Marketing Game Simulation Exercise - Essay Example

Marketing Marketing Game Introduction: This Marketing Game Simulation Exercise would be considering the competitive business advantages and challenges faced by a brand leader. “Speakeasy, one of the nations leading broadband, voice (VoIP), data, and IT service providers, joined the Best Buy family in 2007 and now works with Best Buy for Business as advocates of technology and communication solutions for small business.” (Together we’re the only technology solution small business need: Best buy for business, 2010). For the purpose of this simulation game, it is in direct competition with three strong brand contenders, Micro pear, soft wear Pl and Monitor. The main purpose of this exercise is to enforce marketing strategies that could allow the manager to take strategic decisions on various dynamics in the marketing of voice- recognition devices software (VRD) in the domestic market. “Interactive Voice Recognition or Voice Recognition Information is one of the most common telephone functions in use across the business community and is capable of bringing remarkable benefits to your company. Interactive Voice Recognition allow 24 hour access to a company from its customers Interactive Voice Recognition its phone system.” (Interactive voice recognition, 2005). Coming now to the actual exercise, what Marketing Games actually means to do is to put “you in the driving seat of a fictitious business. You have been brought in by the CEO to develop a winning market strategy that will turn the business around.” (The big marketing game, 2010). Thus the main objective of this game would be in terms of the overriding factors that contribute to profits/losses of the business, and the ways and means by which the losses could be turned around into profits. It also seeks to lower operating costs, increase productivity and ensure better all round performance. Another major consideration that needs to be taken up is also in terms of competitors, since our business development and growth is also dependent upon them, in that the business development of Speakeasy is also linked with that of its competitors who lay stakes on market shares, customer segments and volume of business and off takes. Thus, it is also necessary to predict possible competitive forays and adopt ways and means that could counter these effectively. Principally, “Voice recognition software programs work by analyzing sounds and converting them to text.” (Voice Recognition Software: An Introduction, 2009, p.1). Market Profile of Speakeasy and its competitors: There are only four makers of this VRD in the market. One is the product line which we are responsible for developing that is, Speakeasy and the competitors are Micro pear, Software Pl and Monitor. Our company is now in the number two position with 22% market share, while Micro pear, Software and Monitor have 21%, 32% and 22% respectively. Our aim is to reach the top slot which Software is now holding mainly because it caters to a niche market and charges higher price of $400 and against the other product pricing of $250. Therefore the first strategy is in terms of increasing output capacity and per unit price to $ 300 minimum to be able to gain better revenues and attempt a turnabout in its overall business prospects. It is believed that a three pronged strategy would need to be used for gaining strategic advantages and benefits for Speakeasy as compared to its rival and competitive firms. 1. Level 1 strategies- Involving Strategies that would use increase in output to maximum, backed up with advertising for product promotion and capturing markets. This also involves increases in pricing of products from present $250 to $300 per product. 2. Level 2 strategies – Focus on competitive performances and look at as to what competitors are doing regarding their marketing. At this level, it is necessary to consider the four P’s of marketing and how it could be beneficially imposed in the business scenario of Speakeasy 3. Level 3 strategies would involve the entry of one more product line by Speakeasy. This is needed to maintain the enhanced revenue stream that is necessary for the growth of this product. Again, this could also help in putting the pressures off established products that could be given more time to recoup business. Besides, the addition of a new product line could also generate new revenue streams, help consolidate the prevailing market share balance and even increase the market share of Speakeasy vis-à-vis its competitors, Micro pear, Software and Monitor. Professed Marketing strategy for Speakeasy – Level 1 – Increase capacity and increase per unit selling price: In the case of marketing game for Speakeasy, it is evidenced from the figures provided that all is not too well for the company. For one thing, its actual production is just around 84% and this needs to be hiked up to around 95% of 50,000 viz, 47,500 units and again, when compared to its other competitors like Micro pear and Software, its unit wholesale price needs to be increased from the present $250 to a competitive $300 per unit. The expenses would also be changed in order to become more competitive and achieve control over costs. We present the projected Profit planning for Speakeasy for the forthcoming period as follows: Financial Budget for next period Units Sold 1. Wholesale price 2. Unit cost Gross Sales Cost of goods sold Gross Margins (A) Expenses Advertisement Sales force : Salaries Commission Customer service Marketing research Total Expenses (B) Net contribution (profits ) (A-B) TABLE 1 : Financial Budget Channel 1 Channel 2 Total 27,500 $300 $100 20,000 $ 300 $100 47,500 14,250,000 4,750,000 9,500,000 2077,000 300,000 420,000 150,000 40,000 2987,000 6,513,000 Thus, from the above, it is possible that at turnaround of business could be achieved if the unit selling prices and capacity are increased and also cost rationalization drives are carried out. Perhaps one of the main aspects in this business would be in terms of increasing revenues and lowering costs, which is what the others in the voice recognition business would also be doing. The issues and problems which are being faced by us are also being faced by them, and by studying the completion intensely, it is possible to gain competitive advantages and try to place this company, Speakeasy as the brand leader in the market. “Marketing programs including advertising, promotions, price changes, rebates, allowances, and trade funds are well-planned, well-executed, profitable, and add value to customer relationships. Results of marketing programs are tracked on a timely basis.” (Messerli 2010). The next aspect that needs to be considered in this study would be with regard to the customer segmentation. It is seen that at present, the segmentation is relying heavily on Assistants and managers, or in other words, the non-corporate sector, for business development. There needs to be paradigm shifts in strategies that would envisage a greater emphasis on domestic customers like teachers, students, home usage, etc. This is not to suggest that business sectors needs to be ignored- far from it. What is necessary is that a more profitable avenue with more emphasis on institutional selling could keep the right balance between business and non business sector.”Specialist software training is often essential before you can get the full benefit. Ability Net offers bespoke training covering Screen Readers, Voice Recognition, Literacy Aids and even gaming.” (Adapting technology –changing lives, n.d.) At level 2, It is next necessary to consider the four P’s of marketing and how it could work for Speakeasy in their pursuits for brand leadership in this industry. “One key to knowing which marketing programs to choose involves thoroughly understanding how to leverage the 4 Ps of marketing ― price, product, promotion, and place ― to reach and appeal to your target audience(s). When you have addressed these strategic issues, you are better able to choose marketing programs with the most potential to increase your business.” (Kyle 2010). It is now proposed to tackle each aspect separately in order to reach a viable decision on how this Marketing Game could economically benefit the company, Speakeasy. It has been said earlier than as of now the pricing policy of the company has not been competitive and while its competitors are charging around $400, they were selling at just $250, around 60%. It has thus become necessary for this company to increase prices to $300, in order to be more competitively priced and try to gain market leadership wherein only 3 competitors are present. “Pricing must take into account the competitive and legal environment in which the company operates.” (Marketing: Pricing strategy, 2007). This is important at least from Speakeasy’s perspective because too low a price (what they were pursuing earlier) tends to degrade quality and offer competitive advantages to rivals. Now that the price has been hiked, along with capacity, the sales force could work to their optimum capabilities and competencies, which is what is expected of the sales force, given the kind of remuneration and commission for their efforts. It would not be judicious to cut back on remuneration of sales force since this could reflect adversely on their morale and motivation which is critical for a small organisation like Speakeasy. Most of the revenue generation is being carried out by the sales force and they need to be remunerated more than adequately for their efforts and pains. Considering the aspect of VRD itself, it could be said that “Speech recognition technology has almost unlimited potential to radically reinvent the customer contact experience while meeting all of a customer service director’s tough targets for call management efficiency and cost savings.” (Barnes 2010). Coming to the next aspect of 4 Ps is product. The product made and sold by Speakeasy is undoubtedly of excellent quality that has been vouched b y many satisfied customers. Besides, their R & D are constantly seeking improvement and technical up gradation for these product lines, in tune not only with the demands of customers but also of the competing and rival firms, domestic and global. Perhaps one of the major advantages of Speakeasy could be as follows. “With Speakeasy, your IT department is empowered to quickly and easily add voice support to existing terminal emulation applications. No new server, voice profile training or management, modification or replacement of the host application is required.” (Terminal Emulation: Emulation flexibility, 2009). Thus, there are additional features and lesser hassles with Speakeasy as compared with other products. This too at lower costs, as compared to Micro pear, Software pl and Monitor who is sharing the markets with Speakeasy. Everyone in the world has a unique voiceprint, like fingerprints… "Probably in a few years we wont even need a PIN code. If you have a cold or are holding your nose or trying to disguise your voice, [the system] is going to know. Its called voice normalization. It kind of gets rid of all the static." (Berry 2000). Thus, even when the product aspect is considered, it scores over its rivals in that it has unique features that cannot be imitated or copied by its rival business. Coming to the next aspect of 4Ps is promotion. Here this company needs to make better and deeper inroads. This Marketing Game needs to consider the fact that the present markets of business – Assistants, Artists, Managers and non business – home and Students need to be strongly supported with bulk and institutional selling if this product line needs to grow and develop in future. There are real threats that new entrants with more state- of- the- art, superior technology could upturn Speakeasy’s business opportunities, especially in the global and international segment. Thus, there needs to be a stronger marketing thrust and robust advertisement within the budgets, and if necessary, a higher percentage of 40% of revenues could be allocated for effective advertisement and sales promotion. Internet selling could also be a good avenue for this company, and could reap in rich rewards at no extra costs. This could also support the store sales and help gain competitive advantages through internet selling. “By far one of the easiest and simplest ways to make money is to simply promote something. All you have to do is point people at a website that is selling a good product, then let the owners of that website take over.” (Abayomi Paul 2010). Finally, coming to the last aspect of 4 Ps is that of place. There is need for greater market penetration and positioning by this company, in terms of more aggressive selling and web bases marketing also. Nowadays, placing products with strong backup of advertising and promotion is also important. This could help in adding more revenue and more satisfied customers. All these could also help to pull out this company from the financial constraints it is now facing and ensure better business. This could be used in education and learning fields, and also people who use the computers very frequently. This Marketing Game also suggests that a bias towards institutional and bulk selling preferably at attractive discounts could also work wonders for this company. “The market penetration strategy is when a company is seeking to increase the market share for present products or services in present markets through greater marketing efforts.” (Wal -Mart strategy, 2010). This is especially true of this company which seeks to improve all-round performance through stratified and salient marketing efforts. Through market positioning, the targeted customers and clients are wooed for purchases, all the more since this is not a regular customer item. “Branded merchandise and changing consumer perceptions/lifestyles make continual market monitoring essential.” (Mills 1985). Conclusions: It would be necessary to delve on product life cycles also, since every product line must go through these phases. These products like every other product would grow, mature, stabilize and after a stage, would be overcome by development. Then it begins to decline “and is eventually withdrawn.” (The product life cycle (plc), 2010). However, through innovative and progressive methods it is possible to consolidate the market gains achieved by this company and ensures that the customers are able to utilize these product lines with suitable up gradation and technoglical improvements over a long period of time. Reference List Abayomi Paul, T., 2010. 5 Ways Google help you with your traffic. [Online] Internet Marketing. Available at: http://www.itsawonderfulinternet.com/ [Accessed 18 May 2010]. Adapting technology –changing lives, n.d. [Online] Ability Net. Available at: www.abilitynet.org.uk [Accessed 18 May 2010]. Barnes, P., 2010.What to look for when buying speech recognition technology: The five things you should consider when purchasing a speech solution. [Online] Call centre helper.com. Available at: http://www.callcentrehelper.com/what-to-look-for-when-buying-speech-recognition-technology-108.htm [Accessed 18 May 2010]. Berry, V., 2000. Speak easy with voice recognition. [Online] It World Canada. Available at: http://www.itworldcanada.com/news/speak-easy-with-voice-recognition/133691 [Accessed 18 May 2010]. Interactive voice recognition, 2005. [Online] Cool soft. Available at: http://www.coolsoftllc.com/articles/Interactive-Voice-Recognition.htm [Accessed 18 May 2010]. Kyle, B., 2010. 4P’s of marketing. [Online] Website Marketing Plan.com. Available at: http://www.websitemarketingplan.com/marketing_management/TacticsArticle.htm [Accessed 18 May 2010]. Marketing: Pricing strategy, 2007. [Online] Net MBA. Available at: http://www.netmba.com/marketing/pricing/ [Accessed 18 May 2010]. Messerli, A., 2010. Reinventing Business: Enterprise Data Warehouse Business Opportunities for Manufacturing, Part 3. [Online] Beye Network. Available at: http://www.b-eye-network.com/view/12907 [Accessed 18 May 2010]. Mills, M K., 1985. Journal of the academy of marketing science. [Online] Springer Link, (13.3). Available at: http://www.springerlink.com/content/t2353n7557762805/ [Accessed 18 May 2010]. Terminal Emulation: Emulation flexibility, 2009. [Online] Data Logic. Available at: http://www.wavelink.com/datalogic/te-main.aspx [Accessed 18 May 2010]. The big marketing game, 2010. [Online] Marketing 2 win Blog. Available at: http://www.market2win.com/blog/ [Accessed 18 May 2010]. The product life cycle (plc), 2010. [Online] Marketing Teacher. Available at: http://www.marketingteacher.com/Lessons/lesson_plc.htm [Accessed 18 May 2010]. Together we’re the only technology solution small business need: Best buy for business, 2010. [Online] Speakeasy. Available at: http://www.speakeasy.net/company/bbfb.php [Accessed 18 May 2010]. Voice Recognition Software: An Introduction, 2009. [Online] Ability Net, p.1. Available at: http://www.abilitynet.org.uk/myway/Factsheets/Voice%20Recognition%20Software%20-%20An%20Introduction.pdf [Accessed 18 May 2010]. Wal -Mart strategy, 2010. [Online] OP Papers.com. Available at: http://www.oppapers.com/essays/Wal-Mart-Strategy/77547?topic [Accessed 18 May 2010]. Read More