MARK3082 Simulation Individual Reflection
Introduction
I had the privilege of running the Minnesota Micromotors (MM) simulation in my seminar group. The simulation is an activity designed to expose and better equip students to face the challenges and opportunities of running an actual business in the real world. The task was very eye-opening and as I personally had not had any experience running a simulation or strategic task prior to the MARK3082 Assignment. Initially, I was slightly confused and unsure as to what to focus on while preparing for the simulation, but reading the Foreground Reading and watching the video tutorials were very helpful in shedding some light as to what might be important for the actual simulation.
During my preparation before running the simulation, I decided to try to focus most of my resources on large customers (Segments A–D), particularly Segment A, because it was the largest source of revenue for the company and could be thought of as the ‘cash cow’ of the company, following the Boston Consulting Model Matrix (Reed 2015, pp.117-119).
General Overview and Reflection on Simulation Run and Outcome
I managed to finish one complete simulation run within the allocated time in class. The first few quarters of my simulation saw my total revenues generated go up which encouraged me to keep concentrating on the large customers. However, I soon became too caught up with only trying to improve my power-to-size-ratio product feature and sales force allocation that I ignored other segments like the ‘Integrated Marketing Communications and Training’ and the discounts decisions. As the simulation progressed, my revenues started to decline and I became very frustrated with the outcomes of each quarter. The only other performance measures I skimmed over were market share (on the ‘ANALYSE’ page) and customer satisfaction, which demonstrated my narrow-mindedness and lack of awareness regarding other performance measures. Since focusing on product development and sales force allocation did not seem to be boosting my sales, I decided to change my strategies and experimented with changing the price level and discount rates for each sector, comparing the outcomes obtained after each adjustment. These changes proved helpful some of the times, but were mostly unable to prevent the sales from its decline right till the end, and I obtained only 30 points as my final score.
What Went Well
As mentioned earlier, the focus on allocating more than 50% of my sales force on Segment A and allocating $100,000 dollars to Power-to-Size feature spending proved to be successful in raising revenue to more than 3.5 million and increasing the market share by more than 4% for the earlier quarters. Offering discounts and reducing prices also greatly boosted market share from Segment D and the small customers segment.
What Did Not Go So Well
Upon reflection, I realised that I had not actually paid any attention to my profits generated which (now that I realise) were significantly declining each quarter, even when my revenues seemed to increase; as well as a deeper analysis of my customer market share and preferences (because I had decided not to conduct market research to save on my budget). Despite briefly skimming over the customer satisfaction and getting very frustrated by my customers’ constant dissatisfaction, I did not do anything to try and increase satisfaction because I did not know how to. This is attributed to the fact that I failed to realise that there
actually were videos of the customers explaining the issues surrounding their dissatisfaction. I only recognised this huge mistake of mine after reviewing a screenshot of the satisfaction page, and after my friend had pointed out that it had greatly helped her boost customer satisfaction after we had both finished running our simulations. I also realised that the sales force allocation did not have much impact on the market share or purchases of the customers.
Possible Improvements
From the screenshots taken, I have been able to review my performance outcomes more thoroughly, analyse and reflect on the results of each specific quarter due to prior actions, counter-check with my friends and consolidate my thoughts. Thus, I have been able to identify a few things I would have done or would do differently for future simulations, including the group simulation in Week 9.
Firstly, I would definitely monitor, understand and analyse the impact of my previous quarter’s decisions on the current quarter’s profits and sales. This would then greatly assist me in my future decision-making, especially in helping me increase my profits each quarter and thus the overall score, as the simulation score attributes almost one third of the score on profits alone. I had overlooked this big factor in my simulation and will not do it again.
Next, I would also certainly pay closer attention to my customer satisfaction by analysing and listening to the videos of each segment and tailoring my decisions specifically to adapt to the needs and wants of my target customers. If I do face budget constraints (as I did in my individual simulation), I will specially modify my decisions to respond to the segment I am focusing on for that quarter, however I have to be careful not to neglect other segments. Since customer satisfaction also accounts for 30% of the final score, I will make sure to place a large emphasis on obtaining very high satisfaction from my customers, which I believe would lead to an increase in other performance measures too.
Besides that, deciding to conduct market research may prove useful for deeper analysis of customer market share and preferences of product features and attributes, which will help in wisely deciding the amount of resources actually needed for product development. However with the limited time provided for the group simulation, we may not have much time to analyse the market research obtained, so this will be done based on our own judgement of resources.
One issue that I am still pondering on is whether focusing all my resources on profitable segments to ‘milk the cow’ so to speak, is actually a sensible and prudent decision as MM has a wide range of customers and the other segments need to be attended to too. This is something to be discussed with my groupmates in Week 8. I also realised that customers were quite price sensitive and many easily switched their supplier preferences to other companies when the prices were increased. This is in-line with Porter’s Five Forces Model that shows that the threat of substitutes is a real challenge for a firm (Porter 1980, p.33). Hence, we may consider some specific pricing strategies for the group simulation.
Conclusion
The individual simulation task has been a very eye-opening experience and has taught me, as a strategic marketing student about the significance of monitoring a company’s performance measures, the challenges in allocating resources wisely in response to changing customer preferences, the importance of maintaining and building customer relationships and the threat of competitors in the real business world. I have learned much from the simulation and reflection tasks, which have helped me to not only evaluate my choices and judgements as a decision-maker, but also how I personally think and view the world as a whole.
References
- Porter, Michael July – August 1980, ‘Industry structure and competitive strategy: Keys to profitability’, Financial Analysts Journal, p. 33.
- Reed, 2015 Strategic Marketing: Decision making and planning, 4th ed, Cengage Learning, Sth Melbourne.
