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kellogg/1 Markstrat Welcome JL v 1.txt

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+Well hello and welcome to Markstrap, the exciting online simulation that we'll be playing throughout this course. You know, the challenge in business is really all about making choices and making decisions among so many different options that we have out there from which we could choose. What are we going to sell? How are we going to promote it? Who are we going to sell it to? Should we enter a new market? How are we going to price our products? All these decisions that you have to make. And to really understand the challenge of marketing strategy and leading a business, you have to dig in there. You have to actually go and do it. It's not just enough to talk about it because then it can become too theoretical or perhaps even seem too simplistic and too easy when all you have to do is talk about it versus actually do it. So that's why we play a simulation in this course. To get in there and manage a business and deliver some great results. To learn what it's like to really have to deliver on against a profit target in a highly competitive situation. So you're going to be making decisions in the simulation like what products does your team want to sell? In what markets? To what target audiences? How are your products different? How will you price them? How will you promote them? And what are your priorities? Because of course as a team you can do anything you just can't do everything. And all these decisions will feed into what's ultimately going to happen for your team. Your performance and your results in the simulation. If everything goes well, well you can deliver some great business results. Like in this round when we played the simulation, have a look here at team M. They did incredibly well and pulled away at the end and delivered results superior to all the other teams in their industry. Of course Mark Stratt is unique. Every time we play it you never really know what's going to happen and how the results are going to turn out. Sometimes one team pulls away like we saw team M do there in that round. But other times you know there's multiple teams. Like in this case we see teams L, team R, and team T all kind of neck and neck right there at the end. And other times there's some teams that kind of actually really struggle as you see being the case here. So it can be any number of outcomes. Every time we play it is different. There's no predetermined or pre-described way that these games, that these simulations will turn out. It all depends on you, your team, your decisions, and your strategic thinking, and your tactical executional excellence. So we want you to dig in, to enjoy it, to wrestle with all these choices, to play all eight rounds, see what happens, and you never know. So it's fun, it should be fun, it should be challenging, should be a little bit stressful, kind of like real business. So dig in, let's get started, good luck to you, and we'll give you some tips on how to succeed and how to play Mark Stratt in some future subsequent videos. Good luck and we look forward to seeing your team's results. you

kellogg/2 The Markstrat Interface JL v 1.txt

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+So you're ready to get started playing Markstrip. In this video we'll show you how to do that. We'll start by having a look at the main login screen and then your home screen, your main dashboard, the main interface from which you'll make all your decisions and play Markstrip. So let's dive in. When you first log in at the URL provided, what you'll see is two parts of the screen. On the left is some background information, some additional reading and tutorial material. You can take a look at that at your leisure. What we really want to focus on to get you started are the four fields here on the right side of the main login screen. The first one is your PAK code. That's your personal activity key. Every player who plays Markstrat needs to purchase their own individual license. You'll enter that license number here. Below that then you'll see fields to enter both the industry that you'll be playing in. That's usually a color, aqua, brown, teal, gold, gray. Your instructor will tell you what industry you'll be playing in or competing in. And then below that you'll have a team name. Your team name is typically a letter. MRST or L are the typical team names. So for example if you're in the aqua industry and team T, you'll enter aqua and T in those two fields. And then below that is your team's password. Your instructor will send you, typically via canvas, the initial password for your team. You can change that later. But once you've got all four of those fields filled out, hit submit and you'll enter the actual main interface dashboard where you play Markstrat. Let's take a look at that next. Now what you'll see here are three main sections. First you'll see on the left-hand rail a navigation bar. That's the black strip at the left. I've expanded it by clicking on the little hamburger icon in the top left. It may look on your screen as a kind of compacted smaller version of a black bar on the left. I'd recommend you expand it. Then you'll see a bunch of these squares here across the bottom in the middle. The blues, the teals, and the greens. I'll get to those in a minute. And then in the upper right-hand corner is where I want to start. That's some information about your budget. If you click on that currency sign you'll see what your approved budget is for this round. And as you'll see here, it'll tell you the decisions you've submitted so far. Whether you're above, at, or below budget. That's a budget variance number. And then you'll see a couple of warnings or errors. You'll want to make sure and clear those and check those before submitting your final round of decisions. You can also see in the far right, that icon, if you click on it, will show you who all your teammates are. And importantly, there's a language drop-down. You can play Markstrat in English, Spanish, Portuguese, French, whatever language is most comfortable for you. So now let's return back to the left-hand black rail, which I've got expanded. Before we get into the decision boxes, what I wanted to just point out to you is that in the lower left-hand side, you'll be able to export data through a CSV or Excel spreadsheet. You can see how to do that by clicking on the bottom left. And additionally, you can print any of the screens and any of the information. You see that print function here as well. So that's just sort of a handy dashboard expansion to keep in mind. And you can kind of expand any of those navigational menu items on the left, and it will then zero in on some of these blue or green boxes. So let's walk you through a couple of those different boxes that you've got here. So the first set of boxes that you have are the company profile boxes. The company profile boxes will tell you information about your team. It'll tell you where you stand, how you're doing, and what products that you have in the marketplace. Then you'll see towards the middle some boxes that give you some market research, some competition, some competitive information. Those will be very important. We'll have separate videos on those that you can look at later. And then as we move past market research, you'll see that you've got a set of tools. We have separate videos on, for example, using the conjoined analysis tool, as well as some of the other tools that you might want to use for decision-making. But for our purposes here in this video, we really want to focus you on those set of eight green boxes on the far right-hand side. Those are where and how you and your team will enter your specific decisions for each round of Markstrap. You click on each of those and fill in, for example, what products you want to launch, what characteristics, commercial team, decisions that you make around your sales force. All of those different decisions that you make are entered by clicking on each of those eight right-hand boxes, actually seven right-hand boxes, because the eighth one in the bottom right-hand corner that looks like a chess piece is called decision review. You'll always want to click on that and that's where you can see kind of the totality of all the decisions that you've entered this round. Make sure you and your team are happy with it before you're done. Now, a word about submitting your decisions. You'll notice that there is no enter or submit or complete button, and that's by design. Often players in Markstrat say, wait, what do I hit to enter or submit my decisions? It's not like an e-commerce checkout cart where you sort of click to buy and that's all sales are final at that point. No, here you just enter all of your decisions and at the appointed time when your decisions are due, your instructor or the TA working with your group will go and kind of scoop up all of the decisions as you have them entered here and run the simulation for that round. So whatever you've got entered by that moment in time, by that decision deadline, is the set of decisions that will be factored in as the round is run. No enter or submit button in this case. You'll of course want to check for errors and clear any of those before you're set with your decisions. Make sure you've got no red or orange icons in that upper right-hand corner. But otherwise, that's it. That's how you log in. That's how you navigate this home screen or your dashboard. This is where you'll spend the majority of your time actually playing Markstrat and when you're ready, your decisions will be set and that's what will be used to run the round. So you're all set to play. Dive in. Good luck in the first round and we'll be back with some more helpful tutorial videos on how to help you succeed in each of the decision rounds moving forward.

kellogg/3 Modifying a Brand in Markstrat JL v 3.txt

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+In this video, I'd like to talk to you about how to modify an existing brand within the Markstrat online simulation game. Now, this is a very common question that comes up. I have a brand, but maybe it's not quite as competitive as you'd like it, or consumer needs and tastes continue to change, and you'd like to modify an existing brand that you already have in the marketplace in order to keep up with where the consumer target that is heading. Say, for example, that you are brand tops, as you can see here in the upper left-hand quadrant. Not super competitive versus the other players out there, and clearly not ideal against either of the two potential targets, explorers or professionals, to its left or its right. This is a situation where you might want to think about modifying that product tops. So what do you do? Well, unfortunately, there's no simple, within-round, easy way that you can just click a button and change the features. Actually, what you need to do is you need to initiate an R&D project. Now I know at this point you're saying, wait a minute, I already have a brand in the marketplace. I'm not trying to launch a new brand. Why do I have to launch an R&D project? It's important to remember within Markstrat the difference between products and brands. Products, the underlying R&D projects, may be associated with any brand. So if you'd like to change the underlying features of a brand like tops, then what you need to do is you need to modify it. So the easiest way to do that is to click on the research and development square, and it will show you all of your R&D projects that you've got in place. If you want to start a new one, you can click modify new sonight, which is the green button on the bottom left here, and then that will allow you to enter the different specifications by which you want the revised product or the modified tops product to have as you relaunch it. But you can't do that within one round. You have to run the R&D project in this current round, and then you could launch the revised product in the next round. So how do you do that? Well, what you do is you associate a completed R&D project with a brand, either new or existing. In this case, since you're modifying, you want to associate with an existing product. So you do that by clicking on this pop-up window that you see here, selecting the brand that you're interested in, selecting modify, and associating it with that new underlying base product, underlying base project. So then the final step is to just verify that you've got everything lined up how you want. I like to do that in the brand portfolio decisions green square. Click on that, and then you can see what product you have, what brand that you have in the marketplace, and what is the underlying R&D project or the underlying product that you have associated with it. So again, just the key to remember is that products are not the same as brands. There is no simple, in-round, quick and easy way to modify an existing brand. You have to do that by launching a new R&D project, and then you associate that R&D project with your existing brand, which you can then launch in a subsequent round. So we'll be back with more on how to figure out how to determine what characteristics should go into that R&D project that you want to use, but that's the subject for another video. Thanks for watching. I'm Mike Pearson. I'll see you next time. 

kellogg/4 Understanding the MDS Report JL v 1.txt

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+In this video, we want to talk to you about one of the critical market research reports that you'll use to make your decisions in the Markstrat online simulation game, specifically the multidimensional scaling, or so-called MDS report. The other important report, of course, is the semantic scales, and you'll use that one for R&D decisions. But the MDS report is all about consumer perceptions. It's the result of consumer interviews, research with 200 consumers, to understand how they perceive the brands that are currently in the marketplace. Specifically, they ask consumers their perceptions of the brands on three important dimensions, economy, performance, and convenience. Now, when you look at these reports, rather than seeing those three dimensions as a kind of three-dimensional cube, it's actually split into two different so-called perceptual maps. Let's take a look at what those look like. First, you'll see economy times performance, and you'll actually also see economy times convenience. But you'll see dots on the map representing, first, the five consumer segments and their ideal point on the perceptual map of what they actually ideally would like brands to deliver for them. Second, you'll see color-coded by team, you'll be able to see where each of the brands in market from each team is currently located. And this goes on a scale from minus 20 to zero to plus 20. And you'll notice, again, these are different scales than in the semantic scales where you see numbers representing levels of features or performance characteristics. So if you zoom in a little bit further and scroll down, you can also see how each of those product characteristics from the semantic scale report influence each of the three dimensions here in the MDS. Strong influence, weak influence, moderate influence in economy, performance, and convenience. And if you go a step further and click all the way at the bottom of this report, additional information, you can see how perceptions change over time. You see these sort of little comet tails because, again, your job is to be a step ahead and anticipate where consumer perceptions and consumer desires are so that you can be building your products, doing R&D projects in this round to anticipate the needs of your consumers in the next round. And the multidimensional scale report is a great way to do that. You can use this for a bird's eye view, an overview to get a good sense of what's going on in the marketplace on these three key dimensions laid out as two different perceptual maps. It's important to understand the difference between the MDS reports, which I briefly described here, and the semantic scales. They are related, but of course, just as in the real world, actual product hard characteristics are not always the same thing as how consumers perceive them. Keep that in mind. To understand perceptions, focus on the MDS reports.

kellogg/Designing Products v 1.txt

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+If you want to be successful in the Markstrad simulation, you have to build great products. This is true in the real world as well. It is very hard to be successful if you don't build products and services that your customers are looking for. So the question then is how do we design products that match up with what consumers are after? In the Sonight market, it's a pretty straightforward process, right? Here's what you do. First step, figure out which group of customers you're going after. Who's your target anyway? So for example, I might be going after the Explorer segment. Then you turn to the market research data. What do we know about this customer segment? The report that I find most useful is the semantic data. Now in that report, it shows us exactly what they want on this one to seven scale. So if I'm looking at battery, for example, I look at Explorers and I see that what they want is a 6.0 on that one to seven scale. Perfect, right? Now the challenge is I have to convert that rating into an actual product specification that I can hand off to my R&D team. So how do I convert that? Well, the simplest way to do that is to look at products currently in the market and see how they're perceived. So if I look at how products are currently perceived in the market, also on the semantic report, what I notice that's of interest is that brand move is perceived as a 5.9 on the 6.0 scale on battery. So that tells me that move is perceived as having almost the battery, almost exactly what the Explorer segment is looking for. And then Rock, another brand, let's pick another one just to keep an eye on it, the 5.5. They're a little bit lower. All I do then is I turn to the characteristics of those brands. And what I see is that move in point of fact has battery of 82. And if I look at Rock, it is battery of 78. What does that tell me? Well, that tells me that the Explorers are probably looking for battery. You know, a little bit above 82, maybe 83, 84, 85. That's going to get me in the general range of things. And that's how I can be pretty confident that the specs are going to get me there. And it's got to be above, certainly has to be above Rock at 78, you know, certainly has to be above that. So now I've got, I'm in the neighborhood for it. By the way, over time, what you will see is that the ideal points will move in Mark's trend. So keep an eye on that. What they're after today may not be what they're after tomorrow. And those trends are probably going to continue. So you might see, for example, that the Explorers next time they want 5.8. And you can assume that, that if they want 5.8 next time, it's probably 5.6 and then 5.4. So you can look into the future and design products that are going to match up with what they're looking for years from now. Now in the Vodite market, things are more complicated at the beginning because in the Vodite market, the problem is there's no Vodites. So it's very hard to take the semantic data and turn that into product specs in Vodites until there's a Vodite. All you can really do in Vodite is you can take the semantic data. You know, in Vodites, we do have a little bit of market research data on the semantic. All you can really do is take that information and assume that for some reason, the scale in the semantic data, one to seven, is related to the actual technical range of these characteristics. So for example, let's say I'm going to build a Vodite for the innovator segment and I look at energy and I see on the scale then that it's 3.3. So on a one to seven scale, right, the innovator segment is looking for energy 3.3, right above, you know, sort of right in the middle there. I look at the technical range and I see the technical range for energy is 10 to 100. All I can assume, and it's not perfect, is that somehow those two things are related. So if they want to be in the middle of the semantic scale, that's probably in the middle of that technical range. Is it perfect? It is not. It's very tough to build a product in a market that doesn't exist. This is true in the world as well. All you can do is do the best you can using the information you have and then adjust, learn, change, and move quickly. Keeping up with it, keeping up with what you know, that's going to be a key to success. In sonites and in Vodites, focus on building great products. If you do, that's going to help you do well in the simulation.

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kellogg/Markstrat Getting Started v 1.txt

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+It can be a challenge to get started on the Markstrad simulation. There's a lot to look at. There's lots of things to think about. So the question is, how do you really get underway? I would suggest you want to do three things. First thing, get to know your team. Who's on your team? Who are these folks? What are they interested in? You know, having a strong team will help you a lot as you go through the whole simulation process. Second step, look at where you are. Where do you begin? So for example, look at the overall company financials. Are you making lots of money or not? And then look at your brands. Like what brands do you have to begin? Are they both profitable? Is one more profitable than the other? Look at the multidimensional scaling chart, the perceptual maps. Where are you right now? Are your brands aligned with particular customer segments or not? Step three, think about the big picture strategy. Where do you want to go? Think first about what are the options? What are the different things we could do on our team? That will lead you into a discussion about what is going to be the best strategy as we go forward. Strategy is all about picking between options. So you want to begin by saying, what's on the table? What do we have to think about? And that's going to get you going on your discussion. Once you have your strategy, then you can begin making some actual executional decisions, begin making some moves. But the first step really is saying, okay, let's get to know the team. Let's understand our situation. And let's start thinking about what are the different things we can do.

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kellogg/Setting Your Advertising Media Budget v 1.txt

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+One of the questions I get very frequently from people playing Markstrat is, how do I set my advertising budget? Now, this is an important question for Markstrat and in the real world, but it's not an easy question. There are lots of different things to think about when it comes to setting your advertising budget. Now, the place I would start is the big picture strategy. You know, ask yourself, is this an important brand for my company, for the future, where we're going? Is this an important brand? Well, of course, you're going to want to spend more on advertising. If it's a brand you don't care about, that's a very different situation. Then I would dig into what's happening with the brand. You know, for example, what's the problem or what's my path to growth? Do I have an awareness problem? Is the awareness low? Do I have a perception issue? What's happening? If my awareness is low, well, certainly I'm going to need more advertising spent to try to boost that awareness. If I need to change perceptions, one way I can do that is through advertising. Once I get past that, I dig into more of the specifics, you know, the competitive ad spend chart. That's really useful. What are my competitors spending? That's where I want to look at that. You know, for example, here's an example of an ad spend chart competitively. Now, if I'm working on brand most, well, I look at it and I see that in the Sabre segment, that's my target market, I'm currently spending $830,000. Then I look at what else is out there. Well, I got another brand, Locke, one of my competitors is spending $620,000. And then Soft is spending $960,000. So if I'm running most, and if I want to increase my market share in that segment, well, I'm probably going to need to boost the ad spend. I don't want Soft to outspend me. And next time there's probably an increase coming from Soft. So you know, Soft might go up to $1.1, $1.2 million next time. So I'm feeling like I'm definitely going to need some more ad spend there. There's other things you can think about too. You can think about payback. What's the financial return on this investment? Is that likely to pay back? And you can work with your financials to see if it's likely to be a good financial decision. You can also think about the message you're sending. You know, advertising is very public. So if you spend a lot on advertising, that sends a signal to your competitors about what your intents are. If you spend a lot of money on advertising, that tells everybody that you care a lot about that business. Is it good? Is it bad? Well, certainly that is sending a signal. And I want to think about what's the signals I'm sending to my competitor. There also is another chart you can look at, the advertising experiment. Now this is like a marketing mix model. You may have things like this on your business, but this is a study where they look at all the data and they put together a multivariate regression and they try to figure out what would have happened if the advertising was a little different. So on the version you have here on Markstrad, it tells you what would have happened to your profits if your advertising was 20% higher last time. Now that can be sort of interesting. For example, if I look at the chart here, it's telling me if I'd spent more on most, I would have made a lot more money. But take this chart with a grain of salt. It's looking backwards. It assumes the future is like the past and assumes we're optimizing short-term profit. All of that is not really what we're trying to do. We're trying to build for the long run and build brands that will endure and support. So even though in the short run, my profits might go up or down, that doesn't necessarily tell me what's the right move for the long run. Still, it's another piece of data to look at and think about as you put together your advertising budget. Is there one thing to look at? No. There's lots of different things to look at and think about. When it comes to times to set your ad budget, you want to look at everything that's out there and try to figure out what's going to be the optimal move for your brand this round.

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kellogg/Understanding Your P&L v 1.txt

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+So, one of the things you'll want to become very familiar with as you manage your Markstrat company are your financial statements, in particular your P&L. Now, on a traditional freestanding business, you will see three kinds of financial statements. You'll see an income statement, you'll see a balance sheet, and you'll see a cash flow statement, three different things. In Markstrat, you have just one, the income statement, because in Markstrat, in theory, your company is owned by a larger corporate parent company. That's where the balance sheet and the cash flow is going to show up and be managed. So you really focus that on your income statement. Now, what you'll see on your P&L, profit and loss statement, you'll see two different versions in Markstrat. There's the overall company P&L, and then there's the brand level P&L. Now, the company level P&L, this is how your company's doing overall. Let's take a look at that. So, what do you see on a P&L here? At the top, you've got revenue. Revenue, of course, is units times average selling price. That's going to be your revenue. Then you take away two things from that, the cost of goods sold. That's the cost to manufacture, to produce your products. And below that, you get on that front, you get the inventory cost, the holding cost in terms of the inventory situation, if you had any. That gives you contribution then before marketing. Think of that as variable profit. Below that, you have your marketing spending. Two things, advertising, that's both media and advertising research. Also commercial cost, that's your sales force. Then you get to contribution after marketing, right? That's just contribution before marketing minus your marketing spend. Below that, you'll see a couple other things. You'll see your R&D spend for R&D projects that are going. Also, you'll see your market research spend. Below that, there's a couple other things on the statement that we don't use a lot, the loan function we don't use in the rounds of Markstrat. That's money in, money out. You can ignore those lines. But eventually, you get to the bottom, as earnings before taxes. Your overall company profit, that's what you're really focused on. So that P&L is really useful to be familiar with. Now, when you actually are running your business, what is more useful often are the brand level P&L. So for each one of your brands, you can look at the financials of that brand. Now, on a brand level P&L, what do we see? Well, we see a lot of the same things. We see the revenue there. We see the cost of goods sold. We see inventory expense. That's going to give you contribution before marketing. You see the spending we're doing on each brand. So how much are we spending advertising this brand versus the next brand? Also, the commercial cost, that gives you contribution after marketing. Then you get to the bottom, and you can see if there's any inventory disposal. And again, you get to the contribution, the profitability of each brand. Now, the brand level information is going to be particularly useful when you think about making decisions. Well, I mean, if you look at this round here, look at this team. Well, this team has three brands right now, all right? But if you look at it, most of the profitability, most of the money is coming from that brand most. That's where pretty much all the profit is coming from. There's a couple other brands that are contributing something right now. There's brand Move making a little bit and brand Mojo making a little bit. And that becomes really useful to understand the current situation. Now, it doesn't tell you what's going to happen in the future. You know, in this version, you could see what's happening. They're spending a lot of money advertising that brand Mojo. So hopefully, over time, Mojo will grow. That will increase the overall profitability. Is that actually going to happen? Well, we'd have to see how the round plays out, whether that really transpired. But you begin to understand, by really understanding your P&L, you begin to understand what's happening to the profitability of your company and the profitability of your brands.

kellogg/Using the Conjoint Study v 1.txt

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+One of the most useful types of market research when it comes time to design a product is a conjoint study. Now, a conjoint study is a fairly simple type of research. What they do in constructing a conjoint is they vary certain elements and they watch how customer appeal changes. So as you change different parts of the proposition, how does that affect overall consumer liking? It's a useful study to understand what's important for customers and what things you really want to prioritize. You know, for example, if you were running a delivery service right now, the question is how do people think about speed versus accuracy versus social distancing? What's the priority anyway? And a conjoint can help us understand that. Now in Markstrat, you have some conjoint studies that are available to you and they're useful. However, it is also very possible to misinterpret what you're looking at. So let's take a look at one of these. So here's a conjoint study from Markstrat. What you can see here is four different characteristics and it tells us about the importance of each of these. So what are they're doing here is they're varying the characteristic and they're showing us how utility, think of that as appeal, varies. So on the one side you've got design and what you could see is that as design changes, utility is basically flat. That tells us that it's just not that important. People don't care all that much. On the other hand, things like power and price are super important because their utility varies dramatically as you change things. Now the watch out on conjoint is that it's easy to misinterpret it. So for example, let's look at that price chart, right? What the price chart tells us is that a price of $246 and $323 both are pretty appealing prices and $323 is a little bit better than $246. So you might be inclined to say, well, I'm going to price my product at $323. That's easy. Done. The problem is that's not correct, right? Because conjoint is only looking at four options. It's not looking at all the options. What's the perfect price for this product? Well, if I had to guess, it's somewhere between $246 and $323. There's probably an optimal price that's somewhere between those two numbers. In Markstrat, you have lots of other tools to work with. The semantic data, for example, that's really useful. I think you've got better tools to work with in Markstrat. So use the conjoint to understand what's important, but when it comes time to actually figuring out the specs or the price, look at some of the other tools that are available. That will reduce the chance that you're going to make a mistake on one of these key decisions.