FINAL REPORT

MCS 1000

Tectonic Microcomputers

April 7th, 2017

Introduction

The Marketplace Live simulation game is supposed to educate marketing students

on real marketing situation. Students gathered in teams to create their own

microcomputer company. The companies compete based on total performance,

financial performance, market performance, and marketing effectiveness. The teams

have a balanced scorecard for each quarter and a cumulative scorecard that tracks

their progress throughout all 6 quarters. Companies should be expanding in each

quarter to grow their brands.

Marketing Situation, Competitive Environment, General Strategy

There are 5 environmental forces including social, economic, technological,

competitive, and regulatory (Crane et al, 2014). Social forces were apparent because

of the demographic shift and cultural change in each sales office location. Social

forces will affect the market size and can influence consumer preferences.

Competitive forces also apparent throughout the simulation. The competition will

affect your company’s profits because they could have more of the market share

which would lead to lower profits for your brands. Economic forces also played a

role in the market because consumer income affects purchasing decisions. When

consumer income is higher, consumers will purchase more but if it is lower, they will

purchase less. The simulation did not show any technological or regulatory forces

that could have affected the results.

 Consumer preferences during the simulation remained relatively the same

throughout the 6 quarters. Workhorse and Mercedes preferred a desktop computer

while Traveller segment preferred a laptop computer. The Workhorse target segment

is aimed at business professionals. This segment wanted a desktop with more basic

features and software such as office, presentation, database, and bookkeeping. They

want a computer that has a more affordable price so the computers targeting the

Workhorse segment were cheaper than computers targeting the other two segments.

The Mercedes target segment is aimed at engineers and scientists. They preferred a

desktop computer but wanted more advanced software such as engineering and

manufacturing. The segment also wanted more features like high speed, high

capacity, bigger monitor, and an expanded keyboard. The Traveller target segment is

aimed at business travellers. They preferred a laptop because it is portable so

consumers can travel with it. They want software such as office, presentation,

database, and bookkeeping. They also wanted a more affordable price than brands

targeting the Mercedes segment.

There were 4 other competitors in the microcomputer market during the

simulation. They were called Shark Computers, Galileo Computers, Synergy

Technology, and Constellation PC. In the earlier quarters, Tectonic was behind its

competitors. Around quarters 4 and 5, Tectonic was ahead of its competitors but

remained in the middle for quarter 6. In the earlier quarters, Tectonic had most of the

market share for the Workhorse segment while other competitors had most of the

market share for Mercedes and Traveller. In the final quarter, Tectonic had most of
the market share for Workhorse, Mercedes, and Traveller. Tectonic’s strength

throughout the simulation was the Workhorse segment as the company had the most

market share for most of the simulation.

For each quarter, the main target audience was always the Workhorse segment.

Workhorse had the largest market size in every sales office. The first sales office to

open was in Shanghai where the Workhorse segment was significantly larger than the

other two segments. Shanghai’s Workhorse segment was also the largest compared to

sales offices in other locations. I started targeting the Workhorse segment first and

then started targeting the Mercedes segment once I opened a sales office in Paris

because I noticed the market size getting larger. My last priority was the Traveller

segment because it only seemed profitable once I opened a sales office in Chicago

where the market size is larger than in other sales offices. Overall, targeting

Workhorse and Mercedes proved to be the most profitable.

By the end of quarter 6, I had 6 different brands. I added a new brand in each

quarter because I wanted to expand on each target segment. Each target segment had

a more expensive option and a more affordable option. This gave the customers more

variety based on their budget and how much they were willing to spend for certain

features. Since Workhorse had such a large market size, it had the most brands.

Each brand had its own advertisement with the purpose of persuading potential

buyers and standing out against the competition. Each advertisement mentioned the

brand name, the rebate price, a picture of the type of audience they were targeting.

Each advertisement also mentioned the kind of software each brand featured and
statements that’s made the brand stand out. Statements such as “highest rated brand”

and “fastest processor on market” were used.

We were advised to start the simulation with 5 sales people for each sales office,

but more sales people were needed as the brands expanded. Chicago had the highest

number of sales people because each target segment had a large market size. Paris

and Shanghai had the same number of sales people but they were distributed

differently among each segment. Sao Paulo had the least number of sales people

because each segment had a much smaller market size. For each sales office,

Workhorse had the most number of sales people because it had a market size that was

larger than both Mercedes and Workhorse. Traveller always had the least number of

sales people because it had a market size that was smaller than both Workhorse and

Mercedes. Whenever a new brand was introduced, the segment that the brand was

targeting would get an extra sales person for that quarter.

Analysis of Results and Explanations

My goal for the simulation was to excel in financial performance, market

performance, and marketing effectiveness. I achieved this goal in quarter 5 because I

was steadily growing in other quarters. In quarter 6, Tectonic had a lower overall

performance than in quarter 5. This effected my cumulative balanced scorecard

negatively.

The 4 P’s are place, product, promotion, and price (Crane et al, 2014). The 4 P’s

are an important tool in the marketing mix which is designed to plan for a successful
product or service (Crane et al, 2014). In regards to promotion, each brand had a

rebate of $100 to attract customers to that product since they get a lowered price on it.

For the price, Tectonic’s prices were relatively more affordable than the competition.

The prices started off low and then I increased them because I realized I could sell the

same number of computers even with a higher price tag. For place, each brand had a

different market size depending on what office location they were being sold at. For

example, Mercedes in Chicago had a larger market than Mercedes in Shanghai. I

advertised certain brands more or less depending on their demand in each location. In

regards to product, I tried to meet the needs of each target segment so consumers

from each audience were purchasing the brands.

Tectonic’s performance was acceptable, but it did not excel against its

competition. For quarter 6, Tectonic had the highest total performance, financial

performance, highest market performance. However, Tectonic had the lowest

marketing effectiveness compared it its competitors. In the cumulative balanced

scorecard, Tectonic had the second highest total performance and the highest

financial performance. However, it also had the second lowest market performance

and the lowest marketing effectiveness out of its competitors. In regards to

advertisement ratings, Tectonic did not do as well as its competitors. The company

received had a low rating of less than 70 for the Workhorse segment, a 71 for the

Mercedes segment, and a 79 for the Traveller segment.

Lessons Learned and Limitations of the Simulation

 In the marketing simulation, I learned that advertisement placement makes a

significant difference in profits. Different locations have different demands for each

product so some brands need to advertised more so that they can be profitable. I also

learned that different parts of the world have different demand for computers. This is

due to social forces because demographic and cultural changes affect the market size.

The simulation game has limitations and there are aspects that would be different

in real life. In the real world, the economy can change which would also change

things like consumer income and demand. During the simulation game, the economy

remained constant but in reality, the economy changes frequently. The simulation

does not take into account how a recession would affect the market for computers.

The simulation is organized and simple whereas a real market is much less

predictable and much more severe. In real life, the market would have more

consequences.

Recommended Strategies for the Future

Tectonic’s next step would be changing some its brands. I would take the Journey

Elite brand off the market because it did very poorly when I added it in the 6th

quarter. This brand had the least amount of profits and made the least amount of

sales. The Journey Elite was supposed to target both Mercedes and Traveller, but it is

not preferred by Mercedes and it is too expensive for Traveller so a very limited

number of people were interested in this brand. Then I would remove the Journey
brand and only keep the Journey Plus as the brand that targets the Traveller segment.

I would add another brand that targets Mercedes because it is the most profitable

segment even though it does not have the largest market. In the upcoming quarters, I

would focus a lot less on the Traveller segment in general and advertise the Traveller

brand less.

To start, I would change the segment I targeted at the start of the simulation.

Although Workhorse has a larger market, Mercedes proved to be much more

profitable. Workhorse is broad while Mercedes is more niche. I would also change

the layout of my advertisements because they had a poor rating. This could have

happened because I was trying to put as much information about the brand as I could

instead of focusing on the main points that would attract the consumer. Due to this,

my advertisements did not make my brand stand out against the competitor.

Conclusion

The Marketplace Live simulation game has taught me a lot more about marketing

than I originally knew. It was an enjoyable learning experience and it felt similar to a

real life marketing situation. Creating Tectonic Microcomputers and competing with

other teams felt like a rewarding experience.

References

Crane, F.G.,Kerin, R.A., Rudelius, W., & Hartley, S. W. (2014). Marketing. Whitby,
Ontario: McGraw-Hill Ryerson.