Question

Round 7 in Capsim Simulation... my Low End product, Acre, did not sale well at all ...see below for positioning. Resulted in large inventory carrrying cost I need some guidance on what to do Round 8.

Units available for sale 3008

Sold 463

pfmn 3.5 size 16.5

MTBF 12000

age Dec 31 ...was 5.9

Automation 10

Answer 1

Conceptually, a segment is defined by customers saying, “I want this (whatever ‘this’ is), but within limits.” It is vital for marketers to understand both what the customers want and their boundaries. The Perceptual Map captures these ideas with circles. Each segment is described with a dashed outer circle, a solid inner circle, and a dot we call the “ideal spot.” The dashed outer circle defines the outer limit of the segment. Customers are saying, “I will NOT purchase a product outside this boundary.” We call the dashed circle “the rough cut circle” because any product beyond it “fails the rough cut” and is dropped from consideration. However, that does not mean customers are delighted. A product near the outer limit is badly positioned. The solid inner circle defines the heart of the segment. Customers want products in the heart of segment. We call the solid circle “the fine cut” because products within it “make the fine cut.”

Your customers fall into five groups which are called market segments. A market segment is a group of customers who have similar needs. The segments are named for the customer’s primary requirements, and are called: • Traditional • Low End • High End • Performance • Size At the beginning of the simulation, Traditional and Low End make up more than two thirds of the unit sales However, the Traditional and Low End growth rates trail the growth rates for High End, Performance and Size By year five, High End, Performance and Size will command a greater percentage of the overall market . Note that unit sales versus dollar sales also affect the analysis. Although smaller in unit sales, the Performance, Size and High End segments command a higher price.

Traditional customers seek proven products at a modest price.

• Age, 2 years– importance: 47%

• Price, $20.00-$30.00– importance: 23%

• Ideal Position, performance 5.0 size 15.0– importance: 21%

• MTBF, 12,000– importance: 9%