Market Simulation Analysis for Minnesota Micromotors Inc.
Tarikua Lakew
MT450
Instructor: Joseph Wright
Unit Four Assignment November 10, 2014
Market Simulation analysis for Minnesota Micromotors, Inc.
My quarter one marketing strategy was focused on increasing the sales, the market share and number of units sold for existing and new small customers segment. The reason behind this strategy was that approximately 70% of Minnesota Micromotors, Inc.’s. revenues were generated from customers that placed large-volume orders. The small customers segment represented nearly 29% of MM’s revenue and the organization’s market share in that segment was only 11%.
In order to execute my strategy, I decreased the unit selling price from $142 to $137; I gave additional 3% discount to distributors, increased the Sales Force by two; reduced the Spending on Large Customers by 10%; increased the Spending on Small Customers by 10%; I increased the Sales Force Emphasis on segment B and D (that showed lower customer satisfaction); decreased the Spending on Large Customers Retention by $10,000; increased the budget on New Customer Acquisition by $10,000; gave equal budget both for spending on Marketing Communications Training & Marketing Research; and finally allocated the same $50,000 budget for both Power-to-Seize Ratio Research Spending & Thermal Resistance Feature Spending. I did not allocate any money at this time for Manufacturing Efficiency Improvement as the expected return is in a very long time.
The results of my decisions were: last quarter sales from existing customers increased by 14% and sales from new customers increased by 0% and distributors, on average, are attempting to achieve a 5% profit margin. The efforts to increase the sales from new customers by: reducing the unit sale price to attract new customers, giving additional 3% discount and allocating additional $10,000 for acquiring additional customers did not bring the expected sale from new customers. My marketing strategy for Quarter #1 can be considered as
MT450
Instructor: Joseph Wright
Unit Four Assignment November 10, 2014
Market Simulation analysis for Minnesota Micromotors, Inc.
My quarter one marketing strategy was focused on increasing the sales, the market share and number of units sold for existing and new small customers segment. The reason behind this strategy was that approximately 70% of Minnesota Micromotors, Inc.’s. revenues were generated from customers that placed large-volume orders. The small customers segment represented nearly 29% of MM’s revenue and the organization’s market share in that segment was only 11%.
In order to execute my strategy, I decreased the unit selling price from $142 to $137; I gave additional 3% discount to distributors, increased the Sales Force by two; reduced the Spending on Large Customers by 10%; increased the Spending on Small Customers by 10%; I increased the Sales Force Emphasis on segment B and D (that showed lower customer satisfaction); decreased the Spending on Large Customers Retention by $10,000; increased the budget on New Customer Acquisition by $10,000; gave equal budget both for spending on Marketing Communications Training & Marketing Research; and finally allocated the same $50,000 budget for both Power-to-Seize Ratio Research Spending & Thermal Resistance Feature Spending. I did not allocate any money at this time for Manufacturing Efficiency Improvement as the expected return is in a very long time.
The results of my decisions were: last quarter sales from existing customers increased by 14% and sales from new customers increased by 0% and distributors, on average, are attempting to achieve a 5% profit margin. The efforts to increase the sales from new customers by: reducing the unit sale price to attract new customers, giving additional 3% discount and allocating additional $10,000 for acquiring additional customers did not bring the expected sale from new customers. My marketing strategy for Quarter #1 can be considered as
References: MT450 Marketing Management (2014) Harvard Business Publishing for Educators Retrieved from: https://cb.hbsp.harvard.edu/cbmp What is NACIS? (2012) United States Government Small Business Administration Retrieved from: http://www.sba.gov Winer, S. & Dhar, R. (2011) Marketing Management 4th ed. Prentice Hall