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Shareholder Value (SHV) - PDF

   

Added on  2020-05-16

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Report and Reflection on Simulator Team Experience NameDate

Report: Delta Hedge Fund ManagementShareholder Value (SHV)First Rollover At this stage,the team wanted to popularize our product offering and and so it was decided that we adopt a suitable marketing mix involving the product, price, place. The opening price was set at $ 730 and the team decided to engage in a public relations exercise at a cost f $ 410000, to augment the marketing effort, which was budgeted at $ 332500, for advertising on various media platforms, including TV, magazines, and the Internet. The strategy was an aggressive marketing and public relations campaign to create a hype on the product and attract new customers; with the budgets and projections shown below;The team wanted the brand to be recognized, realizing the value of a strong brand in attracting customers and creating customer loyalty to the brand and $ 250000 was set for brand advertising. For place in the marketing mix, the team sought a direct online selling approach, bypassing middle-men, and set retail margins of 35%. the team planned to increase efficiency and quality as well, as strategic decisions. The planned production was 16000 units, with foretasted sales of 18000 unitsResults: The strategy paid off, with sales increasing and the company achieving healthy profit margins., however, the team did not meet the sales targets and market share and the sales were below the forecast target. At this point, the company was at the same level as the other competitors in terms of shares, share prices, capacity, and sales, with each having a single product. Rollover TwoAt this stage, the team decided to focus on creating brand awareness through aggressive marketing and pricing, with a decision to drop the prices slightly in order to get more customers on board. The

team more than doubled the advertising budget tp $ 950000, with PE expenditure at $ 450000; foretasted sales was 21000 units, and we were to produce 17500 units. Brand advertising expenditure was raised to $ 500000; the shot below shows the decisions taken;Results: Despite lowering the prices and increasing advertising expenditure as well as PR expenditure and efforts, the sales only rose marginally. However, we reasoned that the advertising and PR expenditure was justified as the business was still young and we needed to aggressively penetrate the market, gain market share, and attract and retain customers. To increase reach, a sportsstore was added as one of our distribution channels. Our forecast efficiency was our undoing, at just56% which led to a lot of unsold inventory, inventory has associated costs. We had committed muchless to advertising, compared to competitors, whose advertising expenditure tripled ours, at the veryleast. Rollover ThreeThe team continued the strategy of aggressive advertising and marketing, with a further slight reduction in product prices, and the use of a mixed media approach to advertising as shown below;

Brand advertising expenditure was raised to $ 700000 with the sales channels and decisions on improvement on quality and efficiency also being made, as depicted below;Results: The sales continued to grow, although margins reduced to 33% as we lowered prices slightly. The sales were not as good as we had planned for, and reasoned we should continue with our aggressive advertising and brand promotion strategy with competitive pricing. Low advertising and the media mix used led to low sales compared to competitors, whose sales tripled ours Rollover FourAt this phase, the team decided not to increase expenditure on advertising and brand promotion; these were retained at previous levels. However, a decision was made to enhance efficiency and improve capacity, with quality products and as the new strategic decisions to move forward and meet the sales targets, as depicted below;

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