Monthly Archives: October 2018

Music2Go Marketing Factory

Question of the Week: Why did I receive a different number of units from what I ordered? | Music2Go Marketing Business Simulation

In Music2Go you make decisions for an entire year, but your factory has a limited ability to adjust the number of units produced to try to meet actual demand during the year. This is called Demand Responsiveness.

Demand Responsiveness allows the actual number of units ordered to increase or decrease by up to 20% to meet the actual demand for your product.

For instance, if you ordered 1 million units of a product, then the actual number of units delivered could vary between 800,000 units and 1.2 million units depending on actual demand.

Product Contribution Report in Music2Go Marketing

In our example above, we ordered 1.9 million units of our Sonic product, but the Actual Units ordered was less than this at 1.5 million because the demand for our products was less than what we anticipated to sell.

Note: Most worlds have 20% Demand Responsiveness enabled, although your instructor may request this to be modified or disabled for your Multi-Player. 

Related Articles
Music2Go Sales Promotion Screen

Question of the Week: What is Sales Promotion? | Music2Go Marketing Simulation

Sales Promotion

Sales Promotion in Music2Go works by boosting your distribution coverage and distribution index. You should buy the Distribution Coverage and Sales Promotion Market Research report for detailed information on the Sales Promotion Rating and stage of Product Life Cycle for all firms in the Industry.

There are 6 types of sales promotion activities available to you to promote your
products and support your distributors:

  • Trade Shows
  • Salesforce Training
  • Premiums (Gifts)
  • Website / Social Media
  • Point of Purchase displays
  • Rebates

Each promotional activity has particular relevance to certain stages of the Product Life Cycle as outlined below. Note that the Distribution Coverage and Sales Promotion Market Research report will show the age and stage of product life cycle for every product on the market, as well as the Sales Promotion Rating and the Promotion Mix effectiveness.

Choosing a Sales Promotion Mix

Sales Promotion Mix in Music2Go Marketing

Remember that each of your products will progress through the Product Life Cycle starting in the Growth phase for new products, then gradually progressing through to the Decline stage over the next six rollovers.

Say we launch a new Sports product this period. This new product will start in the Growth phase of the Product Life Cycle. Then from looking at the Sales Promotion table (this can be found in the Player’s Manual and Market Information Report), we can see that our ideal Sales Promotion Mix for a new Sports product is:

  • Trade Shows: 20%
  • Sales Force Training: 30%
  • Premiums (Gifts): 20%
  • Website and Social Media: 15%
  • Point of Purchase Displays: 15%
  • Rebates: 0%

Total =100%

That was a simple example, but what happens in the second year that we sell this Sports product? The product will have moved from the “Growth” phase to “Growth – Starting to Mature.” So the optimal Sales Promotion mix will be 1/3 of the way between the ideal Growth and Mature in the Sales Promotion table. That would give us an optimal Sales Promotion mix something like:

  • Trade Shows: 15%

(Ideal Growth = 20%, Ideal Mature = 5%)

  • Sales Force Training: 27%

(Ideal Growth = 30%, Ideal Mature = 20%)

  • Premiums (Gifts): 26%

(Ideal Growth = 20%, Ideal Mature = 40%)

  • Website and Social Media: 13%

(Ideal Growth = 15%, Ideal Mature = 10%)

  • Point of Purchase Displays: 17%

(Ideal Growth =15%, Ideal Mature =20%)

  • Rebates: 2%

(Ideal Growth = 0%, Ideal Mature = 5%)

Total =100%

Tip: You should buy the Distribution Coverage and Sales Promotion Market Research
report for detailed information on the Sales Promotion Rating and stage of Product
Life Cycle for all firms in the Industry.

Related Articles
Chossing an agency in AdSim

Question of the Week: Which Agency should I choose in AdSim Advertising Simulation?

Agency Selection

The first key decision you need to make for each of your products is whether you will employ the services of an advertising agency to assist you with your media selection.

Four Agencies

Agency selection screen in AdSim

Internal Plan

The Internal Plan means trusting your own media selection ability and going at it alone, which often obtains far greater returns.

The default plan for each product is average at best. Approximately 30% of you promotion budget is being wasted on poor media selection. By carefully reading and analyzing the marketing plan and market overview/research for your product’s target segment, you should be able to greatly improve the effectiveness of your promotion budget.

TV Magic

TV Magic is a media-buying agency that specializes in producing TV advertisements and bulk purchasing TV advertising time.

TV Magic will suggest a TV advertising media plan that will be significantly better than following the default plan. They are less skilled at other media production/selection, but their suggested plans will be noticeably better than the default plan.

Print Works

Print Works is a media buying agency that specializes in producing print advertisements and bulk purchasing print advertising space.

Print Works will suggest a Newspaper/Magazine advertising media plan that will be significantly better than following the default plan. They are less skilled at other media production/selection, but their suggested plans will still be noticeably better than the default plan.

Radio Can

Radio Can is a media-buying agency that specializes in producing radio advertisements and bulk purchasing radio-advertising airtime.

Radio Can will suggest a radio advertising media plan that will be at least significantly better than following the fault plan. They are less skilled at other media production/selection, but their suggested plans will still be noticeably better than the default plan.

Need extra help?
  • You can receive an immediate answer to a number of commonly asked questions through the Smartsims Support Center
  • Alternatively, you can contact our Support Team here.
Testing Decisions in MikesBikes

How do I Test My Decisions in MikesBikes Introduction to Business Simulation?

There are three ways on how you can test your decisions in MikesBikes Introduction to Business Simulation.

1. Live Forecast

The figures on the Live Forecast update in real-time as you click “Apply” on any decision screen. This enables you to easily see the impact of individual decision changes on overall performance.

The figures can then be clicked to bring up the relevant forecast report in full. Previous figures remain in small font below.

The new Live Forecast feature will help you make more informed decisions and provide an immediate warning if you have made poor decisions.

2. Forecast Results Reports

MikesBikes Forecast Results Reports

This menu features reports which give you an indication of your performance – assuming you meet your forecasts.

There are a range of Pro Forma reports available for you to view:

  • Forecast Results Report Overview
  • Pro Forma Income Statement
  • Pro Forma Product Gross Margin Report
  • Pro Forma Cost of Goods Manufactured Report
  • Pro Forma Cashflow Report

3. Offline Mode

This feature in the Multi-Player allows you to try out different decision options and strategies before you commit yourself.

In Offline Mode, your competitors use only their default decisions. So don’t read too
much into the results.

To start Offline Mode, click the “Offline” button next to the Multi-Player launch button.

In Offline Mode, your competitors use only their default decisions. So don’t read too much into the results. For instance, in Offline Mode you might launch new products into empty markets and do very well due to lack of competition. But if you use those same decisions in the Multi-Player, you could do poorly if the other firms choose to launch new products at the same time. So always think about what might happen if your competitors were to do something differently.

Important: After using Offline Mode, your team’s agreed decisions need to be re-entered in the Multi-Player.

Watch our tutorial video here:

 

Note that this feature might be disabled in your course.

Need extra help?
  • You can receive an immediate answer to a number of commonly asked questions through our Support Center.
  • Contact us here.
MikesBikes Advanced Business Simulation

MikesBikes Advanced Strategic Management Simulation

 

MikesBikes Advanced is a highly instructive and engaging means to teach business strategy, management, and decision-making. This Strategic Management Capstone Simulation bridges the gap between theory and practice, as students manage their own bicycle manufacturing company.

Competing individually or in teams, students analyze the market to formulate their own cross-functional strategic plan. The implementation of their strategy requires engaging with all key functional decision areas of their company. Students will master each business discipline, as well as understanding the relationship between each function.

The dynamic marketplace and competitive nature of the simulation ensures that students must continue to adapt their strategy to the changing market and their competitor’s decisions. The competitive element of MikesBikes encourages students to understand these principles and have fun doing it!

For an additional challenge; MikesBikes Advanced enables instructors to simulate market recessions and booms, as well as enable our unique corporate takeover module.

Recommended For:

  • Business Capstone
  • Strategic Management
  • Business Administration
  • Business Management
  • Entrepreneurship
  • Business Strategy
  • Business Policy
  • Management and Leadership Development
  • Organizational Behavior
  • Product Management

Teaching with MikesBikes Advanced

 

MikesBikes Introduction to Business Simulation

 

MikesBikes Introduction is a next generation interactive business simulation application, specifically designed for foundation-level courses.

As an introduction to business simulation, MikesBikes Intro features a unique structure which allows students to gradually build confidence. This is achieved by progressively giving students control over their own company. They will initially determine the price and marketing mix for their only product. Each subsequent decision period they are given additional decision areas to manage to provide an insight into distribution, operations and finance; as well as the task of launching new products into emerging markets.

Recommended For:

  • Foundations of Business
  • Introduction to Business
  • Business Administration
  • Business and Society
  • Business Fundamentals
  • Business Organization and Management
  • Leadership for Business
  • Small Business Management
  • Business Concepts
  • Management Principles

Teaching Foundations of Business with MikesBikes

 

How to set retail price and margin in Music2Go Marketing Simulation

Question of the Week: How do I set the Retail Price and Retailer Margin for each product? | Music2Go Marketing Simulation

Setting your Retail Price

When setting the Retail Price, you should consider things like:

  • How much competition is there in this market segment?
  • How are my competitors pricing their products in this market segment?
  • How sensitive is this market segment to price? What are the minimum and maximum price levels for this market?

Note: We recommend staying away from the top 5%-10% of the price range for every market segment, even for price insensitive segments. The maximum price is the level beyond which NO consumers will buy your products. So even for price insensitive segments, a product that is priced at the maximum looks like poor value compared to a more reasonably priced product.

Similarly do not price too close to the minimum price level for a given market. The extra market share is unlikely to make up for your smaller margins. Start off somewhere in the upper-middle of the price range and work your way up or down from there.

  • What is my overall strategy?
    • High Price, Lower Volume
    • Medium Price, Medium Volume
    • Low Price, Higher Volume
  • What are my projected sales for a given pricing level and advertising mix?

Setting your Retail Margin

Once you set your price, consider your retailer margin, unit cost, unit margin and sales projections. Look carefully at your Forecast Results reports and your Forecast Net Marketing Contribution report.

  • If your sales projections are accurate, will you make sufficient gross margin to give you a positive Net Marketing Contribution?
  • Is it worth giving your Distributors more Retail Margin early in the simulation to encourage them to stock your products and gain market share?
  • Or do you already have sufficient market share and distribution that you can afford to cut your Retail Margins?
Need extra help?
  • You can receive an immediate answer to a number of commonly asked questions through our Support Center.
  • Contact us here.
Check out other Music2Go Marketing articles here: 

Music2Go Tip: Leftover Marketing Budget

Music2Go Tip: Improving Total Marketing Contribution