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Music2Go-Intro Players Manual (revision E)

© Smartsims International Ltd

Music2Go-Intro Players Manual 2

Getting Started ............................................................................................. 2 Single-Player vs Multi-Player ........................................................................... 2 Your Goal – Maximize Marketing Contribution .................................................... 3 Summary of the Music2Go Scenario ................................................................. 4 Key Reports Menu .......................................................................................... 7

Chapter 2: The Music2Go Scenario 8

Market Segment Overview .............................................................................. 8 Standard Segment ................................................................................. 8 Youth Segment ...................................................................................... 9 Sports Segment (Multi-Player only) .......................................................... 9 The Perceptual Map and Segment Movement over Time ............................. 10 Forecast Segment Demand .................................................................... 11

Advertising Media Selection............................................................................ 12 Advertising Reach and Media Viewing Preferences ..................................... 13

Distribution and Sales Promotion .................................................................... 14 Distribution and Retail Margin................................................................. 14 The Product Life Cycle ........................................................................... 15 Sales Promotion and the Product Life Cycle .............................................. 16 How do I choose a Sales Promotion Mix for my products? .......................... 19

Chapter 3 - The Decision Screens 20

Price ........................................................................................................... 20 Product Pricing Screen ........................................................................... 20 How do I set the price and margin for each product? ................................. 22

Advertising .................................................................................................. 23 Advertising Screen ................................................................................ 23

Sales Promotion ........................................................................................... 24 Sales Promotion Strategy Screen ............................................................ 24

Product Development .................................................................................... 25 Product Development Screen (Existing Product)........................................ 25 Launch New Product Screen ................................................................... 27

Chapter 4 - Market Research Reports 28

Market Research Report Screen .............................................................. 28 Market Research Reports Available .......................................................... 28 Free Market Research - Some Product Details Report ................................ 29 Free Market Research - Market Information Report ................................... 29

Chapter 5 - Key Reports 30

Key Reports Menu ......................................................................................... 30 Forecast Marketing Expenditure Budget ................................................... 30 Industry Benchmark Report ................................................................... 31 Product Contribution Report ................................................................... 34

Forecast Results ........................................................................................... 36

Chapter 6 - FAQs 37

Music2Go is a Principles of Marketing simulation where you will plan and implement a Sales and Marketing campaign for the MP3 Player division of a large Consumer Electronics Corporation.

Getting Started

1 Read this Players Manual in full. It contains hints and tips to get you started as well as a detailed overview of the Music2Go market segments, consumer preferences, and advertising reach and viewing habits. You will need this information.

2 Go to www.smartsims.com and log in using the login and password provided by your Instructor

3 Watch the Single-Player Overview video for Music2Go

4 Open your Single-Player and start practicing. This will allow you to get used to the simulation before your Multi-Player competition begins.

Single-Player vs Multi-Player

The Music2Go Single-Player allows you to practice against a single computer controlled competitor. You are able to roll forward into the next decision period / year, or roll back as you wish in order to test and change your decisions. Your goal is to generate more Marketing Contribution than your opponent.

All you have to do is to log into our website, go to the Music2Go menu, and click the blue Launch button to open your firm. Note – we may have to create this for you, so just let us know if you can’t find your Single-Player.

In the Multi-Player you will compete against other students in your class to create the highest Total Marketing Contribution (see ‘goals’ section below). Moving from one year (decision period) to the next is done by automatic rollover on preset dates chosen by your Instructor. Before each of these scheduled times you need to have all decisions for the upcoming year entered into the Multi-Player.

Note: In Multi-Player, your Instructor decides when the simulation will move from one decision period to the next (ie. rollovers). You can NOT roll the Multi-Player forward and backward yourself.

Music2Go-Intro Players Manual

http://www.smartsims.com/
Music2Go-Intro Players Manual 3

Your Goal – Maximize

Marketing Contribution

You are the Vice President of Marketing for the MP3 Player division of a Consumer Electronics Corporation. You will be competing against either a single computer controlled competitor (Single-Player), or your classmates (Multi-Player) who are marketing similar music players.

Your goal in Music2Go is to beat your competitors by maximizing the Total Marketing Contribution of your firm. Or, to put it in simple terms - you want to make as much money as possible!

To do this you will need to carefully plan your Marketing Strategy, decide which markets to enter, how to price each product, analyze market research, optimize your advertising mix for each product, promote your products at different stages of the product life-cycle, and respond to your competitors' actions.

Note: The Industry Benchmark Report under Key Reports shows how you are performing relative to your competitor(s) in terms of Marketing Contribution.

WHAT IS MARKETING CONTRIBUTION?

Marketing Contribution is a measure of how profitable a firm is as a result of its strategic marketing plan. It is the amount of profit remaining after manufacturing (cost of goods sold) and marketing expenditures have been deducted. The only costs still to be deducted are other functional overhead costs for the firm, e.g. finance, administration etc. Positive Marketing Contribution occurs when Net Sales Revenue is greater than Marketing Expenditure.

Marketing Contribution Example

Imagine that you spent $25m on Marketing Expenses. Then if you sold 2 million units at $50 each you would have $100m in sales. If each unit sold cost $30, then the cost of those goods would be $60m. This would give you Marketing Contribution of $15m as in the table below:

Sales $100m

Less Cost of Goods Sold $60m

Gross Margin $40m

Less Marketing Expenses $25m

Marketing Contribution $15m

Note: The Industry Benchmark Report under Key Reports shows how you are performing relative to your competitor(s) in terms of Marketing Contribution.

Music2Go-Intro Players Manual 4

Summary of the Music2Go

Scenario

You assume the role of the Vice President of Marketing for the MP3 Player division of a Consumer Electronics Corporation.

The most successful students will be those who can combine research from multiple sources to create an effective marketing campaign, and who continually review in order to refine their campaign.

YEAR AHEAD AND KEY REPORTS

After every rollover the Year Ahead report outlines new developments in the scenario and gives general hints and tips for the coming year. We strongly recommend you read the Year Ahead report after each rollover so you are aware of new developments in the Scenario.

The Key Reports menu contains important reports that you will need every year.

You will gradually be given more control of your firm as the simulation progresses:

 Year One One existing product selling to the Standard market segment. You make price, margin, sales forecast, and advertising mix decisions (TV, Digital Media, Newspapers, Magazines)