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TEAM ORANGE

Sabre Presentation

Rachel Abbe, Michael Cabagnon, Enrique Gallo, Victoria Meng, and Luc Silver
Team Orange
Roadmap

Strategic Overview Key Takeaways

Data Evaluation Q&A

Team Orange
Team Orange
5-Cs: Overview

Finders Monitors

Studies provided customer preferences and No data


Context potential gains from spending

Three final products: Push 2.0, Pull 2.0, & No products developed by
Company
Cheese Orange

Focused on Monkey and Gibbons segments, Did not have the budget to
Customers each with changing preferences purchase studies

4 competitors all with two initial products Significant competition from


Competitors similar to Push & Pull; by the end of the Blue and Yellow teams
game there were 12 competing products

Sales force of 4 separate distribution Limited information due to


Collaborators channels with media preferences lack of studies.
Team Orange
Team Orange
STP: Targeting Over Time

Period 1 Period 3 Period 5

Market Market Market


Segment Std. Dev. Segment Std. Dev. Segment Std. Dev.
Share Share Share

Monkeys: Monkeys: Monkeys:


Push 3.98 7.4% Push 2.0 5.98 16% Push 2.0 8.6 6.1%

Gibbons: Gibbons: Gibbons:


Pull 8.4 4.3% Pull 2.0 6.3 6.5% Pull 2.0 8.05 4.0%

Gibbons:
Cheese 3.18 7.6%

Key Marketing Insight: Key Marketing Insight: Key Marketing Insight:


The success of perceptual shifts R&D can be rendered non- R&D helps to target more
are dependent on having enough optimal due to shifting accurately, but sales wont
money invested in creative and preferences. Perceptual shifts immediately reflect this if the
advertising. cant fully make up for this. market is mature.
Team Orange
STP: Positioning

Target Customers Consumption by Channel

Key Marketing Insight:


The success of a product isnt
solely reliant on its attributes.
Be in a position where you can
inform and serve your target.
Spend your resources to
Target Customers Media Habits maximize awareness.
Pull Push
Team Orange
Evolution of Decision Making

Initial Strategy Optimized Strategy

1. Identify most 1. Identify target


profitable target segments we can
segments feasibly reach

2. Allocate budget 2. Optimize product


based on long-term attributes based on
goals target segment
preferences

3. Spend remaining 3. Balance


budget on advertising and R&D
advertising spending
Team Orange
Team Orange
4 Ps: Tactical Implementation

Price Product
Reduce unit costs
Operated in Finders Market
Offset higher price
Used old and outdated R&D
with low price
until period 4
perception
Under-emphasized
distribution

Place Promotion
Supply was most Adapt to target segments
popular media consumption
Internet had behavior
highest margins Did not supply sufficient
Direct & Specialty sales force funding
should not be
neglected
Team Orange
Team Orange
Roadmap

Strategic Overview Key Takeaways

Data Evaluation Q&A

Team Orange
Team Orange
Pricing

High correlation between price


and perception
Used regression formula to
predict future ideal price based
on last period
Changes in segment ideal
values are monotonic

Key Marketing Insight: Understanding


ideal price points allows you to price
a bit higher and manipulate
perceptions.

Team Orange
Team Orange
Product Attributes

We used Gibbons past preference trends to Gibbons Purchase Intention for Cheese
determine optimal attributes for Cheese was highest as a result

Key Marketing Insight:


Targeted R&D is much
more successful when
you have sufficient
information about the
customers in the
market.
Team Orange
Income Statement

Upper Bound for next Period


Sensitivity Analysis
Tested different quantities
with associated unit and
holding costs

Key Marketing Insight:


Overproduction is feasible when
holding costs are significantly less than
unit costs.
Team Orange
Competitive Advertising Estimates

Key Marketing Insight:


Understanding competitor behavior in the 4-Ps is critical to a
companys success
Helped us
determine how we
are positioned
compared to other
groups
Correct allocation of
resources in media
Infer whether or not
other teams are
doing R&D

Team Orange
Team Orange
Roadmap

Strategic Overview Key Takeaways

Data Evaluation Q&A

Team Orange
Team Orange
Timing is Everything: Shifting Preferences

Key Marketing Insight: Key Marketing Insight:


R&D without sufficient understanding Hyperfocus on past preferences prevents
of your target market is premature. you from seeing shifting trends.

Period 0 Period 4

Period 2 Period 5
Timing is Everything: Advertising and Team Orange

Awareness

Period 1 Competitive Total


Advertising Market
Company Estimate Share

Red $4491 22%

Orange $2962 8.4%

Yellow $3118 25.2%

Green $5200 21.7%

Blue $4603 22.8%

Key Marketing Insight:


Failing to enter the market early on can
inhibit future awareness. Team Orange
Team Orange
Sunk Cost Fallacy

Purchase Intentions by Segment Period 1

Key Marketing Insight:


Focusing on saving failed
projects prevents you from
moving forward with new
projects that may drive greater
profits.
Period 2
Time and money wasted on
repositioning and dramatic
perceptual shifts

Team Orange
Team Orange
Loss Aversion

Heavy emphasis on losses prevents the company from


rationally assessing points of strength and weakness. This
prevents the company from moving forward with an optimal
strategy. Remaining level-headed after bad periods is
important in assessing future ventures.
Key Marketing Insight:
70-20-10 Rule

Team Orange
Importance of Product Management: Team Orange

Margins

Period 3: both R&D projects from Year 0 had been launched

Key Marketing Insight:


High margins are essential for sales-driven profits. Team Orange
Importance of Product Management: Team Orange

Holding Costs

Period 1

Key Marketing Insight:


Sales forecasts should reflect anticipated market
share, which depends on segment awareness and
attribute accuracy. Poor sales forecasting results in
high holding costs, which pose an unnecessary
obstacle to the companys future innovation. Team Orange