Period 9

2nd place! Our initiatives are falling nicely into place for a strong finish.

Probably the smartest decision we have made to date was dropping SOCK; strategically it freed up valuable resources to push our more entrenched and popular products. We managed to not only get rid of all the inventory of SOLD and SOBO but also sold much more of them this period (almost 100% growth in volume sold for both of the Sonites). As well, we gained a lot of market share in both the Sonite and Vodite markets this period. However, even with our large gains in market share Team E continues to dominate the industry and their success is being reflected in their skyrocketing stock price. Nonetheless, a lot of positives resulted from our previous decisions and it is nice to see our increased sales force is helping to generate enormous sales.

Team E has built a comfortable cushion for themselves but Company O will never give up!

Period 8

We have dropped slightly and rank 3rd at the start of this period. This slip on our part is chiefly due to the fact that the Others market is over saturated with six highly similar products — our strategy to saturate the Others market failed because all our competitors were trying to do the same thing!

This saturation situation was not a complete loss as it has offered us a valuable lesson: careful consideration must be given to competitor actions in order to determine what direction they are planning to move their product mix. Our main goal for this upcoming period will be to get rid of inventory and reinvigorate the sales of our Sonites. As was planned previously, we will reduce our total number of products down to four (drop SOCK this period) so that we can shift more of our advertising and sales force resources to our key products. Thanks to the generous support of the Bart Industry Government, we are again receiving a subsidy this period. We will spend the extra budget on expanding our sales force so as to keep ourselves on par with the industry competitors’ levels.

With increased R&D activities, advertising expenditure, and sales force resources, we believe we will be able to continue to improve our sales in this ever competitive environment.

Period 7

We are back up to 2nd place now! The subsidy from the Bart industry Government proved helpful in getting our products back on track.

Our decision to drop SONY was wise — at least we are not further incurring more inventory holding costs which will hinder the growth of our stock price. It is also good news to know that we sold out most of our products. Our main competitor now is Team E. We will need to find ways to compete head-on with their products; preferably before they get even richer! From the newsletter we found out that they dropped their SEHI (initially targeted at High-earners), and this means that we can now capture the entire High-earners market with our modified SONO the period after next. As for SEMI (which is targeted at Others), they are selling upwards of 378,000 units while our comparable product, SOLD, is only selling in the range of 96,000 units. We must modify SOLD with PSOAR this period so that we can “push” SEMI out of the Others market. At the same time, seeing this opportunity in the Others market, we will modify SOCK this period (based on PSOAR) so that we can saturate the Others market with our products.

The main highlight this period was the 413.7% growth in volume sold for VOTI. We are heading in the right direction and will further modify it with PVOOT to better target the explosively growing followers segment. The future of Company O is looking bright!


As an aside, Company O would like to thank the industry experts: they were generous in informing us that the change in perceptual objectives and price of a product will not be considered a modification to a product.

Period 6

So we rank 4th this period. Back to where we started at. But on a happier note, our budget is now at $11,000 for next period which gives us more room to work with. The Bart Industry Government is also granting each company a subsidy of $1.9 million to help with the slow industry growth.

For the 3rd period in the row, we are incurring a loss on our SONY product. After looking at our brand results report, the decision has been made to drop SONY; it is still in the middle of nowhere on the perceptual map even after modifying it with huge advertising research efforts post-launch. Still, something seems array and we can’t place our finger on it? Since period 4 our management team has wondered if the change in price and perceptual objectives to SONY are considered a modification. The answer is unclear – we inquired with a few of our competitors and as expected, we got consistent replies of “we’re not sure.” It seems that we will not find out the answer until our scheduled meeting with the ‘markstrat experts’ next period.

In the Vodite market, VEXX undercut us in price despite their base cost and characteristics are a little better than our VOTI. We might have been too greedy on our margin, and we will have to get rid of the huge inventory left next period as inventory holding cost for Vodites are considerable. Seeing how Team A is progressively doing better with their Vodites (note: a 139% increase in volume sold), we realized that the Vodite market (especially the followers segment with expected growth of 3000% in next 5 years) has infinite potential for expansion. That is why we are ordering more Vodite research studies next period – we must get to know more about the market before we can excel in it.

Looking now to our long term perspective, we are planning to scale back our total number of products offered because we realize that we do not have enough budget to do extremely well with all five products in market at the same time. However, we must actively participate in R&D to ensure we capture sufficient market share to boost our sluggish stock price.