To help you with your marketing decisions, NewShoes gives you experience in collecting market research, which is a vital function of the effective marketing manager. A good place to start is the Industry News, where you can get an overview of changes in the markets. The Market Sales report provides more detail, showing not only the unit sales in each market and the number of competitors, but also projected sales for next period.
For more in-depth competitive information, you will need to purchase market research. Corporate level research is available for competitors’ product levels and spending on product development. For each market, there is information on price, advertising, consumer promotion, salespeople, dealer promotions, and customer satisfaction. By default, reports of industry averages are available for $10k each. Depending on instructor preferences, industry range and detail reports may become available at prices of $15k and $25k each, respectively.
In addition to market research, there are several tools available to help you analyze your options when making decisions. Break-even Analysis will help you determine the lowest price you can charge for your product in each market without incurring a loss. By entering assumptions about unit sales, you can calculate the break-even price in each market, based on projected expenses from your marketing decisions. Project unit costs using the Cost of Goods Calculator. Simply enter a projection for production (total unit sales for all regions), and it will take into account experience effects to estimate your unit cost for the coming period. The Response Functions analysis screen allows you to graph the relationship between unit sales and a selected marketing variable (price, advertising, salespeople, consumer promotion, or dealer promotion) in a market. Keep in mind that there may not be a direct relationship between an individual variable and unit sales, but graphing the results of previous decisions can be helpful in deciding the best marketing mix for each region. If a contract is open for bidding, the Bid Analysis tool shows the impact on unit cost of winning a contract. Use it to anticipate the impact of additional production from contract sales on your total cost of goods.
Use the market research and decision analysis tools to help forecast what will happen and to understand why results differ from your projections. If there is a big difference, is it because of changes in overall demand? Has your price changed relative to the competition? Have you changed your marketing expenditures, or has the competition made changes to their marketing? There are no simple answers to these questions, and this is the type of complex analysis that marketers face daily. Only by integrating customer needs, the competitive environment, and your own corporate goals into your analysis, can you learn to make the key decisions that will decide whether your firm is successful or not.
Summary of Decision Variables
A summary of simulation variables is provided in Table 1.C (on next page) and should be used as a reference aid when making decisions in NewShoes. Along with each decision variable, this summary includes suggested limits, costs, other factors, and general parameters of the simulation.