Scribd
Upload
47 views

Learning's From TMG Simulation: Product Features

1) Product features that closely match a customer segment's preferences will result in higher market share for that segment compared to competitors. It will also increase demand within that segment. 2) The ideal level of distribution intensity depends on other marketing mix variables. If intensity is too high, salesforces become overworked and less effective. If it is too low, spending efforts are wasted. Higher intensity relative to competitors strengthens the sales channel. 3) Customer service influences both market share and demand. Lower ratios of actual to expected customer service cause sales and share to drop. As industry ratios increase, sales increase.

Uploaded by

Prabir Acharya
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
47 views

Learning's From TMG Simulation: Product Features

1) Product features that closely match a customer segment's preferences will result in higher market share for that segment compared to competitors. It will also increase demand within that segment. 2) The ideal level of distribution intensity depends on other marketing mix variables. If intensity is too high, salesforces become overworked and less effective. If it is too low, spending efforts are wasted. Higher intensity relative to competitors strengthens the sales channel. 3) Customer service influences both market share and demand. Lower ratios of actual to expected customer service cause sales and share to drop. As industry ratios increase, sales increase.

Uploaded by

Prabir Acharya
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 5

Learnings From TMG Simulation

Product Features

The closer your product features were to a segments ideal


point
The higher your share for a segment relative to
competitors those were not as close.
The higher the demand for that segment.

Distribution Intensity
The ideal level of intensity depends on the other
marketing mix variables.
If you set the intensity too high for the size of your
salesforce, they became overworked and less effective.
Intensity set too low leads to wasted spending efforts on
personal selling.
Finally, the greater the intensity relative to competition,
the stronger the channel push.

Customer Service
Influences both market share and category demand.
There is an expected customer service amount based on
unit sales.
Actual customer service spending versus expected
customer service gives a ratio.
Lower ratios cause sales and market share to drop.
As an industrys ratio increase, its sales increase (when the
2nd product was introduced, spending in this category was
split for some firms, causing the customer service ratio to
drop and product 1 sales to decline).

Advertising Spending
Ad spending improves brand awareness and increases
category growth.
Ad spending is relative so increased spending by all firms
leads to a lack of INCREASED awareness.
There is a saturation point for ad spending beyond which
there is very little increased effect on sales and category
demand.

Advertising Type
Pioneering creates category demand.
Direct Competitive increases current ad effectiveness for
the firm, but has very little carryover influence on the firm.
Indirect Competitive increases current ad effectiveness for
the firm (but less so than direct), and there is more
carryover effect.
Reminder is only effective when brand awareness is above
50%.
Corporate is useful for a firm with two products.
Number of Sales Reps
The number much be managed against the distribution
intensity amount.
It requires an increasingly larger number of sales reps to
support the effort in channel 1 than in channel 2.
New sales reps are not as effective in selling, they are
penalized by 20% to account for training.

Other Selling Variables


Percent of Non-Selling Time
Increasing the non-selling time means obviously
the salespeople spend less time selling, but it
also improves the dealer satisfaction.
Dealer satisfaction is particularly important in
channel 1.
Commission Rate
If your firm has a higher commission rate than
other firms, your salespeople will work harder
than theirs.
Sales Promotion Expenditures
Sales promotions reduce the retail price of the
product.
Sales promotions also build goodwill and
increase the dealers satisfaction. This point is
also influenced by the level of distribution
intensity.
These are relative to other firms, meaning equal
spending cancels out any goodwill effects.

Market Research Reports

Report 4 Marketing Effectiveness Report provides data


on the relative position of the issues just discussed. In my
opinion, this would be the best report to purchase each
time. It is essentially your report card.
Reports 3 and 7 are useful to identify where the target
segments are and how well you are reaching them.
Report 6 tells you where the segments shop (it shouldnt
change much over time )
Reports 1, 2, and 5 provide you with industry level (1 and
2) or firm level (5) sales by segment (probably dont need
each every period)

You might also like