Tips to win Markstrat

When I asked my friends what elective classes I should take to graduate, I got couple of answers for the laid-back type of classes, and one for a very intensive training class. In my opinion, senior classes are not supposed to be laid back, but insanely competitive to prep you enter to the real world. So I decided to choose the class that helps expand my knowledge. The class called “Marketing Management”, taught by Professor Laura Dwyer.

If you are a curious type of student and are not afraid to try new thing, and gain new knowledge, this class will be the best to take for your senior year. It gives you an in depth knowledge of middle and upper management level marketing problems. In addition to that, it encourages critical thinking and helps improve effective business writing especially in the report.

The class is divided into two main sections. The first half of the semester is a business simulation called Markstrat, and the other half is for developing a comprehensive strategic marketing plan.

This blog will give you some tips about Markstrat. Far-most, it was the most intense, interesting simulation game I have ever played. Our team ranked last for 4 periods and then won second place. I hope, through my experience, you will know what to do and be the lead in the game.

Do’s and Don’ts in Markstrat:

  • Read the manual: even though it is long, and tedious. IT IS THE BEST GUIDE to SUCESS.
  • Make an excel sheet to keep all the data about the competitors. This will helps you analyze and predict what the competitors are up to.
  • Be the first one in the Vodite market. Do not be afraid that your product won’t be good enough. You can always change it later through R&D. Consumer’s awareness and perceptions are the most important factors to gain the market share in the Vodite market.
  • Use your resources: talk to the professor early in the period, or others who already played this game.
  • Continually have R&D to improve the products because the PRODUCT LIFE CYCLE in Markstrat is real.
  • A product should only target one segment. Trying to target more segments with one products will be the disadvantage for the long run.
  • Take a risk. Don’t be afraid to take short term losses for long term gains. Be creative but smart about your decision.
  • Make sure that you have enough money to keep your product in the portfolio competitively. Too many products without management will decrease the market share in the long run.
  • Map out your team decisions. Know why you are doing what you doing, have data, and numbers to support it. Do not go with “I think we should”. That’s vague and dangerous.
  • Performances in the later periods determine your win or loss, so do not get too comfortable with the initial success.
  • People said buy all the reports. But I think it is redundant. A couple of research reports I suggest buying are:
    • Industry benchmarking: you will be able to see what other teams spend on R&D, thus predict their next steps.
    • Market Report: shows how much product did other teams sold, their prices, and based costs
    • Consumer Panel: shows the market share each product gains in each segment.
    • Distribution Panel:  market share per distribution channel. This will help to allocate the commercial team
    • Semantic Scales: Brand perceptions, important characteristics that consumers want.
    • Market Forecast:  Helps you calculate production plan. ( I will have more detail on how to calculate this next blog)
    • Competitive advertising and competitive commercial teams: shows how much competitors spend on these two categories. Help you determine how much you should spend to gain more market share.

Next blog, I will give out some tips and formula to calculate opportunity/real cost, perception and preferences,  and production.

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9 Responses to “Tips to win Markstrat”

  1. Elon M January 20, 2014 at 9:33 am #

    Found that game far too theoretical. Read this article to learn how things work in the real world: https://medium.com/business-startup-development-and-more/e0937c7f0951

    • lenguyen March 26, 2014 at 4:58 pm #

      I agree with you. The game is very theoretical. But that’s why it is good to apply what we learned from book and start from that point to the real world. Thank you for sharing the link

  2. เกม February 2, 2014 at 10:30 am #

    Have you ever considered publishing an e-book or guest authoring on other blogs?

    I have a blog centered on the same ideas you discuss and would really like to
    have you share some stories/information. I know my audience
    would enjoy your work. If you are even remotely interested, feel free to shoot me an
    email.

    • lenguyen March 26, 2014 at 4:59 pm #

      That sounds interesting! Would you send me the link to your blog?

  3. Zahra March 14, 2014 at 6:32 am #

    What is the best way to calculate production?
    Thanks

    • lenguyen March 26, 2014 at 3:52 pm #

      Hi Zahra,

      I had the same question when I played this game. I asked many professors and they said that there is not yet any formula that helped you calculate production. It is mostly data analysis and prediction, where you compare your production and competitor’s production and their sale.

  4. Jon Kearns March 25, 2014 at 6:47 pm #

    Hello,

    I am really interested in your recommendations. I, myself, am currently playing markstrat. I have followed your guide religiously, and now have a question. My group is launching out Vodite (the first, and only, vodite to be launched this period) and I was wondering what the price should be to create a large demand. Also, I was curious how many units we should produce.

    Currently, I have the price set to $899 with 75,000 to be produced (based on my own calculations I am hoping to take a good majority of the innovators segment, since there is 0 competition). I am putting $2M into advertising and about 31 salespeople.

    Any recommendations? (I understand that your simulation will have been different from mine, but any and all recommendations will be greatly appreciated). If you may, please email me at jonathonkearns@yahoo.com

    Thank you for your time.

    Jonathon M Kearns

    • lenguyen March 26, 2014 at 4:55 pm #

      Good job Jon,

      How many weeks did your product in the market?

      Vodite has three segments: Innovators, Early Adopters, and Followers. What you want to do is to target as as much market share in Followers at the end.

      It was the right decision to be the first one in the Vodite market. and 75,000 is the safe number. Did you sold out the first time in the market? How many products did you have left? if you still have 50% left, then i would say stay with $75000 and increase money on advertising. But if you have about 20% left, the increase production to 80,000. 2 M in advertising is too much.
      You will need to save money for research and produce new products for other two segments ( Ad and Fo).

      This is my suggestion for the next step:
      + after 3 weeks running product for Innovators, you should create another product that target specially early adopter.
      + After five weeks run Innovator product, and two weeks run Early adopter product, have 2 products ready to target Follower.( you will need two products to get as much market share as possible). At this point, depend on your product’s market share, you can drop Innovator product and early Adopter’s product. Have too much product on your portfolio can be really hard to manage.

      Let’s me know if you have more questions!

      • Jon Kearns March 26, 2014 at 10:43 pm #

        Well we have not launched it yet, that is tomorrow. I will give you the results once they are processed.

        Right now, I did really well in the first and second periods so I felt R&D early, on a vodite, was key. I have been told by my professor that price and advertising make very little impact on the innovators segment and, since they are my target (as well as with your input) I have lowered my advertising budget.

        Based on market forecast, there are 96,000 innovators so I upped my production to 80k (assuming that if I sell the highest, the 20% increase will cover the 96k). I am just worried that I may price myself out and not gain the whole market share, despite being the only product. Is it automatic that everyone in the forecast will buy?

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