Business Simulation Report: Marketing & Production Strategy Report

This group simulation report analyzes marketing and production strategies over five years (2019-2023) within a competitive business environment. The report details meeting minutes, decisions made regarding pricing, production volume, advertising, public relations, and branding expenditures. Key performance indicators such as shareholder value (SHV), sales, profit, and demand forecast accuracy are tracked and discussed. The simulation involved launching new products, improving existing ones, and making strategic investments in capacity, efficiency, and quality. The report highlights the team's efforts to adapt to market conditions, manage debt, and maximize shareholder value, culminating in significant growth in sales, profits, and SHV by the final year. The document also shows how the group strategically allocated resources across various marketing channels and operational improvements to achieve a competitive advantage.

GROUP SIMULATION REPORT
ASSIGNMENT
Meetings and Minutes
SUBMISSION DATE: 28TH SEPTEMBER,2018
SUBMITTED TO: REX WALSH
SUBMITTED BY: ANU PRISCILLA KHATI: 11500414
DURGA JAYANTH SEETHAMSETTY :11601098
NIMESHI GAMAGE: 1170020
JOSE DAVID VALENCIA: 11501715

1st Rollover – 15.08.2018, 23:59pm (Sun)
Meeting Title: Year 1 –2019 marketing and production strategy
Meeting called
by
Anu Priscilla Khati
Meeting Date: 11/08/2018 Meeting time 09:00
Meeting
Location
Sydney CBD
Attendees Anu Priscilla Khati, Jose David Valencia, Durga Jayanth Seethamsetty, Nimeshi Shashikala
Babarawana Hetti Gamage
Agenda Topics: Price of product & Budgeting advertisement and PR
Discussions
Price of product & Budgeting advertisement and PR play vital role in the business. So, it is vital to spent
money on part where the company can make a profit. Therefore, price segmentation allows us to offer the
same basic product but add features that clients are willing to pay for.
Conclusions
First year of production, the recommended price was in the mid-range, where the price was at average
which was equivalent with the segmentation. The rational price kept hold of the overall Gross Margin, and
if the market didn’t respond, the price would be re-considered to adjustment to the need.
By analyzing the most effective marketing strategy in the market research in the menu and dictating
segmentation of products, our decision in 2019:
Price: $700
Production: 16,500
Advertisings Expenditure $ 750,000
PR Expenditure $500,000
Action items Person Responsible Dead line
Set a price of product & marketing cost Nimeshi Shashikala Babarawana Hetti Gamage 11/08/2018
Year 1 2019 Key reports
Shareholder Value (SHV)
In 2019 the company’s shareholder value was $11.45. The competition was led by Road-Ranger with
highest SHV 13.07 and Interior Inc. had the lowest SHV of 12.46 that set their position on the 3rd place.
Whereas the cumulative change in SHV was 2.8% for our company and the lowest change for EMS Sydney
was 4.1% and the highest was again 17.3% for road-Ranger.
Sales and Profit
Our Company is manufacturing mountain product with retail price of $700. Retail sales for financial year
2019 were $11,288,200 and that earned us profit after tax of $1,079,908. The total number of shares being
$1,000,000 and earnings per share were $1.080.

Total product Advertisement and PR
Our Company paid $750,000 on the advertisement expense in the year 2019 and $500,000 on total
Product PR and Product awareness was 18%.
2nd Rollover – 22.08.2018, 23:59pm (Sun)
Meeting Title: Year 2 –2020 Develop strategy and Brand

Meeting
called by
Anu Priscilla Khati
Meeting
Date:
18/08/2019 Meeting time 9:00
Meeting
Location
Sydney CBD
Attendees Jose David Valencia, Anu Priscilla Khati, Durga Jayanth
Seethamsetty, Nimeshi Shashikala Babarawana Hetti Gamage
Agenda Topics: To Apply marketing and Branding method
Discussions
Along with previous year decision, we planned to modify profit margin and Branding expenditure.
Conclusions
Brand awareness effects on consumer decision making to repeat purchase from single company because
of trust and quality. We decided to pay more in Brand advertising as part of advertising campaign.
We decided whether it would be better planning an alternative distribution method. Our main concern for
this year to maximize our profit by decreasing the margin. We distributed retail margin to
Product shop=max 25%,
Sports stores=max 25% and
Discount store =25%.
Price: $738
Production: 24,388
Advertisings Expenditure: $3,800,000
PR Expenditure: $1,200,000
Branding Expenditure: $1,200,000
Action items Person Responsible Deadline
Product Branding Jose David Valencia 18/08/2019
Year 2 2020 Key reports
Shareholder Value (SHV)
Our company’s shareholder value decreased comparatively to the SHV of previous year 2019, it became
$11.09. Road-Ranger was leading the market with highest SHV of $18.45 and You-Bike went up that year
by increasing their SHV to $14.02 and beat the Fantastic-four which had hold the SHV of $13.86.
Cumulative Change in SHV
There’s a decrease in the cumulative change of SHV to 3.1%. Road-ranger having the highest cumulative
change of 41.2%. Whereas, the lowest cumulative change was 1.6% for Interior Inc.
Sales and Profits
Company’s Retail sales of 2020 is $ 16,529,724 and profit after tax is $625,336 which has decreased in
comparison to last year.

Unit Sale Price
In 2020 we updated the retail sale price which was $738 still providing one of the best cheapest and most
reliable product.
Demand Forecast Accuracy
The production was 24,388 units that year because we had some opening stock. It showed the demand
forecast accuracy of 91%. We were working hard and trying to get up with the sales in our world in
comparison to our competitors.
Total Product ADVERTISMENT
Our company’s total Advertisements cost in year 2020 was $3,800,000 on total product advertisement in
the market to get wide range of awareness that led to a average amount of sales that year.
Total Product Public Relation
After the experience and calculations we decided that investment in public relations and found out that
magazines were the best source to promote our product, leading the company to spend $1,200,000 on
magazines.

3rd Rollover – 19.04.2019, 23:59pm (Sun)
Meeting Title: Year 3 –2021 developing a new product
Meeting called
by
Anu Priscilla Khati
Meeting Date: 15/08/2020 Meeting time 9:00
Meeting
Location
Dinning Hall KOI,
Attendees Anu Priscilla Khati, Jose David Valencia, Durga Jayanth Seethamsetty, Nimeshi Shashikala
Babarawana Hetti Gamage
Agenda Topics: Controlling Capacity, efficiency, Quality & Debt
Discussions
We decided Brand Advertising as our major campaign and to fund it. Also, our profit position is average,
therefore, budgeting for branding needs to be taken under consideration. Next, we are going to launch a
new product. We have enough capacity to produce mountain product. For that reason, we are not
increasing our capacity rather we decided to invest money on efficiency and quality. As we reserved
money for the future, we decided to pay off the dept which will decrease the interest expenses.
Conclusions
Price: $760
Production: 30000
Advertisings Expenditure: $ 3,800,000
PR Expenditure: $1,200,000
Branding expenditure:1,200,000
Capacity expenditure:0
Efficiency expenditure:1,000,000
Quality expenditure:1,00,000
Action items Person Responsible Dead line
Budgeting of capacity of manufacturing Durga Jayanth Seethamsetty 15/08/2020
Year 3 2021 Key reports
Shareholder Value (SHV)

Our company’s shareholder value increased to $12.71 in the year 2021. Road Ranger is leading the market
with the highest SHV of $20.12 and You-Bike went up that year by increasing their SHV to $13.97 beating
the Interior Inc which had the SHV of $12.16.
Cumulative Change in SHV
We finally managed to increase the cumulative change and secured the change of 14.6%. Road Ranger has
the highest cumulative change of 9.1%. Whereas, You Bike has the lowest cumulative change of 0.4 %.
Sales and Profit
Retail sales of 2021 is $21,903,200 and profit after tax is $1,455,037.
Unit Sale Price
In 2021 we changed the retail price which is $760, and which was effective on that particular year and it is
competitive advantage to us that we are competing on price.
Demand Forecast Accuracy
Our production was estimated for 30000 units that year, but we produced nearly the same amount and we
had few units from previous stock. It showed the demand forecast accuracy of 96% which was a good sign
that we were accurate in estimating.
You Bike had the lowest accuracy margins where they got 23% accuracy.
Total Product Advertisement
We had spent almost same amount as last year with few changes being made in spending in advertising
via:Television which we found great advantage to increase awareness in the market.
Total Product Public Relation
From our experience and calculations, we had decided to invest in public relations specially magazines
were the good source of PR for our business, and we spent $1,200,000 in magazines.
Brand advertising
We will be launching a new product next year and that’s the reason we spent minimal amount on brand
awareness in which was amounted $1,200,000.
Quality and Efficiency Improvement
We had spent $2,000,000 just to further improve our quality and efficiency for our customer to experience
the best service always.

4th Rollover – 22.08.2018, 9:00pm (Sat)
Meeting Title: Year 4 –2022, launch a new product
Meeting
called by
Anu Priscilla Khati
Meeting
Date:
18/08/2021 Meeting time 9:00pm
Meeting
Location
Market street

Attendees Nimeshi Shashikala Babarawana Hetti
Gamage, Jose David Valencia, Durga Jayanth
Seethamsetty, Anu Priscilla Khati
Agenda Topics: Capacity Planner and New Product
Discussions
From this year, we can launch our new product. The discussion includes to introduce the most effective
product that popular in the market. We decided to improve our mountain product which will attract more
customers in the future. We also decided to increase the capacity of the factory and spend more amount
to increase efficiency and quality.
Conclusions
Development expenditure: $3,000,000
Product Launch Expenditure: $1000000
Advertisings Expenditure: $3800000
PR Expenditure: $3,000,000
Branding expenditure: $1,200,000
Capacity expenditure$200*13000): $2,600,000
Efficiency expenditure: $1,800,000
Quality expenditure: $4,500,000
Equity buyback: $1,270,000
Dividend: $0
Action items Person Responsible Dead line
Improvement and launching new product Anu Priscilla Khati 18/08/2021
Year 4 2022 Key reports
Shareholder Value (SHV)
The company’s shareholder value increased in compare to the SHV of previous year 2021, it became
$39.07. Road Ranger was leading company in our world. Fantastic Four was also leading the market but
they hold second position with SHV of $16.11.
Cumulative Change in SHV
We managed to increase the cumulative change in SHV and also secured the change of $207.4% and we
were leading in the market. Interior Inc had the lowest cumulative change of 9.2%.
Sales and Profits
Retail sales of 2022 was $51,450,580 and Profit after tax was $5,452,296.
Unit Sale Price
In 2022, we increased the retail price to $790 as we had developed the mountain product. We had also
launched our new product called “Faster Ride” and it was priced as $2300.
Demand Forecast Accuracy

Our production estimation was 35,000 units this year and we sold 33,102 units. It was a great achievement
that we sold most of our product. For the new Product, we estimated 100,00 and sold 11,000 units and we
did not sell all of them which showed our demand forecast accuracy of 77%.
Total Product Advertisement and Public Relation
We have spent $3,800,000 on Advertisement and $4,200,000 on Public Relation.
Brand advertising
To get awareness in Branding we spent $1,20,000 that gave us 57% brand awareness in the market.

5th Rollover – 29.08.2018, 23:59pm (Sun)
Meeting Title: Year 5 –2023 to launch a new product
Meeting called by Anu Priscilla Khati
Meeting Date: 25/08/2022 Meeting time: 12:00pm
Meeting Location Library, Kent Street
Attendees Anu Priscilla Khati, Jose David Valencia, Durga
Jayanth Seethamsetty, Nimeshi Shashikala Barawana
Hetti Gamage
Agenda Topics: Launch a new product
Discussions
In this meeting, we are focusing our discussion on new Product Pricing. The study about the
estimated preferences for product dimensions in each segment is given below. In this year
we are launching our third new product and developing and making improvements with the
previous two products.
Conclusions
Development expenditure: $4,000,000
Product Launch Expenditure: $1,000,000
Advertisings Expenditure: $ 6,200,000
PR Expenditure: $5,400,000
Branding expenditure: $1,200,000
Capacity expenditure: $1,200,000
Efficiency expenditure: $2,400,000
Quality expenditure: $5,000,000
Equity buyback: $3,540,000
Dividend:$0 (no payment)
Action items Person Responsible Dead Line
Fast-Youth Durga Jayanth Seethamsetty 25/08/2022
Year 5 2023 Key reports
Shareholder Value (SHV)
Our shareholder value was increased in the year 2023 in compare to the SHV of previous year which is
$79.07. We were first and leading in the market in our world5. However, Interior Inc had the lowest SHV in
our world with $13.96.
Cumulative Change
We managed to increase the cumulative change in SHV and secured the change of 102.4%.
Sale and Profits
Retail sales in 2023 were $70,898,960 and Profit after tax was $9,254,655.
Unit Sale Price
In 2023 we managed the price for mountain product $810. We had also launched our new product called
“Faster-Ride” and it is priced as $2400. We have improved Fast-youth and then the price was $380.