Throughout the course of the semester, I worked with a group to open and operate a virtual bike shop on a simulation. We designed brands, managed the distribution of ad content, set prices, opened stores globally, and recruited sales and service people, among many other responsibilities. After 8 quarters, we were the market leader of our industry and placed second in the class overall, which was assessed through our cumulative balanced scorecard results.
3. Financial Performance
(Operating Profit / Sales Revenue) * 10
Steady increase in Q5, Q6, and Q7
● Entered New Locations sporadically.
● Made changes to only bike designs that were needed.
● Kept Salespeople to a reasonable level.
● R&D investments were chosen strategically.
Small Decrease in Q8
● Spent $2,956,272 on
R&D
● Introduced Mountaineer
Max
● Adjusted all previous
bike Models
● Big Advertising Push
4. Market Performance
Average Market Share in Targeted Segments / 100
Steady increases in Q5 and Q6
● Causes:
○ 4 original bikes updated to “plus” models with premium features
○ Introduction of basic, lower prices models in all segments
○ Continuous expansion of stores
Increase in Q7 at 0.39
● 37% market share
○ Highest in Work (1st priority) and Recreation (2nd priority)
● Causes
○ Successful implementation of R&D features
○ Price adjustments
○ Heavy investment in ads for 1st and 2nd priority segments
○ 20% above average spending in sales programs & promotions
Slight increase in Q8 at 0.42
● 43% market share
○ Highest in Recreation (2nd priority) and Mountain (1st priority)
● Causes:
○ All bike designs updated with R&D
○ Expanded budget for regional ads and paid SEM
○ Change in priority
5. Marketing Effectiveness
(Average Brand Judgment / 100 + Average Ad Judgment / 100 ) / 2
Primary Q5-7: Work
Secondary Q5-7: Recreation
Primary Q8: Mountain
Secondary Q8: Recreation
Brand Judgment:
● Mountaineer Max- 86
● Glider Pro- 89
Causes:
● Extensive focus on consumer preferences
Ad Copy Judgment
● Mountaineer Max- 97
● Glider Pro- 88
Causes:
● Imitated competitor’s ads
● Invested heavily in social media and regional advertising
6. Investment in the Firm’s Future
(Cumulative Expenses that Benefit Firm's Future / Cumulative Net Revenues ) * 10 + 1
Highest investments made in Q5 (8.8) and Q6 (5.7)
● Entered Speed segment in Q6
● Added basic models for each segment
● Invested heavily in R&D
● Opened new stores in all but 3 locations
Slight decline in Q7 and Q8 investments
● Modified previous bikes, only 1 bike addition in Mountain segment
● Only able to expand stores in 3 more locations
○ Bogota
○ Johannesburg
○ Konya
● Updated media content and placement
7. Creation of Wealth
Net Investment / Cumulative Investment from Corporate
Headquarters
Large increases in Q7 (2) and Q8 (3.1)
● Opened stores in all regions
● Added 18 new salespeople
○ 6 salespeople in each of our 9 locations
○ 54 total
● Sold our most modified, premium bikes with most expensive R&D
features
● Saturated market with our media
● Offered all bikes at lower prices than competitors
○ Our premium, higher priced models generated more sales
than our standard versions
8. Market Analysis: Target Market Trends
Sales Per Quarter in each segment
Sales per
Quarter
Q3 Q4 Q5 Q6 Q7 Q8 Total
Youth 159 179 529 784 1,273 1,815 4,739
Work 277 532 848 1,416 3,062 4,030 10,165
Recreation 299 329 807 1,517 2,864 3,419 9,235
Mountain 16 17 818 1,147 2,374 3,620 7,992
Speed N/A N/A N/A 1,298 2,306 3,572 7,176
Total 751 1,057 3,002 6,162 11,879 16,456 39,307
9. Market Analysis: Target Market Trends
Target
Market
Takeaways
Youth High youth demand in our first locations (NY, Amsterdam). Only segment
we controlled over 50% of the market. Made up < 10% total bike demand.
Work Responded well to modifications of models(Carriers, Lights). Valued prices
being lower than competitors. Point of purchase display and pictures in ads
were well received.
Recreation Willing to try a new brand if features are present. Respond well to ads that
mention fun, easy to ride, great price.
Mountain Willing to try new brand due to lack of competitors. Wide range of price
paid depending on which type of model.
Speed Preferred a base and pro model, as opposed to 5+ models. Started slow,
ended Q8 with highest sales. Less present in LATAM-MEA.
10. Market Analysis: Competition
Companies Takeaways
Gear Only focused on recreation, mountain and speed, but
remained our biggest competitor. Premium pricing model.
Pikainen Tech Offer the most amount of models (7 Speed). Many different
price points without drastically changing design. Wanted to
give customers many choices.
DealsOnWheels Our largest competitors in work, and kids. Continued to price
cut everyone else. Only one location in LATAM-MEA.
Wheelie Good
Bikes
Not at all present in NORAM-EUROPE. Top priority was kids,
had 2 models priced the same. Lacked unique features or low
prices, ended with least amount of market share.
11. Marketing Strategy and Tactics
Brand Design
1. Work
2. Recreation
Target Segments
4 bike designs until Q5
- 1 for each target segment
- 1 for mountain segment
- 1 for youth segment
Entered into every segment by quarter 6
How?
- Created a Pro and base model for each
segment
Why?
- To become the market leader
- To saturate each segment with our
brands, and gain market share
12. Marketing Strategy and Tactics
Brand Design
Mimicked our competitors’
designs beginning in quarter 5
How?
- Analyzed brand judgement
and product review
Why?
- To gain better insight into
consumer desires and
satisfaction with certain
features
- To increase brand demand
in each segment
Q7
Q8
13. R&D
Invested in technologies that
benefit multiple segments
How?
- Invested in 3 features each
quarter beginning in Q5.
Why?
- To capture market share
from competitors with older
technology
- To continuously innovate
and cause excitement in the
market
What could we have done differently?
- Invest in technologies that benefit one
segment
Why?
- To strengthen brand by having 3 new
features in one segment
Marketing Strategy and Tactics
14. Advertising
Created one advertisement per
segment by Q6
How?
- Analyzed customer needs
Why?
- To stimulate demand for
each segment
- To lower advertising design
costs
- To focus on placement
Marketing Strategy and Tactics
Q6
15. Marketing Strategy and Tactics
Advertising
Placed advertisements in
response to profitability
How?
- Placed more
advertisements in the
recreation and mountain
segments
Why?
- To increase demand of most
profitable segments
Demand
for
recreation
segment
16. Adjusted prices before the start of each
quarter
How?
- Monitored competitor pricing and
undercut them.
- Base Models: lowest priced bike
in market.
- Pro Models: average price but
still undercutting most
competitors.
- Max Models: expensive but not
the highest priced in market
Why?
- To take customers from competition
and increase market share
Pricing
**Only used POP display for most profitable brands**
Marketing Strategy and Tactics
Q9
17. Our Future Brand Strategy
● Three bikes per target market.
○ Base Models
■ Base Design, Minimal to no R&D investments.
○ Pro Models
■ Average design, minimal to maximum R&D investments.
○ Max Models
■ Top of the line design, Maximum R&D investments.
Quarter 8 Quarter 9
Introduction of
Mountaineer Max
Model.
