Market Share
COMP XM SIMULATION TIPS
R&D
• Max out the MTBF
• Position the directly where the market wants it (using the perceptual map)
• Try to make it come out the same year. If not, position it correctly, complete all decisions, then come back and see where dates fall. It’s not terrible if it does not come out within the year, you just lose selling time
Marketing
• Price the products as high as you want. Most likely the market will accept it. For the promo and sales budgets, allocate more money to successful brands. If one brand sucks, don’t waste too much money on it.
• For your sales forecast, ignore what the computer tells you
o Go to the Inquirer and look up the Market Share portion
o Find out the potential size of each market segment for the period you just completed
o Multiply that by “100% + the growth rate”
▪ So if market size is 5000 and growth rate is 10%, you do (5000)(1.1)
o That gives you the new/expected size for the market segment in each period (you need to do this for all the segments)
• Take each product and multiply its market share % by the total market size (this gives you Demand)
o So if you have product A and it has a 10% market share in the “X-segment” (5000 members), and 28% market share in the “Y-segment” (6000 members), this is what you’d do to get the sales forecast…
▪ Total Demand of A = (0.1)(5000) + (0.28)(6000)
▪ Do this for each product
• Add in all the sales forecasts—you may inflate them a little by 10-20 units, depending on what you may expect
Production
• Your sales forecasts automatically transfer here
• It will show you how much you have in inventory
• Subtract inventory from the sales forecast and that is how much you should produce
o So if you have forecasted 1500 units to be produced, and you have 300 in inventory, your production should be 1200
o If it marks it out in red (doesn’t let
R&D
• Max out the MTBF
• Position the directly where the market wants it (using the perceptual map)
• Try to make it come out the same year. If not, position it correctly, complete all decisions, then come back and see where dates fall. It’s not terrible if it does not come out within the year, you just lose selling time
Marketing
• Price the products as high as you want. Most likely the market will accept it. For the promo and sales budgets, allocate more money to successful brands. If one brand sucks, don’t waste too much money on it.
• For your sales forecast, ignore what the computer tells you
o Go to the Inquirer and look up the Market Share portion
o Find out the potential size of each market segment for the period you just completed
o Multiply that by “100% + the growth rate”
▪ So if market size is 5000 and growth rate is 10%, you do (5000)(1.1)
o That gives you the new/expected size for the market segment in each period (you need to do this for all the segments)
• Take each product and multiply its market share % by the total market size (this gives you Demand)
o So if you have product A and it has a 10% market share in the “X-segment” (5000 members), and 28% market share in the “Y-segment” (6000 members), this is what you’d do to get the sales forecast…
▪ Total Demand of A = (0.1)(5000) + (0.28)(6000)
▪ Do this for each product
• Add in all the sales forecasts—you may inflate them a little by 10-20 units, depending on what you may expect
Production
• Your sales forecasts automatically transfer here
• It will show you how much you have in inventory
• Subtract inventory from the sales forecast and that is how much you should produce
o So if you have forecasted 1500 units to be produced, and you have 300 in inventory, your production should be 1200
o If it marks it out in red (doesn’t let