The document describes an educational business simulation game called the Mgfc Business Game. In the game, student teams take on roles in a simulated consumer goods company and make business decisions over multiple quarters. They decide on pricing, production levels, marketing and distribution strategies. Their decisions are input into an economic model that simulates market responses and outputs new scenarios with competitive updates. The game aims to develop students' business skills in a competitive team-based environment.

1. MGFC BUSINESSGAME
Team Based Marketing Simulation
Roma 30/07/2012
Mauro Cavallaro
www.linkedin.com/in/maurocavallaro
businessgame@mgfc.it

2. Indice
From wargames to businessgames
The Mgfc Business Game
The Scenario
The Team Composition
The information system
The decision system
The Qualitative component
Victory conditions
Player’s interface
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3. From Wargame to Businessgame
Wargames were developed for the first time by the Prussian Army in the early 19th century, taking the name
of Kriegspiel. This kind of game was aimed mainly to training all rank officers of the Army: either by
stimulating tactical skills or by proving procedures and rules .
Wargames are mathematic models (more or less complex) aimed to simulate the results of the decision
taken by the players: according to the players’ decisions (input) the model determines the effects (output)
In the same way the Business-game allows to simulate simultaneous business decision effects.
Why a Business-game is an important opportunity for a business school:
 To test the students’ correct learning
To motivate students by using the learned tools in a practical way
 To develop students’ problem solving, decision making and responsibility taking skills
To develop a more interdisciplinary and concrete approach to the problems
 To develop team working skills in a competitive context
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4. The Mgfc Marketing Businessgame
Business scenario: Consumer goods productors
Number of players allowed: 6-18
Microeconomics model: differentiated Oligopoly
Model type: Deterministic
Input: Quantitative and Qualitative (turned into quantitative by human evaluation)
Type of Game: simultaneous decision
Platform: Xls + Filemaker Pro
Parameters and variables: about 40.000
Number of tests: 5
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5. The Mgfc Businessgame
MGFC BUSINESSGAME
info Team 1 Decision
ENGINE
info Team 2 Decision
Scenario Scenario
Q1 info Team 3 Decision Q2
info Team 4 Decision
Parametras
Businessgame consists in a number of turns (one quarter each)
In Every turn players take decisions using the scenario’s provided information.
Decisions are elaborated by the business-game engine and the result is a new Scenario
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6. The Scenario
The scenario consists in:
 10 regions;
 Population structured in different Types whit different sensibility to different stimoulus;
 A multidimensional Demand Curve (2d product, price, communication pressure, distribution coverage);
 Different consumer preferences, monthly consumption and media sensibility grouped in regions and
consumer types;
 Production Cost Structure;
 Media cost structure and availability; Distribution Costs;
 Market Shares (volume/value);
 Products lock-in level;
 Distributors market organization;
 Company's characteristics . (the firms may have different strength and weakness).
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7. The Team
In each team there are three roles
 The Leader
 Decides on price and product (2D) strategy;
 Decides on the scale of production;
 Decides on the allocation of the budget trough Communication and Distribution
 Decide what piece of information are required in order to take decisions
 Communication Manager
 Decides about the media mix
 Decides about promotion and fidelity program
 Retail Manager
 Decides and manage the distribution strategy
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8. The Information provided
Every turn (quarter) each team can require some information. (the capacity of find information
may change across companies)
Other information are provided to all teams
In order to focus the simulation in decision making, the information are all provided in a simple and
clear lay out.
There are three type of information:
 Company’s Information
 Sales, Incomes, Expenditures
 Profits and Losses
 Public Information and Press (the same for each team)
 Public population statistics
 Prices and product features of opponents’ goods
 Newspapers articles
 Prices of advertising, distribution costs etc…
 Researches and Other information (on demand)
E.g.:
 Distributors’ market organization
 Consumers’ cluster analysis
 Competitors’ expenditures in advertising
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9. The Decisions
Decisions
Report Area
Leader dashboard
Every quarter each team member register his decision on his own dashboard.
The dashboard is the tool that the team uses to “communicate” with the simulation engine.
The dashboards may have different support: online, xls or paper
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10. La Componente Qualitativa
The model allows to take in count also qualitative components. (by human evaluation)
 the teams bay attach brief presentation (one slide) to support-integrate their decisions (e.g. define
details about commercials or packaging).
 Those presentation are evaluated in 1 to 5 rank and the result impacts on the effectiveness of the
decisions.
 Evaluation methodology may be defined with the business school.
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11. The Dashboard - The Leader
Define Price, Product and Tecnology (scale of production)
Allocate the budget trogh distribution and communicatio
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12. The Dashboard - The Retail Manager
Decide the allocation of his own budget trough different media (global-Local)
May sign long term contracts (mote than 1Q duration)
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13. The Dashboard - The Communication Manager
Long term communication contracts
Budget $ 50.550 Description investment Q 1 Q2 Q3 Q4 Q5 Q6
Available $ 50.100 xyz $ 450 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500
Allocated $ 50.100 0 $ - $ - $ - $ - $ - $ - $ -
To be Allocated $ - 0 $ - $ - $ - $ - $ - $ - $ -
0 $ - $ - $ - $ - $ - $ - $ -
Old Contracts* 1 0 $ - $ - $ - $ - $ - $ - $ -
New Contracts 2 0 $ - $ - $ - $ - $ - $ - $ -
Tot Contracts 3 max 10 0 $ - $ - $ - $ - $ - $ - $ -
(*) More of 1q duration 0 $ - $ - $ - $ - $ - $ - $ -
0 $ - $ - $ - $ - $ - $ - $ -
0 $ - $ - $ - $ - $ - $ - $ -
1 2 3 4 5 6
Contract
Media Region inv min per Q investment total investment bonus Q Q+1 Q+2 Q+3 Q+4 Q+5
duration
1 Local - TV Reg 1 OK 2 $ 6.080 7100 $ 14.200 100% $ 7.100 $ 7.100 $ - $ - $ - $ -
2 Local - non conv Reg 5 OK 3 $ 4.104 4150 $ 12.450 105% $ 4.358 $ 4.358 $ 4.358 $ - $ - $ -
3 Local - Sponsor Reg 1 OK 1 $ 6.840 7800 $ 7.800 100% $ 7.800 $ - $ - $ - $ - $ -
4 Local - TV Reg 8 OK 1 $ 1.216 5000 $ 5.000 100% $ 5.000 $ - $ - $ - $ - $ -
5 Global - RADIO Global OK 1 $ 24.320 26050 $ 26.050 100% $ 26.050 $ - $ - $ - $ - $ -
6 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
7 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
8 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
9 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
10 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
11 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
12 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
13 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
14 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
15 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
16 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
17 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
18 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
19 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
20 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
21 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
22 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
23 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
24 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
25 #N/D $ - 0% $ - $ - $ - $ - $ - $ -
Mange his retail network
May sign long term contracts (mote than 1Q duration)
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14. Production
Realtime cost structure calculation for each mix Tecnology-Product (2D)
Realtime Break Even Point and Contribution Margin calculation for each mix Tecnology-Product (2D)-Price
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