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The Benefits of Business Simulations to Students & Instructors

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MikesBikes at Quinnipiac University

For decades, business schools have compartmentalized instruction in the various core components – management, accounting, finance and marketing – while rarely linking one to the other. Quinnipiac University have recognized the value of integrating those core components to augment students’ knowledge and understanding of business practices. Continue reading MikesBikes at Quinnipiac University

Title image for JITF Case Study on MikesBikes

JITF Case Study of MikesBikes Simulation within an Introduction to Business Course

15 July 2009



The Institute of Finance Case Research (IFCR) is an academic organization committed to the production and promotion of case research and instructional techniques in all areas of finance.

The Spring 2009 edition of the Journal of Instructional Techniques in Finance (JITF) presents a case study about how the MikesBikes Simulation is used by Quinnipiac University to aid teaching of Capital Structure and Dividend Policy in an Intro to Business Course.


Capital Structure and Dividend Policy in an Intro to Business Course
Sean Reid, Len LaBonia, Ben Shaw-Ching Liu, Patrice Luoma, and Anthony Asare
reproduced from JITF Spring 2009

At the undergraduate level, capital structure and dividend policy are generally introduced in a basic finance class and further developed in advanced courses in corporate finance. Exposure to the concept of shareholder wealth maximization earlier in the curriculum would be beneficial for student understanding of business decision-making. It is difficult to grasp the complexities of the process without some basic appreciation of the financing aspect of those business decisions. This paper outlines a pedagogical method for incorporating capital structure and dividend policy decisions into an Introduction to Business course through the use of a business simulation.


Educators are being challenged with applying new pedagogical approaches that satisfy the needs of the next generation of students who have grown up with immersive, computer mediated experiences (Lynch and Tunstall 2008; Nadolski et al. 2008). A growing body of evidence suggests that well-designed and relevant simulations can help students learn complex materials relatively easier (Lynch and Tunstall 2008). Recognizing the ability of computer simulations to serve as effective learning tools for complex material and also the fact that students in this generation feel comfortable utilizing immersive computer related tools, this paper examines the use of a business simulation tool to teach complex materials in an undergraduate curriculum.

This paper explores how the complex topics of capital structure and dividend policy can be effectively introduced early in the typical undergraduate curriculum in an Introduction to Business course using a business simulation. It also explores some of the challenges and opportunities facing schools that might decide to adopt the use of business simulations in their undergraduate finance curricula. The paper is organized as follows: we describe the introductory course; we then describe the simulation; we next describe the capital structure and dividend policy decision-making strategies required; finally, we conclude with a summary and discussion of challenges and opportunities.


At Quinnipiac University all incoming freshmen and new business majors are required to take a sequence of courses in their first semester that includes Introduction to Business. The Introduction to Business (SB101) course along with Introduction to Information Technology (ISM101) and Personal Effectiveness (SB111) make up the first semester core business sequence. The students take this sequence of three courses as a cohort with projects and assignments that are interrelated across courses. SB101 is taught by a cadre of four to five tenure-track professors with representation from the management, marketing, accounting, and finance departments. The course objectives include exposing the students to the four primary functional areas of business (operations management, marketing, accounting, and finance), emphasizing the interdependency of the functional areas, and developing basic skills required by business students (team-building, leadership, decision-making, business writing, and presentation delivery). While each professor teaches the entire course to their assigned sections, weekly team meetings among the cadre ensure that the respective subject matter expert emphasizes the key goals and objectives for the upcoming topics.

The interdisciplinary course is structured around a computer business simulation called MikesBikes Intro® created by SmartSims Inc. The integrated business simulation ensures that students are forced to apply textbook concepts in an experiential learning exercise shortly after those topics are discussed in class. The sequence of topics is presented in Table 1 with the topic followed by the functional area designated as the subject matter expert responsible for the content of each.

Table 1. Topics and Responsibility.


Teamwork and Team-Building
Planning, Organizing, Leading and Controlling
Financial Statements
Market Segmentation
Demand Forecasting
Production and Inventory Management
Promotion Strategies
Ratio Analysis
Capacity Planning
Debt Capital
Equity Capital
Dividend Policy



A comprehensive survey of literature related to the use of business simulations in courses is Faria (2001). As Faria notes, research has shown that team member personality traits are a major factor in performance in business simulations (Armenakis, Field, & Holley, 1974; Johnson & Landon, 1974; Napier, 1974). Early in the course as part of the teamwork and teambuilding topic, the students complete a modified version of the Herrmann Brain Dominance exercise (Herrmann, 1981) and are divided into seven teams of four to six students. The size of the teams is determined by the size of the section with the constraint that the simulation allows a maximum of seven teams per class. The goal is that each team has at least one student from each of the personality trait groups. For many students, this is their first experience in a team-related educational project.

As a result, the freshman business program emphasizes interpersonal behavior and group dynamics through workshops and course material. These teams work together throughout the SB101 course and the other two courses in the freshman business sequence. Competition within the business simulation is the primary activity for these student teams throughout the semester.


The course is structured so that the topics covered are immediately followed by an application of the concept through a decision- making challenge in the business simulation. The course relies on a custom textbook where the topics are arranged in the order of the required decisions within the simulation. This approach allows the students to immediately relate the concepts covered in the course to actions required to run the company within the simulation.

The MikesBikes Intro® business simulation package allows the student teams to compete among the seven teams within each section. The number of sections (known as “worlds” within the simulation) ranges from twelve to fifteen depending on enrollment levels in the course. Each world contains seven bicycle manufacturing companies in a multi-period simulation. The simulation begins with all seven teams having identical companies and an identical mountain bike product to “sell.” The teams must initially make very basic decisions such as naming their company and devising a promotion strategy for their existing product. With each subsequent period the decisions become increasingly complex and numerous. The exercise culminates with the launch of a new product (either a highpriced road bike, a redesigned mountain bike, or a low-priced youth bike). By the fourth fiscal year in the simulation each team must make a full set of corporate decisions that include promotion expenditures, product selection, product specifications, production quantity, production capacity, plant efficiency and quality, capital structure, and dividend policy. The number of periods can vary but we elect to end after the seventh “rollover” (eight fiscal years).

The winner of the simulation contest is that team with the highest shareholder value. Shareholder value is calculated through a proprietary algorithm developed by SmartSims Inc. described in Equation 1:

SHV = f(EPS, D/E, DIV)

The variables in Equation 1 are defined as follows:

  • SHV is shareholder value defined as market share price plus cumulative dividend payments
  • EPS is earnings per share defined as net income divided by shares outstanding
  • D/E is the debt to equity ratio defined as book value of debt divided by book value of equity
  • DIV is the dividend payment history of the company.


In the MikesBikes Intro® simulation, the student teams launch a new product in the fourth period. During the third period, students must determine whether the company has adequate plant capacity to produce the new product. In addition to the capacity decision, there are significant product development, quality improvement, and promotion strategy costs that are also associated with the new product launch.

At this stage of the course and at this point in the simulation, we introduce the concepts of capital structure. In accordance with the Pecking Order Hypothesis (Myers 1984), the simulation algorithm rewards those student teams that are able to finance their new product launch with internally generated funds. Very few teams are capable of financing the new product launch without raising external capital. The basic tradeoff the teams must make is a comparison of the cost of expanding capacity to launch a new product versus the opportunity cost of lost sales and unsatisfied demand. The nature of the shareholder value algorithm forces the students to thoroughly consider the pros and cons of debt and equity financing and assess the impact of each on the resulting share price.

The first option available to the students is debt. Debt financing is available in the short-term (through an overdraft facility that must be paid back in one year at approximately 20% interest) or in the longer-term (through a three-year maturity bond with an 8% annual coupon rate). The student teams are limited in the amount of debt capital they are able to raise based on the financial condition of the company and a maximum amount available on the decision screen. The bond decision screen can be seen in Exhibit 1:

Exhibit 1. The Debt Capital Decision Screen


As the company takes on additional debt and the debt-to-equity level increases, the students will see an immediate negative impact on the share price within the simulation. Also, as the company’s financial condition changes, the required rate of return on debt changes as well and bonds will sell at a premium or discount. For example, the bonds in Exhibit 1 are selling at a discount indicating that the firm’s cost of debt has increased from 8% since the bonds were issued. This is likely due to the increased riskiness the simulation applies to a firm with the relatively high debt level illustrated in the example.

In the period after debt financing becomes available, the students are given the option of raising equity capital within the simulation. The student teams are also limited in the amount of equity capital they are able to raise based on the financial condition of the company. The decision screen for equity allows for equity issuance, share repurchase, and dividend payments and can be seen in Exhibit 2:

Exhibit 2. The Equity Capital Decision Screen


Companies may issue up to 50% of the market value of existing equity during any period but may repurchase only 10% in each decision period (called a “rollover” in the simulation). Further, stock is issued at a 5% discount to current share price (representing flotation costs and market reactions to equity issuance) and equity is repurchased at a 5% premium to current share price. Raising capital through an equity sale has a positive effect on the shareholder value through lowering firm’s debt-toequity ratio, but a negative effect on the shareholder value through lowering earnings per share (as the number of shares outstanding increases). These effects partially offset each other, but the overall impact on share price to an equity issue is generally negative. The other option available on the equity decision screen seen in Exhibit 2 is the ability to pay a dividend. The simulation limits the amount of dividends that can be paid to 50% of the firm’s retained earnings. The fact that dividends have a positive effect on share value tends to support the Gordon (1963) or Lintner (1962) proposition that dividend payments increase firm value as opposed to the dividend irrelevance theory of Modigliani and Miller (1961). Generally, teams only issue a dividend when there is no other more productive use of the cash.

The choice between debt and equity for external financing affords the opportunity to explore several additional capital structure considerations. Perhaps the most important distinction between the two sources of capital that is made obvious to the student is the discretionary nature of dividend payments on stock compared to interest payment obligations incurred with a bond issue. Next, interest payments are a taxdeductible expense in the simulation while dividends are paid from after-tax profits. Finally, students observe the impact of leverage and cost of capital through analysis of the financing decisions within the simulation.

Once the new product is launched, students will have three additional periods to refine their strategy and compete for the highest shareholder value. Teams can (and do) go bankrupt if they have an unsuccessful product launch or make serious errors, but the instructor has the option of providing an “emergency equity injection” to allow every team the opportunity to complete the game. For the successful teams, financial strategies become as critical as product marketing and capacity/ inventory management strategies to winning the game. Indeed professors teaching the course observe that teams often overemphasize the importance financial strategies designed to improve shareholder value at the expense of other value-creating operational decisions.

Within each world, the teams with adequate cash spend the last three periods making decisions that are intended to drive the share price as high as possible. For many teams, this will involve launching additional new products, improving existing products, potentially selling off excess capacity (at a 50% discount), and implementation of cost control measures. Further, many teams will use available cash to repurchase shares, pay off outstanding debt, and pay dividends in an effort to increase earnings per share, reduce the debt-to-equity ratio, and increase cumulative dividends paid. MikesBikes Intro® has restrictions on the capital structure and dividend decisions to avoid teams being able to “game the system” at the end of the simulation. Recall the 5% premium on repurchased shares, and restriction that teams may not buy more than 10% of the outstanding shares in any one period. Once the maximum number of shares has been repurchased (and earnings concentrated as much as possible), the amount of excess cash that can be paid out as dividends is limited to 50% of the value of retained earnings account from the balance sheet. The winning team is typically a team that had a successful product launch, excellent demand forecasting ability, and a thorough understanding of capacity planning and inventory management. Further, the winning teams always employ at least one, if not all, of the capital structure and dividend policy strategies described above.


In the seven years that Quinnipiac University has used the MikesBikes Intro® simulation package as part of the Introduction to Business course, we have found it to be an effective way to introduce many complex business topics that are often not fully understood by the students until much later in their undergraduate curriculum. In this paper we have focused on the key financial considerations of capital structure and dividend policy. The students are introduced to the concepts as a topic in Introduction to Business and the concepts are reinforced during the later Corporate Financial Management course. For finance majors, the topic is explored yet again in the required Intermediate Corporate Finance course. At the end of the course, the professors in the course conduct a survey of the students. One of the questions seeks to gauge the student perception of understanding in each of the functional areas of business. The survey asks the following question: “Indicate how much you feel you learned about each of the functional areas of business through the simulation.” The responses are on a 5-point scale with 5 being the highest (“A Great Deal”) and 1 being the lowest (“Nothing”). The results of this survey question are presented in Table 2.

The survey indicates that almost 90% of the students in the course feel that they learned some or a great deal about finance through the use of the simulation. A similar question asks them to rate their perceptions on learning with respect to specific learning goals. The survey asks the following question: “Using the rating scale below, indicate how well you feel you learned the concepts through the simulation.” Again, the responses are on a 5-point scale with 5 being the highest (“Learned Very Well”) and 1 being the lowest (“Didn’t Learn at All”). The results of this survey question are presented in Table 3.

For purposes of this study, we focus primarily on the dividend policy and debt/equity financing concepts where the vast majority of students (approximately 85% of respondents) feel they learned the concepts in either the “learned a great deal” or “learned somewhat” categories. While student perceptions of learning are often biased, we interpret these results to mean that the students generally view the simulation as a valuable part of the course and useful learning experience.

The use of the simulation to introduce the capital structure and dividend policy concepts does present challenges. First, a student could possibly learn to correctly change the numbers in the decision screen within the simulation with little to no understanding of the underlying concept behind the impact on shareholder value. Indeed, many of the students that perform best in the simulation are not the same students that perform best in the course. Student grades are determined by exam scores, assignment grades, and a course project that requires synthesis of the course content with simulation outcomes. Another major concern is that students equate success in the simulation with earnings manipulation and accounting “shell games.” In this era of rampant accounting fraud, an academic exercise that rewards potentially questionable financial decision-making is a serious concern. Finally, the nature of the team decision-making does little to ensure that every student on each team fully understands the application of the concept. Often, one or two students on a team make a majority of the decisions and “free riders” are allowed to coast along. We attempt to mitigate this situation by weighting the course project grade by a peer evaluation grade, but invariably some team members “slip through the cracks.” Unfortunately, it is impractical to run the simulation with companies run by individual students. However, every student in the course takes a common final exam specifically designed around the MikesBikes Intro® simulation. This evaluation helps ensure that all students are knowledgeable in the concepts developed during the exercise.

Overall, the MikesBikes Intro® simulation is perceived by students and faculty alike as a positive experience for the new business students. First and foremost, it exposes the students to the different functional areas of business within a company, shows how decisions within those functional areas are interrelated, and demonstrates the importance of each for a successfully managed company. For finance in particular, the positives far outweigh the negatives. Even for students that may not fully grasp the concept during the Introduction to Business course, instructors in upper-level finance courses are frequently able to refer back to the shared MikesBikes Intro ® experiences when these topics are revisited later in the curriculum. Instilling the concept that maximizing shareholder value leads to success in business at an early stage of the curriculum establishes a solid foundation for students in the finance major. Understanding by beginning business students of the impact of capital structure and dividend policy on shareholder value, even at a very basic level, makes the simulation worth consideration for inclusion in an undergraduate business curriculum.

Table 2: Survey Results – Functional Areas of Business

A Great Deal Some A Little Very Little Nothing Rating Average Response Count
Management 152 210 30 9 1 4.25 402
Accounting 110 203 64 22 4 3.98 403
Marketing 209 164 22 7 1 4.42 403
Finance 180 181 31 8 2 4.32 402
answered question 403 403
skipped question 15 15


Table 3: Survey Results – Specific Business Concepts

Learned very well Learned Somewhat Neutral Didn’t Learn Much Didn’t Learn at All Rating Average Response Count
Integration of functional areas 133 207 55 6 1 4.16 402
Industry analysis 154 203 42 2 1 4.26 402
Competitive Advantage 204 164 30 2 1 4.42 401
Competitor Analysis 189 169 40 4 1 4.34 403
Creating an effective mission statement 147 179 62 8 5 4.13 401
Analyzing and using financial data 186 173 38 2 1 4.35 400
Forecasting demand 194 163 34 9 2 4.34 402
Capacity Planning 187 165 40 7 2 4.32 401
Debt versus equity for financing 197 141 52 8 4 4.29 402
Dividend policy 174 161 53 11 3 4.22 402
Effective decision making 225 142 33 1 1 4.47 402
Impact of decisions made on firm outcomes 221 143 36 1 1 4.45 402
answered question 403 403
skipped question 15 15



Armenakis, A., Feild, H., & Holley,W. (1974). Correlates of satisfaction, learning and success in business gaming. Simulations, Games and Experiential Learning Techniques, 1, 272-277.

Faria, A., (2001). The changing nature of business simulation/ gaming research: A brief history. Simulation & Gaming, 32:1, 97-110.

Gordon, M. (1963). Optimal investment and financing policy. Journal of Finance, 18:2, 264-272.

Herrmann, N., (1981). The creative brain. Training and Development Journal, 35:10, 10-16.

Johnson, G.,& Landon, L. (1974). Identifying successful game participants. Simulations, Games and Experiential Learning Techniques, 1, 295-299.

Lintner, J. (1962). Dividends, earnings, leverage, stock prices, and the supply of capital to corporations. Review of Economics and Statistics, 44:3, 243-269.

Lynch, M., and R. Tunstall (2008). When worlds collide: Developing game-design partnerships in universities. Simulation & Gaming , 39:3, 379-398.

Miller, M. and F. Modigliani (1961). Dividend policy, growth, and the valuation of shares. Journal of Finance, 34:4, 411- 433.

Myers, S., (1984). The capital structure puzzle. Journal of Finance, 39:3, 575-592.

Nadolski, R.J., Hummel, H.G.K., van den Brink H.J., Hoefakker R.E., Slootmaker A., Kurvers H.J., and Storm., J (2008). EMERGO: A methodology and toolkit for developing serious games in higher education, Simulation & Gaming, 39:3, 338-352.

Nadolski, R.J., Hummel, H.G.K., van den Brink H.J., Hoefakker R.E., Slootmaker A., Kurvers H.J., and Storm., J (2008). EMERGO: A methodology and toolkit for developing serious games in higher education, Simulation & Gaming, 39:3, 338-352.

Napier, H. (1974). Autocratic vs. democratic decision making. Simulations, Games and Experiential Learning Techniques, 1, 291-294.

Sean Reid (Finance), Len LaBonia (Marketing),Ben Shaw- Ching Liu (Marketing), Patrice Luoma (Management), and Anthony Asare (Marketing) are professors at Quinnipiac University. Together, they team teach the freshman integrated business course described above.

This article has been reproduced in its entirety from the Spring 2009 edition of the Journal of Instructional Techniques in Finance (JITF)

Published by the Institute of Finance Case Research (IFCR)

Mikes Bikes Case Study Article PDF

What are Smartsims Business Simulations?

To truly grasp the impact strategy and management decision-making have on business outcomes, students need real world experience. Smartsims business simulations encourage student engagement and accelerate learning by giving students their own business experience.
Continue reading What are Smartsims Business Simulations?

What are the benefits of using a simulator in a business course?

The Benefits Of Business Simulations

“Education is not the learning of facts, but the training of the mind to think”

– Albert Einstein

Instructors have felt the pull away from traditional teaching methods such as pure theory and case studies thanks to technological advancements in ICT and education. The student of today has been raised in an environment of connectivity with access to PCs, laptops, smartphones, and phablets. It is a part of their social context (Canaleta, Vernet, Vicet & Montero, 2009). Technology has permeated into everything we do, shaping our minds and affecting the way we teach (Carr, 2010). Today’s student may be inseparable from technology in itself (Canaleta et al., 2009; Woollaston, 2013); it is then fair to say their learning environment naturally requires ICT for any form of meaningful engagement. Not only in education but in daily life, the consumer and the student seek to gain a more active role within their environment (Prahalad & Ramaswamy, 2004). Teaching methods therefore are moving away from the student as a passive learner, limited to taking notes and listening. Emerging from this is a new focus on learning surrounding the students actively constructing their own knowledge (Canaleta, Vernet, Vicent & Montero, 2009) and the instructor fulfilling the role of facilitator.As facilitators, the instructors’ role changes from simply distributing facts and theories to allowing the construction of a student experience. This is consistent with increasingly popular experiential learning theories purported by scholars such as Kolb (1984). With this in mind, it is easy for us then to state that online applications like business simulations rightfully occupy a pivotal place in learning environments.

Benefits of Business Simulations

Business simulations allow students and instructors to interact meaningfully. Further, by making various decisions for their simulated firm, students are tasked with transferring learned knowledge from class into a relevant and new scenario which is a requirement for engaging and memorable learning (Dirkx, 2001).

Stumpf and Dutton (1990) recognised that simulations resonate on both cognitive and emotional levels. Students gain the ability to apply learnt theory in action, validating that what they studied is relevant and applicable in the real world. At the same time, they develop communication and analytic skills which will be relevant to their future careers. On the other side of the spectrum, facilitators often feel that they made a positive difference to students’ learning, which is both relevant and required in today’s business world.

Anderson’s (2009) framework outlines three major outcomes from business simulation and cognitive learning:

Learning – Students gain first-hand experience of how business management decisions are interrelated. (e.g. how marketing decisions can affect manufacturing or finance decisions). Executing these concepts themselves, students learn skills such as:

  • Performing under pressure;
  • Analyzing environments to develop and implement a business plan;
  • Collaborating with teammates and managing conflict; and
  • Reflecting upon their performance and identifying areas of improvement to fare better.

The desired learning outcomes of a course are a major factor in the decision of whether or not to incorporate it as part of the course. Over several decades, scholars such as Bloom (1959) and; Gentry and Burns (1981) have provided descriptions of learning and the assessment process:

Cognitive Domain: Bloom’s Taxonomy of Learning Objectives

Learning Objective Description of Learning Assessment Process
Basic Knowledge Student recalls or recognises information Answering direct questions/tests
Comprehension Student changes information into a different symbolic form Ability to act on or process information by restating his or her own terms
Application Student discovers relationships, generalizations, and skills Application of knowledge to simulated problems
Analysis Student solves problems in light of conscious knowledge of relationships between components and the principle that organizes the system Identification of critical assumptions, alternatives and constraints in a problem situation
Synthesis Student goes beyond what is known, providing new insights Solution of a problem that requires original, creative thinking
Evaluation Student develops the ability to create standards of judgement, weigh and analyze Logical consistency and attention to detail

Source: Bloom, Englehart, Furst, Hill & Krathwohl, as cited in Anderson & Lawton, 2009.

It is our cognitive comprehension that allows us to adapt to what we have learnt in one situation to other situations”

– Anderson (2009, p. 199)

Attitudinal – Students engaging in the simulated learning experience gaining an appreciation for business and its nuances. The experience leads to applying learnt concepts to make effective decisions, leading to higher academic/executive performance. How does the engagement start? In his 2015 article, Gove identified that the reason simulations are able to hold learner attention is because they are immersive! Students have to navigate a complex environment and make decisions for interrelated functional areas. This complexity creates a need for students to actively engage with their simulated exercise on multiple levels such as product level, firm level and market level.

Behavioural – Tying in with student attitudes are their behaviours. As immersive as the backdrop of simulations are, they are competitive and instil in students, motivation to succeed and outperform their peers. Add to the fact that they are in a safe, risk-free environment, and you have the makings of a structure where students are willing to spend their time and energy to make well-informed and competitive decisions.

To summarize, as technology became prevalent, so did our ability to co-opt it as a method of teaching and learning. Online applications like business simulations have benefits like allowing teachers to become advisors and moderators in their own classrooms.  Meanwhile, student minds are trained how to think, adapt attitudes and behave competitively to succeed in business decision making.

Contact us if you would like more information on simulations or access to a free demo account.

– Danny Master

Experiential Learning & Music2Go Marketing

Experiential Learning is a highly effective educational tool, and a key feature that sets our Simulations apart from other teaching methods.

Experiential Learning focuses on the learning process for the individual, through observation and interaction with the subject they are learning about rather than the traditional process of learning from a textbook.

Katie Matthew recently spoke at the Annual Conference of the Society for Marketing Advances in Memphis, Tennessee about her integration of ourMusic2Go Marketing Simulation in her Introductory Marketing Course, and how this has added value by bringing Experiential Learning to her classroom. Katie is a Major in the U.S. Army and Instructor at The United States Military Academy at West Point.

Some of the key benefits of Music2Go that she mentioned included the following:

  • Encouraged more student engagement/involvement;
  • Produced better learning outcomes;
  • Students indicated they preferred this style of learning;
  •  Better prepared students to make real-world decisions.

Katie fully embraced the Experiential Learning process by having Music2Go as the “Major Event” for her course. She notes that the “time tested and proven” nature of the Music2Go software, which included teaching resources and 24 hour support played a big part in adopting the Simulation. Another feature she mentions that is typical with Experiential Learning is the immediate feedback students receive on their decisions, which enables them to see what works and what doesn’t. Whether or not decisions are optimal, the results give students a clear and immediate insight into the linkages between functional decision areas – something not possible with traditional learning methods.

“It helped us apply what we learned in class; to see the how wrong or how right we were in making decisions. This experience can’t be replaced except by real life.”

From an educator’s point of view, Katie enjoys the flexibility that Music2Go gives her, with adjustable timelines that can change with course needs, and the ability to easily monitor student performance. She has adopted a “Consultant” role to students, giving teams the option of approaching her for guidance on certain decision areas, and is able to deduct a virtual “fee” from their Marketing Budget within the simulation. This further enhances the real-world feel that the Simulation brings to the classroom, while encouraging participation.

“I enjoyed it so much more because of the competitive aspect it offered. I also learned more because it is a nice change of pace to move away from the books and to see what we would be doing if we actually were in marketing as a profession.”

To be truly effective, Experiential Learning needs to incorporate the entire learning wheel – from goal setting, to experimenting and observing, to reviewing, and finally action planning. The complete process allows students to learn new skills, new attitudes and entirely new ways of thinking.

To see how you can bring Experiential Learning to your classroom via our Music2Go Marketing Simulation, or any of our other simulations, feel free to contact the Smartsims Sales Team at sales@smartsims.com


Credit to Katie Matthew, Bill Madway, and the Society for Marketing Advances – see below links for full SMA publications.

SMA Teacher-Friendly Experiential Learning Projects

Experiential Learning Projects Reference Guide for Marketing Educators

Presentation on Active Learning at the 2011 Marketing Management Association’s Fall Educators’ Conference

Teacher-Friendly Options for Incorporating Experiential Learning Projects in Marketing Courses

Strategic Approaches to Active Learning

Smartsims Feature at the Annual SMA Conference

The Society for Marketing Advances (SMA) held their annual conference during the first week of November 2011, bringing together marketing educators from throughout the United States and abroad.

Lecturer William M. Madway of The Wharton School at the University of Pennsylvania co-chaired the Marketing Education track, putting together a discussion panel called “Teacher Friendly Options for Incorporating Experiential Learning Projects in Marketing Courses”. Bill brings over 20 years of experience in the marketing profession to the classroom. He has used various experiential learning projects in his marketing classes, including our Music2Go Marketing Simulation and the National Student Advertising Competition.

He was joined by Professor Katie Matthew, a Major in the U.S. Army and Instructor at the United States Military Academy at West Point. Katie teaches courses in marketing and military leadership for the Department of Behavioral Sciences & Leadership and also uses our Music2Go Marketing Simulation.

Other educators who shared their experience on the panel include Leslie Kendrick from John Hopkins University & Whiting School of Engineering’s Center for Leadership Education; Marilyn Lavin from University of Wisconsin – Whitewater; and Sandy Utt from University of Memphis.

The session was designed to familiarize marketing educators with effective experiential learning projects that are relatively easy to implement. The session recognized that while educators identified the advantages of experiential learning, and even students tend to prefer active, real-world teching techniques, challenges exist that hinder greater use of these methods.

Below is an excerpt from the Conference Guide regarding this issue:

One major impediment is the amount of time involved in designing and carrying out experiential learning activities, especially real-world class projects. Instructors often must find a company willing to serve as a “client,” and must then manage this relationship. These projects also require instructors to provide a great deal of support for students outside the classroom. What’s more, it can be difficult to assess individual student learning and performance, as many of these projects are carried out by teams. Online simulations eliminate the need to find clients, but still require considerable advising time, not to mention the time needed to address the inevitable technical problems.”

Fortunately, a number of experiential learning options that overcome these challenges are now available for use in a wide variety of marketing courses, ranging from Introduction to Marketing to capstone courses such as Marketing Strategy and Advertising Campaigns. Many of these options involve “live” cases, developed in cooperation with major multinational companies, in which students conduct primary research, develop recommendations, and present their findings to the client company. Multiple universities can simultaneously utilize the cases, which usually include a competitive aspect, i.e., teams at participating schools compete against one another for recognition, and in some cases, prizes. Some of these projects allow students to actually implement their recommendations, with funding provided by the sponsoring company”.

The SMA session focused on four experential learning projects which panelists identified as being among the best available and providing a benchmark against which other options could and should be measured:

The Music2Go Marketing Simulation. A highly realistic,  comprehensive online marketing simulation developed by Smartsims. Students take over the MP3 player division of a large consumer electronics company, and formulate segmentation, positioning, sales, distribution, pricing, new product development, and promotion strategies, as they attempt to build their firm into the leading player in the market. Student teams compete against other teams within their course.

The Marketing Internship Program (MI), one of two types of industry-education collaborative programs created by EdVenture Partners. In the MI program, students taking a for-credit, marketing or advertising class research the target audience; create a marketing campaign, which they pitch to their client for approval; and implement their plan using funds provided by their client. Students also analyze their results and present their findings to their client. Organizations participating in the MI program in recent years include Chevrolet,
Nissan, Sapphire Mobile Systems the FBI, and the U.S. Navy.

The Google Online Marketing Challenge. Student teams receive $200 of Google advertising, and work with local companies or NGOs to create online marketing campaigns. The challenge is open to colleges around the world. Regional winners and their professor receive a trip to a regional Google office; the global winners and their professor receive a trip to Google’s world headquarters.

 The American Advertising Federation’s National Student Advertising Competition. Student teams develop an integrated communications campaign to address a real-world marketing problem facing the sponsoring company or non-profit, and “pitch” it to a panel of judges in regional competitions. The top team in each region advances to the national finals. Recent NSAC sponsors include AOL, Coca-Cola, Florida Tourism, J.C. Penney, and State Farm Insurance.

The panel also discussed the integration of the above projects into syllabi, the instructors’ roles, the provision of resources and assistance in overcoming likely challenges. Performance evaluation, participant reflection and the impact of competitive elements in the projects were also discussed.

Below are some publications courtesy of William M. Madway:

Presentation at 2011 Society for Marketing Advances Conference on Teacher-Friendly Experiential Learning Projects

Teacher-Friendly Experiential Learning Projects Reference Guide for Marketing Educators

Presentation on Active Learning at the 2011 Marketing Management Association’s Fall Educators’ Conference

Smartsims are proud to be recognised at the SMA, which discussed the Segmentation Options of the simulation in great detail covering Market Demographics, Products, Pricing, Distribution and Promotion. Panelists discussed how one of the simulation’s greatest value adding feature was recognizing and catering to Consumer Preferences across various unique and emerging market segments. We hope to continue contributing positively to the Marketing Educational System throughout the world.

– Danny Master

Logo/crest for wharton university

Wharton Joins Smartsims

We are pleased to welcome The Wharton School of the University of Pennsylvania and Professor William Madway into the Smartsims family.

Professor Madway teaches the Introduction to Marketing Course (MKTG 101) at Wharton. Professor Madway first experienced our Simulations at Villanova University in 2009, while teaching Business Dynamics using our MikesBikes Intro Business Simulation.

After the success at Villanova, Professor Madway introduced our Music2Go Marketing Simulation to Wharton. As the MKTG 101 course is condensed over Summer, Music2Go was used over a five day period with decisions being processed daily. Team ‘The Sonic Hedgehogs’ emerged victorious with a Cumulative Net Marketing Contribution of $170,546,758.

“I appreciate how proactive and supportive you and everyone else at Smartsims are. As a teacher, it’s good to know your organization has my back! It’s like you all are part of the teaching staff!” – William Madway

The Wharton School is consistently ranked as one of the top business schools in the world.