MKTG 450W Markstrat Presentation Essay

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School

Pennsylvania State University *

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Course

450W

Subject

Marketing

Date

Feb 20, 2024

Type

docx

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Uploaded by BaronNeutron16817

Bailey Bauer, Charlotte Fullem, Katherine Kaufmann, Flora Wu Professor Lapa MKTG 450W 4 December 2023 Company Narnia is arguably the company that has had the most changes throughout the simulation. We have ranged from having the highest budget to the lowest budget throughout the nine rounds. Honing in on our marketing decisions in rounds 6,7, and 9 has given the team many insights and lessons as we observed the downturn of our company and learned how to strategize the beginning of a comeback. Our downturn began in period 6 and led until period 9, when we started to see ourselves regain some revenue. Analyzing the decisions made by ourselves and our competitors and observing how the market changed has given us some crucial insights. We have two brands, NOON and NOVA, in our Sonite market for Narnia. Throughout rounds 6,7, and 9, both brands decreased in value and unit share. First, by round 9, NOVA and NOON had an increase in base cost, and the price decreased from round 6. Our volume was very low compared to the other brands, and by round 9, we had modified our variations. In our Voldites market, our unit and market share started very high in round 6, and we were dominating the market. However, our variation was lower. We had the highest volume. However, as we reached round 7, NEXT was losing market share. Our most significant change was in energy and connectivity. We made an error in modification, causing NEXT to leave the target segment. By round 9, it was evident that the volume for our brands was very low compared to our competitors. This resulted in our declining performance because we needed to understand consumer behavior and fully incorporate effective marketing initiatives. As marketers, we could have made the most of our limited budget. We allocated our money elsewhere, resulting in our failure to advertise adequately. Revenues for Narnia declined steadily across the last four periods, making only a small comeback in period 9. Following our peak performance in period 5, which placed us above all of our competitors, Narnia began what would become a steady downfall. From periods 5 to 6, revenues dropped by over 14%. Several factors may play into why this drop occurred, the biggest contributor likely being that our Sonite brands’ top competitors, MOVE and LOOP, modified their products and earned the highest unit share, stealing much from our brands. Our lone Vodite brand also brought in less revenue in period 6 than it did in the previous round, as more brands entered the market and began absorbing some of the revenue we once had. As we reflect on period 7, we see consistency in the downturn of our revenues from round to round. Revenues decreased by 12% in round 7 for company Narnia. Notable changes in the market that could explain this result include a lack of advertising for our new launch of brand NEVA and a failed R&D modification to brand NEXT that drew it away from its targeted segment.

When we again saw a further downturn in our revenues in round 8, we decided to make significant changes in period 9, hoping to regain higher revenue. To do so, we began to phase out brand NEXT from the Vodite market, as it was negatively affecting our company by only bringing in $514k in revenue and holding only 0.1% of the unit share in the Vodite market. This benefitted our company in period 9, as we saw our first increase in revenue since period 5, which increased by 6%. During the selected periods (6, 7, and 9), we observed a significant downturn in our revenues and EBT, experiencing an 11% decline from Period 5 to Period 6. This decline may be attributed to the initiation of three R&D projects coupled with budgetary constraints. Furthermore, there was a notable shift in inventory costs – transitioning from surplus products in prior periods to a current scenario of insufficient production, necessitating increased manufacturing. In Period 7, the downward trend in EBT persisted, potentially stemming from the introduction of the Voldite brand, where we struggled to keep pace with industry competitors. Finally, in Period 9, there was a notable upturn in EBT, rising from 29% to 41%. This positive shift is believed to be a consequence of a deliberate phasing out of our NEXT brand. The decision to discontinue NEXT was driven by its unfavorable reception within the Followers Target Market. By eliminating this brand, we created more strategic space for the expansion of other brands, channeling all advertising and R&D efforts into NOON, NOVA, and NEVA. In essence, the fluctuating financial performance across these periods emphasizes the complex dynamics influenced by R&D endeavors, budget limitations, inventory management, and strategic brand adjustments. This strategic realignment, particularly the phase-out of the underperforming NEXT brand, has liberated resources and positioned us for growth, emphasizing a focused approach on NOON, NOVA, and NEVA in our future endeavors. During our last few rounds, we experienced an extreme drop in market share that led us to assess our line of brands/revenue streams. There are many lessons we’ve been able to pull from our time running company Narnia and how these can be translated to a real-life company strategy. In order to regain a competitive edge and sustain success in the business environment, a company must learn how to combat drops in market share, learn how to succeed with a smaller advertising budget than competitors, and understand when a company is failing and address the issues accordingly. First, a company must do a deep dive into their brands to fully understand which customer segments are contributing most to the declines in revenue. It is essential to determine if any of the current or prospective buyers fall into specific categories, demographics, geographic locations, etc., that may lead to the earnings reduction. Understanding the subtle elements that affect buying decisions within these categories allows a business to realign its marketing efforts for better revenue performance and create customized plans to address specific problems. When dealing with a smaller advertising budget than your competitors, it can be helpful to identify the channels that provide the highest return on investment. Suppose a company is using social media, direct media, sponsored advertisements, etc., to spread awareness about their

products; in this case, it is important to determine which ones are generating the most engagement and which ones are producing the least engagement. Companies should consider cutting budgets for platforms that are not working presently. During a time of low advertising budgets, it is crucial to retain customers. Loyal customers can produce word-of-mouth advertisements when they truly believe in a product. To create this relationship, a marketing team can send personalized and targeted ads to these customers. Overall, it is important to be willing to adjust strategies as needed. In some cases, a company may need to phase out a brand in order to succeed and continue to survive, even if it's not what they want to do. To make this decision, the company should analyze the root cause of poor performance. This analysis will help guide the decision- making process. Additionally, the company must understand the financial implications of phasing out a brand. They should ask questions such as "Will this decision help produce more revenue for the company?" and "What are the costs associated with marketing and potential rebranding?" Once these questions are answered, the company can gradually reduce its marketing efforts and slowly cut back on advertising and promotions to avoid an abrupt customer cutoff.

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MKTG 450W Markstrat Presentation Essay

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