FinalReportToTheBoardCocoComputers

Coco Computers Final Report 1
Marketing 450
Final Report to the Board
April 19, 2015
Coco Computers:
Clark Coyle, Ivan Gutierrez, Luis Herrera, Chloe Mensching, Nicole Vaninetti

Table of Contents
Cover Page......................................................................................................................................1
Table Of Contents ..........................................................................................................................2
Executive Summary .......................................................................................................................3
Part 1- Review of Financial and Market Performance in Year 2..............................................4
Financial Performance………………………………………………………..................................4
Market Performance………………………………………………………………………………..6
Overall Trends……………………………………………………………………………………14
Part 2- Highlight of Business Marketing Plan……………….……………………………….16
Brand Strategy……………………………………………………………………………………16
Pricing Strategy…………………………………………………………………………………...16
Advertising Strategy……………………………………………………………………………...18
Sales Channel Strategy…………………………………………………………………………...18
Part 3- Assessment of business strategy & Performance in Year 2 ........................................19
Brand Strategy……………………………………………………………………………………19
Pricing Strategy…………………………………………………………………………………...22
Advertising Strategy……………………………………………………………………………...26
Sales Channel Strategy…………………………………………………………………………...28
Significant Events………………………………………………………………………………...30
Part 4- Assessment of Current Situation and the Market........................................................34
SWOT Analysis………………………………………………………………………………......36
Part 5- Preparing for the Future………………………………………………………………………..38
Investments in the firm’s future…………………………………………………………………..38
Economic Outlook………………………………………………………………………………..38
Staying Competitive Through the Future………………………………………………………...38
Part 6- Legal and Ethical Considerations……………………………………….…………….41
Part 7- Lessons Learned…………………………………………………………………….….41
Outline of Controls……………………………………………………………………………….42
Summary of Recommendations………………………………………………………………….42
Conclusion………………………………………………………………………………………..42
Index of Important Charts and Figures………………….…………………………………...43

EXECUTIVE SUMMARY
The purpose of this report is to review financial and market performance during the
second year of operations, asses our business strategies and the implementation of our business
strategies throughout the second year, provide a review of significant events that impacted our
organization and the market during the second year of operations, assess our current situation
and the market, explain how we have prepared our organization to compete in the future, address
legal and ethical considerations, explain our plan for monitoring plan implementation and
controls, and provide a description of the lessons learned throughout this experience.
There are several important facts to keep in mind while reading our report. All of these
facts were partly responsible for important decisions, recommendations, and conclusions made.
The first fact to remember is that one of the key drivers in our organization is teamwork. The
team members of Coco Computers met on a regular basis to engage in collaborative conversation
regarding important decisions and the future of our organization. Another key fact is that our
overall strategy was aggressive in that we were not afraid to take risks and made confident
decisions despite several warnings from our independent auditors and control systems. In regards
to our market performance, our approach was to be aggressively ambitious from the very first
quarter of operations and let that carry us forward in the quarters to follow. This worked pretty
well for us considering the fact that we had the highest market share at the end of the first year
and managed to stay competitive in terms of market share throughout the second year despite our
profit focused pricing strategy. When it came to pricing our brands, we agreed that we would
favor high profit margins and fewer sales over low margins and high sales. This strategy worked
very well for us, as we were the first team to make a profit in the industry and consistently had
the highest financial performance in the industry. Another important fact to consider is that while
we had laid out a clear and strategic tactical plan for the second year of operations, the
unpredictable nature of the environment and our competition forced us to make slight deviations
from our initial marketing plan presented to the board at the end of year one; it is important to
note, however, that all deviations were justified and provided positive results. Several significant
events took place within the second year of operations. These affected all aspects of our
organization and the industry, however, our highly adaptable nature made it possible for us to
respond quickly and effectively.
The overall performance for Coco Computers for both years in operations was
outstanding. Within two short years we managed to produce significant profits, and create a
wealth of over 415% of the initial investment. At the end of year two we held the titles for
highest rated brand, highest rated ad, and highest market share for the Innovator and Mercedes
markets. Not only were consistently ahead of our competition on the balanced scorecard, but we
finished the second year with a cumulative balanced scorecard performance rating of 89; over
double the amount of the next highest team.
While our performance over the first two years provided excellent results, our
organization is dedicated to continuous improvement. Recommendations for the future involve
close monitoring of plan implementation, re-considering sales promotion strategies, re-
consideration of ad design strategies, and improving our plans and investments in the
organization’s future.

PART 1- Review of Financial and Market Performance
Financial Performance
FIGURE 1A
For quarters 5-8 our financial performance was really positive. Our net profit for each
division increased each quarter. In 5 and 6 we faced a small amount of debt due to our
investment in the company through research and development and opening new branches.
However, we were confident that revenues and profits in the future would not be an issue. Our
cumulative net profit for each division was in the positives, and kept increasing except for the
slight economic downturn faced in quarter 6.
Altogether our financial performance for each quarter was calculated into the balanced
scorecard. It is calculated by taking our operating profit and dividing it by our sales revenues,
then multiplying that number by 100. A positive number is desired, and the larger it is the better
it is. Every quarter in year 2 we had positive financial performance on the balanced scorecard. In
quarter 5 we had a 35.045. In quarter 6 it went down a little to 34.790. This is probably due to
the large investments into our company’s future. For quarter 7 the number had jumped down to
32.862, because we invested a lot more into research and development. It was also the first
quarter in which we were able to incentivize our workforce, so we spent a great deal on training
programs, demonstration kits, and contests. For quarter 8 our financial performance increased to
34.859. We see those numbers only going up within the next two quarters

Creation of Wealth
FIGURE1.1A
For quarters 5 and 6 we had a lower return on investment than what we had started with
from the previous year in quarter 4. The large investments we were making put us a little into
debt, and there was an economic downturn in the first half of the year. We believe that this is
what caused those lower ROI’s. Our performance picked back up in quarter 7 however, and we
were debt free and making large profits. Quarter 8 was huge for us, leaving us with an incredibly
high return on investment. In the next two quarters we have reason to believe our return on
investment will only continue to increase. It seems to be going in a positive direction, and there
isn’t currently any threat of economic downturn.

Market Performance
In our second year market performance was lacking because the playing field evened out a little
more once market research was available. Market performance in quarters 5-8 was considered a
weakness for us, but it still wasn’t as bad as it could’ve been. It fluctuated each quarter, and
showed steady declines in market share and demand until our last quarter.
Quarter 5
FIGURE 1B
FIGURE 1.1B

For quarter 5 we had .275 on the balanced scorecard. We were holding the third highest
market share at 21%. This was down from the number one spot in quarter 4. However, at this
point we were still holding the highest market share for 3 of our target markets: the Mercedes,
Innovator, and Traveler. Workhorse is ranked as 4th on our list of priority, and after seeing that
we only held the fourth spot for market share in that market at 18% it stayed that way going
forward.
FIGURE 1.2B
Our overall market demand went down this quarter compared to last as well. Instead of
having the highest total demand we dropped to having the second highest demand for this
quarter. We were still holding the highest demand for the Traveler market, the Mercedes market,
and the Innovators.
Quarter 5 Market Demand:
 Total – 2,770
 Traveler – 1,053
 Workhorse – 565
 Mercedes – 375
 Innovator – 599

Quarter 6
FIGURE 1.3B
FIGURE 1.4B
In quarter 6 the balanced scorecard said our market performance was .325. This was up
from last quarter, but still considered a weakness. Our total market share increased to 22% from
the previous 21%. However, the only one of our target market segments that we still had the
largest market share for is the Mercedes. For the Innovator and Traveler, our market share
dropped to the second highest market share. We hold the fourth spot consistent with last quarter
for the Workhorse market.

FIGURE 1.5B
In quarter 6 we still held the second highest total demand. However, compared to last
quarter, the demand for each individual target market dropped. Instead of having the highest
demand for Traveler, Mercedes, and Innovator we had the second highest. Our demand for
Workhorse went up a little from last quarter. In quarter 5 our demand for the Workhorse was at
565, and in quarter 6 it went up to 748.
Quarter 6 Market Demand:
 Total – 4,809
 Workhorse – 748
 Mercedes – 903
 Innovator – 952

Quarter 7
FIGURE 1.6B
FIGURE 1.7B
In quarter 7 our market performance on the balanced scorecard dropped lower than it was
in quarter 5 at the start of the year. Our market performance for quarter 7 was .265. Our overall
market share dropped down as well to 19% tied with ATEA, Inc. as the third highest market
share. In this quarter we were still holding the highest market share for the Mercedes and the
second highest for the Innovator which is consistent with last quarter. For the Traveler market we
hold the third highest market share, and for the Workhorse we actually moved up to hold the
third highest market share.

FIGURE 1.8B
Market demand went down again during this quarter. We held the third largest total
demand, but we were still holding onto the most demand for Mercedes. We again held the
second position for the Innovator market, but dropped once again for the Traveler to third. The
workhorse market was at third again.
Quarter 7 Market demand:
 Total – 8,047
 Workhorse – 1,156
 Mercedes – 1,632
 Innovator – 1,647

Quarter 8
FIGURE1.9B
FIGURE 1.10B
In the last quarter our market performance on the balanced scorecard went up slightly to
.295. This number is still considered weak, but it is moving in a positive direction from last
quarter. Our overall market share ended at 23%, which is higher than last quarter putting us at
the second highest in the industry. We kept the highest market share for the Mercedes by a
significant amount and retook the largest market share for the Innovator. In regards to the
traveler, we moved up again to have the second largest market share. The percentage of market
share we held for the Workhorse market went up 2%, but still is only the third highest market
share for that segment.

FIGURE 1.11B
Total demand went up significantly in the last quarter. We ended up with the second
highest total demand. The demand jumped back up to the highest position for the Innovator, and
the demand for the Mercedes had not changed. The Traveler, demand jumped up from last
quarter to the second highest demand. The Workhorse is steadily average and stationed in the
third spot for demand.
Quarter 8 Market demand:
 Total – 17,579
 Workhorse – 2,671
 Mercedes – 3,315
 Innovator – 4,027

Overall Trends
FIGURE 1C
Through each quarter, as shown in strategic graph 1C, market size started increasing
steadily from the moment we started selling our products in quarter 3. Market size grew
significantly from quarter 7 to quarter 8.
FIGURE 1.1C
Our revenues continued to increase since we put our products on the market. This is
illustrated in figure 1.1C. The smaller increase between 4 and 5 was probably due to the fact that
we hadn’t changed our brands at that time. We decided to put money into research and
development before changing our brands.

FIGURE 1.2C
The balanced scorecard stayed positive throughout each quarter. From quarter 4 to
quarter 5 the balanced scorecard went down significantly because of all the money we were
investing at the time. Our financial performance rating scored lower during those times. From
that point forward it increased again, and then into quarter 7 it increased very slightly. It isn’t a
noticeable increase in figure 1.2C, because the total performance number went from 41.911 in
quarter 6 to 41.974 in quarter 7. In quarter 8 our numbers increased significantly, as it was a
huge quarter in terms of revenues.

PART 2- Highlight of Business Marketing Plan
Brand Strategy
Under our tactical plan going into the second year we had very clear goals as far as the
brand strategy goes. We wanted to be a technical leader, and we wanted to capture the Mercedes
market segments. Research and development was going to be a huge focus in the second year to
achieve capturing the Mercedes. It was also stated that we were going to focus on modifying
only 2 brands, and then creating one new brand in quarter 6.
Pricing strategy
The pricing strategy presented in our business plan involved analyzing and comparing
competitor pricing strategies and price judgment, focusing on high profit margins and profit per
unit (PPU), and considering the state of the economy as signaled in the simulation. Competitor
analysis involved identifying good price judgment ratings and matching them to the prices set for
those brands. An example of this is shown is figure 2B. When analyzing competitor pricing
strategies we took a cross analysis approach between price judgment and brand rating. One of the
biggest factors in price analysis was comparing the brand features of our competition and trying
to determine what affect the different brand ratings had on price satisfaction. Because our
strategy included maximizing profit margin and PPU, we also took notice to the different regions
that the brands were selling in and the highest “price willing to pay” in each of the cities in the
regions. In order to keep our market share competitive, we attempted to keep our prices as close
to a 99% price rating while still trying to achieve the highest profit margin possible. By reading
through the lectures in Marketplace Live, we discovered that certain quarters, such as quarters 5,
7 and 8, had different market potential due to “changes in the economy”. According to
Marketplace Live quarter 5 was slower due to an economic downturn and quarters 7 and 8 had
huge market potential.

Figure 2B

Advertising Strategy
Our advertising strategy for the second year in operations involved adjusting current ads
and creating new ads in order to increase our evaluation score from the International Advertising
Federation. This also involved competitor analysis and cross analysis between ad judgment and
ad features. As we expanded into more cities in different regions, we wanted to place more
emphasis on regional ads rather than local ads because they reach a wider audience and could
potentially lower total advertising costs.
Sales Channel Strategy
Our strategy in regards to our sales channel for the second year was to hire enough sales
people in each quarter to meet our projected demand. This number was obtained by dividing
each quarter’s projected demand by 150 (number of units predicted to be sold by each sales
person). Projected demand was calculated by increasing the demand from the previous quarter by
about 50% each quarter. Initially we focused our efforts on the Traveler, Innovator, and
Workhorse market segments, having most of our sales people target the innovator and traveler
segments. During the second year we were planning on taking over the Mercedes segment, we
wanted to do so by adjusting our brands to meet their needs and providing sufficient sales people
with that focus. Our marketing plan also mentioned expansion to new cities within the two
regions we were present in. At the time, we did not have any intentions of moving into the
APAC region, as it was already very heavily saturated with competition.

PART 3- Assessment of Business Strategy & Performance during year 2
Brand Strategy
Throughout the second year we stuck to the marketing plan for the most part. We did
focus a lot on research and development, and we did successfully capture the Mercedes market.
In quarter 6 we had also built one new computer targeted toward the Mercedes market making a
total of four brands. However, throughout each quarter we modified almost all of the brands
rather than focusing on just two.
Quarter 5
Research & development purchased:
 Hard drive: Fail-proof ultra capacity – to be available in quarter 6 - $1,705,542
 Networking: High speed – to be available in quarter 6 - $1,563,413
Modifications made to brand:
 No modifications were made to any of the brands
When it came to the R&D we wanted to focus first on internal capabilities to improve our
products rather than physical attributes. We made the decision to hold off on modifying any of
the brands until we had the R&D to add to it.
Quarter 6
 Case: Slim-stylish (laptop) – to be available in quarter 7 - $2,131,927
 Computing power: Ultra fast – to be available in quarter 7 - $2,842,569
 Keyboard & mouse: High comfort – to be available in quarter 7 - $994,899
 Turst II for the Traveler: added the new hard drive and networking capabilities
 Lolo II for the Workhorse: added the new computing power
 Hundo III for the Innovator: added the new computing power
 Designed a new brand for the Mercedes market named Superior
Looking at the R&D for quarter 6 we wanted to start adding more physical features to our
brands to make them prettier essentially for our primary markets of the Mercedes and Traveler.
That is why we chose the high comfort keyboard & mouse for the Mercedes. We then chose the
slim-stylish case for the Traveler’s laptop. The ultra fast computing power was just to add to the
internal superiority of our brands to remain a technical leader moving forward. Modifications
were made to each brand carefully by referencing the customer’s needs and wants.

Quarter 7
Research & Development purchased:
 Case: Stylish (desktop) – to be available in quarter 8 - $1,421,285
 Case: Slim (Laptop) – to be available in quarter 8 - $1,705,542
 Office software: Office upgrade – to be available in quarter 8 - $1,847,670
 Battery: Long-life – to be available in quarter 8 - $1,421,285
 Turst III for the Traveler: added new case and computing power
 Lolo III for the Workhorse: added new computing power and keyboard & mouse -
changed the monitor from 21” high res. to 19” standard
 Hundo IIII for the Innovator: did not make any modifications
 Superior II for Mercedes: added new computing power and keyboard & mouse
The R&D for this quarter we split between internal and external attributes. We made decision
for both the R&D and the modifications based on the customer’s needs and wants. For the Lolo
III we decided to change the monitor based on our number 1 competitor at the time, and the fact
that the Workhorse wanted something that was easy on the eyes. We only added or changed
things we felt absolutely necessary in order to minimize cost increases.
Quarter 8
 Other software: Security suite – to be available in quarter 9 - $2,558,312
 Special features: Touch screen – to be available in quarter 10 - $896,365
 Monitor: 17” advanced (laptop) – to be available in quarter 11 - $431,977
 Monitor: 32” high resolution (desktop) – to be available in quarter 12 - $351,750
 Turst IV for the Traveler: added new, longer battery life and new office software
 Lolo IV for the Workhorse: added new office upgrade
 Hundo IV for the Innovator: added new case and office upgrade
 Superior III for Mercedes: added stylish case and office upgrade
For quarter 8 there were only four options left for the R&D. We figured going forward it
would be best to have a new development offered in each quarter for the next year. It would also
show that we are investing further into our future rather than having it all available at once. That
is why we made the decision to split up each feature between the next four quarters. Again with
the modifications we made we based them off of customer’s wants and needs, or added features
we felt added to the brands such as stylish cases.
Overall, the results from our deviations proved to be positive. By adjusting our brands
every quarter and implementing the new research and development features we were able to
remain competitive in the industry. The results of our brand strategy can be seen in figure 3A. By

the end of quarter 8 we had achieved the highest brand rating in every one of the market
segments except for the Workhorse segment in which we had the second highest brand rating.
FIGURE 3A

Pricing Strategy
Our pricing strategy stayed consistent throughout the second year of operations. Our
focus remained on achieving high profit margins and price judgment. This resulted in our
average price being highest in the industry (figure 3.01A). Our approach continued to be
competitor analysis and considering the “economy” within the simulation. While we did adjust
our prices and rebates for nearly every brand every quarter, none of the adjustments made were
very significant and all adjustments to prices were justified by adjustments to brand features.
This created a deviation from the initial marketing plan because rather than adjusting two brands
per quarter (as presented in the initial tactical plan) nearly all four of our brands were adjusted in
each quarter throughout the second year. This resulted in adjustments to the price of each brand
in order to compensate for the increase in cost to produce each unit and to minimize the decrease
in profit per unit.
FIGURE 3.01A
Overall, the results from the deviation proved to be positive. The quarter 8 price
judgment results for each of our brands from their corresponding target markets were all within
3% of our goal of 99% (as illustrated in figure 3.1A). Also, while profitability was not discussed
in detail in our marketing plan, it was something that we closely monitored each quarter. This
was especially important in quarter 6 when we realized that we were losing significant market
share to firms with similar products that were undercutting our prices. In response, we lowered
our prices in an attempt to regain market share. We believe that this sacrifice was affordable and
necessary, as financial performance was our greatest strength and market performance was one
of our weakest areas. This was successful, as our market share increased in quarter 8; however,
these price drops along with generous investments in brand promotion took a toll on the overall
profitability of each brand. Figure 3.2A shows the decline in profitability of each brand from
quarter 5 to quarter 8.

FIGURE 3.1A
Q8 Price Judgment - Americas
Company Brand Costcutter Innovator Mercedes Workhorse Traveler
CoCo Computers Turst IV 53 100 100 86 97
CoCo Computers Lolo IV 61 100 100 99 100
CoCo Computers Hundo IV 52 99 100 84 96
CoCo Computers Superior III 41 77 98 66 75
Q8 Price Judgment - APAC
Q8 Price Judgment - EMEA

FIGURE 3.2A
Brand Profitability Q5 Brand Profitability Q8
Turst Lolo Hundo II Turst IV Lolo IV Hundo IV
Superior
III
Sales Revenue 3,722,400 2,093,138 3,346,400 26,092,750 8,709,900 11,521,800 16,569,824
- Rebates 56,400 35,300 46,800 406,150 73,200 198,400 0
- Cost of Goods
Sold
1,627,945 941,776 1,636,555 12,959,456 4,608,000 5,869,197 7,643,079
= Gross Margin 2,038,055 1,116,062 1,663,045 12,727,144 4,028,700 5,454,203 8,926,745
Brand Design 0 0 0 60,000 60,000 60,000 60,000
+ Ad Design 30,000 0 30,000 30,000 30,000 0 30,000
+ Brand
Advertising
94,744 77,949 109,673 547,765 799,889 397,436 903,316
Brand Promotion 79,800 57,000 57,000 91,200
+ POP Display 600 200 600 1,200 600 0 1,800
= Brand Expenses 125,344 78,149 140,273 718,765 947,489 514,436 1,086,316
Brand Profit 1,912,711 1,037,913 1,522,772 12,008,379 3,081,211 4,939,767 7,840,429
Profit per Unit 1,696 1,470 1,627 1,579 1,053 1,525 2,058
% from Sales
Revenue
51 50 46 46 35 43 47
Looking forward, we do not foresee any changes to our pricing strategy in the near
future. While we did experience a decrease in profit per unit throughout the second year (mostly
due to heavy brand promotion) we managed to remain the top competitor in the industry. We
will continue to keep a close eye on Wayne enterprises, as they improved significantly
throughout the second year and currently hold the highest market share in the industry. However,
despite the fact that Wayne Enterprises managed to sell more units than us in quarter 8 (As
shown in figure 3.1B) with their low pricing strategy, a look at the balanced scorecard results for
quarter (Figure3.2B) reveals that our financial performance (Calculated by dividing operating
profit by sales revenue) was still highest in the industry. Because the overall results of our
pricing strategy have proved to be positive, for the near future, it is decided that we will continue
with a strategy that favors profit margin over market share. If this strategy no longer continues to
yield positive results, our contingency plan involves lowering prices once again to gain a higher
market share.

FIGURE 3.1B
FIGURE 3.2B

When it came to the advertising side of our strategy, we went along with what we had
said we would. Our strategy was straight forward; it consisted of creating new and improved ads
and watching the competitors’ ads to make adjustments. Our strategy also included increasing
regional media and showing a preference for regional media mostly due to the lower costs. For
the most part, we were able to use our own ads to appeal to consumers. There were not many
instances when the competition had a higher ad rating that our own. However, our competition
was quick to copy our ads and innovate on their own. As far as ad design and creation goes, there
was not much room for departure from our marketing plan. While we generally took the same
approach when evaluating and creating our ads, we did experience some deviation from our
marketing plan in that we modified more than two brands in each quarter. This resulted in an
increase in advertising costs, however, we believe it was justified by excellent ad judgment and
overall increase in marketing effectiveness. Figures 3.3B and 3.4B illustrate the quarter 8 ad
ratings and marketing effectiveness for both years in operations, respectively.
FIGURE 3.3B

FIGURE 3.4 B
Ultimately, our deviations from the marketing plan seemed to be positive. While we did
not succeed in having the highest brand rating in every market segment, we remained
competitive and our “shaken” ad received the highest overall rating with a consumer judgment of
91. Our regional advertising did increase along with our local advertising. Our marketing
effectiveness (calculated by adding average brand judgment and average ad judgment) increased
overall leaving us with a .823 on the balanced scorecard for quarter 8 and a .789 for the
cumulative balanced scorecard (the highest in the industry). Moving forward, we can continue to
adjust our ads to increase our ad scores. It will be smart to look at the competition and mimic
their ad success. We will continue to improve our Innovator and Mercedes on our own due to our
high scores. Recommendations for the future may include creating a more detailed advertising
strategy and closely monitoring the effects of local and regional media advertising.

Our strategy in regards to sales channel was also very straightforward. It mostly involved
projecting demand making sure we had enough sales people in our markets to support our
projected demand. We also had plans to expand into other cities throughout regions in which we
were already present. At first, we focused our sales people on the innovative, workhorse and
traveler markets in our Toronto and Chicago sales offices. These were our initial target markets
but as we grew our business we began to transition more towards the Mercedes market rather
than the workhorse. Where we placed our sales people reflected these target markets and were
based off of the locations demand in certain areas. Figure 3.5B presents our sales channel
distribution and expenses for quarter 8. Figure 3.6B presents a quick summary of the growth of
our sales team over the first two years in operations.
FIGURE 3.5B

FIGURE 3.6B
Sales office decisions per quarter
 Quarter 1 – no stores purchased or in operation
 Quarter 2 – Purchased Toronto & Chicago
 Quarter 3 – Operating Toronto & Chicago
 Quarter 4 – Purchased Paris
- Operating Toronto & Chicago
 Quarter 5 – Purchased Sao Paulo & Abu Dhabi
- Operating Toronto, Chicago & Paris
 Quarter 6 – Purchased Tokyo
- Operating Toronto, Chicago, Paris, Sao Paulo & Abu Dhabi
 Quarter 7 – Purchased Mexico City, Shanghai, & Warsaw
- Operating Toronto, Chicago, Paris, Tokyo, Sao Paulo & Abu Dhabi
 Quarter 8 – Purchased Mumbai, Sydney & Johannesburg
- Operating Toronto, Chicago, Paris, Tokyo, Sao Paulo, Abu Dhabi, Mexico City,
Shanghai, & Warsaw
Departures from the Marketing Plan
In our pro forma and tactical plan we estimated our new hires per quarter based on our
projected demand and an assumption that each employee would sell roughly 150 computers
each. The estimates we made changed as the market did and we did not hire exactly the same
number of employees each quarter as we planned but by the end of year two had a total of 174
employees, which was close to our projection of 171. At the beginning of the year we started off
slow in hiring employees but quickly realized that we were on the lower end compared to our
competitors and made the changes to vamp up our staff.
When making decisions for Quarter 5 sales offices we determined that we would
purchase the Abu Dhabi location. After further assessment we decided to purchase this location
along with Sao Paulo. This deviation from the plan was justified as we had the capital and
needed to increase our investment in the firm’s future. As the year progressed we continued to
purchase more and more locations, ending the year with nine operational sales offices and three
more in the process being opened for quarter 9. This was justified as the more sales offices we
were able to open; the greater number of customers could be reached across all three regions.

Significant Events
There were several significant events that occurred throughout the second year that
effected brand management, pricing, advertising, and sales force both within our own
organization and throughout the industry as a whole.
In quarter 5 we were given the opportunity to invest in research and development for new
brand features. We saw this as an opportunity to get ahead of our competitors and capture the
Mercedes market before anyone else. Throughout the next few quarters we invested heavily in
research in development which, when added to our brands, resulted in the highest market share
in the industry for the Mercedes and Innovator segments at the end of the second year (Figure
3C).
FIGURE 3C
A significant event that affected pricing in the second year was the sudden and dramatic
change in pricing strategy for Wayne Enterprises that took place in quarter 7. In the span of just
one quarter, Wayne Enterprises went from having the lowest market share in the industry to
having the highest (Figure 3.1C). After an in depth analysis of market research, we discovered
that their success was mostly attributable to their dramatic drop in prices. Figure 3.2C displays
the change in average price for all competing firms in the industry as well as the sudden drop in
average price for Wayne Enterprises in quarter 7. This sudden change in pricing strategy and
market share raised a lot of awareness among competing firms. Some may have even
reconsidered their current pricing strategies.

FIGURE 3.1C
FIGURE 3.2C
In the beginning of the second year of operations we were given the opportunity to
advertise regionally in addition to local advertising. This was significant to our organization
because it required us to create and evaluate a new strategy in regards to advertising. Usage of
regional advertising for the industry was slow at first, but experienced a pretty steady growth
within the last two quarters (Figure 3.3C).

FIGURE 3.3C
Going into quarter 7 we were given the opportunity to invest in special sales force
programs and sales force promotions. Seeing as how we were experiencing a decline in market
share at the time, we decided to take advantage of the opportunity and invest heavily in both
special sales force programs and sales force promotions. While we did not experience an
increase in market share, our demand per sales person made a dramatic jump from being lowest
in the industry in quarter 6 to highest in quarters 7 and 8 (Figure 3.4C). However, the market
impact graph (Figure3.5C) revealed that the effectiveness of the programs and promotions had a
dramatic decrease during the second quarter in effect. To compensate for that, we decided to
generously increase the value of the incentives and programs for quarter 8. This resulted in
another boost of demand per sales person (as show in figure 3.4C) which was not as significant,
but definitely helped us stay ahead of the competition.

FIGURE 3.4C
FIGURE 3.5C

PART 4- Assessment of Current Situation and the Market
Going into the second year of operations we knew that the competition was sure to make
adjustments of their own in order to remain relevant. In quarters four and five, we held nearly
40% of the market share. This was big for us. Right away, we were the dominant company.
However, the competition was quick to make changes in order to even out the market share. In
quarter 8 we held 23% of the market share. This was still a decent share, considering there were
5 companies that were trying to gain customers. Figure 4A illustrates this market share in quarter
5 compared to our ending market share in quarter 8.
FIGURE 4A
Demand for each computer was significantly different in quarter 8. As more money was
available, each company made their brand better than before. We had decided that the Mercedes
brand was going to be our biggest focus. The performance report we had in quarter 8 showed that
customers wanted our Mercedes brand more than the competition’s Mercedes brand. We had a
bigger demand by more than a thousand than the next best-selling Mercedes computer. We really
focused on the Innovator brand as well. Once again, our innovator computer sold nearly a
thousand more than the next best one.
We were outsold in every brand other than the Mercedes and the Innovator. We were willing
to accept this fact, only because we were going for the higher-end computers. We could have
made a computer that appealed to the cost cutters and gain a large market share, but doing so
would contradict our pricing strategy and we did not want to make a computer if we thought we
weren’t going to gain sufficient profit from of it. In total for quarter 8, consumers wanted 17,579
of our computers. Wayne Enterprises had a total demand of 25,860. This was significantly larger
than ours and was mostly attributable to their incredibly low prices. This was our biggest threat.
However, we still had the highest brand judgement for all computers except for the workhorse.
The scores we received for the Costcutter, Innovator, Mercedes, and Traveler were 85, 91, 76,
and 91 respectively. This can be seen below in figure 4.1A.

FIGURE 4.1A
We were really able to see that Wayne Enterprises was our biggest competition with the
results of quarter 8 (Figure 4.2A). They were able to get really close to our scores and even
surpassed us in market performance and market effectiveness. They were able to catch up and
perform exceedingly well by taking a look at the competition and offering a better price. All
being the same, the better price will always win. Their lower prices were enough to get the
attention of numerous customers. This is a problem that will definitely be worked on in the near
future. We don’t wish to go down to the point where we’re barely making any money off of the
computers. Although Wayne Enterprises was pricing their computers lower than ours, we were
still able to make significant profit by selling fewer computers than them.
FIGURE 4.2A

SWOT Analysis
Coco Computers was able to pull together and make quality computers that were
favorable in the eyes of the consumers. We were able to consistently remain the number one
company in the industry throughout 8 quarters of operation. To do so, we had to highlight our
strengths and work past our weaknesses.
Strengths
One of our biggest strengths was communication. We continued to meet on a regular basis after
year 1 in order to provide feedback and make decisions as a team. By getting everyone’s input, we were
able to make the best possible choices that we could. By creating great brands, opening offices, filling
them with salespeople, and advertising, we were able to finish year two with a cumulative wealth score of
4.141(Figure 4B). Our performance was 89.598, which was more than twice that of any other company.
FIGURE 4B
Weaknesses
Performance in year two was in no way perfect. We had weaknesses that we had to
address. Toward the end of year two, we noticed that we started to lose market share. This was
due to the fact that a different company was pricing their computers at a lower price. This was a
problem because we either had to lower our prices or spend more to make our brands more
appealing. It was more comfortable when we had nearly 40% of the market share a year ago.
Now that the market share was in the 20’s, we really tried to make sure our brands were
desirable.

Opportunities
Our opportunities are going to come mostly from our upgraded computers and better ads.
We have yet to find the sweet spot when it comes to the advertisements. We believe that we have
quality ads, but they can be improved to really capture the attention of the potential consumers.
By upgrading our computers, we can offer something that other companies can’t. This will allow
us to charge a premium, which will then result in a profit for our company. Other companies may
price their computers lower, but we’ll have the R&D necessary to boost our sales.
Threats
Going into next year, we’ll know that the competition is looking to make a profit through
the quantity of computers sold. We understand that their prices may be lower than ours. This can
be a problem because if they match our computers’ specifications, their price will make the sale.
As seen at the end of year two, this strategy really increased the market share of our biggest
competitor. However, if we can offer products with components not found in other computers,
we can charge our premium without having to worry about anyone else.
At CoCo Computers, we’re focused on providing high quality products to consumers by
being effective and innovative. We aim to create a product that is seen as luxurious; we aim to be
seen as a high end brand. Our goal is to make a profit from the sale of our computers. We look at
the market share to see where we stand, but we do not necessarily rate our overall performance
through it.

PART 5- Preparing for the Future
Investments in the firm’s future
Investing in R&D, Sales People and Sales offices is our main push for our company’s
future.
The following shows the R&D that will be available for each quarter:
 Quarter 9 – Other software: Security Suite
 Quarter 10 – Special Features: Touch Screen
 Quarter 11 – Monitor: 17” advanced (laptop)
 Quarter 12 – Monitor: 32” high res. (desktop)
By hiring 90 new sales people for our several locations (bringing it to a total of 174), we
have continued to expand and push our products. We also have invested a large amount in
special sales force programs and promotions. With training, contest programs and demonstration
kit programs our total planned sales program expenditures is $540,000. Furthermore we spent
$285,000 on cash and gift bonus’. We hope that investing in our sales force will excite them to
sell our product efficiently and effectively. We will also be opening sales offices in Mumbai,
Sydney and Johannesburg that will be operational in quarter 9.
Economic Outlook
As innovative technology increases into the future, personal computers will be able to do
greater things for the customer. The economy of the PC industry will continue to boost as people
become more knowledgeable and hungry for the all the new and improved gadgets. There will
always be a market for personal computers and devices as long as people rely on them to do
everyday tasks both business related and personal. Companies should look out for and consider
possible cannibalizing products as new items are launched into the market. It is important to keep
up with the always changing and evolving products so they will not fall behind
.
Staying Competitive Through the Future
Brand Strategy
The technology world has become an extremely competitive and lucrative market. Our
company has been able to have a continuously strong presence in the PC world and will continue
to acquire new innovative elements to offer our customers. Our brand strategy includes
capitalizing on all of the R&D features that will be available for use in the future and focusing
closely on our target markets, offering each one a computer they cannot live without. With
quality and smart investing on our side we obtain a leg up over other PC sellers in multiple
locations.

Pricing Strategy
We enlist a price strategy that is somewhat high compared to our others but fits well with
our tremendous quality products. Presenting only the best, gives our brand name an edge against
our competitors.
Advertising is a huge component in getting our name and our brands out there, informing
customers of all the great products we provide. By not only increasing our local media we have
also boosted regional media through several magazines and journals. We strategically placed
these regional ads based on our target markets interests and the brands we offer.
By investing more and more into our staff we will create a competitive work environment
with a low turnover of employees and competition to reach sales expectations. People want to
work for us and we are able to produce a competent staff that is prepared and knowledgeable in
selling our brand.
Pro Forma
Below is Coco Computers pro forma starting in the second year and projecting the next 2
quarters (Figure 5A). We projected our demand to increase by 20% each quarter as we add R&D,
open new stores and increase awareness of our brand name. We will continue to grow our staff
team, first staffing our three new locations and adding to the existing operational stores.
Furthermore, by increasing both local and regional advertising by 35% in both quarters we will
be able to reach more customers in all areas.

FIGURE 5A

PART 6- Legal and Ethical Considerations
Some of the legal and ethical concerns we ran into while running our company
were Deceptive ads, information trading, and the honor code. While in the game, one major
problem we kept running into was trying to submit the ads and then the game would consider it
to be deceptive. There are a number of factors that could contribute to an ad being deceptive.
While the game did warn us about submitting deceptive ads, it would not fully prevent a team
from publishing the ads. If desired, any team could have submitted a deceptive ad and would
only face consequences if another team caught them and filed suit. Unfortunately, the business
world contains massive amounts of proprietary information that can be taken advantage of. One
legal and ethical threat within this simulation was the possibility of information trading.
Fortunately, our strong team loyalty kept our team members from sharing or abusing our
valuable information. When we first registered for marketplace live, we were forced to adhere to
their rules and policies which clearly prohibited any team from cheating in any way shape or
form. After reviewing what our company did while in the game, it is safe to say that we were
overall well covered in the ethical and legal side of things.
PART 7- Lessons Learned
Though throughout the game most of the group had a solid grasp on the four P’s of
marketing and the many concepts associated with them, we still ran into a few snags. In the very
early stages of the game we forgot to buy market research in the second quarter. It wasn’t a game
ending mistake but still a pretty solid mistake. If that mistake wasn’t made we might have been
able to go into more markets sooner. We choose not to go into any markets that quarter based on
the fact that we didn’t know what we were facing in other regions. One thing we would do
differently in the future when it comes to the product department is try to make a product to
capture two markets. A real life example is Apple’s Mac Book; it captures the Mercedes market
but is not overly expensive so it also catches the innovator. If we could of caught on to that
earlier we could of saved a good amount of money on production costs because instead of having
two computers for two markets we could of have one for both markets. When it comes to the
topic of place the team did pretty well. We learned to use the market research to predict
consumer needs and find out which areas wanted which computers. With this information we
decided which computers had the best fit with which cities. As for price, we used the rating tool
and competitor analysis to keep our prices at a reasonable level so the consumers would still buy
our products and we would still be making money. Perhaps the most important lesson from
participating in marketplace live was responsibility and teamwork. This simulation helped us
further develop our communication skills and forced us to be accountable for our individual
assignments. Overall, we were successful in collaborating and cooperating as a team and that is a
skill that will definitely be useful in the real business world.

Outline of Controls
The key to being successful is being adaptable, so it is important to continue to develop
and prepare our company for change in the future. Controls for future implementation of plans
include contingency plans and performance evaluation/audits. Performance evaluation will be
more strongly directed toward our sales force. This type of evaluation will involve feedback and
management from a supervisor that will be responsible for a team of sales people in an area.
Performance evaluation will give us a good idea of how our sales team is performing and can
provide great opportunities for improvement. In order to prepare ourselves for the unpredictable
future, contingency plans will be created. The scope of these plans can include anything from a
sales force strike to a natural disaster. Generally, all contingency plans will follow an outline
with 5 essential steps:
1. Assess the situation and Identify the problem and/or cause
2. Communicate with upper management, employees, stakeholders, and if necessary,the general
public
3. Develop and implement a solution or plan to solve the problem
4. Once the problem is fixed, test the solution for possible flaws
5. Continue usual operations
6. Communicate with upper management, employees, stakeholders, and if necessary,the general
public
7. Plan for the prevention of the same or similar situations.
Summary of Recommendations
The game may have ended in the eighth quarter but we have continued to invest heavily
in our future. In the future, we want to continue with research and development so that we don’t
get behind the technological curve. We will continue to strive to create the highest quality
products that meet the needs and desires of our target market segments. As for price, we will
continue to favor high profit margins over a low price/high sales volume strategy. Our strategy
will still include competitor analysis. As of quarter 8 we are preparing to operate in every city
available and will continue to seek opportunities for growth. In regards to promotion, we
recommend more closely monitoring the effects of local and regional advertising on sales
volume. Another aspect of promotion was our sales force. During the second year we invested
heavily in special training programs and incentives to boost sales. Seeing as how the
effectiveness of these programs and incentives rapidly decline over the span of two quarters, we
recommend reconsidering such heavy investment in these programs.
Conclusion
Overall, the past two years of operation have been a great success for Coco Computers.
Our strong team communication and aggressive strategies have allowed us to consistently stay
ahead of the competition. As we continue to expand, we plan on continually seeking knowledge
of the industry, our competitors, and our consumers. We will continue to lead the industry and
stand by our mission of providing innovative and reliable personal computers for the aspiring
consumer.

Index of Important Charts and Figures
Figure 1A- Pro Forma Profitability of Marketing Division.......................................................4
Figure 1.1A- Cumulative Contribution of Marketing Division .................................................5
Figure 1B- Q.5 Advanced Balanced Scorecard...........................................................................6
Figure 1.1B- Q.5 Market Share ....................................................................................................6
Figure 1.2B- Q.5 Market Demand................................................................................................7
Figure 1.3B- Q.6 Advanced Balanced Scorecard........................................................................8
Figure 1.4B- Q.6 Market Share ....................................................................................................8
Figure 1.5B- Q.6 Market Demand................................................................................................9
Figure 1.6B- Q.7 Advanced Balanced Scorecard......................................................................10
Figure 1.7B- Q.7 Market Share ..................................................................................................10
Figure 1.8B- Q.7 Market Demand..............................................................................................11
Figure 1.9- Q.8 Advanced Balanced Scorecard.........................................................................12
Figure 1.10B- Q.8 Market Share ................................................................................................12
Figure 1.11B- Q.8 Market Demand............................................................................................13
Figure 1C- Q.1-8 Market Size.....................................................................................................14
Figure 1.1C- Q.1-8 Revenues ......................................................................................................14
Figure 1.2C- Q.1-8 Balanced Scorecard ....................................................................................15
Figure 2B- Cross analysis Price Judgment & Competitors’ prices.........................................17
Figure 3A- Q.8 Brand Ratings....................................................................................................21
Figure 3.01A- Q.1-8 Average Price.............................................................................................22
Figure 3.1A- Q.8 Price Judgment...............................................................................................23
Figure 3.2A- Q.5&8 Brand Profitability....................................................................................24
Figure 3.1B- Q.1-8 Number of Units Sold..................................................................................25
Figure 3.2B- Q.1-8 Financial Performance................................................................................25
Figure 3.3B- Q.8 Ad Ratings.......................................................................................................26
Figure 3.4B- Q.1-8 Marketing Effectiveness .............................................................................27

Figure 3.5B- Q.8 Sales Channel Decisions.................................................................................28
Figure 3.6B- Q.1-8 Sales Force ...................................................................................................29
Figure 3C- Q.8 Market Share .....................................................................................................30
Figure 3.1C- Q.1-8 Market Share...............................................................................................31
Figure 3.2C- Q.1-8 Average Price...............................................................................................31
Figure 3.3C- Q.1-8 Number of Regional Ads ............................................................................32
Figure 3.4C- Q.1-8 Demand Per Sales Person...........................................................................33
Figure 3.5C- Sales Promotions Effectiveness ............................................................................33
Figure 4A- Q.5&8 Market Share................................................................................................34
Figure 4.1A- Q.8 Market Demand..............................................................................................35
Figure 4.2A- Q.8 Balanced Scorecard........................................................................................35
Figure 4B- Q.8 Cumulative Balanced Scorecard ......................................................................36
Figure 5A- Q.5-10 Pro Forma.....................................................................................................40

FinalReportToTheBoardCocoComputers

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