Neilsen’s Ice Cream – Marketing Game

Training for management

Training result-oriented work. Training in team building. Flexible working conditions. Music workplace. To start off the research and development, we more so went with our best guess, feeling that this round would truly come close to being somewhat of a trial and error round.

So the numbers for research and development are as follows: Process:

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Round 2

Looking at the results from the previous round we made according to adjustments, which are as follows.

Standard Ice Cream

With a starting price of 280 euros for the standard ice cream, the product did fairly well on the market. Our market share of the standard ice cream is 29%, which is pleasing, but staying there will be tough. A small change in the price will be made in order to see if demand goes up or down, or is affected. We will still continue promoting the product a commercial approach, and continue with the same amount of money for the budget (4000 euro). Special Ice Cream Nielsen's strongest product was our Special Ice Creams with an amount of 483. We won’t change anything on this product and will see if this does affect the company results in the next round. We will purchase 600 new items for the next round.

Luxury Ice Cream

Luxury Ice Cream did a good job in the previous round but can be improved by making some small changes. Nielsen changes the way of promoting to a Price/Quality advertisement, hoping that form of marketing will catch more attention.

Sugar-Free Ice Cream

We sold 387 units of Sugar-free ice creams last round, which is quite a high amount if you compare it with our competitors. To attempt to increase sales and market share, Nielsen will lower prices on this product from 285 to 280. The marketing budget of 4000 euro still stands and is put towards a commercial where they are telling about the price and quality relation.

Round 3

Standard Ice Cream

The standard ice cream was doing quite well in the last round, so we felt only minor changes were needed. We had an average quality for this standard ice cream which we changed into a high quality, this is due to we believe that in order to be competitive you can’t settle on average. We purchased 350 products with good quality. This high quality needs to be compensated by a higher price because if you are just higher your quality, you will lose money. We changed the price from 285 to 295 euros. We are going to promote this product to a commercial which is giving the rich history of the product. Our marketing budget for the standard ice cream in this round is 4000 euros. With higher quality and higher prices, we should make some more profit out of our standard ice cream.

Special Ice Cream

Again it seems that the special ice cream is our strongest selling product. We had a price of 295 with good quality. The changes will be made to up the sales of this special ice cream. We increased the marketing budget from 4000 euros to 4100 euros, so that people won’t lose interest and also stay ahead of the competition. We invested this 4100 euro in a tv commercial where Nielsen’s is proud of the high level of quality at this special ice cream. Because of the high sales, we purchased 450 special ice cream on an excellent basis. The sales are very good for this special ice cream, so we made a decision to change the price from 295 to 300 euros. This shouldn’t make such an effect on people's buying behavior. It’s in relation to change from good quality to an excellent quality of the purchased items.

Luxury Ice Cream

The sales of the luxury ice cream weren’t so high in the fourth period. There should be a reason for this, which we need to fix with making some changes. First, we want to change the price from 295 to 290. This should people make more convenient to buy our product. When you are just lowering the price, somebody has to know that you made these changes, so we hired up the marketing budget from 4000 to 4200. This money will be invested in a sales promotion, so on that, the sales will increase this product. As a result of bad sales in the previous round, we don’t need such a high purchase of products. We will purchase 150 luxury ice creams on a good quality base.

Sugar-Free Ice Cream

The sugar-Free Ice Cream was the weakest product of the 4. With 203 sales and a market share of 15%, the sugar-free ice cream performed very poorly. We need to change something to higher up the sales and the market share. We changed the price of the sugar-free ice cream from 280 to 270. We will promote these prices with a marketing budget of 4000 euros which won’t be changed from the previous round. This money will be invested in sponsoring, where we are telling that the sugar-free ice cream has the best quality. The sales were such as bad, that we don’t need much to purchase. We are purchasing 150 sugar-free ice creams, which should be enough because of an inventory of 400 stocks. Also in an attempt to sell more, we had a press release stating that we were offering for a limited time a Holiday Special Sale, which is why the price was then lowered by 10 euros. In Human Resources we were not performing well as far as our staff was concerned, so we decided to try increasing the education budget from ‘average - 2500’ to ‘good-4000’, in hopes that higher education will provide them with what they need to perform their job and possibly be more satisfied. Also, we felt that it was needed to make a few changes in the research and development area as a way to increase the sales of sugar-free ice cream.

Round 4

One key observation made after reviewing the results of the previous rounds was that with the increase to the education budget there was a slight positive movement in our internal sector. This prompted us to then not only give on more increase in the education budget but to also provide an increase in funding to the salary department. An unfortunate fallout however from a miscommunication between our group members was our inventory, and this is the round where we could have turned it around if caught in time, however, we neglected the round delay, and ended up running out of stock of certain products.

Round 6

The big change was within the Human Resources as well and the working conditions.

After examining the data a little more it was decided to change the working conditions to include the following: Lease espresso machine Training result-oriented work Lease ERP software using ASP Lease CRM software using ASP Flexible working conditions

Standard Ice Cream There were a few changes made in the marketing of this product due to declining sales. We went from focusing on the rich history to associating more with price/quality. The pricing seemed high as well so we lowered from 285-275, as well as adjusted the budget from 4100-4000. For an inventory, 280 products we purchased at a good quality Luxury Ice Cream We felt the only adjustment that should be made was in the pricing, which we lowered from 290-280. Since stocking was also an issue we felt it would be wise to order 400, rather than 150 as in the previous round Special Ice Cream. Pricing was a way too high, so it was determined that hurt our market share of this product the most over the past few rounds. In response, we lowered the price from 300 down to 280 but increased the budget from 4200 to 4300. Then we shifted the focus of the marketing from best quality to Price/Quality and ordered 350 in inventory at good quality rather than excellent. Sugar-Free Ice Cream Only adjustment made with this product was the purchase of 300 inventory. We looked at the results further and also concluded that we were missing out on market research, which was most definitely hurting our chances of competing. After discussing it, we determined that it was wise to purchase market research on the competitor's prices and society's values. The results from the pricing were shocking for us. The whole time our standard ice cream was far too overpriced, as was our sugar-free, but the changes made previous to the communications mix proved to be almost spot on with the research. But this information was taken heavily into consideration for the next round of decisions.

Round 7

Standard Ice Cream

With the huge price difference in our products versus the competitors, we decided that the price needed to be lowered immediately from 275 to 220. Marketing communication matches up with the society's values research, but we ordered 300 in inventory and changed the quality to weak. Luxury Ice Cream Comparing our price to the research from the previous round we determined pricing was fine as is, but the marketing communications needed to be changed from price/quality to cheap. We then ordered 500 in inventory with hopes of high future sales. Special Ice Cream The pricing again matched up well enough to stay competitive so we adjusted the communication from price/quality to the best quality and also ordered 250 in inventory.

Sugar-Free Ice Cream

Another big price change was made when we saw that we were almost 20 euros more than the rest, so we dropped from 270 to 250, and also ordered 500 inventory hoping for increased sales. There was no change made for communications.

Round 8

Again we ran into the problem of running out of inventory, still not fully realizing the key was in what we were overlooking. With hopes to make one final comeback, we decided that it would be a good idea to have another press release announcing one more final sale. Looking back, I see that this may have been our fatal error.

In response to sending out the press release, our prices had to be lowered further and we did so as follows:

In combination with the lower prices, we also increased the marketing budget to 4500 for each product, in hopes of reaching more people with the new of the sale. We then stacked up inventory ordering 800 standards at weak quality, 800 Luxury average quality, 700 Special at average quality, and 800 Sugar-Free at average quality.

Conclusion

All in all the company would have been successful had it not been for the failure to realize the inventory situation earlier. Also, earlier purchasing of market research such as competitors' pricing would have proven much more beneficial in earlier rounds. Nielsen’s actually had one of the highest company equities as well as the highest net turnover but dropped drastically in net profits in the final two rounds. Looking back all of these were very simple, if not too simple, mistakes that could have been avoided through clearer communication.

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