Mgfc Business Game Presentation

Team Based Marketing Simulation

Roma 30/07/2012Mauro Cavallarowww.linkedin.com/in/[email protected]

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Indice

From wargames to businessgames The Mgfc Business Game The Scenario The Team Composition The information system The decision system The Qualitative component Victory conditions Player’s interface

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From Wargame to Businessgame

Wargames were developed for the first time by the Prussian Army in the early 19th century, taking the name

of Kriegspiel. This kind of game was aimed mainly to training all rank officers of the Army: either by

stimulating tactical skills or by proving procedures and rules .

Wargames are mathematic models (more or less complex) aimed to simulate the results of the decision

taken by the players: according to the players’ decisions (input) the model determines the effects (output)

In the same way the Business-game allows to simulate simultaneous business decision effects.

Why a Business-game is an important opportunity for a business school:

To test the students’ correct learning

To motivate students by using the learned tools in a practical way

To develop students’ problem solving, decision making and responsibility taking skills

To develop a more interdisciplinary and concrete approach to the problems

To develop team working skills in a competitive context

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The Mgfc Marketing Businessgame

Business scenario: Consumer goods productors

Number of players allowed: 6-18

Microeconomics model: differentiated Oligopoly

Model type: Deterministic

Input: Quantitative and Qualitative (turned into quantitative by human evaluation)

Type of Game: simultaneous decision

Platform: Xls + Filemaker Pro

Parameters and variables: about 40.000

Number of tests: 5

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The Mgfc Businessgame

Parametras

ENGINE

Team 1

Team 2

Team 3

Team 4

Scenario

Q1

info

info

info

info

Decision

Decision

Decision

Decision

Scenario

Q2

MGFC BUSINESSGAME

Businessgame consists in a number of turns (one quarter each)

In Every turn players take decisions using the scenario’s provided information.

Decisions are elaborated by the business-game engine and the result is a new Scenario

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The Scenario

The scenario consists in:

10 regions;

Population structured in different Types whit different sensibility to different stimoulus;

A multidimensional Demand Curve (2d product, price, communication pressure, distribution coverage);

Different consumer preferences, monthly consumption and media sensibility grouped in regions and

consumer types;

Production Cost Structure;

Media cost structure and availability; Distribution Costs;

Market Shares (volume/value);

Products lock-in level;

Distributors market organization;

Company's characteristics . (the firms may have different strength and weakness).

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The Team

In each team there are three roles

The Leader

Decides on price and product (2D) strategy;

Decides on the scale of production;

Decides on the allocation of the budget trough Communication and Distribution

Decide what piece of information are required in order to take decisions

Communication Manager

Decides about the media mix

Decides about promotion and fidelity program

Retail Manager

Decides and manage the distribution strategy

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The Information provided

Every turn (quarter) each team can require some information. (the capacity of find information may change across companies)

Other information are provided to all teams

In order to focus the simulation in decision making, the information are all provided in a simple and clear lay out.

There are three type of information:

Company’s Information Sales, Incomes, Expenditures Profits and Losses

Public Information and Press (the same for each team) Public population statistics Prices and product features of opponents’ goods Newspapers articles Prices of advertising, distribution costs etc…

Researches and Other information (on demand)E.g.: Distributors’ market organization Consumers’ cluster analysis Competitors’ expenditures in advertising

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The Decisions

Every quarter each team member register his decision on his own dashboard.

The dashboard is the tool that the team uses to “communicate” with the simulation engine.

The dashboards may have different support: online, xls or paper

Leader dashboard

DecisionsReport Area

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La Componente Qualitativa

The model allows to take in count also qualitative components. (by human evaluation)

the teams bay attach brief presentation (one slide) to support-integrate their decisions (e.g. define details

about commercials or packaging).

Those presentation are evaluated in 1 to 5 rank and the result impacts on the effectiveness of the

decisions.

Evaluation methodology may be defined with the business school.

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The Dashboard - The Leader

Define Price, Product and Tecnology (scale of production)

Allocate the budget trogh distribution and communicatio

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Decide the allocation of his own budget trough different media (global-Local)

May sign long term contracts (mote than 1Q duration)

The Dashboard - The Retail Manager

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The Dashboard - The Communication Manager

Mange his retail network

May sign long term contracts (mote than 1Q duration)

Long term communication contracts Budget 50.550$ Description investment Q 1 Q 2 Q 3 Q 4 Q 5 Q 6Available 50.100$ xyz 450$ 500$ 500$ 500$ 500$ 500$ 500$ Allocated 50.100$ 0 -$ -$ -$ -$ -$ -$ -$ To be Allocated -$ 0 -$ -$ -$ -$ -$ -$ -$

0 -$ -$ -$ -$ -$ -$ -$ Old Contracts* 1 0 -$ -$ -$ -$ -$ -$ -$ New Contracts 2 0 -$ -$ -$ -$ -$ -$ -$ Tot Contracts 3 max 10 0 -$ -$ -$ -$ -$ -$ -$ (*) More of 1q duration 0 -$ -$ -$ -$ -$ -$ -$

0 -$ -$ -$ -$ -$ -$ -$ 0 -$ -$ -$ -$ -$ -$ -$

1 2 3 4 5 6

Media RegionContract duration

inv min per Q investment total investment bonus Q Q+1 Q+2 Q+3 Q+4 Q+5

1 Local - TV Reg 1 OK 2 6.080$ 7100 14.200$ 100% 7.100$ 7.100$ -$ -$ -$ -$ 2 Local - non conv Reg 5 OK 3 4.104$ 4150 12.450$ 105% 4.358$ 4.358$ 4.358$ -$ -$ -$ 3 Local - Sponsor Reg 1 OK 1 6.840$ 7800 7.800$ 100% 7.800$ -$ -$ -$ -$ -$ 4 Local - TV Reg 8 OK 1 1.216$ 5000 5.000$ 100% 5.000$ -$ -$ -$ -$ -$ 5 Global - RADIO Global OK 1 24.320$ 26050 26.050$ 100% 26.050$ -$ -$ -$ -$ -$ 6 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 7 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 8 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 9 #N/D -$ 0% -$ -$ -$ -$ -$ -$

10 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 11 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 12 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 13 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 14 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 15 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 16 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 17 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 18 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 19 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 20 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 21 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 22 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 23 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 24 #N/D -$ 0% -$ -$ -$ -$ -$ -$ 25 #N/D -$ 0% -$ -$ -$ -$ -$ -$

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Production

Realtime cost structure calculation for each mix Tecnology-Product (2D)

Realtime Break Even Point and Contribution Margin calculation for each mix Tecnology-Product (2D)-Price