Neilsen’s Ice Cream – Marketing Game

[pic] Neilsen’s Ice Cream Report Report Katherine Johnstone HMMA†¢ CAH †¢ January 17, 2011 [pic] Introduction The company that I was part of during this marketing game was known as Nielsen’s Ice Cream. The aim of the game was to earn the most market share by making the right choices in marketing the products, purchasing the inventory, managing human resources, and working together. This report will go through the decisions made, reasons for them, and the outcome. Round 1 When starting out the game, our first round of decisions on marketing can be summed up with the following chart : Price |Marketing Budget |Promotion |Purchase | |Standard Ice Cream |280 |4000 |Commercial – Rich history |500 | |Special Ice Cream |295 |4000 |Commercial – Best quality |500 | |Luxury Ice Cream |295 |4000 |Sales Promotion -Cheap |500 | |Sugar Free Ice Cream |285 |4000 |Commercial – Quality/Price |500 | |Then we moved to our Human Resource Management, and made d ecisions that would affect our company internally. Board Salary: 5500 euro Size Sales Department:20 euro Education Budget:Average –> 2500 euro Working CircumstancesAverage –> 2600 euro Working Conditions:Training for management Training result oriented work Training on team building Flexible working conditions Music workplace To start off the research and development, we more so went with our best guess, feeling that this round would truly come close to being some what of a trail and error round. So the numbers for research and development are as follows: Process: 1000 euro Standard Ice Cream2100 euro Luxury Ice Cream2600 euro Special Ice Cream2400 euro Sugar Free Ice Cream2200 euro Round 2 Looking at the results from the previous round we made according adjustments, which are as follows.Standard Ice Cream With a starting price of 280 euro for the standard ice cream, the product did fairly well on the market. Our market share of the standard ice cream is 29%, which is pleasing, but staying there will be tough. A small change in the price, will be made in order to see if demand goes up or down, or is affected. We will still continue promoting the product a commercial approach, and continue with the same amount of money for the budget (4000 euro). Special Ice Cream Nielsen strongest product was our Special Ice Creams with an amount of 483.We won’t change anything on this product and will see if this does effect the company results in the next round. We will purchase 600 new items for the next round. Luxury Ice Cream The Luxury Ice Cream did a good job in the previous round, but can be improved by making some small changes. Nielsen changes the way of promoting to a Price/Quality advertisement, hoping that form of marketing will catch more attention. Sugar Free Ice Cream We sold 387 units of Sugar free ice creams last round, which is quite a high amount if you compare it with to our competitors.To attempt to increase sales and market share, Ni elsen will lower prices on this product from 285 to 280. The marketing budget of 4000 euro still stands and is put towards a commercial where they are telling about the price and quality relation. Round 3 Standard Ice Cream The standard ice cream was doing quite well the last round, so we felt only minor changes were needed. We had an average quality for this standard ice cream which we changed into a high quality, this is due to we believe that in order to be competitive you can’t settle on average.We purchased 350 products with a good quality. This high quality needs to be compensated by a higher price, because if you are just higher your quality, you will lose money. We changed the price from 285 to 295 euro. We are going to promote this product to a commercial which is giving the rich history of the product. Our marketing budget for the standard ice cream in this round is 4000 euro. With a higher quality and higher price, we should make some more profit out our standard i ce cream. Special Ice Cream Again it seems that the special ice cream is our strongest selling product.We had a price of 295 with a good quality. The changes will be made to up the sales of this special ice cream. We increased the marketing budget from 4000 euro to 4100 euro, so that people won’t loose interest and also to stay ahead of competition. We invested this 4100 euro in a tv commercial where Nielsen’s is proud of the high level of quality at this special ice cream. Because of the high sales we purchased 450 special ice cream on a excellent basis. The sales are very good for this special ice cream, so we made a decision to change the price from 295 to 300 euro.This shouldn’t make such an effect on peoples buying behavior. It’s in relation to change from a good quality to an excellent quality of the purchased items. Luxury Ice Cream The sales of the luxury ice cream weren’t so high in the fourth period. There should be a reason for this, whi ch we need to fix with making some changes. First we want to change the price from 295 to 290. This should people make more convenient to buy our product. When you are just lowering the price, somebody has to know that you made this changes, so we hired up the marketing budget from 4000 to 4200.This money will be invested in a sales promotion, so on that the sales will increase of this product. As a result of bad sales in the previous round, we don’t need such a high purchase of products. We will purchase 150 luxury ice creams on a good quality base. Sugar Free Ice Cream The sugar Free Ice Cream was the weakest product of the 4. With 203 sales and a market share of 15% the sugar free ice cream performed very poorly. We need to change something to higher up the sales and the market share. We changed the price of the sugar free ice cream from 280 to 270.We will promote this prices with a marketing budget of 4000 euro which won’t be changed from the previous round. This m oney will be invested in sponsoring, where we are telling that the sugar free ice cream has the best quality. The sales where such as bad, that we don’t need much to purchase. We are purchasing 150 sugar free ice creams, which should be enough because of an inventory of 400 stocks. Also in an attempt to sell more we had a press release stating that we were offering for a limited time a Holiday Special Sale, which is why the price was then lowered by 10 euros.In Human Resources we were not performing well as far as our staff was concerned, so we decided to try increasing the education budget from ‘average – 2500’ to ‘good-4000’, in hopes that a higher education will provide them with what they need to perform their job and possible be more satisfied. Also, we felt that it was needed to make a few changes in the research and development area as a way to increase the sales of the sugar free ice cream. What we decided was to decrease the budget fo r the luxury ice cream research and cycle it into the sugar-free’s: Process: 1000 euro Standard Ice Cream2100 euro Luxury Ice Cream2600 euro ? 200 euro Special Ice Cream2400 euro Sugar Free Ice Cream2200 euro ? 2600 euro Lastly, we felt that it was time to purchase some market research in the form of a market analysis in order to gain a better understanding of our competitors and the market we are all in. Round 4 Round 5 One key observation made after reviewing the previous rounds results was that with the increase to the education budget there was a slight positive movement in our internal sector. This prompted us to then not only give on more increase of the education budget, but to also provide an increase in funding to the salary department.An unfortunate fallout however from a miscommunication between our group members was our inventory, and this is the round where we could have turned it around if caught in time, however, we neglected the round delay, and ended up runni ng out of stock of certain products. Round 6 The big change was with in the Human Resources as well and the working conditions. After examining the data a little more it was decided to change the working conditions to include the following: Lease espresso machine Training result oriented work Lease ERP software using ASP Lease CRM software using ASP Flexible working conditionsStandard Ice Cream There were a few changes made in the marketing of this product due to declining sales. We went from focusing on the rich history to associating more with price/quality. The pricing seemed high as well so we lowered from 285-275, as well as adjusted the budget from 4100-4000. For inventory, 280 products we purchased at a good quality Luxury Ice Cream We felt the only adjustment should be made was in the pricing, which we lowered from 290-280. Since stocking was also an issue we felt it would be wise to order 400, rather then 150 as in the previous round Special Ice CreamPricing was way to high , so it was determined that hurt our marketshares of this product the most over the past few rounds. In response we lowered the price from 300 down to 280, but increased the budget from 4200 to 4300. Then we shifted the focus of the marketing from best quality to Price/Quality, and ordered 350 in inventory at good quality rather then excellent. Sugar Free Ice Cream Only adjustment made with this product was the purchase of 300 inventory. We looked at the results further and also concluded that we were missing out on market research, which was most definately hurting our chances of competing.After discussing it, we determined that it was wise to purchase market research on the competitors prices, and societies values. The results from the pricing was shocking for us. The whole time our standard ice cream was far to over priced, as was our sugar free, but the changes made previous to the communications mix proved to be almost spot on with the research. But this information was taken h eavily into consideration for the next round of decisions. Round 7 Standard Ice Cream With the huge price difference in our products versus the competitors we decided that the price needed to be lowered immediatly from 275 to 220.Marketing communication match up with the societies values research, but we ordered 300 in inventory and changed the quality to weak. Luxury Ice Cream Comparing our price to the research from the previous round we determined pricing was fine as is, but the marketing communications needed to be changed from price/quality to cheap. We then ordered 500 in inventory with hopes of high future sales. Special Ice Cream The pricing again matched up well enough to stay competitive so we adjusted the communication from price/quality to best quality and also ordered 250 in inventory.Sugar-Free Ice Cream Another big price change was made when we seen that we were almost 20 euros more then the rest, so we dropped from 270 to 250, and also ordered 500 inventory hoping fo r increased sales. There was no change made for the communications. Round 8 Again we ran into the problem of running out of inventory, still not fully realizing the key was in what we were over looking. With hopes to make one final comeback we decided that it would be a good idea to have another press release announcing one more final sale. Looking back, I see that this may have been our fatal error.In response to sending out the press release, our prices had to be lowered further and we done so as follows: Standard Ice Cream: 220 to 205 Luxury Ice Cream : 280 to 250 Special Ice Cream: 280 to 250 Sugar Free Ice Cream:250 to 215 In combination with the lower prices, we also increased the marketing budget to 4500 for each product, in hopes of reaching more people with the new of the sale. We then stacked up inventory ordering 800 standard at weak quality, 800 Luxury average quality, 700 Special at average quality, and 800 Sugar-Free at average quality. ConclusionAll in all the company would have be successful had it not been for the failure to realize the inventory situation earlier. Also, earlier purchasing of market research such as competitors pricing would have proven much more beneficial in earlier rounds. Nielsen’s actually had one of the highest company equities as well as highest net turnover, but dropped drastically in net profits in the final two rounds. Looking back all of these were very simple, if not too simple, mistakes that could have been avoided through clearer communication. [pic] Nielsen’s Ice Cream Logbook Katherine JohnstoneHMMA †¢ CAH †¢ January 17, 2011 [pic] Name:Katherine JohnstoneGroup:Nielsen’sWeek:50, Round 1&2 | When | Who did what? |Task went: – Good/wrong – Why? | |Present at meeting |Before each round |Jef, Dammis and I discussed our strategy and how to implement it |One member left to go home for the holidays, but never mentioned being in contact or showing much concern for the 2 roun ds he would miss | |Actively participating |Before each round |Jef input data as did myself and Dammis |Again, Ross was not around, and neither side tried as they should have to make contact | |Dividing tasks Before each round |Marketing Plan tasks were split, when being redone Dammis did Ross’s Piece |The corrections were only in the pieces Dammis and Jef covered, so I revised mine and theres, and put the report together so that we all still worked together | |Cooperation |Before each round | |Minor arguments, and a small amount of miscommunication, but over all we cooperated well. | |Discussions |Before each round | |Discussed all moves before and during the input of data for each round, and brought up whatever we felt might be or could be a future issue | |Deadlines | | |Marketing Plan- December 8, 2010Round 1- Week 50, Tuesday December 14, 2010 Round 2- Week 50, Friday December 17, 2010 | | Name:Katherine JohnstoneGroup:Nielsen’sWeek: 1, Rounds 3&4 | When | Who did what? |Task went: – Good/wrong – Why? | |Present at meeting |Before each round | |Ross and Myself just arrived back this day, but Jef was absent, so Myself and Ross met with Dammis on Skype | |Actively participating |Before each round | |Dammis and I made most of the decisions, while Ross tried to catch up and understand what we were doing | |Dividing tasks |Before each round | |I input the data while Ross and Dammis discussed | |Cooperation Before each round | |Everyone present coorperated and agreed on everything | |Discussions |Before each round | |Sometimes they were a little heated, but points were always made, but somethings did get over looked. | |Deadlines | | |Round 3- January 4, 2011 Round 4- January 7, 2011 | | Name:Katherine JohnstoneGroup:Nielsen’sWeek:2, rounds 5&6 | When | Who did what? |Task went: – Good/wrong – Why? | |Present at meeting |Before each round | |All were present at the second last meeting, but it was just myself and Ross at the last meeting | |Actively participating Before each round | |Not everyone was involved and some members seemed uninterested in completing the rounds | |Dividing tasks |Before each round | |Usually it was just myself and dammis inputting the data as well as reviewing it | |Cooperation |Before each round | |Not everyone helped to make the decisions, but those who did agreed and cooperated well | |Discussions |Before each round | |Missed out on the little fact about inventory because a dicussion was never finished | |Deadlines | | |Round 5- January 11, 2011 Round 6- January 14, 2011 Marketing Report and Logbook- January 17, 2011 | |