Marketing Simulation Essay

Overview Our company Orange experienced a very successful campaign and grew more profitable over the six quarters throughtout the Market Simulation. In terms of market share in comparison to the competition, we placed fourth holding 12 percent market share. We initially targeted the Mercedes market, and later developed products aimed at the Traveler and Workhorse clientele. In terms of profitability, we suffered a loss moving from Quarter 1 to Quarter 2, which is typical of most early-stage companies. However, each quarter thereafter we were able to maintain a profit, ending with $18,270,122 gross profit and $15,232,910 operating profit.

Our six computer models are the driving factor behind such success. These models include The Motherboard, Babyboard 2. 0, Horseboard, Superboard, Toddlerboard, and The Ponyboard. The Superboard, out of all the models, was our most profitable device with $6,303,840 in profit. We also embarked on a major expansion endeavor, spreading our brand originally from Chicago to Paris, Shanghai, and Sao Paulo. Our knowledgeable sales force comprised of 60 individuals, coupled with our extensive advertising and competitive pricing allowed Orange to rise to the top.

By the end of the Marketplace Simulation, Orange was in first place for cumulative total performance, accounting for a variety of business disciplines that contributed to our success. While we placed third in the simulation in terms of overall financial performance, we placed first overall for market performance and marketing effectiveness. Brand Design: Over the course of the six quarters, we made varying adjustments to our brands in order to keep up with the ever-changing competitive markets.

In Quarter 2, we decided to enter the Mercedes market with The Motherboard computer. Specifically, this brand was designed to be the top of the line product that suited all the most important needs of Mercedes. Some of these needs included a fast and powerful processor, the ability to link with other computers, and a machine that is capable of multitasking (Fig 1. 1). We figured that starting out in the highest-end market would be beneficial to creating a good name for our company, and then we would be able to trickle down throughout the other brandstarget market segments.

Our results from Quarter 2 showed that we were successful with The Motherboard, as we possessed 46 percent of the market share for Mercedes. In Quarter 3, we introduced The Babyboard to the Traveler market segment. We designed our product to match the best-suited brand for Traveler, which was SwifTech’s Quickfly. We were slow to expand from our original two brands, and lost some of our momentum with our Quarter 4 decisions. When we got our results, we realized that we needed to introduce more brands in order to keep up with the highly competitive markets. Quarter 5 marked our first Quarter quarter of rapid expansion.

We introduced an additional product lines to Mercedes and Traveler, and created our first unit product for Workhorse. The new product lines for Mercedes and Traveler, The Superboard and The Toddlerboard respectively, were the higher quality versions of the The Motherboard and the The Babyboard. They , which were enhanced with all of the necessities and priced slightly higher than the original lines. Our initial brand for Workhorse was the The Horseboard, and it possessed the most basic features at the lowest price, to appeal to a consumer who was looking for something simple to use.

We continued the trend of making two slightly varied products for each market segment in Quarter 6 when we introduced the The Ponyboard to supplement a slightly lower-end product than the The Horseboard. Sales Design Strategy: The sales design strategy of Orange was based primarily on the customer’s (Workhorse, Mercedes and Traveler) needs and wants. This consisted of the top eight preferences in either a laptop or a desktop, and the top six segments of applications. Additionally, each of the target market’s priceprices willing to pay is are shown in (Fig 1. 2).

Initially, Orange felt it was most appropriate to choose to target the Mercedes market in Chicago. This allowed for The Motherboard to be produced, which led to 46 percent% domination in only the Mercedes market. Unfortunately overall Orange only had a 12 percent% overall market share, and felt it was necessary to expand into the portable laptop industry of Traveler with The Babyboard 2. 0, and opened a plant in Paris. By Quarter 3, the market size had reached 10,000 customers, which allowed for expansion in the cities of Shanghai and Sao Paulo, and the last target market of Workhorse.

The generous rebates were attractive to the target audience, and allowed for the introduction of The Horseboard, The Superboard, and The Toddlerboard. By Quarter 6, a total of 60 sales people had been employed, and due to the overall low prices of the products, as well as the rebates, Orange gained a 2 percent% market share. Financial Performance: Throughout these first phases of our company, Orange has created a positive financial pattern. While we implemented an aggressive growth strategy and expanded our empire internationally, we kept our costs to a minimum. Naturally, we started Quarter 2 with a deficit due to startup costs.

Unlike most companies, our costs were controlled however, and we were only behind by just over $12,000. As advertising has always been a core competency of our company, we spent a total of $109,471 developing and promoting our first batch of advertising. The leasing costs and office spaces were kept to a minimum in the first two quarters as well, since we were only operating out of one location. As we moved into the Quarter 3, we expanded internationally and our rental costs increased. However, our sales skyrocketed as well. We had begun to turn a profit, and were in the black by $1,155,328.

In Quarter 4, we continued the pattern of financial growth, and maintained an increase in sales. Again, we were fiscally conservative and attempted to keep costs to a minimum (Fig. 1. 3). An important component of Orange’s financial history is the profitability of each brand we sell (Fig 1. 4). Our first line, The Motherboard, dedicated to the top-tier consumer, introduced us to the marketplace. We turned a profit of $922,344 throughout all six quarters. This is a modest percentage of our empire, yet it accounts for the beginnings of our financial gain. Our most profitable brand, The Superboard, generated $6,303,840.

We invested a lot of time and capital in the creation of this line, and it paid off. The ToddlerbBoard, HorsebBoard, and PonybBoard were all profitable as well, with over one million made from each. Financially, only one of our lines performed less well than we had hoped. Our second line, The Babyboard 2. 0 only generated $452,198. Unfortunately, we were unable to sell a high number of these units, and the cost of goods sold was very high in comparison. In the end, each of our brands was able to generate profits. Our conservative fiscal policy allowed enough room for growth without spending more than we could handle.

Finally, our revenues continued in a positive direction throughout every quarter, and we are confident the future will play out in the same way (Fig 1. 5). Competition: In the computer market, competition is very fierce. Thus, our company had to constantly position itself to be able to compete with the other companies in the market. To this end, we opened our first sales office in Chicago, hoping that our knowledge of the American marketplace would aid us in capturing a large initial market share. This plan was successful and put us near the top in overall performance in the computer market.

From this point, our company decided that in order to continue our success, we needed to examine the competition to find out what we were doing right, what we were doing wrong, and how we could improve. This plan enabled us to better understand what customers wanted without having to invest heavily into producing prototypes, because we were able to utilize other company’s products and sales numbers as though they were test products. Our first major interaction with our competition came in Quarter 4our fourth Quarter of operation. We introduced our The Babyboard product for the Traveler segment in our third QuarterQuarter 3 of operation.

We made the mistake however, of not considering the Traveler segment’s desire for the computer to be fun to use. We discovered this issue by examining our competitor’s products and finding that all competitors that were more successful than us had included games with their product. Despite the increased costs of production and the cost of redesigning our brand, profits for the The Babyboard nearly doubled the next qQuarter (Fig. 1. 6). We also looked to our competition to determine our expansion plans. We realized immediately that with such fierce competition, the first mover advantage would be crucial.

Thus, we expanded as quickly as possible by opening sales offices in every possible location. We also handled competition by expanding into every market segment, eventually offering a product for all segments of the market. Our company felt that this strategy would ensure that even if the competition would overtake us in one area, we would be able to survive on the strength of our other products while we figured out how to react. This strategy ultimately served our company well, as we were the top overall performer in the computer market. Conclusion

The results of the past six quarters have clearly shown that Orange has met its primary goals and exceeded expectations, becoming one of the most consistent and profitable companies in the industry. By using a conservative fiscal policy as well as an aggressive and competitive expansionary policy, we have seen Orange grow and become a stable company that is definitely worthy of further investment. To put it into a more detailed perspective, the way we dealt with competition, brand management, sales strategy, and our financials, was what brought us to the top and remains the reason we plan on becoming even more profitable in the near future.

By starting in the Mercedes market, we were able to establish ourselves early as a company that promotes high-end, top quality products. This made it extremely easy in the future to expand to the other brands such as Traveler and Workhorse, since we were already best known for our superior products, that we have constantly updated to satisfy the ever changing consumer demands. By using this strategy, we were eventually able to generate enough revenue to expand to four different areas of the world, making our brands even better known and reaping most of the first mover advantages.

However, this idea alone was not sufficient to achieve the revenues that we experienced over the past few quarters. Additionally, we knew that for our company to be profitable, we needed to get our name out there. This is why our strategy was to hire a large amount of sales people in each country, and invest a large sum of our operating capital in advertisements that would appeal to the wants and needs of specific target markets. Though we have experienced relative success the past six quarters that have propelled us to the top of the industry in overall performance, we are owhere near complacent. With the competition so fierce and the landscape of the technological environment constantly changing, we feel that we are prepared to respond to any competitive and technological pressures that we might have to face in the future. Our company has been the model company in terms of consistency and financial growth and we feel as though our results so far have proven that Orange is a safe investment that will provide lucrative returns in the future. Figure 1. 1 Figure 1. 2 Figure 1. 3 Figure 1. 4 Fig 1. 5 Fig 1. 6

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