company for this paper is the WONDER Company. It mainly deals with the selling
as well as manufacturing of various up-to-date tablets. The preferences of all
the customers, around the globe are changing at a rapid pace. Hence,
development of various fortified strategies is required to move a product
successfully, through its lifecycle. However, different stages of marketing
have to be followed by the company before rolling out anything new in the vast
arena of business. Alternatively, the report aims to deduce the results of a
marketing simulation game, for three selected products, W2, 1, and 3. Both the
allotted R&D budget and the commodities’ prices will be decided by none
other than the appointed marketing department’s VP. Even the marketing and
financial results will be subject to recording so as to analyze them. As per
the given scenario, Joe Thomas, the previous VP of WONDER organization was
hardly creative to allocate R&D expenses and overall prices, in each year.
His performance was nevertheless not as such bad. Only one product, i.e., W3
did not run well in the tablet market. On the contrary, the WONDER’s CEO Sally
terminated Joe for his lack-luster techniques of marketing. It is crucial to
dissect that 2017’s new tools cannot be made until and unless the previous
ones’ results are not analyzed, thoroughly. The simulation results and
scenarios may decipher very different situations than the ones in real-life.
Interestingly, the decisions of the new VP are better than Joe or not can be
understood from the cumulative results.
as well as analysis in the context of simulation
deals with the results of simulation. It is crucial to understand that the
customers conceive different perceptions about the products in varying years.
For example, in the very first year, the customers are worried about a
product’s performance. Even they remain sensitive to the prices of various
services and products. On the other hand, the second year is more about
witnessing the products’ efficiency, according to the set prices. The customers
are not afraid to pay a lumpsum amount for a good product. Hence, a company can
prepare the price list in a similar fashion. The third year consists of careful
planning for a product’s performance as they start to expect more from the
visible in the Appendix 10 how 2013’s decision has figured out. The three
products, W1, 2, and 3 were priced as 222, 403, 170 dollars, respectively, for
the year 2013. Research and development cost allocation can be observed as 20,
15, 65 percentages for the three consecutive products. It can also be
understood how none of them were eliminated from the market. The experimental
nature of the organization is visible to a large extent, from this aspect (Østergaard
& Fitchett, 2012). As a result, the decision has manifested in the
cumulative profit of 503,808,517 dollars, in 2013. According to the
articulation of the advisor, the product lifecycle of W2 represents the growth
phase. Thus, there is still a huge potential to tap the W2’s market,
holistically. Hence, some new strategies may help in resulting in the same
aspect (appendix 10). The customers, who are its potential buyers, may not be
aware about it or marketing techniques were not sufficient enough. On the other
hand, W1’s performance is nothing less to its market competitors. Therefore,
W1’s is quite similar to its substitutes. It also implies that the price of
this product is more or less, appropriate.
In 2014, the marketing manager wanted to do something else
and fetch a drastically varying result. Hence, he listed 250, 486, 200 dollars,
consecutively for W1, W2, and W3. Previously, in the year 2012, it was
observable how W3 was not performing well. Despite of such result, even in the
second year of his performance, the same was not removed from the marketing
simulation. As far the developmental and research expenditures are concerned,
30 percent of the total allocated amount was kept for W1. Second product, W2,
received an R&D allocation of 50 percent, whereas 20 percent was only for
the third one, that is, W3. A difference in allocation can be noticeable here.
For example, in the previous year, maximum budget was allocated to the losing
product. However, in the next year, the VP wanted to allocate less for the
same. The above decisions contributed in the cumulative profit of 773,266,502
dollars for that year. Alternatively, the advisor suggested that the W1
performance remained same as the previous year’s results. Hence, it continued
to give a neck breaking competition to all other new and existing competitors.
Even the same strategy also helped in refraining any new player to enter the
tablet market. On the contrary, the W2’s price should have been increased, at
little a bit. It is because the same is not fetching much profit for the
company (Baker, 2014). Thus, a loss generating product must not be kept on the
list of an organization. It was necessary to increase the price or eliminate
the same from the strategic business unit (Xiong, Ke, Liu, Zhao, Xing & Xu,
2013). On the other hand, the customers of W3 product were comparatively very
new. Therefore, they are just coming to know regarding it. As a result, one can
understand how it is just the growing stage for W3 (appendix 11).
Contradictorily, the new customers may need special attention from the
company’s end. Apart from all these things, the overall profit has definitely
increased in 2014, when compared to 2013’s performance.
The cumulative profit for the year ending 2015 was 457358144
dollars. It also shows how a dip in the profit margin is vividly observable.
Alternatively, the prices of commodity 1W, 2W, and 3W were 300, 200, 300
dollars, sequentially. In order to satisfy the customers, the price of W2 had
been lowered to a large extent, thereby leading to a drastic loss. On the other
hand, the variable cost was higher than that of revenue. At times, the experts
proclaim that excessively compromising in terms of profit can be expensive for
a company against the consumers’ wish (Faria & Wellington, 2014). If the
product’s demand was less and the customers were not receiving value for money
then it was necessary to eliminate W2, entirely. The competitive firms have
pushed the product in the shakeout zone, which also means that the other
competitors’ strategies are far much better than this one. A major limitation
in terms of business strategy is visible here. On the other hand, 35, 45, 30
percentages were decided for the research purpose of those chosen products
(appendix 12). Excessive cost was incurring for the W2’s development.
Contradictorily, it was another reason for the product’s phaseout from the
market. The advisor had nothing much to say about this aspect. However, an
aggressive strategy can be watched for this product.
The results of 2016 proclaim a
profit, which is cumulative in nature. It is 444,567,598 dollars. Apart from
these, the advisor merely expounded about the first product. Even for the same,
prices are quite low. Once more, it can be deduced that customers were
prioritized, during the strategy-making episode (appendix 13). The costing
allocated for the products were primarily, 450, 430, 250 dollars. On the other
hand, the budgets for development were marked as 23, 37, 40 percentages, in the
case of W3, W2, and W1 commodities.
for the Joe’s time scale
1, the revenue during the Joe’s time can be seen. Here, the revenue for W3 was
not at all steady. However, W1 held a significant place in the market.
Alternatively, the profit gained for W1 was also good enough (appendix 2). The
appendix 4, 6 and 5 represent the three product’s income statement,
individually, for 2012. On the contrary, consolidated profit in appendix 3 is
for all three of them, which amounts to almost 86,637,786 dollars. The
profitability was near about 17 percent. Income statement for W3 denotes 0
percent profitability, which means that the same was not at all rolling amongst
the customers, smoothly. On the contrary, appendix 7, 8, and 9 portray the
market reports of different tablets. W1 was shifting towards its phaseout
section due to the market saturation rate, which was 15 percent.
Contradictorily, the market saturations rates for W3 and W2 were 2 and 8
percent. In fact, W3 hardly had any sale during that time, i.e., 2012. Most
importantly, the number of customers who did not purchase the tablet was
17500000. Even though the first tablet extracted a huge amount of net profit
from the sales volume yet it was not enough. The reason being less of customers
were tapped for the same (Frasca, 2013). Alternatively, W1’s cost was more than
that of the other competing products, which dampened the expectations of the
The appendix 14 has been included to give an idea regarding
the varying stages of development of any commodity. When Joe or any other
marketer is deciding various aspects of promotions and other mixes, it is
substantial to interpret how the product life-cycle manifests. There are four
main stages of a product’s development in its respective market; they are
introduction, maturity, decline, and growth phases. The rate of customers
remains less during the growth phase because of inadequate efforts of the
marketers (Vos, 2015). Conversely, the decline phase also shows a similarity
with the growth phase, where customers are lost in the hands of competitors.
Thus, decision has to be taken judiciously, in each PLC stage.
conclusive from the above-report that Joe’s decisions may not be very creative
but some of them were definitely decent enough. On the other hand, the recent
VP’s market strategies emit the fumes of experimentation. Hence, it is better
to blend both creativity and conservatism in several market-based decisions for
the upcoming period of 2017. The simulation results of 2014 imply the maximum
profit range, even though the decisions were not very perfect as per the