Minnesota micromotors simulation

Running Head: MINNESOTA MICROMOTORS (MM) MARKET SIMULATION

MINNESOTA MICROMOTORS (MM) MARKET SIMULATION 2

Minnesota Micromotors (Mm) Market Simulation

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Minnesota Micromotors, Inc (MM) is situated in the Minneapolis. It is a company that deals with the production of orthopedic medical devices or products. The customer satisfaction and development of the service production is one of the crucial aspects for the Minnesota Micromotors if it has to enjoy the competitive advantage (Slantcheva-Baneva, 2012). Additionally, if the company manages to run the quarter successfully, it is evident that it will run the remaining quarters with less or minimum hindrances. Additionally, as per the Slantcheva-Baneva (2012), the key objective of every decision is to ensure that there is an increase in revenue and the market share price. More so, it also wants to be in a position to offer jobs or employment. Additionally, another ongoing concern of the Minnesota Micromotors amid a time of incorporation will be all about the retaining its existing employees. Furthermore, the company needs to be in a position to maintain the high-profit margin so that it will be in a position to enjoy more revenues. In this issue of Minnesota, the issue under scrutiny is all about attracting new customers as well as retaining existing ones and increasing the sales

The Minnesota Motors is segmented into the four parts, namely: segment A, B, C, and D. The segment A put a high emphasis on the motors power-to-size performance and is typically involved in a high-level support in the sales for the customization. More so, the segment B has a lot of interest with the thermal resistance performance and comprehensive knowledge in the sale representatives. More so, there is a least segment which is C. This segment is price-sensitive, and its aim is to ensure there is a high motor performance for both the power to size and thermal resistance. The segment D is highly priced sensitive and it is typically distributed to the one that is interested in economic rates of individual members. Additionally, the minor observation showed that customers that are in need of the small volumes of the vehicles may prefer the one that is integrated with the surgical tools while product literature of the vendor ends up becoming comprehensive.

The key objective of coming up with every decision in the Q1 is to help the company in investing an adequate amount of money that in the departments that are available within the Minnesota Micromotors with the aim of increasing the profit and market share. Additionally, the simulation consisted of the product pricing strategies, product quality, engagement of the employees’ training, and reviewing the customer’s relations. More so, if it happens that an organization takes a decision of investing into all of its departments it is a significant move though it will not be all about spending entire money on them. In this case, it will be all about making crucial decisions like distribution of the resources in all its departments such as the market research department and sales representative department. More so, to make sure that there is standardization of the resources that are distributed, then it will mean that the resources should be distributed equally in the two departments. In this case, the strategy which can be the most optimum is all about increasing income levels and market share through making sure that an attention gets laid on the right segment. Additionally, an Orthopower Motor department was the price at $135, and the variation of the discount off the list typically varied between 6-18%. The variation was for the large volume purchases as per online simulation.

Additionally, in Q1, the list of prices is equivalent to $135 while the discount of the distributors is 5%. More so, there are other areas of concentrations for the large discounts and were based on various segments. For instance, in the segment A, 13% discount was allocated since it will result in a great volume of the sales. Secondly, segment B took approximate 10%, segment C took about 6%, and last and segment took 18% in the discount. In addition, a different approach was used in Q1 in a way that Segment A was set as 11%, Segment 9.5%, segment C 5%, and the segment D given 9.5%. The discounts were put in a such a way that it will aid in assessing the outcomes of incrementing the discounts both in segment D and C. In the final quarter, the sale force was changed such that segment A was changed to 50% while segment B was put to 30% and on the other hand decreasing the sales force of the other segments, that is, segment D to 25% while Segment C to 24%. Additionally, later the sale force was later the sales force was equalized in a such a way it was divided into the four portions where each in 25% to find out if there will a possibility of generating pleasing outcomes. Thus, based on the results below, the strategy worked because there was an increase in the segment share and quarterly revenue

More so, there are other segments that would have a greater meaning are the customer segments by splitting them between the small-scale and large customers. For instance, the large volume customers will be in need of high-power motors, unlike others who will not be willing to compromise the performance level at any lower prices. Thus, there is a need for putting the price sensitivity into consideration as well as the discount rate for customers and distributors. The price sensitivity aids in a measure how the change in prices has been affecting the customers’ behaviors. For example, in the Minnesota Micromotors, it is evident that there is lower purchasing power clients and the high range of the high-end clients. Thus, having considered the four segments, the segment D and C and high and least price-sensitive respectively while the segment A and B are more concerned with the quality. Therefore, it is evident that segment A and B can be changed yet in the simulation of the prices it is not possible for the prices to be changed in a percentage that is more than 5% to avoid compromising the discount rates. As per the simulation, the segment C is termed as the least price sensitive, and still, it is not possible to increment it in a percentage that is more than 2%. More a decrease of the same might lead to losses because the profit margin will be affected. Lastly, the segment D is not price sensitive because current customers will take the current prices as their market prices.

Additionally, the derived demand can be termed as the demand for intermediate goods or factors of production required amid a time of producing final goods. Thus, as the demand for the final good falls or rises, the demand for intermediate goods may increase or decrease. It is evident that a company that is selling goods and services in other organizations may find the derived demand crucial because it has so much positive control toward the purchasing power of the consumers (Whitaker, 2016). Thus, if the demand of the final product is high, this will ultimately mean that there is the higher derived demand of the intermediate goods and raw materials.

More so, the North American Industry Classification System (NAICS) was created as the standard that will be utilized in classifying the business establishment for analysis, collection, and publication of the statistical data that are linked to the business economy of the United States (US Census Bureau, 2014). The Minnesota Micromotors typically falls under the category 335312 of the NAICS.

References

US Census Bureau. (2014). North American industry classification system.

Slantcheva-Baneva, V. (2012, January). Developing Marketing Strategies with a Marketing Simulation Tool in a Master's IT Class. In Proceedings of International Conference on Application of Information and Communication Technology and Statistics in Economy and Education (ICAICTSEE) (p. 553). International Conference on Application of Information and Communication Technology and Statistics and Economy and Education (ICAICTSEE).

Whitaker, J. K. (2016). Derived Demand. The New Palgrave Dictionary of Economics, 1-3.