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Final Report
COMR 465 102
Instructor’s Name: Phaedra Burke
Date Submitted: Monday, December 5th, 2022
Simulation Team: 6
Names:
Isha Afzal, 51722585
Lynn Campbell, 19443662
Emma Ho, 37195534
Koosha Issari, 66800392
Maanit Rohira, 21952205
Table of Contents
Overall Outcome
1
Target Market Choice
2
Turn Decision-Making Review
3
Product Strategy
3
Price Strategy
3
Promotional: Advertisement Strategy
4
Promotional: Distribution Strategy
4
Competitive Analysis
5
Pricing
5
Distribution
6
Promotion
7
Competitive Intelligence
8
Our models/theories
9
Areas for Improvement
10
Lessons Learned
10
Conclusion
11
Exhibits
12
A.1: Important Characteristics for School Children in Backpacks
12
A.2: Customer Feedback from School Children for Team 6 Backpacks
12
A.3: Unit Price: Team 6 (orange)
13
A.4: Sales in Different Channels
13
A.5: Net Profit Throughout the Simulation
14
A.6: Market Share Throughout the Simulation
14
A.7: Cost Per Every School Child for All Types of Advertisements
15
A.8: Units Sold Throughout the Simulation for Team 6
16
A.9: Marketing and Campaign costs over the 6 quarters
16
A.10 Total Revenue of every firm from quarters 1 - 6
17
A.11 Overall team performance from quarters 1 to 6
17
Overall Outcome
Throughout our 6 simulation quarters, we were able to create a low cost backpack paired
with a marketing strategy that successfully placed us #1 amongst our competitors in gross profit,
gross margin, units sold, net profit, and final balance at the end of round 6.
1
When developing our initial strategic plan report, we designed the company vision
around minimising costs and marketing expenses, maximising the rate of return on out
investment, and reaching a goal of 50% gross profit margin on the packs. Additionally, our
primary objectives included obtaining the majority of our target segment’s marketing share and
maximising revenue. Looking back on our original goals compared to our performance
outcomes, as reflected in the leaderboard, we were able to determine where we felt that we
succeeded and where, if given more time, we would refine our strategy.
One way we kept our costs low was by choosing inexpensive materials when designing
our pack. These basic materials allowed us to maintain a low cost of production and sell at a
price that was lower than that offered by competitors, but high enough to generate a $__
marginal profit. Our simple design and everyday low pricing allowed us to appeal to a wide
range of consumers, increasing our market share.
We also kept marketing costs low at $2,700. Our marketing strategy was our primary
concern for the majority of the rounds. After the first couple of rounds, we felt as though we had
a greater potential for sales should we invest more in our promotional strategy. We then made the
decision to increase our promotion and distribution costs with the goal of increasing market share
and sales. This caused our average margin to decrease from $15.44 in quarter 1 to $14.78 in
quarter 6. However, with this decrease, we experienced a significant increase in return on
marketing, telling us that our investment was worthwhile. Despite successfully increasing our
return on marketing, according to the leaderboard, we placed 3rd in this category. Thus, if given
additional opportunities, marketing strategy is something we would have tweaked further.
Luckily, decline was not a common trend for our company, as every other metric experienced
growth.
An area we are very proud of is our market share. We had the greatest market share
amongst our competitors at 22%. We are also satisfied with the fact that our sales increased by
524 units from quarter 1 to quarter 6. We believe this is due to growth in customer satisfaction,
product satisfaction, and return on marketing. A graphical representation of our growth from
quarter 1 to 6 (over various metrics) can be found in Exhibit A.11.
Target Market Choice
Initially, we wanted to target school children, as well as university students, but then we
stuck to school children because they have the greatest market share. Although their growth rate
is only 1%, their purchase behaviour was 5% last quarter, which is the greatest in comparison to
the other target segments. They also have the greatest product awareness with 19%.
Using the attractiveness criteria, we saw that the market share was 39,415 (substantial),
there was little to no overlap with other target markets (identifiable). We also saw that backpacks
were a standard purchase as children need them for school (responsive), parents were investing
in good backpacks for their kids (profitable), and with our marketing strategies, consumers will
know about our backpack, its characteristics and how to buy it (reachable).
School children really valued capacity, as well as comfort and durability. We wanted to
maintain a design that was minimalistic enough to appeal to other segments, therefore, we had to
2
sacrifice some of the school children’s desired characteristics such as cartoon graphics.
Therefore, our backpack has a more mature design, appealing to many segments.
We stuck to the same target segment throughout the simulation because we wanted to
focus on how we can grow our market share, which was when we decided to purely choose
advertisements that attracted school children after realizing social media and gaming sites didn’t
attract as many children.
Turn Decision-Making Review
As team 6, once we started the simulation, the main objective for our company was to get
the greatest market share and also the greatest net profit from all the teams. Throughout the
simulation, we focused on trying out different advertisements and promotions strategies to be
able to get the highest market share and profit.
Initially when we started, we had wanted to get the greatest share in both school children
and university students' market. Therefore, we had chosen to design a minimal backpack which
can easily be targeted to both groups. This also helped us have the lowest production cost of
$7.00 per unit from all the teams.
In the first quarter of 2022, we had followed our strategic plan closely and soon realised
that we have a lot of competition with other teams for school children and university students.
There was one team targeting school children and two teams targeting university students, but
they also had a good share of the school children market.
Product Strategy
Due to the high level of competition in the school children market, the backpacks looked
really similar between the teams. Therefore, in the second quarter of 2022, we replaced the thin
spaghetti straps with basic straps. The basic straps cost us one additional dollar per bag.
However, we were able to increase the level of comfort and durability by one point each. These
are the second most important characteristics in school bags for school children at 23% for both.
This can be seen in Exhibit A.1, which shows the importance of the five characteristics for
school children in backpacks. Other than this change, we had kept the backpack the same
throughout the rest of the simulation because we had good feedback from the school children
group, as seen in Exhibit A.2.
Price Strategy
After the first quarter of 2022, we also changed the price of the backpack from $32.00 to
$34.00 to cover for the extra marketing costs, investment in market development funds, and the
product changes (straps). In the second quarter of 2022, we verified with the feedback from our
target group, and they were satisfied with the pack price. As seen in Exhibit A.2, the price was
“high, but still in their budget,” and so we decided to keep it at $34.00 throughout the simulation.
End of the simulation, this was the lowest price per unit from all of the teams as seen in Exhibit
A.3.
3
Promotional: Advertisement Strategy
After the first quarter of 2022 results came in, we realised we are in close competition
with team 8. We were in rank 1 for profit at $2968.00 (Exhibit A.5). However, we were at rank 2
for market share at 27%, while team 8 was in rank 1 with 42% of the market share (Exhibit A.6).
We wanted to increase our market share, therefore we decided to invest in more advertising to
increase our market reach.
We kept the advertising frequency at 1x for gaming sites. However, we increased the
advertising frequency from 2x to 4x for comic books. The purpose was to increase market reach
for school children and university students through this change. We were able to change the total
reach from comic books from 61 to 244. More specifically the reach to school children increased
from 35 to 140. The reach of university students increased from 15 to 60. We also decided to
start an advertisement with social media at 1x frequency. The main purpose of starting this
advertisement was to increase the reach to university students. With one social media
advertisement frequency, we were able to reach additional 60 university students and an overall
increase of 187 for total reach.
However, after the second quarter of 2022, our profit rank was still 1st at $2,311.00
(Exhibit A.5), however the market share had decreased to 23% (Exhibit A.6), and we were at
rank 3. We realised it was best for our team to focus only on school children and change our
advertising strategy. At this point, we changed our overall strategy to target two groups (school
children and university students) to instead only focus on one group more closely, school
children. We performed calculations to calculate the largest reach to school children with the
lowest cost per every school child (Exhibit A.7). We realised that the best way to get the largest
reach with the lowest cost per school child is through comic books. We were able to reach 1
school child for $13 through comic books. Therefore, we changed the advertising strategy to
having 8 full page ads in comic books. This increased our marketing costs by $100 from the
second quarter of 2022. The change did decrease the total reach from 521 to 488, however, it
increased our total reach to school children from 182 to 280. After the third quarter of 2022, the
number of units sold had increased from 474 in the second quarter of 2022 to 553 in the third
quarter of 2022 (Exhibit A.8).
Promotional: Distribution Strategy
We were still worried about the market share and decided to invest in additional
promotional strategies through distribution channels. We observed that in the second quarter of
2022, the Discount Retail Chain had the highest reach to school children of 3262 and also had
the highest number of total sales of 427 (Exhibit A.4). We had the best chance to increase our
market share by increasing our share in this channel. Therefore, we invested in the $1000 Market
Development Funds in the Discount Retail Chain. In the third quarter of 2022, it increased our
sales in the Discount Retail Chain from 210 in the second quarter of 2022 to 285 (Exhibit A.4).
In the final quarter of 2022, we held 33% of the Channel Market Share in Discount Retail Chain.
We decided to keep the investment in market development funds in the Discount Retail Chain
throughout the rest of the simulation. After the second quarter of 2023, we had 367 sales from
the total sales of 995 in this channel which meant we had 36% of the market share in this
channel.
4
In the third quarter of 2022, we also decided to offer a $5 promotion through the Direct
channel. We had the highest profit margin of $22.00 in this channel compared to all the other
channels. We also noticed that the total sales were low in this channel (Exhibit A.4). A total of 35
bags were sold through this channel in the second quarter of 2022 and our team had sold 12 bags.
We wanted to offer the promotion to help us get a greater share in this channel. After the third
quarter of 2022, our sales increased to 17 in this channel. We decided to keep the $5 promotion
in Direct channel throughout the rest of the simulation. After the second quarter of 2023, we had
34 sales from the total sales of 93 in this channel which meant we had 36% of the market share
in this channel as well.
Starting the first quarter of 2023, all print advertising was available at a 25% discount for
the next three quarters. Our marketing costs decreased from $3600 to $2700. End of the final
quarter of 2022, our profit rank was still 1st at $2,505.50 (Exhibit A.5), however the market
share had decreased to 20% (Exhibit A.6), and we were at rank 2. We were not satisfied with our
standing for the market share and wanted to start an additional promotional strategy. We decided
to start another market development fund spending with the Department Store since it had the
second highest reach to school children. After the final quarter of 2022, the Department had a
total of 498 sales from which our company had 135 sales (Exhibit A.4). We had a channel market
share of 27% in the Department Store. The total reach for school children through the
Department Store was 3727. After the first quarter of 2023, our sales increased from 135 to 226.
Also, after the first quarter of 2023, our profit rank was still 1st but increased to $4,378.60
(Exhibit A.5) and our market share had also ranked 1st at 21% (Exhibit A.6). We were really
satisfied with the result and decided to keep this investment throughout the simulation. After the
second quarter of 2023, we had 271 sales from the total sales of 810 in this channel which meant
we had 33% of the market share in this channel.
After the second quarter of 2023, our profit rank was still 1st but increased to $6,252.50
and our market share was still 1st but increased to 22%. We had achieved both our goals for the
simulation to hold the greatest market share and also have the greatest net profit from all the
teams. Our Final Balance was $30,399.60, the highest from all the teams.
Competitive Analysis
Pricing
Our product was minimalistic using midrange materials with a lack of many features.
This allowed us to price our backpack towards the bottom range of the market prices. In the first
quarter of 2022 our backpack was priced at $32, shortly thereafter increased to $34 to increase
margins, along with Team 3’s backpack. Due to their more cost heavy and advanced backpack
while being priced the same as us, we presumed Team 3 was enacting predatory pricing to try
and initially establish themselves in the market as a price leader. This did not work as well as
they hoped and in quarter two Team 3 increased their price to $41 to presumably increase their
extremely low margins. Team 8 decided to utilise promotional pricing, pricing their bag at $39
with various $5 sales promotions through their Direct, University Store and Online Discount
Retailer channels. This gave them a quick jolt of sales, initially dominating the share of the
5
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Show the formula you used and how you derived the answer.
For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).
BIUS Paragraph
Arial
A Moving to another question will save this response.
10pt
hyji
27
描く A
Bb
toggle_stat... A
N
IQ5
0 WORDS POWERED BY TINY
Question 8 of 19 > >>
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OA. 0.097
OB. 0.967
OC. 0.004
OD. 0.040
Mark for review (Will be highlighted on the review page)
>
LOST LO EAST
DONT
Review My Answers
18°C Mostly cloudy AENG
CERTIFICATE OF TRAMMING TRANSPORTATION OF DANGEROUS GOODS
CERTIFICATE DE FORMATION TRANSPORT DES MERCHANDS DANGEREUSES
James Purkisarajah
Klean or
N
Save & Exit
75 Advance Blvd Brampton, Onta
2:52 F
2022-18
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