Professional Documents
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Student Handbook
Student Handbook
Student Handbook
by
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Publisher: STRATX
Publisher: STRATX
Logo Design: Synergy Network, Waltham, Massachusetts
Website Design: Business Lab, Paris France
ISBN# 0-9743063-2-0
Version 1.01
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Contents
Introduction…………………………………………………………………………………………………………v
About STRATX………………………………………………………………………………………………………vi
About the Author…………………………………………………………………………………………………vii
Questions and Technical Support……………………………………………………………………………viii
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Table of Illustrations
All figures in this manual are from a sample file obtained during a past run of the Markops Online
simulation. They are included to provide examples of charts, tables, graphs or input screens. Please
note, the market situation used for these examples is different from the one which you will face.
Figure 1 – Sample Markops Online ID card _________________________________________ 1
Figure 2 – Installing Markops Online Team Software ________________________________ 2
Figure 3– Modifying your Proxy Settings __________________________________________ 4
Figure 4 – Authenticating _______________________________________________________ 6
Figure 5 – Self-assigning to your team ____________________________________________ 6
Figure 6 – Opening your team file ________________________________________________ 7
Figure 7 – Saving your team file on the Markops Online server ________________________ 8
Figure 8 – Submitting your decisions for run _______________________________________ 9
Figure 9 – Checking Course and Team status on the Markops Online server ___________ 10
Figure 10 – Physical attributes of marketed brands ________________________________ 12
Figure 11 – Reduction of production cost as a function of cumulative production _______ 13
Figure 12 – Summary of distribution channels’ margins and discounts ________________ 15
Figure 13 – R&D Report : Discovered Formulas____________________________________ 17
Figure 14 – R&D Report: Developed formulas _____________________________________ 17
Figure 15 – Brand portfolio decision screen_______________________________________ 18
Figure 16 – Brand launch or upgrade decision screen ______________________________ 18
Figure 17 – Brand management decision screen ___________________________________ 20
Figure 18 – Channel management decision screen _________________________________ 21
Figure 19 – Ordering market research studies _____________________________________ 22
Figure 20 – Comparing expenses with available budget _____________________________ 22
Figure 21 – Setting your team name _____________________________________________ 23
Figure 22 – Newsletter : Company Key Performance Indicators ______________________ 24
Figure 23 – Company Report : Firm Results _______________________________________ 26
Figure 24 – Company Report : Messages from the simulation ________________________ 26
Figure 25 – Consumer panel : Market shares ______________________________________ 27
Figure 26 – Consumer Survey : Shopping habits ___________________________________ 27
Figure 27 – Distribution Panel : Distribution coverage ______________________________ 27
Figure 28 – Semantic Scales : Brand Perceptions __________________________________ 28
Figure 29 – Semantic Scales : Brand Map_________________________________________ 29
Figure 30 – Competitive Intelligence : Advertising budgets __________________________ 29
Figure 31 – Market Forecast : Channel sizes and growth rates _______________________ 30
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Figure 32 – Market Forecast : Expected new brand launches by competitors ___________ 30
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Introduction
Markops Online is the latest STRATX simulation.
As with every StratX simulation, Markops Online places real market forces at the heart of the learning
experience. Markops Online focuses on operational marketing, while keeping the key principles of
strategy at the heart of decisions. It's all about giving participants a platform from which to apply their
ideas, and the security to build skills with confidence.
Used in combination with traditional training methods such as conceptual sessions or case studies,
Markops Online is a highly effective tool to learn operational marketing concepts,
such as brand management, channel management, communication and promotion or pricing strategy. It
also covers key strategic marketing concepts such as brand portfolio strategy or segmentation and
positioning strategy.
Similar to a flight simulator, this marketing simulation allows students and managers to practice new
skills in an intensive time frame and in a risk-free environment before trying them out in a real business
environment.
The mathematical model of Markops Online is based on solid theoretical foundations, and the underlying
formulas have been extensively tested. This simulation has been used to successfully train a large
number of students and executives from many universities and organizations.
Several months of development have been necessary to develop the Markops Online simulation, which
benefits from StratX‟ extensive experience in the field of business simulations. In particular, StratX is the
author of the Markstrat Online simulation, which was originally developed more than twenty years ago by
Jean-Claude Larréché, Alfred H. Heineken Professor of Marketing at INSEAD, and Hubert Gatignon, The
Claude Janssen Chaired Professor of Business Administration and Professor of Marketing at INSEAD.
During the Markops Online exercise, you and your team will be given a company and product portfolio to
manage in a dynamic and interactive environment. No previous computer experience is required but it is
important to prepare by reading this handbook prior to beginning your course. If you do not read it
carefully, you will run the risk of putting your team at a competitive disadvantage!
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About STRATX
StratX is a unique consulting and management development group that brings together disciplines from
leading business schools, management consultants and learning design specialists. Founded by INSEAD
Marketing Professor, Jean-Claude Larréché, our aim is to help leading international corporations achieve
their business objectives along three dimensions: strategic change facilitation; marketing skills and
capabilities development; and marketing excellence and customer centricity.
Moreover, our approach mobilizes a group of individuals behind a common goal with a common
language to achieve results. StratX offers training solutions that include advanced business simulations,
interactive concept discussions, team project work and a host of other traditional and on-line learning
opportunities.
Over the past twenty years, our R&D team has designed and developed a portfolio of world-class
business simulations, including Markstrat 3 and Markstrat Online, used in over 500 business schools and
universities throughout the world. StratX has also developed the L‟Oréal e-Strat simulation, used each
year since 2001 during the L‟Oréal e-Strat Challenge, an on-line interactive, simulation-based
competition during which thousands of teams run a Cosmetics company and compete for a chance to
sell their virtual company to a board of L‟Oréal executives.
Our world-wide network of StratX consultants work with clients such as L‟Oréal, General Electric, Pfizer,
Siemens, ABN AMRO, Novartis and Boeing.
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About the Author
Rémi Triolet holds a master's degree in computer science from ENSIMA, an engineering school in
Grenoble (France), and a PhD in mathematics from Paris-VI University and Ecole Supérieure des Mines de
Paris.
Just after his graduation, Rémi worked in a research team at Ecole Supérieure des Mines de Paris and
then at Morpho-Systems, a medium-size French company leader in the automated recognition of
fingerprints. His main interest at that time was the design of efficient numerical algorithms for
supercomputers.
Rémi joined StratX in 1991 to work in close cooperation with Professor Jean-Claude Larréché on the
design and development of new leading strategic simulations such as "MARKSTRAT-PHARMA",
"MARKSTRAT-SERVICES", "MARKPRO Business-to-Business", "GAMAR3", etc.
Important milestones in Rémi's carreer at StratX were the design of "MARKSTRAT3" and "MARKSTRAT-
ONLINE", two versions of our star simulation, licensed in over 500 business school around the world, and
of "E-STRAT", a web-enabled simulation developed for L'Oréal and used to run a global competition with
over 30,000 business school and university students.
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Questions & Technical Support
This manual has been designed to be as clear and complete as possible. However, the Markops Online
simulation is fairly complex and we know by experience that some topics will require additional
explanation. If you have questions regarding this handbook or the simulation we suggest that you follow
the steps below.
Check the Frequently Asked Questions (FAQs) available for download on the www.markopsonline.com
web site. Other students may have already asked a similar question, checking the FAQs will help you
save time. If you do not find the response to your question in the FAQs, please contact your instructor.
As most instructors prefer to keep the full content of their course, StratX‟ policy is to not respond
directly to student‟s questions.
Responses to frequently asked questions do not address specific team situations and do not provide
advice or hints on strategy, management, marketing, finances or any other topic. For these subjects, you
should only count on your knowledge, ideas and experiences (or those of your team…)
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1 REGISTRATION AND SOFTWARE SETUP
You will have to go through a few easy administrative steps before you are able to make your first set of
decisions with Markops Online. Please read carefully the following pages as it is important that you perform
these steps in the appropriate order and at the right time.
The tasks to perform are listed below and are explained in more detail in the following pages.
• Purchasing your own copy of this handbook and registering on our web site;
• Downloading and installing the Markops Online team software;
• Testing your installation and discovering the Markops Online environment with the SAMPLE file.
FILL IN YOUR PERSONAL MARKOPS ONLINE ID CARD AND KEEP IN A SAFE PLACE.
The license number given to you by your instructor is unique. It is required to register on the Markops Online
web site. You can write it down on the front of this card.
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Step 2: Go to www.markopsonline.com, select the Registration section and follow the instructions carefully. You
will be asked to choose a username & password and to enter your course ID and your license number. If you do
not yet know your course ID, leave the cell blank and continue; you will be allowed to enter it later.
The additional fields: Team ID and Team Password are explained in Chapter 2.
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1.3 Practicing using the SAMPLE File
If you want to test your installation and practice prior to the beginning of your first Markops Online decision
round, you may do so with the SAMPLE file. This SAMPLE file is installed by default in your “My Markops Online
Files” folder when you install the Markops Online software. The password for this file is SAMPLE. This data file
contains results for all rounds up to Round 3 and default decisions for Round 4, from a previous run of the
Markops Online simulation. It will allow you to practice using Markops Online, i.e. to browse through the results
charts and graphs; to print a sample Annual Report; to enter each of the decisions screens; and to test your
HTTP connection by using the Tools menu.
The SAMPLE file is a practice data file. The market situation which you will be faced with during your actual
Markops Online course will be substantially different. Similarly, the decisions you will find in this file are not the
examples of the best ones that a successful team can come up with. Thus, our advice is:
DO NOT SPEND TOO MUCH TIME ANALYZING THE MARKET SITUATION OF THE
SAMPLE FILE. ANY DECISIONS MADE USING THE SAMPLE FILE WILL NOT BE
RUN THROUGH THE SIMULATION MODEL AND WILL BE IGNORED ONCE YOUR
COURSE STARTS. MOREOVER, THE INITIAL MARKET SITUATION WHICH YOU
WILL HAVE TO ANALYSE ONCE YOUR COURSE STARTS WILL BE DIFFERENT.
1.4.3 Checking your Team and Course status on the Markops Online
server
At any time, you can use the Tools/Check Status on Web server function of the Markops Online to provide you
with your latest Course and Team status, as shown in Figure 9.
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1.4.4 Modifying your Proxy Settings
If you connect to the Internet via a Proxy server, you can use the function Tools/Proxy Settings to modify your
Proxy settings.
By default, this form is pre-filled in with the settings used by Internet Explorer. Please contact your IT
department should you need to modify your Proxy settings.
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2 MAKING DECISIONS WITH MARKOPS ONLINE
2.1 Overview
You and your team will have to make up to six rounds of decisions during a Markops Online course. For your
decisions to be processed by the simulation model, data need to be exchanged over the Internet through a database
server called the Markops Online server.
The data to be exchanged are your decisions and the simulation results. All data is located in a file called Team File,
named TEAMXX.XST, where XX stands for the team number which will be communicated to you by your Markops
Online instructor at the beginning of your course. There is only one file per team as all members of the same team
share the same results and the same decisions. However, you will see that the team file can be duplicated on several
computers if two or more team-members want to work in parallel.
For the first round of decisions, your team file contains information on the initial situation, i.e. market data,
consumer segments, brands, channels, firms, as well as a copy of the decisions that were made by the previous
management team. For subsequent rounds, the file contains the latest simulation data, obtained after the simulation
run, and a set of decisions –called default decisions– that are just a copy of your decisions from the previous period.
The objective of these default decisions is to prevent you from starting each time from scratch when making
decisions, with zeros in all input screens. If you use these default decisions during the Markops Online exercise, your
results may suffer dramatically as they are far from being optimal.
Your Markops Online instructor is responsible opening each decision round, which will give you access to the latest
simulation results.
Once your Instructor has opened a decision round, you and your team are in charge of your team file. You can read
and print out your latest annual report and begin the process of analyzing the current situation. This analysis will
lead to a series of decisions, which will be input into the decision screens provided. Once your decisions are finalised
and error-free, you are in charge of saving your team file to the Markops Online server and requesting a run of the
simulation. The simulation model will run, and produce a new set of results. You will be able to access your updated
team file as soon as your Instructor opens the next decision round.
2.2 Authenticating
This step is required each time you connect to the Markops Online server, for example to download or to upload your
team file. For security reasons, access to the Markops Online server is reserved to registered students. If you are not
yet registered, please refer to section 1.1 of this manual.
The window shown in Figure 4 pops up each time you connect to the Markops Online server. Enter the username and
password that you chose upon registration and select Next. The software connects to the Markops Online server and
checks your identification. Please, note that you must be connected to the Internet to authenticate. The Markops
Online software does not initiate an Internet connection.
If you do not remember your username and password, click on Lookup in the pop-up window shown on Figure 4and
you will be redirected to the Student Login section on the Markops Online web site; using your Markops Online
license number you will be able to retrieve your personal data.
If you are working on your own computer, you can tick the option Remember the password. Your password will be
stored locally and will automatically reappear each time you authenticate. Please Note; this option should not be
used on shared computers.
If your team is complete, you will be able to download your team file from the Markops Online server to your local
disk drive and your team file will open automatically upon completion of the download.
If your team is not complete, you will receive a message from the software. In that case, just wait until the other
members of your team register on the www.markopsonline.com web site and self-assign to your team using the
Markops Online software. Once this is done, you will be able to download your team file.
Please note: Even if your team is complete, your Markops Online instructor must have started the Markops Online
course before you can download your team file from the Markops Online server.
2.4 Downloading your Team File from the Markops Online server
At the beginning of each decision round, you must download your team file from the Markops Online server to
access the latest simulation results. To download your team file, click on Open/From web server… in the File menu.
The download is completed upon authentication, and the team file opens automatically.
If you have started a working session, and need to close it to resume it later, just click on Close in the File menu.
Your decisions will be saved automatically on your computer‟s hard drive.
To open your team file from your local computer at a later stage, you must use the File/Open/Local Copy function
and then select your team name and enter your team password in the screen shown in Figure 6.
As explained further in section 4.7, your team and you will be required to set a new name for your team during your
first round of decisions,.You will then have to use this new name to open your team file during subsequent decision
rounds. Your password, however, will remain the same throughout the Markops Online exercise. If you forget your
team password, you can retrieve it by using the Tools/Check Status on web server function of the Markops Online
Team software, as explained in section 2.9.
Please note that if you choose to work in this way, you should work in a sequential manner and not in parallel,
otherwise you risk losing decisions which have already been taken. For example, we recommend the process
described in Table 1.
If Team Members 2 and 3 do not coordinate and decide to download the file from the Markops Online server on Day
2 and work on this file in parallel, then the file which will be saved on the server at the end of Day 2 will only contain
the decisions taken by Team Member 1 and the ones taken by Team Member 2 OR Team Member 3, depending on
which one has saved its file last. In any case, this file will NOT CONTAIN ALL OF YOUR DECISIONS.
Please make sure that the decisions you are about to submit for run are the latest ones before you click on
“Yes.” Once you have submitted your decisions for run, you will not be able to make any further modifications
to your decisions until the beginning of the next decision round.
If the Submit for Run function in the File menu is grayed out, it means that your decisions are either not complete or
not error-free. You will not be able to submit your decisions for run until you correct your errors.
Figure 9 – Checking Course and Team status on the Markops Online server
2.10 Starting your next Decision Round and Accessing your Team
Rankings
As soon as your instructor opens a new decision round, you will be able to download your updated team file by
following the instructions detailed in section 2.4.
You will also be able to compare your results to those of the other teams in your Markops Online course, by using
the Rankings menu. Please note that access to this menu is controlled by your instructor. You will only be able to
access your course rankings if your professor decides to grant you access.
3.1 Introduction
The Markops Online business game simulates a fictitious world where four companies are in competition to
market a portfolio of brands to several groups of customers. The simulated market is complex enough to
illustrate different marketing situations, i.e. various segments of customers (based on family income, marital
status, occupation, …), several customer value combinations (high-end brands versus low-end ones), varying
price sensitivities, different communication and promotional tools, traditional distribution channels (from mass
merchandisers to specialty chain stores) as well as new e-enabled channels (such as e-grocers and e-
boutiques), etc.
You and your team will manage Chewy, one of these companies, during six periods of six months, i.e. three
years in total. The simulation model will run the decisions and results of the other companies automatically,
challenging you with innovative decisions, but also responding to your moves.
The other human teams involved your Markops Online course will manage the same company Chewy, but in
other simulated worlds, totally separate from your own world. Consequently, the decisions of the other teams
will have no impact on your own results. Your ultimate objective is to maximize shareholder value as reflected
by the Share Price Index of Chewy. However, there are two ways to measure your results:
Absolute Measure. Your share price index at the end of the exercise will be compared to the ones of
your direct cyber competitors. You may, for instance, have increased the market value of your company
by 300% while your best competitor will only have achieved a result of 250%.
Relative Measure. Your final share price index will also be compared to the ones achieved by the other
human teams, who have run the same exercise with the exact same starting situation and the exact
same competitors. Your absolute performance of 300% may be reevaluated as fairly poor if another
team achieved a result of 500%!
As far as this Markops Online exercise is concerned, only the relative measure will be taken into account. The
ultimate winner will be the team which has achieved the highest Share Price Index for its own Chewy company.
As new formulations come onto the market, improvements will take place in certain products‟ attributes. Bear in
mind that an improvement in one dimension may result in deterioration in another dimension. For instance, a
3.6 Consumers
The consumers who purchase Yumite products are of varying ages, occupations, and family status. They are all
adults, over 18 years of age, who purchase the products for personal use or for the family. Market studies show
that these consumers can be divided into five major groups, or segments, having similar needs and purchasing
behavior.
1. High earners – The members of this group are characterized by their high incomes. They are men or
women over 25 years of age, either single or married without children, and studies show that they
usually buy expensive products, which they can afford, and that their purchases can be motivated by
social status. They are heavy users and can sometimes be price insensitive to the point of disregarding
cheap brands.
2. Affluent Families – People in this segment are aged 25 – 45, and are either married or single with
children. Their high income level leads them to be frequent buyers and users of Yumites. They can
afford expensive products and often view price as an indication of quality.
3. Medium Income Families – These consumers have less disposable income than the Affluent Families,
and are thus more price sensitive. This segment also includes some sub-groups who do not fit with the
other segments. Although this segment is the largest in value and is composed of several sub-groups,
most customers have similar needs. They are looking for relatively inexpensive products with average
physical attributes.
4. Low Income Families – Individuals in this segment are aged 25 – 45, and are either married or single
with children. Their low income levels, however, causes their budgets to be strained, and leads them to
be less frequent buyers and users of Yumites, and to be very price sensitive.
5. Singles – As the name of this segment indicates, Singles live alone. They are generally between 18 and
35 years of age and can be students or employed. All in all, while being relatively heavy users, they
demand average levels of physical attributes from their Yumite products and tend to be price-sensitive.
Each segment has specific needs in terms of physical attributes and price. The semantic scales market studies
reflect the relative importance of the different physical attributes and of price for each consumer segment, as
well as consumer perceptions of each of the marketed brands as regards their physical attributes and price.
Awareness levels and purchase intentions vary significantly for existing products from one group to the other.
In addition, market forecast studies show that the size and growth rates of the five segments are quite different.
Your team is responsible for the design and implementation of the marketing strategy of your firm. You will
have to decide the overall orientation of the company regarding:
the product portfolio strategy – which brands the company is going to develop and market;
the segmentation and positioning strategy – which market segments will be targeted and how products
will be positioned;
the marketing mix strategy – the day-to-day operational marketing decisions such as pricing,
production, communication and distribution.
You will manage your area as a profit center, and your performance will be measured by the following
indicators: net contribution generated, brand market shares, your ability to grow the firm‟s revenues, quality of
R&D projects successfully developed, etc. Finally, the best measure of your company's success will be its Stock
Price Index, a measure that takes all of the above indicators into account.
This chapter describes the decisions you will have to make each period. Before making dramatic changes, you
should try to get a feel for the behavior of the market. Do not jump hastily to conclusions and bear in mind that
obvious solutions may be based upon an incomplete analysis. To reach more robust decisions, use the
information from market studies to analyze your situation and past competitive behavior.
C 02 B – Ini
“C” as Project Active Type of
Chewy Rank Ingredient project
For example, Chewy may find the following series of formulas coming out of R&D:
C01A-Ini : Initial formulation of active ingredient “A” ;
C02B-Ini : Initial formulation of active ingredient “B” ;
C03C-Ini : Initial formulation of active ingredient “C” ;
Figure 13 shows the list of formulas discovered during the sample run. All these formulas are available for
development.
The Main screen to enter Brand Portfolio decisions is shown in Figure 15. The first decision is whether or not
you choose to develop any formula in this period. If so, a drop-down screen will allow you to select amongst the
formulas which have been discovered but not yet developed. Due to resource constraints in the R&D
department, you may only develop one formula per period, even if more than one has been discovered.
You may then decide to launch a new brand or to upgrade an existing one with one of the formulas already
developed, or with the formula you just decided to develop. If you click on Introduce, a second screen will allow
If instead of developing a new brand, you choose to upgrade an existing one, do so by first selecting the brand
in the list of Figure 15, for instance CANDY, and then by clicking on the Upgrade button. The same screen as
the one in Figure 16 pops up to let you select the correct formula in the drop-down menu.
Whenever you make these decisions, the screen of Figure 15 lists the brand portfolio elements in the current
period, and the next one, based on the changes you have just decided.
Advertising. You must make two advertising decisions each period. Firstly, you should determine the
advertising media budget allocated to each brand. This budget will be used to purchase media space and time.
Your advertising agency will select automatically the most appropriate media that targets the most relevant
segments for the brand.
Secondly, you must specify the budget allocated to advertising creation. This finances the advertising research,
creative work, media selection, and other activities conducted by advertising agencies which improve the quality
of your message. In past years, companies have devoted on average 7% of their total advertising expenditures to
advertising creation. Advertising creation will usually make your advertising more effective, and is especially
important when you introduce a new brand or when you look to reposition an existing one. In these last two
instances, higher percentages are recommended, in the range of 15 to 20%.
Positioning. An essential part of your marketing effort will involve delivering the appropriate messages to the
various segments, in line with what they expect, and considering what your brand has to offer. Using the
Semantic scales study and the relevant Brand maps (see Market Studies section for more information on
Semantic Scales), you can decide on the content of your advertising, along two of five dimensions: Performance,
Nutrition, Packaging, Flavor or Price.
Making positioning decisions is fairly easy. You should first choose one or two dimensions amongst the ones
that are most relevant to the targeted segments. The Semantic scales study will give you the relative importance
of each dimension for a specific segment. As you can see in Figure 17, team Sample decided to use Flavor and
Performance for brand CAKE. Then, you must determine what is the ideal position where you would like to be
positioned on the corresponding Brand Map. An example of such a map is given in Figure 29. As you can see,
team Sample decided to position brand CAKE at a position (6, 6.7), close to brand WARM, probably because this
brand is successful with CAKE target segments.
4.6 Budget
Each period, your division will be given a total budget to spend. A minimum applies, so that even if your results
wer not good during the last period, you will still be able to function with a reasonable level of activity. Similarly,
there is a maximum, as available resources are allocated to other divisions in the case of a very successful
period. Those minimum and maximum levels are indicated in the Newsletter.
The budget screen of Figure 20 shows a summary of what has been spent via decisions made in all the previous
screens. It also compares your total costs to the available budget and indicates the positive or negative
deviation.
Note that you will not be authorized to submit your decisions to the Instructor if you exceed your budget.
Additional screens are available which provide budget details by brand and by channel.
You will have access to your annual report at the beginning of each decision round. The annual report provides
you with the results of the period that has just ended. For instance, you will be making decisions for period 4
based on the annual report of period 3. The annual report is composed of three separate sections: the Company
Report, the Newsletter and the Market Studies. Screenshots of the most important tables and charts are included
in this chapter. For more tables and charts, please refer to the annual report that you will receive at the
beginning of the simulation exercise.
5.1 Newsletter
The Newsletter provides general and financial data on the industry, on the competing firms and on marketed
brands. The Newsletter consists of the following charts.
Company Key Performance Indicators – The screen shown in Figure 22 provides comparative charts with
various financial and marketing performance indicators such as: market shares, retail sales in the various types
of channels, current and cumulative contributions, stock price indices and return on investment ratios. All
numbers are given in absolute values or as percentages.
The financial and marketing indicators are well-known and do not need additional explanation. The shareholder
value indicators are described below in more details.
Market Capitalization. This is the value of the company, calculated by multiplying the stock price by
the number of outstanding shares. For simplification reasons, you can assume that there will be no
change in the capital structure of the companies, e.g. no issuance of additional stock. Thus, the
variation in the Market capitalization is a good representation of how companies are valued by
investors.
Although it is not always easy to understand the variations of stock price, the main drivers of market
capitalization are revenues and profits. The best way to increase your stock price is to grow revenues
and profits with no fluctuations.
Stock Price Index (SPI). This is a simple measure used to monitor the variation of your stock price and
to compare it with those of your competitors.
Brand Results. This chart shows essentially the same information as the Firm Results chart, for the current
period only, but broken down for each brand in the portfolio. Additional information is provided on units sold,
average unit retail and selling price, and total number of units produced.
Market Shares & Distribution Coverage. This screen provides information on the way in which each of your
brands is represented in the various distribution channels. It indicates each brand‟s total market share in units
and in value, as well as the percentage of each type of distributor which carries your brand.
Discovered Formulas. This chart, depicted in Figure 13, is a listing of the formulas that have been discovered
by your R&D department but have not yet been developed for use as brands. For each one, you can see its
physical characteristics, initial base cost as well as the minimal base cost which can be achieved when 40 million
units will have been produced. Also given is the cost to develop the formula, if you so choose.
Keep in mind that R&D will continue discovering several formulas per period. Based on your analysis of the data
in this chart, you need to decide which, if any, you wish to develop in the current period.
Developed Formulas. This is simply a summary of those formulas you have already developed for use as
brands in your portfolio. See an example of this chart in Figure 14.
Messages. Finally, this screen contains messages from the simulation regarding events which have taken place,
such as new formula discoveries or developments, and reminders of essential steps which need to be taken.
Competitive Intelligence – This study estimates total advertising expenditures for each competitive brand by
segment. It also provides the average advertising spending by brand and by firm, in total and for each segment.
Further charts give estimates on how much was spent for each brand in Trade Marketing and Promotion, for
each traditional and online channel.
A sample chart is shown in Figure 30. This data will be essential in explaining past performance or to
determining suitable spending levels for the current period.
Benchmarking – In this section you will find a comparison of key figures and financial results for the various
companies in the Markops Online world. The available data is fairly comprehensive and is presented in the same
format as the Firm Results chart, given in Figure 23.
Finally, this study also provides the new brands expected to be launched by your competitors in the upcoming
periods. See Figure 32 for an example.
It is important that you carefully read and understand the information in this manual before the beginning of
the simulation exercise. From previous use of Markops Online in a classroom environment, we have found that
you will benefit by paying particular attention to the following advice.
Emphasis on strategic issues. Concentrate your efforts on strategic issues and long-term planning. The
emphasis of the simulation is not on short-term activities, such as promotions or discounts.
Importance of analysis. Before making decisions, be sure that you understand the behavior of the
market. Do not jump to the first explanation, or conclusion, that you may have reached when faced
with a problem: it may be incomplete. The detailed analysis of Market Research Studies, of your own
situation and of past competitive behavior should help you reach more robust decisions.
Group time allocation. Make sure that you allocate your discussion time sensibly between problem
areas. You will be under pressure to submit your decisions by the given deadline, and you should avoid
making decisions hastily in the last minutes available. Do not waste time on discussing a $100,000
expenditure if it will force you to rush through other decisions where millions of dollars are at stake.
Decision input errors. Your team will have to bear the consequences of errors made in entering your
decisions using the Markops Online software. These errors cannot be corrected after the run has been
requested. Be particularly careful to specify your decisions in the correct units and to submit your
decisions on time.
Role of the instructor. The Markops Online instructor cannot manipulate the simulation parameters
during the course of the simulated periods. The simulation has been designed to automatically
generate environmental changes. The markets will evolve mainly according to the actions taken by the
competing firms. There will, thus, be no interference by the instructor in favor of or against any team,
and you should feel entirely responsible for your firm's performance.
In the final analysis, you will soon realize that, even though you have access to extensive marketing
information, your judgment has to play an important part in making your decisions. As in most real business
situations, there is no single specific solution to any of the problems that you will encounter. There are,
however, alternatives that will clearly appear inferior after good analysis of the situation. There are other
alternatives that will appear satisfactory but for which the relative merits depend mainly on the uncertainties of
competitive actions. In this case, you will have to anticipate likely competitive behavior and to make choices
under uncertainty. Over a series of decisions, sound analysis and good judgment will inevitably bear fruit.
We hope that participating in the Markops Online simulation will give you a better understanding of strategic
and operational marketing concepts, and that you will enjoy this learning experience!