Capsim Strategy Essay

1256 WordsFeb 8, 20096 Pages
Capsim strategy. Let's start off with the marketing expenditure. Marketing is a must spend, and cannot be stingy on that! Promotional budget to increase awareness. The aim is to reach 100% awareness in the shortest period of time. For the first product which is already in the market, YR1 spend $1700 and YR2 spend $2500, subsequent spending is $1400 to maintain 100% awareness. For new product, on the year that it is going to be launched (eg. Mar 09), make the spending on YR09 $3000 (this will come out in your statement as $3250), YR10 which is the year after will required $3000 as well and subsequent spending is $1400 to maintain 100%. Sales budget to increase accessibility. Its very hard to come out with a proper formula on how this works as it takes into consideration all products in an existing market. My suggestion is, don't be stingy. Spend $3000 on each product until accessibility reach 100% then tune down to $2000. Yearly! Next, its our product. What kind of specification and how many and which market? Launch 5 products. 1 product each year. All product will target the low tech market but will also cater for the high tech market. MTBF will set to highest point for low tech requirement, if I remember correctly is 21000. To get the yearly specific product positioning, you have to get the fine cut line for both high tech and low tech in YR8 which is the final year. Your 5 products should be spread out and resting on the low tech fine cut line which is in the high tech region. After you have decided the positioning for all 5 products, you can calculate backward for each products as you already know how much the low tech market move each year. Performance increase by 0.5 units every year and size decrease by 0.5 units every year just in case. Work backwards! When you want to launch a new product, the positioning of the product should be for the year the

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