- War Of The Marketers ...

Quest to Find India's Best Marketing Campus

1.

Introduction:
Your Team has been appointed as the core marketing team for a new start up mobile manufacturing company. You have to take decisions which start right from selecting the headquarters to selecting which advertising promotions to launch. Your performance would be evaluated through 4 years of simulation time wherein your objective would be to maximise profit (cash balance) at the end of 4 years.

2.

Time Frame:
The time frame for the simulation is 4 years. Your companys performance over the period of 4 years will determine your rank in the market. Each Year is divided into 2 phases, each of a time period of 6 months: a) Start Phase b) Tactical Phase The decisions which need to be taken in each of the phases are different and are explained in the case. A day of real time is equivalent to 6 months of simulation time.

3.

Todays Simulation Time & Decision Time Frame:

The decisions and the corresponding time in the Real World & Simulation Environment for the Start Phase in context of todays simulation are summarised in the following table: Year Year-1 Start Phase Simulated Time Real Time Decisions HQ Geographical Region Cities to Enter Eco-System Mobile Phone Model Distribution Production & Price

6 months

4 hours

During the time window of each phase the market simulator would not be operating. However, you would be still able to see number of competitors entering a particular city dynamically. You can enter your decision any time during this window and only the end values entered in the decision parameters would be considered for calculating the payoffs. Changes in the market and results of the day will be visible only after the window closes for the day. Also be ready for surprises at the start of each simulation phase. 4.

Competition:
The teams playing the simulation are mainly your competition and their decisions will affect the market dynamics and consequently your payoff.

- War Of The Marketers ... Quest to Find India's Best Marketing Campus
5.

Consumer:
Mobile phones are a high involvement purchase product. Every user selects the phone based upon the utility she/he seeks out of a mobile phone. A preliminary market research study was done to gauge the voice of the consumer. This research was done using consumer panels in six colonies across the four geographies. The aim of the research was to find out preferences of residents of the colonies in terms of mobile phone usage outside its regular use as a communication device. The snapshot of the results of the user preference survey from the study is provided in Exhibit A. Some of the excerpts from the study are given below: a) Name: Minal Shah Age: 24 yrs. Gender: Female Family Income: 7, 00,000 per annum Profession: Student I do download a lot of video songs or films on my mobile through GPRS/3G. And the viewing experience matters a lot in terms of clarity of picture and sound. I do place a lot of importance on how a video song plays on a mobile before purchasing it. b) Name: Antarikha Manhan Age: 40 years Gender: Male Family Income: 4, 00,000 per annum Profession: Service Apart from the basic call function, I tend to use the camera frequently. Whether it is some function or a vacation, I tend to click pictures with my mobile. Nowadays, mobiles dont have loud music facility in them. I dont feel comfortable using headphones so I need a phone with an excellent sound system. c) Name: Benjonjoy Das Age: 32 yrs Family Income: 10, 00,000 per annum Profession: Businessman Internet is the primary use, of course. Business mails, meetings and conference chats, they are a routine. The Boria Bank app is a must & also many of the other useful apps like the stock market app, news feed and scanner. d) Name: Shaili Kotar Age: 37 yrs. Gender: Female Family Income: 3, 50,000 per annum Profession: Housewife I use it for very basic purposes and dont understand half the things they provide in phones these days. But it should look good and the colours should be bright enough so that I can see the numbers. A decent camera is of course a value add as I can click pictures of my family e) Name: Pooja Hemchandra Age: 18 yrs. Gender: Female Family Income: 12, 00,000 per annum Profession: Student Online Games & apps are a must. It should support as many games/apps as possible. Mainly the apps which support multi-user chat are very important. The mobile should be such that it should stand out and look fashionable.

- War Of The Marketers ... Quest to Find India's Best Marketing Campus
f) Name: Bhola Yadav Age: 50 years Gender: Male Family Income: 6, 50,000 per annum Profession: Service I am a tech savvy guy. People of my age shy away from using email and internet but I am addicted to it. I like mobiles on which I can browse the net quickly and download old Hindi songs. I spend hours with my headphone plugged listening to Kishore Kumar The study also collected the demographics data of each colony. The data was collected and tabulated as follows:
Colony Income Distribution < 3,00,000 3,00,000-6,00,000 6,00,000-7,00,000 7,00,000-10,00,000 >10,00,000 Income Distribution < 3,00,000 3,00,000-6,00,000 6,00,000-7,00,000 7,00,000-10,00,000 >10,00,000 Income Distribution < 3,00,000 3,00,000-6,00,000 6,00,000-7,00,000 7,00,000-10,00,000 >10,00,000 Income Distribution < 3,00,000 3,00,000-6,00,000 6,00,000-7,00,000 7,00,000-10,00,000 >10,00,000 Income Distribution < 3,00,000 3,00,000-6,00,000 6,00,000-7,00,000 7,00,000-10,00,000 >10,00,000 Income Distribution < 3,00,000 3,00,000-6,00,000 6,00,000-7,00,000 7,00,000-10,00,000 >10,00,000 % 25 40 15 10 10 % 15 30 40 10 5 % 10 15 35 28 12 % 9 18 28 35 10 % 30 35 18 10 7 % 10 40 30 15 5 Gender Male Female % 60 40 Age < 22 years 22-30 years 30-40 40-54 >54 Age < 22 years 22-30 years 30-40 40-54 >54 Age < 22 years 22-30 years 30-40 40-54 >54 Age < 22 years 22-30 years 30-40 40-54 >54 Age < 22 years 22-30 years 30-40 40-54 >54 Age < 22 years 22-30 years 30-40 40-54 >54 % 20 23 42 10 5 % 24 30 31 10 5 % 24 23 36 12 5 % 20 30 35 9 6 % 20 23 32 23 2 % 20 23 35 10 12 Occupation Student Service Business Freelance/Agent Other Occupation Student Service Business Freelance/Agent Other Occupation Student Service Business Freelance/Agent Other Occupation Student Service Business Freelance/Agent Other Occupation Student Service Business Freelance/Agent Other Occupation Student Service Business Freelance/Agent Other % 22 42 23 7 6 % 30 30 31 6 3 % 26 28 26 15 5 % 27 40 18 12 3 % 22 30 23 16 9 % 22 32 23 7 16

Colony

Gender Male Female

% 65 35

Colony

Gender Male Female

% 52 48

Colony

Gender Male Female

% 55 45

Colony

Gender Male Female

% 48 52

Colony

Gender Male Female

% 62 38

- War Of The Marketers ... Quest to Find India's Best Marketing Campus
6.

Markets:
You can market the product in India in four geographical areas: Punjab, Gujarat, Tamil Nadu & Bihar Each area has details about: a) Sales Data of Consumer Electronics in various cities in these areas (Data is indexed to a scale and is provided for the Electronics category in the areas. The sales data is not for mobile phones. Also, it cannot be used as an indicator for the potential performance of mobile phones in the areas) b) Demographic Information ( about the cities in these areas Note: The consumer electronics sales data and demographics data for cities in each state are given under the Select Cities tab in the simulator In Year 1 (Start Phase) each team should decide on a particular geographical area for their Headquarters (HQ). Headquarters (HQ) basically decides the factory/manufacturing site. For the simulation, it is assumed that you have infinite production capacity. The location of the HQ does not restrict teams from venturing into cities in other areas. Each team is free to choose the cities where it wants to market its product irrespective of its HQ location. The number of teams who have their HQ in a particular region would be displayed and updated dynamically. The decision of the other competing teams to enter a particular geographical area (i.e. the number of teams entering a particular market area) will affect the market dynamics in that area. The cost of setting up the HQ is INR 2,00,00,000. Also, you can change your HQ location at the Start Phase of any Year. However there will be a fixed cost of INR 1,00,00,000 deducted if you change your headquarters after Year 1.

7.

Demand:
The total demand in the market (City) is a function of the population of the respective market. Through the preliminary market study that was conducted, the total initial demand for the four geographies was estimated to be around 20,00,000 units (estimate includes demand for all eco-systems).

8.

Product:
(i)

Choosing Eco-System:

In Year 1, your company can manufacture phones in 2 base templates (Eco-Systems) a) Alpha b) Beta Each Template is defined by an Eco-System which it uses and has its corresponding base cost for manufacturing. Due to its capabilities and technical design each eco-system has a set of features which it can support. 4

- War Of The Marketers ... Quest to Find India's Best Marketing Campus
Due to manufacturing constraints in Year 1, you can produce phones having only one of the above Eco-Systems. However the restriction for the next 4 years of simulation would be different. You can change the Eco-System in the Start Phase of the Next year. But a pullback cost of INR 10,00,000 will be levied on the team. Eco-Systems keep on undergoing up-gradation and newer Eco-Systems are expected to be developed in the near future. Note: The base cost of the Eco-System is added and considered for calculating the cost of the mobile. There no cost for just selecting a Eco-System. To change the Eco-System in the same Phase first remove the Mobile prepared and then remove Eco-System. (ii)

Designing Mobile Phone Model:

After choosing an Eco-System you can choose the features that your phone will have. The features are clubbed under the label of Design, Handset Type, Display, Camera Pixels, Sound quality, Eco System & Processor speed. Some of the features and the importance of each in moulding your model are given below: Feature Design Components Material Choices Regular Metal Finishing Carbon Fibre Finishing Broad Base Sleek Super-Sleek Regular AMOLED Super-AMOLED Small Medium Large Tactical Keypad Qwerty Capacitive Touch Touch & Qwerty Resistive Touch Details It decides how rich does it look in addition to how durable the phone is. Carbon Fibre is the best material The shape determines the style quotient or trendiness of the phone. Super Sleek is considered to be the trendiest of all designs. It shows how clearly a picture/video looks on the mobile screen. Super Amoled being the best quality available This gives the size of the mobile display screen

Shape

Display

Quality

Size of Display

Handset Type

Interface

Keypad- Numbers and navigation keys in hard format Qwerty- Numbers along with alphabets. Helps in easy Chatting/SMSing Touch-Full touch phone with Capacitive Touch being better but more expensive than Resistive Touch Quality of the pics taken by the camera depends upon the pixels. Higher the pixels better the quality.

Camera

Pixels

1 Megapixels 2 Megapixels 5 Megapixels 8 Megapixels

- War Of The Marketers ... Quest to Find India's Best Marketing Campus
Sound Quality Speakers Regular Speakers Dual X Speakers Sambo Speakers Processor Speed Gega Hertz of Processor High Speed Medium Speed Low Speed For Regular speakers- Sound quality is poor while loudness is medium. For Dual X Speakers the sound quality is high while loudness is medium. Sambo Speakers are the loudest but their sound quality is medium Processor speed determines internet browsing speed & quality of games that can be played

Note: Not all features are provided in the above table. A complete list is available on the simulator. Not all features will be available for every Eco-System. Also the features may be sub-divided into types as displayed in the simulator. A model is defined as a combination of Eco-System along with a set of features. Any change in any of the features and/or Eco-system will result in a new model. Not all features would be compatible with both eco-systems. Each eco-system will have a corresponding set of features listed which would be compatible with its software. Manufacturing constraints in Year 1 permit the production of only one model. The decision for which model to be launched would be taken in Year 1 (Start Phase). However for restriction on the number of models and/or Eco-System would change after the first year. If you want to discontinue a model in next year, there is fixed cost of INR 5,00,000 for pullback of the model. The following are the restrictions in each of the 4 years of simulation. Year 1 2 3 4 No. of Eco-Systems Allowed 1 2 2 2 No. of Models Allowed 1 2 3 3

(iii)

Price & Production:

You will have to set price for each model in the Start Phase. The price you set would be same for all markets you place your products in. You cannot customise price for each market. However you can change your prices after every 6 months i.e. Start and Tactical Phases of the Year. It is assumed that you have outsourced the production function. You must only choose the number of mobile units you need to manufacture based upon number of competitors in the entire market and the demand of the market. 6

- War Of The Marketers ... Quest to Find India's Best Marketing Campus
The excess unsold mobile units will be kept in inventory. Due to a manufacturing policy followed by your company, the inventory remaining at the end of the Year would be sold at 50% of the cost and inventory will be set to zero. Note: If you edit the Eco-system or Model in the same Phase, the values for price of the model and production will be reset in the simulator. You have again choose values for the same 9. Choosing Cities to Market the product: There are a total of 32 cities (8 in each state) in which you can market your product. The decision regarding your choice of cities is done in Start Phase. In Year 1, you can market your product in maximum of 4 cities. These cities need not belong to the same geographical region and can be in any of the 4 geographical regions. In Year 2, you can market your product in a maximum of 8 cities. You can change the cities you want to market only in Start Phase of any of the Years. If you remove the city selected in a previous Start Phase, the pull back cost for that decision would be INR 10,00,000. The following table provides the distribution constraint imposed: Year 1 2 3 4 No. of Cities Allowed 4 8 12 16

Note: You can change the cities in the Same Phase without any costs. However, if you change your city next year in the Start Phase the pull back will be levied. 10. (i)

Business Model:
Distribution:

You will also have to decide on the distribution of your products. Since you do not have in house competency on this, you will have to outsource the function. The following are the options for outsourcing1. Really Time Ltd.:- They have been in the business for over a decade and are really good at what they do. Their stronghold is in West and South India. 43% of their revenue comes from electronics goods. 2. Mod Earn Distributors Ltd.:- They have been in the logistics business for the past 6 years. Their stronghold is in North and East India. 64% of their revenue comes from electronics goods.

- War Of The Marketers ... Quest to Find India's Best Marketing Campus
3. New Bees Ltd.:- They are comparatively new in the business. They just completed 3 years. However, they have two clients and both of them are electronics manufacturers. They function mostly in West and North India. 4. On Your Mark Distributors Ltd.:- They have been in the logistics business for 8 years. They are known all over the industry for high standards of service. 8% of their business comes from electronics manufacturers. Their stronghold is in South and East India. Each of the companies is known for superior service over competitors in the regions that they have a stronghold in. You need to select your logistics according to the nature of service they provide. The contract for signing up a distributor is INR 1,00,00,000 over and above the commission that is charged according to the tariffs. This decision can be taken only in the Start Phase of each Year. Following are the fixed tariff rates as quoted by the companies. All figures are in % of Price per phone:Company Really Time Ltd Mod Earn Logistics Ltd New Bees Ltd On Your Mark Logistics Ltd Bihar 2.5 2.5 1.0 3.0 Punjab 1.5 2.5 2.0 2.0 Gujarat 1.0 1.0 1.5 2.0 Tamil Nadu 2.0 1.5 1.0 2.5

Please note that these tariffs correspond to the case wherein the cities are in the same state where the HQ is located. For example Mod Earn Logistics Ltd will charge a tariff of 1.0% to distribute in Gujarat region if your HQ is based in Gujarat. You can change your distributor in Start Phase of any year. However, according to the contract a termination fee of INR 50,00,000 has to be paid to the distributor. To distribute products to a city in a different state each distributor charges an extra 1% tariff over and above their existing rates. 11. Interest Rates: Interest Rate will be offered at 1% per year by a leading financial organization on the the total payoff amount during the slot period. In case investment exceeds the payoff in hand, the same organization will fund your credit requirements at the rate of 5% per year with payoff turning into negative as an indicator for same. Note: The decisions taken in any round can be changed within that particular round without any cost implications. The cost implication is only there if the change in decision is made in the subsequent round after the round where the previous decision was taken. To see changes reflected in the cash amount, please refresh the page properly using Ctrl+F5.

- War Of The Marketers ... Quest to Find India's Best Marketing Campus

Exhibit A:

Prefered use: Colony 1

26%

7%

7% 14%

Watching videos/ Gaming Surfing the Internet Keeping/ Listening to music Talking for long hours

7% 17% 22%

Clicking memories Office related use Style Statement

Prefered use: Colony 2

11% 12%

8%

24%

Watching videos/ Gaming Surfing the Internet Keeping/ Listening to music 16% Talking for long hours Clicking memories

10% 19%

Office related use Style Statement

- War Of The Marketers ... Quest to Find India's Best Marketing Campus

Prefered use: Colony 3

9% 18%

15%

Watching videos/ Gaming Surfing the Internet 23% Keeping/ Listening to music Talking for long hours

12% 11% 12%

Clicking memories Office related use Style Statement

Prefered use: Colony 4

7% 20%

18%

Watching videos/ Gaming Surfing the Internet 22% Keeping/ Listening to music Talking for long hours

10% 13% 10%

Clicking memories Office related use Style Statement

10

- War Of The Marketers ... Quest to Find India's Best Marketing Campus

Prefered use: Colony 5

23%

6%

8% 16%

Watching videos/ Gaming Surfing the Internet Keeping/ Listening to music Talking for long hours

9%

18%

20%

Clicking memories Office related use Style Statement

Prefered use: Colony 6

6% 15% 10%

22%

Watching videos/ Gaming Surfing the Internet Keeping/ Listening to music 17% Talking for long hours Clicking memories

12% 18%

Office related use Style Statement

All the best!!!

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