5/6/2018

In our final week of marketing, we used several concepts that were taught and discussed throughout the semester and applied it to the marketing simulation. Main concepts that were applied to to the simulation were: Push Strategy, Product Life Cycle, and the 4P's.

Push Strategy:
Refers to the idea of pushing one's product to the public through distribution channels

Taking the offering to the customer:
Image result for push strategy
  • Trade Shows
  • Personal selling
  • direct selling
Promote through:

  • Package design
  • Point of Sale
Why use Push Strategy:

  • Increase demand through distribution
  • Provide sales incentives to intermediary
  • Added incentive for customer to buy
    • Seasonal 
    • Novelty
    • Price discount at Point of Sale
  • Lower cost items
  • Impulse purchases
In order to apply the Push Strategy to the marketing simulation, our team had to attempt to lower prices, greatly improve point of purchase advertisements, and increase discounts. I feel that we were successful in doing this strategy due to the fact that we were able to greatly able to increase units sold, revenue, and stock price.

Product Life Cycle:
 The PLC is a model that attempts to display the four stages a product will go through.

The four stages are Introduction, Growth, Maturity, and Decline.

Introduction stage occurs when the product first enters the market.

  • raising awareness 
  • maximizing profits 
  • recuperate research and development costs or keeping prices low 

In the Growth stage, the investments made previously begin to pay off.

  • Market share and profits increase

The Maturity stage has the highest level of profitability because the customers now are primarily repeat customers.

  • Well known
  • Low variable costs

Lastly, the Decline Stage is where companies are forced to make decisions about the products future.

  • Maintain/Improve
  • Cash Cow
  • Discontinue
When given the opportunity to introduce a new product in period 3 of the simulation, our team decided against it. Realizing that we only have 6 periods to work with, we believed that the associated costs of getting the product through the introduction and growth stages would take too long to see returns in the limited time frame. If given longer period of time we would have liked to introduce a product. There were many concerns about how we would allocate the funds for the product and advertisement if we were fighting to increase the success of Allround already.

4P's:

Price: We applied the push strategy through periods 1 & 2 which decreased price to be only slightly higher than market average. Then beginning in period 3, we began to increase price by 5 cents a period in order to keep up with market prices and unit costs.

Promotion: We sought to greatly increase both our advertisement and promotion expenses in order to increase brand awareness. We managed to increase our awareness from 69.4% to about 76%. Additionally as part of the Push strategy, our point of purchase expenses were increased dramatically as well as modifying our ad message to display primarily benefits and primary.

Place: Early on in our planning process for the simulation our team realized that mass merchandiser sector was the fastest growing and would continue to grow greatly. Realizing this, we sought to target this distribution channel in order to dominate shelf space. Mass merchandiser would eventually overtake drug stores for sales revenue and with the largest shelf space in this channel, we saw tremendous results at the end of the simulation.

Product: We sought to not reformulate the product to eliminate alcohol. Additionally, we did not feel that introducing a new product would be best given our limited time frame for the simulation. This is further discussed in the PLC section of this blog post.

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