RESULTS REPORT

Name: Jhon Ivan Tauta Laverde.

Email: jhon-ivan88@hotmail.com

SIMULATION TITLE: Product Life Cycle

SIMULATION DESCRIPTION: Holden Evan is creating its own brand of hot

sauce, Burnin\' Rock, using exotic peppers sourced through fair trade. As
product brand manager, your task is to successfully introduce the new product
into the marketplace, and manage the brand through the product life cycle.

You earned 100 percent.

DECISION SUMMARY

You chose to place Burnin\' Rock in health food store chains and the organic
food sections of supermarkets. This was the best choice for reaching your
target demographic.

You chose to use the best ingredients. This was the best choice, since it was
consistent with the product definition and would be more profitable in the long
term.

You chose to spend more on promotion, which was a risky but successful
decision.

You chose to spend $6 million – three-quarters of the product\'s first-year

sales earnings – on future production capacity and promotion. This was the
best answer. Heavy investment is usually appropriate in the growth stage of a
successful prodcut.
You chose to increase promotion spending the same in response to growth.
This was a good choice, since you needed to continue educating consumers
while warding off competition. The spending increase was affordable by
spreading promotion costs and unit manufacturing costs over a larger volume.

You chose to keep prices the same in response to growth. This was the best
choice.

You chose to create new variations of the product, such as new flavors and
varying degrees of heat. This was a good choice to sustain market growth.

When the product reached maturity and sales plateaued, you chose to modify
the market by finding new users for the product. This was a good choice.

You dealt with product maturity and increased competition by creating a new
advertising campaign and marketing Burnin\' Rock more aggressively. This was
a good choice.

DETAILED ASSESSMENT

Background

You are the product brand manager at Holden Evan, a global corporation that
sells a variety of consumer goods.

Holden Evan is creating its own brand of hot sauce, Burnin\' Rock, using exotic
peppers sourced through fair trade.

As product brand manager, your task is to successfully introduce Burnin\' Rock

into the marketplace, and manage the brand through its product life cycle. You
have significant freedom to make the marketing decisions you think best, but
the CFO has directed you to make at least some profit on this brand each year
beyond the first.
Product Development

According to the product plan, Burnin\' Rock will contain exotic peppers sourced
through free trade. These exotic peppers contain antioxidants and have a
distinctive flavor.

The product will have the slogan \"Hot sauce with taste\". It will be marketed for
its health benefits, the quality of its ingredients, and its delicious taste. It will be
aimed at upscale consumers who consider themselves sophisticated and
socially responsible, and will initially sell for $5 a bottle. Initial market research
indicates that this product could be very successful.

Positioning

First, you need to decide the best place to sell the product, based on the
product positioning you are trying to achieve.

You chose

OPTION 2

Place the product in health food store chains, and in the organic food sections
of grocery stores and supermarkets.

Ingredients

Now decide how Burnin\' Rock will actually be produced.

You chose

OPTION 1

Use the best ingredients, as specified in the product definition.

Slow Growth

It\'s still early in the launch stage. Sales of Burnin\' Rock are not rising quickly.
Growth is slow and the product has not yet turned a profit. How do you respond
to this?

You chose

OPTION 3

Spend more on aggressive promotion in order to increase product sales.

Growth

Burnin\' Rock sales are growing strongly, exceeding expectations and reaching
$8 million in the first year. During this period the product lost $1.23 million. You
consider the product to now be in the growth stage.

You need to decide how much to spend over year two on future production
capacity and promotion, to continue to grow the brand. What would be a
reasonable figure?

You chose

OPTION 2

$6 million

Adjusting Promotion

Now that you are in the growth stage, how should you adjust the amount of your
budget for promotion, compared to the launch year?
You chose

OPTION 3

Increase promotion spending

Adjusting Prices

The CMO is pleased so far and wants to know how you plan to adjust prices in
response to growth.

You chose

OPTION 2

Keep prices the same

Sustaining Growth

Now it\'s year three. The CEO wants to know your plan for sustaining market
growth.

You chose

OPTION 2

Create new lines of the product, such as different flavors and different degrees
of heat.

Maturity

It\'s five years later, and sales have reached a plateau. The product is clearly in
the maturity stage. What should you do to increase sales?
You chose

OPTION 3

Modify the market by finding new users for the product.

Maintaining Sales

Burnin\' Rock has reached maturity. Sales growth is slowing down. Competitors
are numerous and have introduced products that are better, or cheaper, or
more aggressively marketed. What will you do to keep sales up?

You chose

OPTION 3

Create a new advertising campaign and promote Burnin\' Rock more

aggressively.

New Marketing Campaign

The old, \"sophisticated\" marketing campaign is replaced with a newer, edgier

campaign aimed at a younger demographic. This refreshes the brand.

Decline

Five more years have passed, and all hot sauces – Burnin\' Rock as well as
its competitors – are experiencing declining sales. Market research suggests
that hot sauce is no longer popular and is not likely to come back into fashion.
Sales are down to $22 million per year, and profits are down to $2 million per
year. What should you do?
You chose

OPTION 2

Cut costs such as advertising to a minimum so as to realize the maximum profit

from Burnin\' Rock\'s declining years.

Feedback

You earned 100 percent.

If you would like to improve your skills while improving your score, read your
textbook and review your course materials before attempting this simulation
again.