Product Launch a two hour simulation covering basic marketing and financial concepts.

SUMMARY

KEY LEARNING: The simulation covers these issues:

• PRODUCT LIFE CYCLE
• PRICING STRATEGY
• PROMOTIONAL STRATEGY
• PROFIT & CASH FLOW
• ANALYSIS, DIAGNOSIS & DECISION-MAKING
• FORECASTING
• TEAM WORKING

AVAILABILITY: This business simulation is designed to be used by your trainers.

Learn more about running a business simulation yourself.

DURATION: Two hours. This short duration allow the simulation to fit into most course time-tables (even the "difficult" after dinner slot).

TARGET AUDIENCE: The simulations are designed to be used by trainees, junior management up to middle management, functional specialists and supervisors. Or, as an ice breaker, for all levels up to senior management.

METHOD: After a short briefing the training group is divided into several teams of three to five participants. Each consider the problem facing them and then make a series of decisions that are fed, by the team, into their own microcomputer that simulates their effect. The results are printed for the team to analyse before making their next decisions. This decision-making cycle should be repeated for at least eight periods. At the end of the simulation phase the teams reunite to discuss and compare results.

HARDWARE REQUIREMENTS: Ideally a single PC and printer for each teams (of four or five participants). But, if necessary two or three teams can share a single computer with printer.

The simulation uses an advanced simulator that supports tutoring, provides for ease of use and will run on all Windows operating systems from Windows 98 thorough Windows 8.

KEY LEARNING

PRODUCT LIFE CYCLE

Participants launch a unique product into a new market without competition. But, eventually, competition will arrive. So, first, they are concerned with penetrating the market and growing sales. When the competition arrives, the market situation changes and sales peak and then erode. Consequentially, participants manage the whole of the Product Life Cycle from initial launch, through growth, maturity to decline.

PRICING STRATEGY

Each period, teams must decide how much to charge for the product and so, must decide the correct price to meet period and long term marketing targets. Initially, participants will be selling into a price insensitive market that, probably, will accept high prices. However, as the product penetrates the market and the mix of customer changes, price sensitivity increases. Finally, when competitors enter the market, customers become very sensitive to price. As a consequence, throughout the simulation, participants must assess price sensitivity and adjusting their price. An adjustment that has to take into account sales growth, long and short-term profit needs and cash flow.}

PROMOTIONAL STRATEGY

Each period, teams must decide how much to spend on promotion and so, must decide the correct level to meet period and long term marketing targets. Initially, participants must promote heavily to grow the customer base and establish themselves before the competition arrives. When competitors enter the market, the need for promotion reduces (as competitors help build product awareness) and as price reductions reduce profit.

PROFIT & CASH FLOW

During the simulation, participants must consider both profit and cash flow and realise the difference between the two. Initially, as sales grow, participants must worry that too rapid expansion will exhaust their cash reserves and lead to bankruptcy. Equally, a too prudent launch will mean that they are not established in the market before the competitors arrive.

Over the Product Life Cycle, profits will move from initial losses, peak and then, as competition "bites" erode and may, eventually, lead to losses. A very skilful team may be able to make cumulative profits of over a million and this may be used as a target, to encourage competition and choose a "winner".

ANALYSIS, DIAGNOSIS & DECISION-MAKING

The uncertainties, ambiguities and dynamics of the simulation mean that it can be used to acquaint new graduates, engineers and scientists with the nature of business and decision-making.

FORECASTING

Throughout the simulation participants must accurately forecast demand so as to set the right production level. Too low production will loose sales and reduce profits. Too high production may risk over expansion and bankruptcy and will reduce profits because the product has a limited life and a proportion of surplus inventory will be scrapped.

TEAM WORKING

With participants working in small teams, they have the opportunity to share experience and knowledge, present and promote different viewpoints, develop time management and their "people" skills.

DOCUMENTATION

Documentation is provided separately for the UK and US Versions MS Word format and comprises:

A Participants' Manual that provides, for the participants. a description of the simulation, a description of their task and how to use the software.

The Background Notes describe the simulation for the trainer and may be used as a handout to the participants at the end of the simulation. (Please contact us for these)

The Record Sheets are optional and are provided to allow teams to share key results as the simulation progresses.

Using the Simulator provides, for the trainer (and computer support staff), information about installing the simulation and the use of the software.

Running the Simulation provides, for the trainer, information about running the simulation.

Briefing is a MS Power Point briefing explaining the simulation to the participants. (You may find it useful if you review this before reading the briefs.)

	UK Versions	US Versions
Participants' Manual (Souper Hot)
Participants' Manual (HoTTea)
Record Sheet
Using the Simulator
Running the Simulation
Briefing (Product Launch)
Briefing (HotTea)

SIMULATOR DOWNLOAD

This is provided to allow you to download an evaluation version of the simulation. 

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Most recent update: 03/09/15
Hall Marketing, Studio 11, Colman's Wharf, 45 Morris Road, London E14 6PA, ENGLAND
Phone  +44 (0)20 7537 2982 E-mail jeremyhall@simulations.co.uk