marketing_plan

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Jan 9, 2024

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Executive Summary At TopShop, our Big Idea for the Markstrat Simulation is to create different products that are able to appeal to each segment of the market including High Earners, Professionals, Explorers, Shoppers, and Savers. We analyzed the five C’s in relation to our company. Our company is TopShop. We produce top-of-the line Sonites and Vodites for the Markstrat world. Our product line consists of TONE, TOPS, and Tock. We are best known for our product TONE. Sonite and Vodite collaborators tend to shop in the following three distribution channels: Specialty Stores, Mass Merchandisers, and Online Stores. TopShop’s products are mostly sold in Specialty Stores. These stores are most convenient for our customers as they are geographically close to them. Our customers mainly consist of High Earners, Professionals, and Explorers. Our competitors in the market include the firms of Lucky1s, MOOLAH, R, and SMU. Our major competitor is R. They have developed the product ROCK that is a major competitor for our TONE. Our company performed a S.W.O.T. analysis to analyze our internal and external strengths, weaknesses, opportunities, and threats. Our biggest strength is our TONE product. Even though it is the highest-priced product, it is still one of the most successful products in the market. Our biggest weakness is our product TOPS because it is losing money for our company. Our biggest opportunity is the opportunity of a wide market with different wants from consumers. We can create products to target all of these segments. Our biggest threat is ROCK as it is the product that competes the most with our products. Our objectives in the Markstrat Simulation for period 3 include that we want to increase our Revenue and Net Contributions and make modifications to Tock. We plan to increase advertising for Tock and TONE. The targeting strategy is that we are currently targeting the higher end of the economy. We also have the strategy to compete with ROCK in the creation of our Tock. Our targeting strategy for the rest of the simulation is to target each segment of the market with different products created by our company. Our positioning strategy is to have the market think of our products as high quality. Our new product development strategy in Period Two was to create Tock that competed against ROCK which is our highest competitor. Our tactics include our product line of TOPS, TONE, and Tock. The place for our products is that they are all sold mostly in Specialty Stores. TONE is our highest quality and highest-priced product. We created Tock to imitate ROCK except for Tock having a lower price. Most of our products are sold to Mass Merchandisers. Our implementation plan includes our new Sonite product of Tock created in Period Two. Our modifications include that in Period Three we will fix our Tock product to make it more consumer friendly. We dropped advertising for TOPS in Period Two, and in Period Three we are going to do more advertising for Tock and TONE. A summary of our pro forma statement includes a company analysis for company profit and loss statements and brand contribution statements for Period Zero, Period One, and Period Two. Our budget consists of the expected numbers for Period Three for TONE, TOPS, and Tock. Then we analyzed how much we spent on each product for each period, and lastly we took into consideration the net contribution for each product. Our goal as management is to maximize the wealth of our stockholders through the success of our products that will target each segment of the market. 1

Situation Analysis COMPANY TopShop is a company that produces top of the line Sonites and Vodites for the Markstrat world. Our product line consists of TONE, TOPS, and Tock. We are best known for our product TONE as it is popular among the market as it sold 96,000 units in Period Two. Our TOPS is our least-productive product in the market as it doesn’t bring in very much revenue. TOPS sold 35 thousand units in Period Two. Our Tock was recently introduced into the market and it has been off to a great start as it sold 48 thousand units in Period Two. It has already surpassed our TOPS in its first period. We want to become the most well-known company in the market that offers products tailored to each segment of the market. Our strengths are that we carry the TONE in our product line, we have higher-end products that reach the higher end of the market, and we plan on creating products that will meet the needs and wants of each group of customers. The sales of our products drive the success of our company as seen in the following sales reports: TONE TOPS Tock Sonites Sonites Sonites Volume Sold Period Zero 121 58 Volume Sold Period One 89 59 Volume Sold Period Two 96 35 48 Our TONE is our highest selling product that sells the most volume consistently each period. Our TOPS is consistently our worst selling product, and our Tock introduced in Period two is our second best selling product. We expect our Tock to make up for our sales loss in TOPS. Sonit es Vodit es Net Contribution Period 0 14,62 6 0 Net Contribution Period 1 13,55 8 0 Net Contribution Period 2 15,89 8 0 Our Net Contribution started out strong in Period Zero, dropped in Period One, and then rose again to our highest in Period Two. We introduced a new product in Period Two, which helped boost our Net Contribution for the Sonites. TONE TOPS Tock Sonites Sonites Sonites Revenues Period Zero 38,05 7 13,98 7 Revenues Period One 31,11 6 13,94 0 2

Revenues Period Two 32,67 7,522 9,832 The revenue brought in by each product reflects the volume of that product sold. Our TONE consistently brings in the most revenue as it has the most units sold. Our TOPS consistently has the lowest amount of revenue as it has the fewest number of units sold, and our Tock started out with 9,832 in revenue for the first period it was introduced. Our TOPS dropped in revenue for Period Two because we removed a lot of resources that we were using to promote TOPS and we used them to create Tock as a new product into the marketplace to compete with the number one selling product of ROCK. TopShop is consistently the third top selling brand the past two periods. Our Brand Awareness started out weak in the first period with 46% Brand Awareness for TONE and 39% awareness for TOPS. After lots of focus on advertising, we have increased to 58% awareness of TONE, 45% awareness of TOPS, and 13.4% awareness of Tock for Period Two. Our brand strength is increasing each period, but there is still room for improvement. Our company currently has many opportunities to meet the needs of the higher-end of the market that is willing to spend more money on products. We have our product TONE that is able to reach this segment of the market. COLLABORATORS According to Markstrat, Sonite and Vodite consumers tend to shop in the following three distribution channels: • Specialty Stores – These stores are usually small and may not necessary belong to organized chains. They are geographically close to their customers and can provide a high level of service and technical support. As they do not distribute many different product categories, Sonite products account for a large proportion of their sales. These stores usually carry a broad product line for each category, including the most expensive and/or high-performance products. Because of their high level of technological expertise, specialty stores are likely to be the preferred distribution channel for Vodite products. • Mass Merchandisers – These stores operate on a low-price, high-volume basis and try to minimize overheads. As a consequence, the level of service offered is lower than that of the two other channels. While mass merchandisers carry many different product categories, the depth of each product line is usually restricted to a few units. They often distribute the cheaper, low-performance products. Their lack of technical expertise and the low level of service may well prevent them from distributing Vodites in the early years. • Online stores – This category of stores includes the web-only merchants (such as Amazon.com and Newegg.com), as well as the e-commerce websites of traditional retailers (BestBuy.com and Wallmart.com). Although only a small percentage of consumer electronic sales are done on the web, this percentage is much higher for Sonites products, especially for highly connected consumers such as Shoppers. Convenience is the key advantage of online stores as consumers may shop from their home at the time of their choice. In addition, they have 3

access to an almost unlimited choice and can compare features and prices very easily. Privacy and security are the primary concerns of online shoppers, but new mechanisms are put in place by banks and e-commerce sites so as to reduce fraud. Online stores are likely to become more important in the next 5 to 10 years. There are approximately 10,000 specialty stores, 6,000 mass merchandisers belonging to 6 different chains, and 1,000 online stores. In Markstrat the distributor margins are 40% for specialty stores and 30% for the other ones. TopShop’s products are distributed mostly to Specialty stores. Specialty stores take up more than 50% of the market. This is a huge part of our market with 9,777 distributors of ours being Specialty Stores. 6,166 distributors of ours are mass merchandisers, and 1,027 distributors are online stores. When making decisions for each period, we tailor our sales towards specialty stores as this outlet provides most of our sales. It looks as if the markets of Shoppers and Savers is going to increase substantially in the next five periods, so our company is going to need to adjust to tailor more to mass merchandisers as this is a big part of the market for shoppers and savers. T Tock S onites T TONE S onites T TOPS S onites Specialty Stores 4 9.6 % 4 5.0 % 3 1.1 % Mass Merchandisers 2 5.1 % 2 2.3 % 6 .4 % Online Stores 3 3.2 % 2 7.1 % 1 4.4 % S pecialty stores Mass merchandiser s O Online Stores Nu mber of Distributor s 9 ,777 6,166 1 ,027 CUSTOMER Sonite customers, according to Markstrat, are adults who purchase the products for personal or professional use. Market research studies show that the Sonite market can be divided into five major groups of customers or segments, having similar needs and purchasing behavior. • Explorers (Ex) – People in this segment show a high level of interest in Sonites and other similar products. They are extremely knowledgeable about Sonite technology and the different characteristics of the existing brands. Explorers were probably among the first to use Sonite products. They demand high-performance products, i.e. products with high 4

processing power and/or large screens. They are less concerned by the convenience of the products (battery life, design or number of features). However, they are quite price-sensitive, since they use Sonite products for their personal use and do not necessarily have high incomes. • Shoppers (Sh) – As the name of this segment indicates, Shoppers are doing a lot of shopping. They have a good knowledge of marketed brands and are doing extensive product comparison. They are looking for products with a high quality –price ratio and average levels of both performance and convenience. Like Explorers, they use Sonite products for personal purposes and are quite price-sensitive. This segment of the market is expected to almost double in size in the next five years. TopShop is looking to create products that will be tailored to the needs and wants of this market. • Professionals (Pr) – Individuals in this segment may use Sonite products for both personal and professional reasons. As a consequence, they are looking for high quality, high-performance and easy-to-use products. They can afford expensive products and often view price as an indication of quality. • High Earners (Hi) – This group is characterized by their high incomes, using Sonite products on a private basis. Studies show that they usually buy fairly expensive products, which they can afford, and that their purchase is partially motivated by social status. Although they tend to use their Sonites less than the average consumer, they demand performance and convenience from the products. • Savers (Sa) – This segment includes all consumers who are cautious in the way they spend their money. Although this segment is the largest and is composed of several sub-groups, most customers have similar needs. They are looking for cheap, low-performance products with average convenience. Experts believe that the penetration of this segment is not as high as the other segments. As a consequence, its future growth rate could exceed forecasts. This segment of the market is expected to almost double in size in the next five years. TopShop is looking to create products that will be tailored to the needs and wants of this market. Each segment has specific needs in terms of physical characteristics and price. 33% of the market share for High Earners purchased our product TONE in Period Two. 19% of the Explorers purchase TOPS, as well as another 12% of the market share for Explorers purchase Tock. Our products are sold mostly within the segments of High Earners and Explorers. This is a good distribution strategy for today’s market, but as the market will change in the future, we will need to adjust to target more Shoppers and Savers as these markets will increase the most. 5

COMPETITORS: Our competitors in the market include the firms of Lucky1s, MOOLAH, R, and SMU. Our major competitor is R. They have developed the product ROCK that is a major competitor for our TONE. The ROCK is almost identical to TONE with the same features except has a lower price and is much more successful. We created Tock to be a competitor to ROCK which has the same features as ROCK and a competitive price with Tock being about $10 cheaper. The only problem for our company is that ROCK has more brand awareness in the marketplace. The following charts include diagrams of our competitors’ products in comparison to ours for which products target which segments of the market. Our products TONE, TOPS, and Tock are in red. 6

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