  games  can  be  run  at  the  same  time  and   players  are  able  to  be  participants  in  multiple  games.   Turn:  The  marketing  simulation  is  a  turn-­‐-­‐-­‐based  game.  This  means  that  all  players  must   complete  their  turn  before  the  results  are  calculated.     29    

Appendix   Buy  Calculation   One  of  the  core  tenets  of  our  game  design  approach  was  to  ensure  that  our  underlying  game   systems  reinforce  the  lesson  that  a  successful  marketing  strategy  is  one  in  which  all  4P’s  work   together  in  harmony.    As  a  result,  all  of  the  decisions  players  make  in  the  game  contribute  to  the   buy  calculation  that  determines  how  many  backpacks  players  sell  each  turn.      The  following   diagram  provides  a  visual  overview:      

How  the  4  P’s  Contribute  to  Sales  Performance  

   

Place  

Promotions  

Product  

Price  

    Distribution  Channels  

  determines  the  total  #     and  demographic  mix  of   consumers  in  the  world  

  who  are  able  to    

purchase  your  pack.  

Integrated  communications   determines  the  number  of   those  consumers  who  are   aware  of  and  potentially   interested  in  buying  your   pack.  

The  ultimate  purchase  decision  factors  in  the  actual   Product  (characteristics  and  special  features)  and   Price  of  the  backpack.    Sales  of  all  the  backpacks  in   the  world  are  distributed  among  the  five  target   markets  based  on  how  well  the  pack  matches  the   ideal  pack  of  each  market  segment.    

    The  Buy  Calculation:  Step-­‐By-­‐Step   Step  1   Each  Target  Market  has  a  desire  to  purchase  a  backpack.    Some  market  segments  are  more   motivated  than  others,  meaning  a  small  few  each  quarter  will  decide  to  get  off  the  couch  and   head  to  the  store  and  buy  something.    Most  of  the  target  market,  however,  will  stay  home  and   wait  until  they  hear  about  a  backpack  that  meets  their  needs.    Crafting  a  Media  Campaign  that   effectively  promotes  the  pack  through  Positioning  Messages  and  Advertising  Vehicles,  causes   more  market  segments  to  “get  up  off  the  couch”  to  buy  the  pack.   Each  Target  Market  has  different  responses  to  Positioning  Messages.    Selecting  the  right   messages  will  convince  certain  people  your  backpack  is  right  for  them.  However,  each  target   market  can  only  consume  messages  through  media  vehicles  and  each  target  segment  has   different  percentages  subscribing  to  each  media  vehicle.    Investing  in  the  right  media  vehicles   ensures  those  subscribers  will  hear  about  your  messages  (right  or  wrong)  and  thus  become   aware  that  your  product  exists  and  whether  it  appeals  to  them.   Each  quarter,  the  target  market  evaluates  the  Media  Campaign  by  calculating  its  Position   Message  Score  and  Media  Vehicle  Score.    These  two  scores  combine  to  form  the  backpack’s   overall  AIDA  score.    The  target  market  uses  the  AIDA  score  twice  to  determine  whether  to  shop   for  a  backpack.   30    

First,  the  backpacks  are  ranked  based  on  the  AIDA  score.  The  first  backpack  that  you  will   evaluate  when  you  arrive  at  the  store  receives  the  highest  AIDA  score.    Second,  the  actual   number  of  the  AIDA  score  determines  how  many  people  from  a  specific  target  segment  will   arrive  to  evaluate  that  backpack  and  consider  purchasing  it.    A  perfect  AIDA  score  results  in   almost  the  entire  population  of  the  target  segment  going  shopping  for  that  backpack  that   quarter.    A  low  AIDA  score  will  only  motivate  a  fraction  of  the  people  to  decide  that  maybe  that   backpack  merits  a  purchase  in  the  current  quarter.     Step  2   At  this  point,  each  quarter,  a  percentage  of  the  target  market  will  decide  to  go  shopping  for  a   backpack,  with  their  choices  prioritized  by  AIDA  score.       Each  target  market  has  different  percentages  that  shop  at  different  places.    Just  because  a   prospective  customer  has  heard  about  a  backpack  and  will  consider  buying  it,  doesn’t  mean  the   place  offers  the  backpack,  or  that  the  backpack  will  meet  the  customer’s  needs.    Thus,  each   quarter  the  motivated  target  market  shoppers  will  go  to  the  various  stores  in  different  numbers   and  look  for  backpacks  to  buy.    As  the  player,  you  need  to  have  your  backpack  at  the  store  to   have  any  chance  of  it  traveling  from  the  shelf  to  the  checkout  counter,  regardless  of  the   strength  of  your  Media  Campaign.    Even  if  you  create  a  perfect  backpack  that  succeeds  in   generating  strong  consumer  demand,  you  can’t  sell  it  if  stores  don’t  carry  it.     A  small  fraction  of  each  target  market  will  always  hunt  down  your  company’s  website  and  buy   direct.    These  are  the  passionate,  dedicated  consumers.    But  the  majority  of  the  market  will  buy   at  stores.   When  consumers  arrive  at  the  store,  they  begin  to  evaluate  backpacks  in  the  order  of  their   respective  AIDA  scores.    The  product  most  appealing  to  the  consumer  will  be  evaluated  first   using  a  buy  calculation  (described  next).    When  the  buy  calculation  finishes,  a  certain  number  of   those  consumers  will  buy  the  backpack  and  go  home.  The  remainder  will  stay  and  look  at  the   next  backpack  down  on  the  AIDA  list.     Step  3   Here’s  how  the  buy  calculation  runs  (each  backpack  receives  a  score):   Each  Target  Market  has  a  concept  of  the  perfect  backpack  in  terms  of  Characteristics.    Each   Target  Market  wants  a  backpack  that  has  a  certain  number  in  capacity,  a  certain  number  in   comfort,  durability,  etc.    When  the  player  builds  a  backpack,  each  target  market  scores  the   backpack  by  comparing  its  actual  characteristics  numbers  with  those  in  their  idealized  backpack.     This  results  in  the  Backpack  Base  Score.   Each  Target  Market  also  weighs  characteristics.    If  they  can’t  get  the  perfect  backpack,  they   weigh  each  characteristic  based  on  its  relative  importance  to  them.  One  target  market  may   penalize  a  backpack  more  heavily  if  it  isn’t  close  to  its  ideal  capacity.  Another  group  may   penalize  the  backpack  if  it  flunks  the  ideal  durability  test.  This  will  affect  the  Backpack   Characteristic  Score.     31    

Step  4   Each  Target  Market  also  wants  Features  on  a  backpack.    Optional  features  like  water  bottles,   cartoon  graphics,  waterproofing,  and  laptop  sleeves  enhance  a  backpack’s  core  appeal.  Each   target  market  awards  major  bonus  points  to  backpacks  that  include  features  that  the  target   market  wants.  A  backpack  already  considered  unappealing  (based  on  Step  3)  will  receive  only   minor  bonus  points,  even  if  it  includes  some  of  the  desired  features.   We  now  apply  the  feature  bonus  to  the  Backpack  Base  Score,  resulting  in  the  overall  Backpack   Experience  Score.     Step  5   Each  Target  Market  also  has  an  ideal  Price  they  will  pay  for  a  backpack,  regardless  of  whether   the  backpack  is  ideal  or  not.    This  reflects  a  general  perception  of  the  value  of  backpacks.  When   the  Target  Market  sees  the  backpack  in  the  store,  they  adjust  the  Backpack  Experience  Score   based  on  price.    The  closer  the  price  is  to  ideal,  the  more  inclined  the  target  buyer  will  be  to   keep  the  score  at  its  Step  4  value.    If  the  backpack  moves  too  far  in  one  direction  or  another   from  their  desired  price,  the  buyer  will  reduce  the  score.   After  making  this  price  adjustment,  we  end  up  with  the  Backpack  Final  Purchasing  Decision   Score.     Step  6   Finally,  we  calculate  the  ideal  score.    The  target  market  knows  what  a  backpack’s  ideal  score   should  be  based  on  characteristics,  features,  and  price.    So  the  shoppers  who  have  made  it  this   far  evaluating  a  backpack  compare  the  Backpack  Final  Purchasing  Decision  Score  with  the  Ideal   Score  and  that  determines  the  percentage  of  those  shoppers  that  will  end  up  buying  that   backpack  and  taking  it  home.   The  remaining  people  repeat  the  buy  calculation  for  the  next  backpack  on  their  list,  until  we   have  determined  every  sale.  Anyone  who  hasn’t  purchased  a  backpack  goes  home  and  waits  to   buy  a  backpack  until  next  quarter  (or  in  subsequent  quarters)  when  we  repeat  the  process   starting  with  step  1.    

 

32    

Matrix  of  Values   Area Affected

Select Turn

Cost of Materials -A-:

None

A weak crop this year has increased the production cost of hemp by 40%.

Cost of Materials -B-:

None

Rising cost of materials has raised the production cost of the Square and Large Rectangular Backpacks by 20%.

Cost of Materials -C-:

None

Competition between material suppliers has lowered the cost of the Advanced fabric by 10%.

Discount Retail Chain:

None

My analysis shows that the Discount Retail Chain has lost about 10% of its previously reported customer base. Perhaps shoppers are moving to other channels?

Distribution Channel:

None

Good news for a change. The Discount Retail Chain distribution channel is now offering more favorable terms. They've dropped their required cut from 50% to 40%.

Distributor Cut:

None

The Online Discount Retailer is halving its distributor cut from 40% to 20% for the next two quarters.

Market Development Funds -A:

None

The cost of market development funds in the Department Store channel has decreased from 1,000.00 to 500.00 this quarter only.

Market Development Funds -B:

None

The cost of market development funds in the Online Discount Retailer channel has increased to 1,500.00 from 1,000.00.

Market Development Funds -C:

None

The cost of market development funds in the High End Outdoor channel has decreased from 1,000.00 to 500.00 this quarter only.

Marketing Message -A-:

None

New data suggests a 'Smart' marketing message now has a greater appeal to Outdoor Enthusiasts.

Marketing Message -B-:

None

New data suggests a 'Lightweight' marketing message will now be more appealing to Luxury Trendfollowers.

33    

Description of the Event

Marketing Message -C-:

None

New data suggests 'Cutting Edge' marketing messages will be more appealing to University Students.

Online Retailing:

None

It appears more and more people are shopping online. Total customer reach in the Online Discount Retailer channel has increased by 5%.

Poster Advertising:

None

All poster advertising is available at a 25% discount for the next three quarters. Something to consider when planning our ad buys.

Print Advertising:

None

All print advertising is available at a 25% discount for the next three quarters. Something to consider when planning our upcoming media spending.

Radio Advertising:

None

All radio advertising is available at a 33% discount for the next three quarters. Something to consider when planning our upcoming media spending.

Retail Price:

None

The High End Outdoor retail channel has raised their required cut from 28% to 35%. On the bright side, they've increased the accepted retail price of backpacks to $200.

Segment Data -A-:

None

New data suggests University Students are showing a willingness to pay more for backpacks.

Segment Data -B-:

None

My latest research shows that DURABILITY is now a more highly valued backpack trait for University Students.

Segment Data -C-:

None

My latest research shows that ecofriendliness is now in high demand by luxury trend-followers. I thought you should know.

Segment Growth -A-:

None

New demographic data suggests Urban commuters are growing faster than previous estimates. The urban commuter growth rate has increased from 4% to 6%.

Segment Growth -B-:

None

Demographic data shows the luxury trendfollower market segment is growing slower than previous estimates. Luxury trendfollower growth rate has decreased from 7% to 5%.

34    

Television Advertising:

Bad news. The cost of all television advertising has increased by 15%. Take that into account when making advertising buys this quarter.

None

 

35