Table of Contents:

2013
Marketing Plan

Colleen Mulry, Chad Crabill, Emily Depner, Lauren Parr, Robert
Ritacca
Luxurious
1

EXECUTIVE SUMMARY:
The purpose of this report is to document the strategy that our company has chosen and explain
the rationale behind our decisions, to provide a market assessment and a future outlook for both
the Clinite market, to outline the competitive analysis and provide a competitive outlook for the
future of our company. We also are demonstrating how we produced our market assessment and
our commitment to the results of the Markstrat simulation.
Company Luxurious currently has a stock price index 1327. We are currently ranks 2nd with our
competitors. We currently have 2 products on the market, Like and Lime. In period 4. We will
launch our new product Picasso, which will result in Company Luxurious in having three
products. Like is our top selling product. This product brings in 62% of our revenue. We target
low income and singles for our product Like. Our high end product Lime, brings in 38% of our
profit. With product Lime we target affluent families and high earners. Our companies
positioning strategy is to compete head to head and continue to build customer awareness and
concentrate efforts gaining new market share in the Clinite market. Our overall plan is to create
enough revenue so that we can use this money to create a new Nutritie. With the expansion of
the Nutrite market we foresee that this will increase our revenue to get into first place. We feel
that team Luxurious will be in first place by period ten.


SITUATION Analysis
2

INTERNAL AUDIT
COMPANY OVERVIEW:
Luxurious is a company that strives to provide our customers with a product with in their
price range. We are a top of the line cosmetic company that offers two products currently that
strive to satisfy our customers wants and needs in regard to quality of product and also price of
product. We are confident in our management team and also our sales force. Our management
team is consisted of 5 individuals with a strong work ethic and various backgrounds. A major
positive of our management team is our competitive nature. We strive to perform up to the best
of our abilities and eventually beat out our competitors. Along with a strong management team
we see a strength for our product is the total number of sales reps we have. In quarter 3 we
currently have a total of 94 sales reps broadcasting our product. With this high sales force we
believe this can increase our sales. Our total budget for the upcoming quarter is 2,545 thousand
or 2.5 million. Currently we have two products, Like, Lime. Throughout the first 3 periods our
product Like was a top earner for our company. Team Luxurious prides itself in our Like
product. We are known for our product Like. For our Like product we target a low income and
singles segment at a price of 11.75, we believe that this price is within their cost range and is an
equal representation of the quality of the product. We keep our product Like at a low cost
because of the low manufacturing cost to make the product. We see this price level as a strength
for our company. A weakness for our product Like was that we ran out of inventory in period 2.
In regards to our product Lime we are targeting high earners and affluent families. Although our
price is higher than other companies we believe this is a reasonable price because of the quality
of the product and our performance rate. Although we see this as a reasonable price our
customers are not as excited about our Lime product. We see the product Lime as a weakness in
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terms of price. We plan in the future to lower the cost of Lime to be more competitive. A
strength of our Lime product is that although the price is high there are consumers willing to pay
for the high price. A final positive for our company is that our products target specific segments.
Our products go after certain income levels. Our products are very profitable, because we sell
each of our products at a good equilibrium price where the consumers are willing and able to buy
them. Our Like 62% of our companys profit and our Lime is at 38% for company profit. Like
many companies our team does have weaknesses. We believe a weakness of ours is not having
enough of a budget to do everything we want to do. The last quarter was a prime example of this.
We wanted to introduce our new produce Picasso and we did succeed the problem was that this
took away from our marketing research. Cutting back on the marketing research last quarter was
a mistake. Our weakness would be managing our budget. As a management team we struggle in
terms of showing up on time to our meetings, and also sticking with our decisions. Overall we
are good at getting along together and have a strong commitment to winning the simulation.
Revenue in millions

The right figure shows our
Revenue from period 0 to
period 3. Our revenue is
increasing each period.



4

The figure to the right shows our Net Contribution.








The figure to the right
shows Total Retail Sales
in terms of units.





EXTERNAL AUDIT:
COLLABORATORS:
5


Distribution is another key part in improving our company and the goals of the company.
We have 2 products that are produced to hit each segment accordingly. Our product Like mainly
uses mass merchandizers and specialized mass to sell products. Lime targets more to Specialized
mass and Department stores. This chart below shows this more clearly.
This is the merchandising budget in thousands.

With
collaborators
comes our
commercial team.
This graph shows
how we allocate
our sales reps to
each channel.


The distribution of our
products matches well
with the preferences of
our customers for each
individual segment.

CONTEXT ( EXTERNAL ENVIRONMENT):
Political aspect of this game was not revealed in the handbook. Economic Currently we operate
in an economy that has an average inflation rate of 2%. Inflation affects the production
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advertising commercial and market research costs of our company. We do not foresee the
inflation increasing. The Gross National Product (GNP) provides our management team with
information about trends in the Markstrat economy. In the recent past, the overall economy has
been growing as a rate of 4%.Social There are a handful of competing companies that
manufacture and market consumer durable goods. We foresee no major social event in the near
future. In terms of industry we believe that we are in a competitive market. The companies we
are competing against have many options for cosmetics. We believe our company is reliable to
our customers. Our first hurdle is to deal with the inadequacies of the technological components
of the Clinite product. We see in the future that we will have a better product to produce and we
foresee this with a breakthrough by the releasing of the Nutrites.
CUSTOMER:
Customers are hugely important to us. Without our customers we would fail. Because we are
currently in the cosmetic industry we believe we are focusing more towards women than men.
Our product line is expanding and we believe that this will help customers with different
financial situation still enjoy a cosmetic that they will enjoy but also can afford. We target these
people to better their lives. They buy our product to better them which in turn boosts their self-
esteem. In terms of Like product we target towards Low Income Families. Individuals in this
segment have a similar family situation and age range as the Affluent Income families. Their
lower income levels, however, causes their budgets to be strained, and leads them to be less
frequent buyers and users of cosmetics, and to be very price sensitive. Their loyalty is below
average. The next segment we target is singles. As the name of this segment indicates, Singles
live alone. They are generally between 16 and 35 years of age and can be students or employees.
All in all, while being relatively heavy users, they demand average levels of both performance
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and pleasure from their cosmetic products and tend to be rather price-sensitive. Singles are not
loyal to any brand; on the opposite, they tend to favor new brands and switch very easily is the
new brands fit their needs.
In regards to our Lime product we target towards high earners. The members of this
group are characterized by their high incomes. They are women over 25 years of age, either
single or married without kids, and studies show that they usually buy expensive products, which
they can afford, and that their purchases are partially motivated by social status. They are heavy
users, with an average loyalty to their favorite brands, and they are price insensitive to the point
of disregarding cheap brands, and they demand high levels of performance attributes from their
products. We also target our product Lime towards Affluent Families. Women in this segment
are aged 25 45, are either married with kids or single parents. Their high income levels leads
them to be highly loyal, frequent buyers and users of cosmetics, and they are definitely not price
sensitive. Consumers in this segment are looking for high quality, high-performance and
pleasant-to-use products. They can afford expensive products and often view price as an
indication of quality. Looking over our market research we believe that the market is always
changing. It is our hope to keep selling a substantial amount of Like and increase our sales in
Lime. We believe if the customers like the product that we give them they will continue to buy
the product. We believe customers are not buying our Lime product because the price is too
high. We have each segment in the right category. The customers that are buying are buying high
end products but the high end products are being sold for a cheaper price. We plan to lure them
away from the competition buy dropping our Lime product price. The customer wants a different
price that is lower then the current price we are selling Lime at for. We believe that the
customers are very satisfied by our Like product because we are the top selling brand for this
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product. For lime we believe that we could raise the overall satisfaction for the Lime brand. We
believe that the customer loves the cost of our Like product. Our management team sees that
Lime is too high and this is a problem for our company. The major deal breakers are price for us.
If a price is too high we will lose customers compared to our competition who is pricing their
products at a cheaper level. With the expansion of the Nutrite market we believe that we will
need to take out a loan to pay for an expansion of a new product. With the market changing we
need to change with it. In order to come out on top of the industry we need to keep our old
products but we also need to look into investing in new products. Every customer is different and
we strive to have our product appeal to a specific characteristic that the customer wants. We
looked at what characteristics each income wanted in a product or what characteristics were most
important to them.








We used this chart to help us determine in what characteristics were most important for
our Picasso product.

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Segment Period Efficacy Safety Packaging Pleasure Usability Price
Affluent Period 1 6.1 5.58 4.53 3.89 4.66 4.95
Affluent Period 2 6.11 5.63 4.55 3.93 4.77 5.03
Affluent Period 3 6.12 5.67 4.57 3.97 4.89 5.09
Highs Earners Period 1 5.08 5.82 5.98 6.59 5.98 5.63
Highs Earners Period 2 5.13 5.86 6.02 6.63 6.01 5.71
Highs Earners Period 3 5.18 5.89 6.05 6.68 6.04 5.78
Low Income Period 1 2.13 2.89 2.05 1.77 2.09 2.29
Low Income Period 2 2.21 2.93 2.08 1.83 2.14 2.24
Low Income Period 3 2.29 2.97 2.11 1.91 2.21 2.14
Med. Income Period 1 4.44 4.4 5.47 5.07 5.19 3.81
Med. Income Period 2 4.59 4.5 5.37 4.91 5.09 3.83
Med. Income Period 3 4.76 4.62 5.26 4.74 4.97 3.85
Singles Period 1 3.56 2.86 4.03 4.34 3.55 3.17
Singles Period 2 3.6 2.9 4.17 4.51 3.65 2.99
Singles Period 3 3.63 2.93 4.27 4.61 3.72 2.19





We also wanted to look at the overall size of the market growth each segment is predicted to
have. In the next periods to follow singles will be growing the most. We need to keep this in
mind in creating new products so we can boost our sales.
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Chart Below shows the segments in the next 5 periods. I n terms of millions.


MARKET SIZE:
11

This is a chart of the market size of the brands currently in the simulation this can give us an idea
of how much sales can potentially increase and we use this chart to determine our inventory
number. This goes in line with customer because we can see how the customer number will
eventually increase.



COMPETITORS
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We have four major competitors in the Cosmetics Industry. The four other companies in the
market are Monopoly, Revolution, St8tment, and TRUE. Our competitors have strengths and
offer better features than we do when it comes to a one certain product. The company Revo has a
brand awareness much higher than ours, RICH being at 71.6% and RISE at 56.1%. Whereas our
team Luxurious for our products LIKE is at 68% and LIME is at 54.5%. Between the two
companies, we both advertise to around the same people with our products; between high
earners, affluent, medium income, low income, and single consumers. Strengths from a different
team, St8tment, have a higher amount of people that would rather buy their product than any
other team. They have more of an opportunity to gain for each consumer is a way we can gain
new consumers. A way to gain more consumers new and repeat volume sales with their
consumers. New and repeat volume sales provide information on brand loyalty to consumers.
SILK and RICH both had more loyalty toward their brands. Somehow these companies were
able to keep a great enough brand to have repeat and also new consumers buy their products.
Being able to have repeat and new consumers to buy a brand also depends on the price of the
product. Our price for our lower priced product is $11.75. We offer our product at a slightly
higher price than most, but our competitor TIME has their product priced at $20.99. That is a
$9.24 difference between prices for a lower priced item for the rest of the competition. The
higher priced products our competitors have lower prices than us. We have the highest price of
$25.00 and our major competitor Team Revo has a price of $20.00. That is a $5.00 difference
between the two products. Making the price affordable would be to lower or raise our prices
depending on the product and quality of the product. If we lower or raise our prices for our
products, the competitors could raise or lower their prices as well. This could be good for us
when it comes to lowering our own prices, but if the competition lowered their prices we would
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end up possibly losing money if no one bought our product and the competitor was able to sell
out their product. Our competitors do not offer better features than are products. Currently all the
characteristics of each product are the same. Although characteristics are the same some
competitors offer better price points. We have the highest priced product in the simulation, which
could be seen as a weakness. The competitors may respond to our success in terms of our Like
product by placing their price at 11.75 because it is so successful.
SHARED PRICE INDEX

This chart shows the shared price index per quarter for each company. Its clear that company R
has dominated in shared price index. We are in second place with a shared price index of 1327.
A positive is that our companys shared price index continues to rise.



14

INDUSTRY RETAIL SALES
This graph in Millions shows our industry retail sales. It is clear that company R
has the highest retail sales.
INDUSTRY VOLUME
In Millions

15

VALUE MARKET SHARE:

This graph shows our value market share. Currently Team Rebo is beating us in market
share by 6 percent.
UNIT MARKET SHARE

Currently our unit market share is at 19%, the winner in this graph is Team S. Our group
assumes that they are selling their product for very cheap which moves a lot of units. Although
this may be a positive for Team S, overall they arent making enough money to compete with us.
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TOP SELLING BRANDS

The current top selling product currently is Rise. Ours is in second. What we see as a problem is
that rich is also a top selling brand and our product Lime is not a top selling brand. Our solution
here is to make sure Lime becomes a top selling product.
TOP SELLING BRANDS- VOLUME

This shows the top selling brands in terms of volume. Here it shows that silk is beating the
competition by a high number. Once again their overall price is too low to make enough of a
profit to overcome our team.
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We have four major competitors in the Cosmetics Industry. The four other companies in
the market are Monopoly, Revolution, St8tment, and TRUE. Our competitors have strengths and
offer better features than we do when it comes to a one certain product. The company Revo has a
brand awareness much higher than ours, RICH being at 71.6% and RISE at 56.1%. Whereas our
team Luxurious for our products LIKE is at 68% and LIME is at 54.5%. Between the two
companies, we both advertise to around the same people with our products; between high
earners, affluent, medium income, low income, and single consumers. Strengths from a different
team, St8tment, have a higher amount of people that would rather buy their product than any
other team. They have more of an opportunity to gain new and repeat volume sales with their
consumers. New and repeat volume sales provide information on brand loyalty to consumers.
SILK and RICH both had more loyalty toward their brands. Somehow these companies were
able to keep a great enough brand to have repeat and also new consumers buy their products.
Being able to have repeat and new consumers to buy a brand also depends on the price of the
product. Our price for our lower priced product is $11.75. We offer our product at a slightly
higher price than most, but our competitor TIME has their product priced at $20.99. That is a
$9.24 difference between prices for a lower priced item for the rest of the competition. The
higher priced products our competitors have lower prices than us. We have the highest price of
$25.00 and our major competitor Team Revo has a price of $20.00. That is a $5.00 difference
between the two products. Making the price affordable for each consumer is a way we can gain
new consumers. A way to gain more consumers would be to lower or raise our prices depending
on the product and quality of the product. If we lower or raise our prices for our products, the
competitors could raise or lower their prices as well. This could be good for us when it comes to
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lowering our own prices, but if the competition lowered their prices we would end up possibly
losing money if no one bought our product and the competitor was able to sell out their product.

WHICH GROUP IS LEADING IN THE SIMULATION?
Team Rebo is leading the simulation as of Period 3, because of their high shared price
index. They also offer competitive prices of 13.00 for their Rich product and 20.00 for their Rise
product which contribute to their revenue of 72 million dollars. They also have 27% of the value
market share which means they account for a high percentage of a market through a specific
entity. As a team we need to be able to translate sales targets into market share because this will
demonstrate whether forecasts are to be attained by growing with the market or by capturing
share from Team Rebo. The latter will almost always be more difficult to achieve. Market share
is closely monitored for signs of change in the competitive landscape, and it frequently drives
strategic or tactical action.






19

S.W.O.T ANALYSIS
Strengths:
As a company working in a highly competitive environment, we are able to determine the
weaknesses of our competitors and transform them into our strategic success. By consistently
being one of the top companies, we are able to analyze our customers wants and use our price
tactics to ultimately gain the highest stock price index. Our main strengths consist of our efficient
and effective production levels, our ability to keep track of the changing market (how we target
the various customer segments), our pricing strategies, as well as our constant increase in
revenue.
High Earners 4% 47%
Affluent 4 % 35 %
Med. Income 10 % 8 %
Low Income 42 % -
Singles 40 % 10 %

20

This chart consists of our strategy when it comes to how we segment our customers. For
our like product, 4% of the market is high earners, 4% are affluent, 10% medium income,
42% low income, and 40% singles. For our lime product, 47% of the market is high
earners, 35% affluent, 8% medium income, and 10% singles.

This chart is an example of our increase in revenue from period 0 to period 3. Our revenue
has increased from 37 million to 55 million dollars. This is a strength to our team, because
with our like product having the price of 11.75 and our lime product being 25.00, the
demand of our products consistently increases.




21

Weaknesses:
While researching the internal conflicts of our team, we have found that our weaknesses
consist of our lack of inventory which in turn creates loss of revenue, our lack of market
knowledge for our lime product, our inability to forecast future sales, as well as our lack of
budget which makes it difficult for us to spend the money on research.


This chart consists of our production chart for period 3. For our like product, we had
produced 4,700,00 and sold 4,693,000 so we had enough inventory for this specific period.
However, in period 2, we had sold more like product than we had produced. We were not
prepared with our inventory which is why this became a weakness for us. Our lime product,
however, has continuously been a struggle to sell so we always have had leftover inventory for
the sales we produce.
22


This chart consists of our budget size which unfortunately is at a lower amount than the
resources we need as a team to succeed. This is a weakness, because in order to research our
market in order to introduce new products, we need the most money possible.




23

Opportunities
When it comes to opportunities, we have an advantage when it comes to the external world.
There is to be an estimated growth in the market that will benefit us directly. Also, with the
growth in the customer segment, the 4% growth for the gross national product, as well as the
new product we will be releasing, these opportunities will continue to help us grow as a business.
Here is an example of the amount we as a team had spent in regards to research and development
expenditures. In period 3, we had spent 1.3 million dollars in order to launch our new product.
This amount is more than any other competitive team. We believe that in order to gain the most
possible revenue, we must spend the majority of our budget towards research.
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This graph illustrates the growing market. With the Clinite market at a constant increase,
our new product is guaranteed to be a success with our customers. In period 0, the market
size had been 22,776,000. Since then, the size had increased to 38,854,000 in period 3. With
this large jump, the future of our team is in a profitable position.




In this graph, it determines the
overall growth when it comes to the
customer segments. This demonstrates
that the low income customers are
steadily increasing which will give not
only our new product an automatic
advantage but our new product.
Because our new product will focus on
this customer segment, we hope to see
major revenue increases.



25


Threats
When it comes to increasing profitability and sustaining market shares and revenues, this
becomes an external threat to us. Also, the competition from the other teams, the hopefully high
turn around rate for our R &D, the inflation rate, as well as the increasing competition in the
Clinite market continues to bring us anxiety for the future.

This graph demonstrates the market for the affluent families. This segment is steadily
decreasing which directly influences the success of our new product. In order for our team
to continue to increase our revenue, we must follow the market and decide which segment
we should be marketing to.
26


Here is the cumulative R&D we had purchased for our new product. We had spent 1.3
million on R&D so we need to make sure this purchase gives us a positive turn around
when it comes to new product development.






27


Period 3 Next Period Estimation
GNP Growth Rate % 3 % 4 %
Inflation Rate % 2 % 4 %
Loss incurred for inventory
disposal
% Transfer
Cost
20 % 20 %
Inventory holding cost per
annum
% Transfer
Cost
8 % 8 %
Commercial people operating
cost
$ 21,649 22,956
Commercial people hiring and
training cost
$ 3,247 3,443
Commercial people firing cost $ 5,412 5,739






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Objectives:
Our objectives for Period 4 include: unit objectives, revenue objectives, net contribution
objectives, and a new product development objectives. For our unit objectives, team Luxurious is
going to sell 5,000 units of our product Like, while we will sell 1,500 units for our product Lime.
For the Cost of Goods Sold, Luxurious wants to sell 5,000 units with an average unit transfer
cost of 3.32 for the product Like and sell 1,400 units with an average unit transfer cost of 6.50.
For Period 4 our Cost of Goods Sold would come out to 16,600 units for Like and 9,100 for
Lime. Our revenue objectives for Period 4 are to earn $65 million. Luxurious is going to earn
$30 million before taxes for Period 4. Brand revenues for each product will also be higher with
Like being at $40 million and Lime being at $28 million. Earning more revenue, we will be able
to have a higher budget for the Period 5. With a higher budget of $12 million we will be able to
advertise and buy more research for our new products that we want to implement. Our Net
contribution objectives are to earn $30 million for Period 4, after marketing Luxurious will earn
$27 million. In Period 4, Luxurious is introducing a new product targeted towards singles at a
lower price, but also a higher quality of product. Other objectives for Period 4 is to raise our
Share Price Index. For Period 4, our Share Price Index will be at 1450. Period 4, our market
share needs to be higher than 19%, our goal is to raise the market share to 22% for Period 4.
STRATEGYS
The target strategy
The Targeting Strategy for Luxurious is to make sure we get greatest amount of customers. To
target singles and low income, at an affordable but high-quality product, we will be able to gain a
29

majority of the market share, Share Price Index, and revenue. To be able to do this for our
company, making new products and specifically designing the product to what a certain group of
customers want will keep the customers coming. With this idea in mind, our idea will be to use a
single-segment targeting strategy. In Period 4, we plan on going after singles with a new
Cliniteproduct and use a product specialization targeting strategy to go after low income families
and singles at the same time. We plan on targeting only the needs of these two customers to gain
the most market share, Share Price Index, Net Contribution, and revenue.
POSITIONING STATEMENT:
Luxurious makes you sparkle and shine, worth every nickel and dime. Our company works
towards satisfying our customers wants and needs to look and feel better about themselves
without the worries of affordability.


POSITIONING STRATEGY:
For the Luxurious Company, our positioning strategy is more towards promoting for singles.
Luxurious is the one Company that is what everyone wants. We provide a product tailored to
everyones wants and needs, combining affordability and quality within our major products. Our
products give you confidence in design and comfort with a lower expense but a higher quality of
product compared to the other companies in the industry.

30



Looking at the graph above, singles will be rapidly growing within the next five periods. Our
goal with our products, especially Like, is to target towards singles. We also need to position our
product towards low income families because they will also be growing more so than any other
part of the channels of customers.
NEW PRODUCT DEVELOPMENT STRATEGY
STRATEGY LINKED TO SWOT
NEW PRODUCT DEVELOPMENT:
Picasso
Our product Picasso is a Clinite that has efficacy level of 26, safety at 14, packaging 62, pleasure
67, usability 29. Efficacy is the ability of the product to deliver the benefit intended. Safety
31

measures the degree to which the product produces few or many side effects. Packaging
characteristics include attractiveness convenience to carry and appropriate size. Pleasure is the
measure of how pleasing a product is to use, over and above its efficacy or convenience, this
refers texture, scent.

PRODUCT RATIONALE OVERVIEW:
Clinite:
As a team we are working to improve our current products by learning and correcting our
flaws and building on our strengths through three periods of our simulation. To evaluate the
efficiency level of our marketing team we reviewed our results in the semantic scales in the
Clinitemarket each period. At first as marketers we worried about our brand awareness and plan
for spending our limited budget on marketing research. To prove to our customer that we are
goal orientated to produce the most remarkable product we spent our budget in period one on a
consumer survey to find out everything about our customer. We needed this valuable first hand
research to find out what is important in the eye of the customer.
When we produced our brand we were excited and determined to have the customers in
our Clinitemarket aware of our brand. Our evidence that customers are aware of our companys
product is in the consumer survey of our marketing simulation. The results verify that we have
succeeded in our objective of having the customers in our market aware of what Like and Lime
are, and what these products can provide for the customer. We are comfortable with our LIKE
product having a whopping 68% of brand awareness. Only Revolution had a slightly higher
percentage of brand awareness in our market through the first three periods. Our LIME was
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slightly under our standard through three periods of brand awareness. However, since one of our
products is being noticed we are confident that we have spent our budget correctly in the market
research department, which includes the marketing forecast, brand awareness, consumer panel,
and competitive advertising and competitive commercial.


Our first period we tested the water with a tight budget and minimal brand awareness that
two new products would be hitting the Clinite market. We spent over $150,000 in our first period
on a consumer survey. The plan behind spending $60,000 was to find out who we were targeting
with our two products and what our target market was willing to spend based on individual
needs. We were not hesitant in our spending; knowing that it would result in being able to
produce a product based on who the customers are being either high income, low income, single,
or family. Then we would be able to learn their wants and expectations of a product based on a
$0.00
$25,000.00
$50,000.00
$75,000.00
$100,000.00
$125,000.00
$150,000.00
$175,000.00
$200,000.00
$225,000.00
$250,000.00
Market Research
Period 1 Period 2 Period 3
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0
1
2
3
4
5
6
7
8
9
10
Consumer Standard Period1 Period2 Period3
LIKE Consumer Characteristic Report
Price
Efficacy
Safety
Pleasure
Packaging
Usability
characteristic survey. The amount of money spent on the consumer survey was the most
important decision in our period 1. Our consumer survey allowed us to be able to distinguish the
types of customer we are targeting for each brand. We knew that both our brands were meant to
be targeting the same individual. We wanted to learn how to get customers to spend their
discretionary income, meaning the customer who has a disposable income to spend. We learned
about our customers by evaluating customer characteristics in semantic scales 1 being the least
important and 10 being the most important. In our first period report; Price was reported at a
perfect 10 for being the most important factor for deciding what product to purchase.

After evaluating our consumer standards based on the following characteristics: price,
efficacy, safety, pleasure, packaging, and usability we were able to make some assumptions and
reevaluate our strategies to better our products revenues. Price is the most important factor, it
over powers the importance of all the other characteristics combined because our pleasure,
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usability, and packing all exceed the consumers expectation, but because our price is not near the
consumers expectation our LIKE product hasnt fulfilled its full potential of being the most sold
and profitable product in the market.

Limes profitability for our Luxurious company is only 35% compared to Likes 65%. Even
though; our price of Lime is closer to the customers expectation than Like it has other flaws that
are contributing to its rather poor performance. The Like product had pleasure and usability off
the charts and succeeding the consumer standard, the Limes consumer evaluation arent off the
chart, which means that we havent met the all-around expectation of what our customer expects.
Lime is our high priced product, which means that if it sells more units than lime than obviously
our company will be ecstatic that our high priced product is running the market; however, we
have yet to accomplish that based on the results and consumer report.




0
2
4
6
8
10
Consumer Standard Period1 Period2 Period3
LIME Consumer Characteristic Report
Price
Efficacy
Safety
Pleasure
Packaging
Usability
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FOUR PS: PRODUCT, PRICE, PLACE, PROMOTION
PRODUCT:
For our products in the Luxurious Company, we target towards certain markets. For our product
Like, we are targeting towards singles and low income families. The product designed for this
market is more of a value priced item and not so much of a high quality item. The features for
the product Like are Efficacy, Safety, Packaging, Pleasure, and Usability. Each of the
characteristics is placed on a scale from 10-100. Efficacy is the ability to produce a desired or
intended result that the customers want. Efficacy is at 42, Safety at 33, Packaging at 51, Pleasure
at 60, and Usability at 69. For our product Lime, we offer more of a higher-end quality product
compared to the value in which people are looking for. The reason why this product, Lime, is
more high-end quality over value is because Lime is marketed towards high earners and affluent
families. The characteristics of the product Lime are efficacy, safety, packaging, pleasure, and
usability. Efficacy is at 69, Safety at 78, Packaging at 42, Pleasure at 49, and Usability at 46. The
characteristics are what the people want. To be able to grasp what the customers want, the
products Like and Lime need to be more tailored to the customers wants. The graph below
focuses on the characteristics for each product.



36

PRICE:
The price for our two brands in the Clinite market is Like at $11.75, and Lime at $25.00. The
price of our Like brand is lower in price to be able to suit the lower income buyers and the family
buyers. This product is also made more of a lower quality to be at a more affordable price. For
the product Like, penetration was necessary because we wanted to make sure that the product
was visible to the public fast and where the customers were available by advertising to see the
product. For the product Lime, we thought that having the product at a higher price would attract
more of the high earners and affluent families to buy because they would see that it was more of
a high-quality product making this more of a high-quality positioning then a skimming purpose.
For the next period 4, we plan on lowering the price of Lime to still target the same group of
people but to show them that it is still an affordable product.
PLACE:
Specialty stores are the small and also not necessary stores that customers look at and belong to
organized chains. These stores cater to where customers are located and provide the greatest
level of service and technical support. Specialty stores distribute only a certain type of product
but focus mainly on a product line not multiple brands. Specialty stores focus on high quality and
expensive products.
Mass merchandisers are stores that operate on a low-price, high-volume basis. The service for
this type of location is that they are less concerned with service to the customers. Mass
merchandisers carry cheap, lower-quality products preventing higher-quality products being sold
there.
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Online stores are web-only merchants. Convenience is what online stores provide. The shoppers
can be at home and not have to leave in order to receive their products.
For each of these stores, the margins obtained are different because of the level of service and the
volume of product sold.
Our commercial decisions have led to having our product sold in different places of distribution.
We currently have 94 full time commercial salesmen selling our brand. For our Like product we
have 20 people selling mass merchandise and 27 selling specialized mass merchandise. Like is
sold in mass merchandise, but for Lime we took a completely different approach. We current
have 21 consultants selling Lime in department stores and 14 representatives selling specialized
mass. For both products, Like and Lime, we advertise in the social media and target anyone who
is willing and able to buy the product. The goal for each product is that the advertising will make
the customers want to buy the different products.

This graph shows where each customers buy in which channel, for Luxurious, we focused on
every channel but for two separate products. For singles, medium income, and low income we
focused more on mass merchandising and specialized mass. For high earners and affluent
families we focused more on department stores. For all of the customers we didnt really focus
38

on beauty portals. Beauty portals didnt really help us when it came to revenue so we didnt
really focus and will not really focus on beauty portals.



Based on this graph, this is where all of the focus our company decided on for a combination of
each product. Beauty portals have the least amount of focus, while specialized mass
merchandising is our main focus for both products.
Promotion
Our promotion tactics are mainly directed toward how we advertise. In three short periods we
have spent 1.8 million for Like and 1.6 million for Lime. Besides our advertising we have spent a
large amount on our production planning. The 5 million units of like and 1.4 million units of
lime is to provide enough units to our customers demand. However, unfortunately we did in
39

period two run out of units of our like product. This set us back for period three because we were
unsure how much more we should buy for the next period. For our product Like, we advertise so
much that it is our best selling product. Lime isnt as popular with the customers but it seems as
if there is enough promotion for each product. The goal for our advertising and commercial
teams is to get people to know about the products Like and Lime to be able to sell large
quantities. Social media is our largest media that is advertising to the customers.








This graph shows where we put all of our resources to get our products known. We focused more
on advertising than anything else to get customers to buy our products. We focused less on
studies and plan to expand more of an opportunity to buy more studies to see what people want
and what the other companies are doing.
40


This graph shows the average brand awareness for our two products along with the rest of the
companies. Currently everyone we had targeted knows about our products.
Product Description:
Nutrite
This cosmetic is a new type of food-based beauty care products. Have 5 physical characteristics
including, clinical benefit, nutrition facts, packaging, flavor and variety. Clinical benefits would
include skin elasticity, reduction of aging spots, reduction of hairless, etc. Nutrition facts would
measure the degree to which the product is good for you or has high quality ingredients. A high
rating is an indicator of no preservatives, little artificial color, no added sugar, reduced salt and
low saturated fat. Packaging would include the attractiveness, convenience to carry, and
appropriate size. Flavor is quality of the product taste, in terms of uniqueness and pleasure of the
taste experience with the product, and of ability to support the performance claim. This includes
41

concepts like smooth, natural and fresh. Variety includes the number of product variations in
terms of serving sizes, flavors or presentations.

Which Group is leading in the simulation and why?
Team Rebo is leading the simulation as of Period 3, because of their high shared price index.
They also offer competitive prices of 13.00 for their Rich product and 20.00 for their Rise
product which contribute to their revenue of 72 million dollars. They also have 27% of the value
market share which means they account for a high percentage of a market through a specific
entity. As a team we need to be able to translate sales targets into market share because this will
demonstrate whether forecasts are to be attained by growing with the market or by capturing
share from Team Rebo. The latter will almost always be more difficult to achieve. Market share
is closely monitored for signs of change in the competitive landscape, and it frequently drives
strategic or tactical action.
New Product Development:
Review of Performance:
While writing our memo for period 3, we had determined certain objectives for Team Luxurious.
These include: To gain a revenue: 53 million dollars, have a Shared Price Index of 1400, have
earnings of 25 million dollars, as well as be in first place with the highest SPI of over 1600.
What had occurred in Period 3 was: A Revenue of 55 million, a Shared Price Index of 1327, and
Earnings of 23 million. Although we did not make our objective for earnings and our Shared
Price Index, we had successful results when It came to our overall revenue at the end of Period 3.
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Implementation Plan
1 2 3 4 5
New product LIKE/LIME R&D on
Picasso
Launch
Picasso

Modifications Consumer
survey
Consumer
survey
Experiment/market
research
Advertising Increase Focus on
LIKE
Increase
both


Team Luxurious launched their LIKE/LIME products in period 1 hitting the market hard.
We advertised as much as we could to promoted our products better than any other company. In
period 2, we bought the consumer survey so see how our customers felt about our products. We
also bought other market research to best determine where we stand in the market. In period 3,
we felt we had a good stake in the market with a SPI of 1327. We currently stand in 2
nd
place
behind team Revolution. Also, in period 3 we realized our LIKE product is our best seller
making 62% of our profit. With this being said, we decided to make advertising LIKE our
priority and doing everything we can to keep it a top product. We did research and development
on another Clinite called Picasso to launch in period 4.
In the future for team L, periods 4-10, we have a big plan to get into first place. Period 4
could be a break-out period for our company with 3 products in the market, while the other 4
groups only have 2 products. We will invest in another consumer survey to mainly see how
Picasso is doing in the market and making sure our consumers like it. In period 4 we will be
43

increasing advertising for all 3 of our products making sure their brand awareness and sales are
high. In period 5, we will be do a marketing experiment and buying market research.

6 7 8 9 10
New Product R&D on new
nutrite
Launch
nutrite
R&D on
another
nutrite
Launch
nutrite

Modifications Take out
loan
Consumer
survey/market
research
Drop LIKE
price

Advertising Increase all
by 15%
promote Increase
with all
available
money
increase

Starting the second half of the simulation, we hope to be in first place with the highest SPI. With
3 products in the market, we will be starting research and development on a 4
th
one that will be a
nutrite. To do this we will take out a loan worth around 8 million dollars to fund it. Also with the
loan money, we will try to boost our advertising by 15% for each product in hope of higher sales.
For period 7 we will be launching the new nutrite. This is a big risk because nobody has been in
this market before. Also, we will be buying a consumer survey and a lot of market research so
we can determine where we stand in the market and how to better our products. This is a period
44

where we could modify a product to meet our consumer needs. For period 8 we will start the
R&D on another Nutrite making that 2 Nutrites and 3 Clinites. In period 9, we will be launching
the new Nutrite as long as our first Nutrite is a success. Also, we will be dropping the price of
LIKE to really boost our sales and increase profits. Then we will spend more in advertising and
distribution to keep competitive with all the other companies. In period 10, hopefully we have
done enough to stay in 1
st
place. The only thing we will do in period 10 is spend all available
money on advertising.
Proforma
Period 0 Period 1 Period 2 Period 3 Cumulative
Revenue 36,789 42,238 48,808 54,980 182,815
Cost of goods
sold
-19,494 -21,906 -23,034 -24,549 -88,983
Inventory cost -594 -166 -14 -12 -786
Contribution
before
marketing
16,701 20,165 25,760 30,419 93,046
Advertising
expenditures
-3,000 -3,230 -3,480 -3,502 -13,212
Commercial
team cost
-1,428 -2,509 -2,071 -2,204 -8,213
Contribution
after marketing
12,273 14,426 20,209 24,713 71,622
Market research
studies
-245 -167 -249 -76 -737
R&D 0 0 0 -1,260 -1,260
Loan received 0 0 0 0 0
Exceptional cost
or profit
0 0 0 0 0
Earnings before
taxes
12,028 14,259 19,960 23,378 69,625

Total Budget=8 Million Dollars