1. The document outlines a company's product targeting and marketing strategies over multiple periods in a simulation. They initially targeted low income consumers but realized private brands would dominate that segment, so switched to targeting singles and median income consumers. 2. They underestimated competition in some segments like affluent consumers but found success targeting health conscious consumers as first movers. They preempted competitors by developing family-oriented products. 3. Both successes with strategic targeting and failures from underestimating competitors are discussed. Key lessons included focusing on important elements like advertising, making bold choices with tradeoffs, and paying close attention to competitors.

1. Markstrat
Monday, April 20th 2015
Laura Frias, Michael McBride, Alex Sugano, Travis Shirley
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2. Target Segments
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ROUND 1 ROUND 7

3. RICH: Singles
Originally targeted low income (and singles)
Rationale: largest segments, unaware customers in low income
By period 3, realized that private brands would always have low income
Switched to Median Income and Singles
Supreme made a perfect product for median income
Immediately switched to focus solely on singles with both R&D and
advertising
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4. RISE: 50/50 Affluent and High
Earners
We decided early on to drop its price, drop its advertising, and relatively
ignore it.
Assumed the high margin competition would be too strong.
False assumption
Split segment expenses 50/50 between affluent and high earners
Minimized promotion
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5. RUNWAY: Health Conscious
Targeted health conscious because they were early adopters and we
expected to be first to market
Did not expect to capture every segment
Only product in industry took all sales (first mover advantage)
This was crucial, because we knew that early sales would fund more R&D
and expansion
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6. RUMBLE: Families
Family segment in Nutrites grew to twice the size of health conscious or
elderly by round 6
We knew this represented a threat from Supreme
We decided to preempt the competition and develop a product that would
target families in order to prevent entrants from gaining market share
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7. RICH (Clinite)
PRODUCT:
Usability (69)
Pleasure (60)
Packaging (51)
PRICE:
$12
PLACE:
Specialized Mass (47%)
Mass Merchandise (33%)
PROMOTION:
Advertising Media: $7,500K
Advertising Research: $800K
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8. RICH (Clinite)
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IDEAL VALUES
BRAND PERCEPTIONS

9. RICH (Clinite)
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10. RISE (Clinite)
PRODUCT:
Safety (78)
Efficacy (69)
Pleasure (49)
PRICE:
$19
PLACE:
Department stores (33%)
Specialized mass (33%)
PROMOTION:
Advertising Media: $100K
Advertising Research: $50K
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11. RISE (Clinite)
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IDEAL VALUES
BRAND PERCEPTIONS

12. RUMBLE (Nutrite)
Product:
Clinical Benefits (72)
Packaging (69)
Variety (60)
Price:
$26
Place:
Specialized mass (40%)
Department Stores (37%)
Promotion:
Advertising Media: $2,357K
Advertising Research: $800K
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13. RUMBLE (Nutrite)
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IDEAL VALUES
BRAND PERCEPTIONS

14. RUNWAY (Nutrite)
Product:
Clinical Benefits (63)
Flavor (57)
Price:
$25
Place:
Specialized Mass (42%)
Department Stores (42%)
Promotion:
Advertising Media: $3,150K
Advertising Research: $500K
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15. RUNWAY (Nutrite)
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IDEAL VALUES
BRAND PERCEPTIONS

16. Period 1: Clinites
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17. Game theoretical decision to launch
Nutrite
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Our Prediction Expected Opponent Prediction
Refresh
Opp. Opp.
Refresh
10m, 10m 12m, 20m
20m, 12m 10m, 10m
10m, 10m 25m, 20m
EnterDon’t
Don’t
Don’t
Don’t
Enter
EnterEnter 20m, 25m 10m, 10m

18. Period 2: R&D Into The Nutrie Market
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19. Period 3: Continuation of R&D
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20. Period 4: Nutrite Initial Launch
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21. Period 5: Further R&D Into Families
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22. Period 6: Clinite Advertising
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23. Overall Industry Trends
Price sensitive customers entering market at faster
pace
Profit margin trade off
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24. Overall Industry Trends
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25. Successes and Failures
SUCCESSES:
1. First mover advantage in the
Nutrite market
2. Targeting singles with Rich and
lots of advertising
3. Underfunding Rise
4. Preempting competitors
entrance into Nutrite market and
their strategies
FAILURES:
1. Not anticipating Supreme
targeting singles in Period 1
2. Not anticipating Supreme would
target median income in Period 4
3. Targeting low income with Rich
in Period 1
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26. Key Learning Experiences
1. Focused on Semantic Elements that had most importance
a. Advertising and pricing
2. Bold choices paid off, but required trade-offs
3. Paid close attention to competitor’s maneuvers
Eg. Noticed the amount of money Supreme spent on R&D
4. Short and long term goals - stayed consistent with our plan
5. Competitive Advertising and Commercial experiment study
a. Avoided diminishing marginal returns (most people were overspending)
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