How much competition is there in this market segment?.When setting the Retail Price, you should consider things like: Music2Go Tip: Leftover Marketing Budget.
Music2Go Tip: Improving Total Marketing Contribution Life Cycle for all firms in the Industry. Report for detailed information on the Sales Promotion Rating and stage of Product Tip: You should buy the Distribution Coverage and Sales Promotion Market Research That would give us an optimal Sales Promotion mix something like: That was a simple example, but what happens in the second year that we sell this Sports product? The product will have moved from the “Growth” phase to “Growth – Starting to Mature.” So the optimal Sales Promotion mix will be 1/3 of the way between the ideal Growth and Mature in the Sales Promotion table.
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Then from looking at the Sales Promotion table (this can be found in the Player’s Manual and Market Information Report), we can see that our ideal Sales Promotion Mix for a new Sports product is: This new product will start in the Growth phase of the Product Life Cycle. Say we launch a new Sports product this period. Remember that each of your products will progress through the Product Life Cycle starting in the Growth phase for new products, then gradually progressing through to the Decline stage over the next six rollovers. Note that the Distribution Coverage and Sales Promotion Market Research report will show the age and stage of product life cycle for every product on the market, as well as the Sales Promotion Rating and the Promotion Mix effectiveness. There are 6 types of sales promotion activities available to you to promote yourĮach promotional activity has particular relevance to certain stages of the Product Life Cycle as outlined below. You should buy the Distribution Coverage and Sales Promotion Market Research report for detailed information on the Sales Promotion Rating and stage of Product Life Cycle for all firms in the Industry. Sales Promotion in Music2Go works by boosting your distribution coverage and distribution index. Question of the Week: What is Sales Promotion?.Music2Go Tip: Allocating Your Marketing Budget Note: Most worlds have 20% Demand Responsiveness enabled, although your instructor may request this to be modified or disabled for your Multi-Player. In our example above, we ordered 1.9 million units of our Sonic product, but the Actual Units ordered was less than this at 1.5 million because the demand for our products was less than what we anticipated to sell. This is called Demand Responsiveness.ĭemand Responsiveness allows the actual number of units ordered to increase or decrease by up to 20% to meet the actual demand for your product.įor instance, if you ordered 1 million units of a product, then the actual number of units delivered could vary between 800,000 units and 1.2 million units depending on actual demand. In Music2Go you make decisions for an entire year, but your factory has a limited ability to adjust the number of units produced to try to meet actual demand during the year. This Photo by Unknown Author is licensed under CC BY You can receive an immediate answer to a number of commonly asked questions through our Support Center.Improving Total Marketing Contribution Need extra help?
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How to Set Retailer Price and Retailer Margin in Music2Go If you see any inventory disposal costs, then you know that your competitor has either updated an existing product’s design or abandoned one. Firms with large inventories are over forecasting demand. Firms that have no inventory holding costs have stocked out, because they are under forecasting demand for their products. You can gather some valuable market research from looking at the figures for your competitors. $1 million of inventory would be dumped for $935K giving a loss of $65K. If a firm updates a product with a new design or abandons it altogether then all existing inventory is dumped at 93.5% of what the firm paid for it. Inventory Holding CostĮach year all firms are charged 3.5% of the value of their average closing inventory for inventory holding costs to cover the cost of warehousing etc.įor instance, if you have 1 million units of unsold stock at the end of the year at a cost of $40 per unit, then you have $40 million of inventory which will cost:ģ.5% *$40 million = $1.4m in holding cost Inventory Disposal Loss There are two types of inventory costs in Music2Go.
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