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TECH CHAMP FINAL PRESENTATION REVIEW
- 1. TECH CHAMP FINAL PRESENTATION Balqis Al Makhmari
- 2. Table of contents Performance review Assessment of strategy and its execution Assessment of current situation Lessons learnt Summary Questions
- 3. Mission Statement To be the best in the eyes of our customers through providing premier products, services and solutions of the highest quality.
- 5. Cumulative balance scorecard Rank Company Name Total Performance Financial Performance Market Performance Marketing Effectiveness Investments in Firm's Future Creation of Wealth 1 Smart-Tech 40.824 26.014 0.275 0.772 2.459 3.215 2 Tech-Com 33.542 20.020 0.304 0.770 2.323 3.084 3 Kinetic 12.227 24.211 0.159 0.769 3.174 1.304 4 Turbo-Tech 10.457 21.833 0.118 0.726 2.801 2.004 5 Tech-Champ 5.019 10.659 0.231 0.763 2.232 1.195
- 6. Executive summary Good News Bad News COGS is second lowest as we trying to achieve economic of scales Expenses increased specially for ads Highest market share in innovator and second highest share in workhorse Competitor strategies changed (market demand and share was fluctuating) Sales performance enhanced slightly Ad’s judgment was not highly effective Quite good marketing effectiveness Lost rank 2 which was achieved in Q7 Creation of wealth improved Financial performance and market effectiveness fluctuated throughout Achieved good brand ratings Advertising strategy was the weakest link Price judgment 100 in all segments Had to stop RnD investment due to low cash availability in Q7
- 7. Total performance 0 10 20 30 40 50 60 Q4 Q5 Q6 Q7 Q8 Total Performance Smart-Tech Tech-Com Kinetic Turbo-Tech Tech-Champ Increase slightly after Q6 because of increase mostly in financial performance & marketing effectiveness Tech-Com has the best overall performance as result of enhance market performance
- 8. Market share of all companies TECH CHAMP’s Market share by segment 20% 27% 15% 26% 12% 18% 27% 18% 22% 15% Tech-champ Tech-com Turbo-tech Smart-tech Kinetic
- 9. Financial performance High Expenses (sales force expenses /Ads/R&D/sales office lease ) High Sales as it increase by +7 Millions from Q7 Cost of goods sold increased comparative to Q7 but lowest among competitors as we were trying to achieve economies of scale Revenues 37,790,457 - Rebates (478,597) - Cost of Goods Sold (23,727,897) Gross profit 13,583,963 Sales Office Leases (840,000) + Sales Force Expense (3,928,913) + Brand Promotions (36,800) + Special Programs (13,575) + Ad Creation/Revision (120,000) + Point of Purchase Display Expenses (21,600) + Advertising Expenses (2,977,800) + Engineering Cost for New Brands (300,000) + Market Research - Operating Expenses 8,238,688 Miscellaneous Income and Expenses + Other Income - - Other Expenses - - Research and Development Costs (2558312) - Set Up Costs for New Sales Offices - Cumulative Net Profit for Division 1,366,987 Expenses Gross profit Operating profit 5,345,275 Net profit for division 2,786,963
- 10. Q8 Market Demand Tech-Champ Market Demand 15% 22% 18% 27% 18% Kinetic Smart-Tech Tech-Champ Tech-Com Turbo-Tech 0 2000 4000 6000 8000 10000 12000 14000 16000 Q3 Q4 Q5 Q6 Q7 Q8
- 11. Our target markets initially were innovator and traveler By the end we focused on innovator and workhorse as both scored well in brands, ad’s and price judgments
- 13. Strategy analysis • Analyze customer needs and wants • Analyzing customer response competitor offerings Understand customer • Brand/ad/price judgement • Competitor brands and placements Analyze market • Marketing strategy adopted by competitors • Tracing offerings and rebates Analyze competition
- 14. • Defining sales strategy based on market size of target segments • Deciding sales office placements Research Distribution • Defining the 4 P’s: • Product • Place • Promotion • price Defining marketing mix
- 15. • Quarterly analysis of financial position • Projecting division profitability Financial analysis • Regular revision of decisions quarterly based on customer response and competitor’s strategy Review and revise
- 16. Strategy and execution Positioning • Extended brand range (laptops and desktops) for different segments • Premium strategy for Mercedes and Innovator • Penetration strategy for Costcutter and Workhorse Target market • Markets selected based on: - Customer demand - Small high margin segments - Large geographic markets (market size) • Targeted all segments in all regions Segmentation • Grouped similar needs and wants of customers from different market segments: - TC Smart II (Mercedes & Innovator) - TC CC III (Costcutter & Workhorse) • Focused on primary & secondary markets
- 17. MARKETING MIX Product Promotion Price Place
- 18. Product Brands • 9 brands (3 Mercedes, 2 Traveller, 1 Workhorse, 1 Costcutter, 2 Innovator) • Offered highest rebates RnD • Battery: long life laptop • Networking: high speed • Hard drive: fail proof ultra cap • Special feature: Touch screen • Other software: Security suite Brand judgment • Good brand judgment • RnD features enhanced the customers feedback
- 19. Major Decisions: Top customer needs addressed for each segment Naming strategy: promoting the Brand name (eg. TC-Mission, TC-Smart, etc.)
- 20. Promotion Brand promotion: One ad per product General advertisements for target segments Focus of regional and local advertisements (Q8 48% local and 52% regional) Ad rating improved by Q8 Rating is poor compare to competitors: negative impact of marketing effectiveness
- 21. Sales force promotion: Sales programs (training) introduced in Q7 Cash and free gifts for customers Bonus for sales people Price Rebate Highest sales force expense amongst competitors Major decisions: Inset ratio improvement Highest advertising expense By Q6 advertising expenditure was hitting points of diminishing returns Adjusted by Q8
- 22. Premium strategy: Penetration strategy: Adopted for Mercedes & Innovator Offered high quality products Added RnD features Customers have high willingness to pay for higher quality Adopted for Costcutter & Workhorse Price sensitive segments Provided products that benefits their needs Pricing them at average demand of customers Price
- 23. Major decisions and result: Customer satisfaction achieved Received 100 as price judgment in all segments Kept competitive edge in pricing by offering highest rebates. Kept eye on competition pricing to ensure competitive edge while leveraging our brand judgement
- 24. Geographic expansion: Major decisions: Focus on large, highly competitive segments Focus on geographic markets which minimize distribution costs Niche Marketing Opened 12 offices in all geographic locations by Q8 Assessed and reassigned sales representative staff levels Determined average number of sales representative Budgeted number of sales representative per office Enhanced support staff to meet the customer need Place
- 25. ASSESSMENT OF CURRENT SITUATION (if simulation was to continue)
- 27. - Creative leadership &Teamwork - Collaborative process - R&D investment - price judgment is strong in all 5 markets - Geographic Advantage – all are fully operating - Good brand management for target segments - High Operating Cost ( Low Financial Performance) - Bad Ads Design (low rating) - Market awareness - Lack of competitive strengths (gaps in capabilities & weak brand name) - Financial (Cash flow & High cost structure) - More R&D Investment - Increasing Demands of Segments - More Geographical Expansion - potential to add 1 or more markets and expand overall market share - New product development - Further growth in target markets to capture more market share - Reduce cost - Increased product offering - - Increasing Competition - Changing Customers Preference - Facing intensive price competition - Competitors new products and innovation - Time delays increase cost - Limited funding W InternalExternal ControllableNonControllable S O T Assessment of CURRENT SITUATION
- 28. LESSONS LEARNT
- 29. General lessons: Differntiate amongst competitors Take first movers advantage Thorough market analysis enhances understanding of customer needs and wants Develop good marketing mix Risky and aggressive approach initially assists in grabbing opportunities Even if leading, competitors should not be underestimated since market is dynamic
- 30. Brand management lessons: More of something leads to diminishing returns. Provide brand features that fulfill needs of market segments, otherwise customers finds products very complicated. Advertisement should not clutter all information. Relevant amount of information and creativeness should be added to provide effective ads. Sales force in offices should be relevant to office needs. In long term RnD investments boosts success and satisfies customer needs. Competitive position is gained based on customers’ willingness and overcoming competitor strategies.
- 31. Simulation lessons: Simulations allowed us to apply marketing concepts learnt in the course. It provides a prospect to perform evaluation on future improvements that enhances the opportunity to excel in future. Encourages critical thinking in evaluating current positions. Allows to develop map for future success and adapt recommendations. Encouraged team work. Markets are dynamic, getting ahead is easier, staying ahead is difficult.