Company Name: Compustar: Marketplace-Business-Simulation-How-Win-Edited-5-31-09-A.Html
Company Name: Compustar: Marketplace-Business-Simulation-How-Win-Edited-5-31-09-A.Html
Company Name: Compustar: Marketplace-Business-Simulation-How-Win-Edited-5-31-09-A.Html
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marketplace-business-simulation-how-win-edited-5-31-09-
a.html
Executive Personnel:
Jason Juren VP Finance
Tameisha Smith VP Advertising
Reagan Simpson VP Sales Management
Monica Greak VP Brand Design
Marketplace Marketing Plan
Marketing 5332: Executive Decisions in Marketing
I. Executive Summary -
CompuStar started the first year very optimistic that it could design a strong brand
and create a powerful advertising campaign that would lead us to dominance in the market. Our
optimism regarding our brand design was well placed, and as of Q5 we have maintained the
strongest workhorse brand with a score of 72. We expect this score to improve even further in
Q6 given the new R&D items we have purchased (New Word Program & High Speed modem).
While the CostCutter brand has been a bit more volatile (We no longer had the best brand as of
Q5 68 versus MicroChip's 72) we believe that our coming changes to the brand will give us the
strength we need to recapture the market and re-establish ourselves as the premier
CostCutters. In year two we plan to continually redesign our brands as we learn from our
competitors and as we gather more market data. We have also planned the launch of an
Innovator brand and a Traveler brand. These brands are simply copies of the best brands on
the market. We feel that by doing this we can capture the under-served markets in which we
have no real competitors and at the same time deny valuable resources to our competitors.
These new brands will of course be updated as our competitors launch improved versions and if
they prove successful we will purchase R&D components for them and attempt to surpass the
competition with them.
Our optimism regarding our advertising ability was somewhat off-set by a cold reality.
Our initial advertisements were rated poorly for the CostCutters (63) while our Workhorse add
began at a mere 55. We launched the Workhorse Euro ad with much suspense and were
greeting with a mere 53. We have learned from our mistakes which were essentially leaving far
too much clutter in our ads. We have launched two ads per product now. The first for each is a
completely redesigned add that will be running more frequently in regional advertising
(approximately19 times for CC and WH respectively) and the other two adds are straight copies
of the other successful ads of our competitors. We have now planned to redo at least 3
advertisements a quarter in order to better fit our advertising schedule and content around the
market information that we can collect.
We opened sales offices in New York, Chicago, Berlin,& London in year one and in
year two at the end of Q5 we will be in every city with the exception of the Canadian region and
LA. By the end of Q6 we will be in every city. This will allow us to use the more cost effective
regional advertising across the board and reach every potential customer out there. We plan to
have approximately 10 people per sales office and will reduce or increase this number as the
economics of each sales office in terms of sales per employee become better understood.
Overall, CompuStar is currently in "second place" if you go by sales volume and a
balanced score card, but we believe that in the second year we will violently overtake our
competition. We feel that we will maintain a firm monopoly on the WorkHorse brand and that we
will entrench our CostCutter brand as well. That coupled with the fact that we are about to
launch a war against AgilitY by challenging them on their Innovator and Traveler brands means
that we have everything to gain and stand to profit handsomely from the spoils of war. Year two
will prove to be exciting, suspenseful, and most of all profitable for CompuStar.
PART II:
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A. CompuStar is committed to being the world’s leader in advanced, practical, and
cost-effective business solutions, by providing our customers with high-quality
microcomputers and complete customer service programs.
a. CompuStar WH
c. Brand Judgment
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offered a ‘very high capacity hard drive’. Our brand also offered
an expanded keyboard with hot keys as opposed to their standard
keyboard, but it is difficult to assess who has the true advantage
with the given components. Orange may have the advantage with
the standard keyboard since the potential customers are looking
for minimum complexity and little training needed for this
computer, yet we may carry also carry somewhat of an advantage
since there is a need to program special functions. One of the
advantages that their brand carried over ours is that their
computer provided a DVD drive as opposed to our CD drive. Our
brand and Orange OR-Infinity1900 remained as the top two
brands from Q3 to Q4, yet there were no brand changes for both
companies. The brand design and brand judgment remained the
same for both quarters.
Q3 CompuStar/ Orange/
CompuStar OR-
WH/ Infinity1900/
72 69
Base Components X X
Standard desktop design X X
Compact disk (CD) X
read/write drive
Digital video disk (DVD) X
read/write drive
High Capacity hard drive X
Very high capacity hard X
drive
Office software-word, X X
spreadsheets
Accounting/bookkeeping X X
software
Business graphics software X X
Presentation software X X
Database software X X
Web design software X X
19” high resolution monitor X X
for desktop
Mid-range processor X X
Standard keyboard X
Expanded keyboard with X
hot keys
Antivirus software X X
Standard network/Internet X X
connection
Windows for professionals X X
with high security protection
Q4 CompuStar/ Orange/
Page
CompuStar OR-
WH/ Infinity1900/
72 69
Base Components X X
Standard desktop design X X
Compact disk (CD) X
read/write drive
Digital video disk (DVD) X
read/write drive
High Capacity hard drive X
Very high capacity hard X
drive
Office software-word, X X
spreadsheets
Accounting/bookkeeping X X
software
Business graphics software X X
Presentation software X X
Database software X X
Web design software X X
19” high resolution monitor X X
for desktop
Mid-range processor X X
Standard keyboard X
Expanded keyboard with X
hot keys
Antivirus software X X
Standard network/Internet X X
connection
Windows for professionals X X
with high security protection
d. Ad Judgment
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For Q4, an additional ad was also created for this brand to
be distributed in Europe. Instead of promoting the “highest
rated brand – Work Horse”, the “lowest price in town” was
advertised and the rankings of the features were adjusted.
In comparison to the ad ran by Orange for their OR-Infinity1900 in Q3, we received a lower ad
rating for CompuStar WH (63 versus 55). Our ad included the top 5 of the same promoted
features as Orange’s ad, but their ranking system elevated the importance of those features
more than we did. In order to improve our ad, we removed some of our features that had lower
classified wants/needs/applications, such as “bookkeeping” and “easy to use, simple design”,
and added new features. The features added, “ready to use, bundled software”, “highest rated
brand – work horse”, and “picture office setting”, increased our ad rating from 55 points to 58
points.
We also created a new ad to be placed in Europe to promote that our brand is the “lowest price
in town” as opposed to the “highest rated brand – work horse”. The ad scored a 53 in Europe.
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The ad insert quantities for the CompuStar WH were also doubled from Q3 to Q4. Our ad
judgment scores still needs improvement and the ad features and placement will be revisited
after reviewing market research.
Q3 CompuStar/ Orange/
CompuStar OR-
WH/ Infinity1900/
55 63
Mention brand name 8 5
(115)
Do variety of tasks 2 1
(128)
Local sales/service 7
(121)
Bookkeeping/budgeting 9
applications (113)
Word processing 1 2
application (129)
Data management 6 3
application (117)
Easy to use, simple 3 4
design (110)
Easy on eyes with 5
larger screen (118)
Link PC to local 4
network/Internet (120)
Q4 CompuStar/ Microchip/
CompuStar Business
WH/ Chip/
58 71
Mention brand name 9 1
(115)
Manufacturer’s rebate 2
(115 for lower price)
Do variety of tasks 1 6
(128)
Local sales/service 7 5
(121)
Word processing 2
application (129)
Data management 8
application (117)
Easy to use, simple 3
design (125/110)
Ready to use, bundled 5 4
software (116)
Highest rated brand – 4
Work Horse (115)
Link PC to local 6
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network/Internet (120)
Picture office setting 3
(125)
Q4 CompuStar/ AgilitY
CompuStar Computers/
WH Euro/ Valutron/
53 68
Mention brand name 9 1
(115)
Lowest price in town 4
(115)
Manufacturer’s rebate 2
(115 for lower price)
Do variety of tasks 1 6
(128)
Local sales/service 7 5
(121)
Word processing 2
application (129)
Data management 8
application (117)
Easy to use, simple 3
design (125/110)
Ready to use, 5 4
bundled software
(116)
Link PC to local 6
network/Internet
(120)
Picture office setting 3
(125)
e. Price Judgment
In order to determine if demand due to price is elastic, we calculated the price of elasticity for
our work horse brand amongst Q3 and Q4. Using the price ratings as demand quantity
substitutes and using the Q3 and Q4 prices in comparison, the price of elasticity was
determined to be 1.029. Therefore, it was determined that the sensitivity to price was elastic,
indicating that it was a good move to reduce prices from Q3 to Q4 and also may indicate that
lowering prices may help to improve the price rating and therefore, improve customer’s
potential for purchasing.
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United States $3,087 $0 $3,087 87
a. CompuStar CC
Base components
Standard desktop design Multi-purpose workstation (96)
Compact disk (CD) read/write Fast computer to computer links (85)
drive
Standard hard drive Computers are lowest priced (119)
Office software-word, Word processing(127)
spreadsheets
Accounting/bookkeeping Bookkeeping, budgeting (119)
software
Presentation software Presentations (104)
Database software Data management-accounts, inventory (109)
15" monitor for desktop Computers are lowest priced (119)
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Budget processor Computers are lowest priced (119)
Standard keyboard Minimum complexity for operators(123)
Antivirus software Peace of mind-safe,secure,no hassle (128)
Standard network/Internet Easy to tie into local area network(92)
connection
Windows for professionals with Peace of mind-safe,secure,no hassle (128)
high security protection
c. Brand Judgment
Q3 Compustar CC Microchip/Busines
68 s Chip
64
Base components X X
Standard desktop design X X
Compact disk (CD) X X
read/write drive
Page
Standard hard drive X
Office software-word, X X
spreadsheets
Accounting/bookkeeping X X
software
Presentation software X X
Database software X X
15" monitor for desktop X
Budget processor X
Mid-range processor X
Standard keyboard X X
Antivirus software X
Standard X X
network/Internet
connection
Windows for X X
professionals with high
security protection
High capacity hard drive X
17" monitor for desktop X
Web design software X
Mid-range processor X
Base components
Page
Presentation software X X
Database software X X
15" monitor for desktop X X
Budget processor X
Standard keyboard X X
Antivirus software X X
Standard network/Internet X X
connection
Windows for professionals X X
with high security
protection
Business graphics X
software
Mid-range processor X
d. Ad Judgment
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Ad Features CompuStar CC CompuStar CC CompuStar CC
Q3 Q4 Copy
Q4
Mention brand name 9 6 6
Lowest price in town 2 2 3
New & improved brand, 5
claim 1 time
Local sales/service 8 4
Bookkeeping/budgeting 5 5
applications
Word processing 1 1 1
application
Data management 7
application
Ready to use, bundled 6
software
Easy to use, simple 3 3 2
design
Picture office setting 4 4
In comparison to the ad ran by Microchip for their Business Chip in Q3, we received a higher ad
rating for CompuStar CC (62 versus 61). In comparing the ads, our ad seemed to be more
detailed with the program applications that our computer offered and microchip seemed to focus
on just advertising the top features, such as “word processing applications” and “do variety of
tasks.” It seems as though our ads were somehow ranking alike although the vast differences.
Although our ad increased by a point in Q4, AgilitY Valutron surpassed us (63 versus 74).
From reviewing the ads, it can be concluded that our ad may have had too much clutter and not
enough focus on the main features of promotion.
Our ad judgment scores still need improvement and the ad features and placement will be
revisited after reviewing market research.
Page
Link PC to local 92
network/Internet
Picture office setting 122 3
Picture Business Professionals 122 4
e. Price Judgment
CompuStar WH / Workhorse
Page
CompuStar CC / Cost Cutter
CompuStar WH / Workhorse
Sales Office Unit Sales For Sales Staff Unit Sales per
First Segment (Sales Only) Salesperson
New York 44 1 44
Chicago 33 1 33
Sales Office Unit Sales for Sales Staff Unit Sales per
First Segment (Sales Only) Salesperson
Berlin 208 2 104
London 215 2 107.5
New York 142 2 142
Chicago 142 1 71
Page
Quarter 3 – (First Segment – Work Horse)
Sales Office Unit Sales for Sales Staff Unit Sales per
Second (Sales Only) Salesperson
Segment
New York 121 4 30.25
Chicago 92 3 30.67
Sales Office Unit Sales for Sales Staff Unit Sales per
Second (Sales Only) Salesperson
Segment
Berlin 283 4 70.75
London 399 4 99.75
New York 240 4 60
Chicago 186 4 46.5
D. Company Performance
Page
game
AgilitY
60055 6.584 14.096 0.555 0.680 1.331 0.930
Computers
team 4
2.
II. Marketing Effectiveness
Formula: marketing effectiveness = [average brand judgment/100 +
average ad judgment/100]/2
(1) Brand Judgment – Q4
(a) Segment 1: CompuStar WH – Work Horse
(b) Segment 2: CompuStar CC – Cost Cutter
(2) Ad Judgment – Q4
(a) Segment 1: CompuStar WH – Work Horse
(b) Segment 2: CompuStar CC – Cost Cutter
Ad design and judgment are critical. There are three different factors that
directly effect ad judgment and unfortunately, we have not had as much improvement in
ad design as desired. CompuStar is currently investing time toward finding what these
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ads should solely consist of. Specific ad claims were an easy start. The company
believes that we are achieving a solid idea of what claims should be in the ad, which
has helped increase our ad judgment in previously targeted segments. Improvements
have been shown although we still may not have precise claims. The judgments for
Cost Cutter ads from Quarter 3 to 4 increased by 1, while the judgments of Work Horse
ads increased by 3.
Our company has, however, a good basis for the number of claims that should
be in the ad as well as the order of the claims. As a result, the ads were rated within
our desired segments. CompuStar believes that these higher ratings from Q3 to Q4 are
mostly due to the revised ad claims in the advertisements.
b. Market Performance -- Q4
(a) Segment 1: CompuStar WH – Work Horse
(b) Segment 2: CompuStar CC – Cost Cutter
Market Performance is a measure of how well the managers are able to create
demand in their primary and secondary segments. Since this performance will depend
upon the number of competitors- If there are 3 firms, a good score would be greater
than 0.5. If there are 8 teams, a good score would be greater than 0.35. Currently, there
are 3 other firms in competition with CompuStar for a total of 4 competitors. Our
average market performance equaled 52 which signified above average. This was an
improvement from the average score of 47 from Q3. Although CompuStar offered no
price rebates, the opening and expansion of our sales force improved the overall market
performance score.
A summary is as follows:
--United States: net change of 7 salesmen in region (With total of 10 in New York and 9
in Chicago)
--Europe: net change of 5 salesmen in region (With total of 10 in Berlin and 10 in
London)
We have chosen to expand into China with 8 salesmen in Shanghai and Tianjin
as well as 10 salesmen in both Guangzhou and Beijing for a total of 36 salesmen in Q5.
These were low cost regions to open offices in and were also not occupied by
competition in the prior quarter (3). However, our biggest competitor, AgilitY Computers,
had opened offices in two cities in China for Q4 leaving Shanghai and Tianjin open
allowing CompuStar to reap the profits of these untouched cities.
Financial Performance
Page
Cumulative: -20.02
d. Creation of Wealth
Quarter 3:
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Creation of wealth = net investment / cumulative investment from Corporate
Headquarters
= 247,948 / 1,500,000
= 0.17
In quarter 3 our product segments were the following- First segment: Work
Horse, Second segment: Cost Cutter. Our performance for Q3 in wealth creation
was the poorest performance in this area in the game at 0.17 as compared to the
average of 0.33. At 0.43 Orange has the highest score for wealth creation. This
indicates that our current revenues are less than Corporate Headquarters has
invested. Our expenses to open new sales offices with low revenue depressed
the creation of wealth of our firm. There is a quarter delay after the set up cost of
sales offices are incurred before these offices become active and generate
revenues. We expect to see revenue generated from these investments in the
upcoming quarters. Market research costs equaled $40,000 for this quarter.
Quarter 4:
Creation of wealth = net investment / cumulative investment from Corporate
Headquarters
=714,938 / 2,000,000
= 0.36
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Formula: Investments in the firm’s future = (Current expenses that benefit
firms future/Net Revenues)*10+1
Where; Current expense that benefit firm’s future = Cost to open new sales
office + R&D investment in new brand features and new brands
Quarter 3:
Current expenses that benefit firm's future = 260,000 + 0 + 0 = 260,000
net revenue = 1,079,948 - 0 = 1,079,948
Investments in the firm's future = (260,000 / 1,079,948) * 10 + 1 = 3.41
Quarter 4:
Current expenses that benefit firm's future = 350,000 + 0 + 0 = 350,000
Net revenue = 5,123,700 - 0 = 5,123,700
Investments in the firm's future = (350,000 / 5,123,700) * 10 + 1 = 1.68
Cumulative:
Investments in the firm's future = 5.09
There are two factors that affected CompuStar’s Investment in the Future scores:
Opening new sale offices: In the test market in Quarter 3, we decided to open new
offices in New York and Chicago, and this opening cost us $ 260,000. In return, net
revenue totaled $1,079,948. In quarter 4 office leases totaled 350,000 which in turn
increased our net revenues to $5,123,700
Brand modification: In Q4, we spent $ 90,000 on brand modification. However, brand
judgment neither increased nor decreased. We need to increase customer satisfaction
in Q5.
Cost Work
Cutter Horse
Average brand judgment in
Q3 68 72
Average brand judgment in
Q4 68 72
Difference 0 0
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Sales offices opened in Q4 Lease Cost
Shanghai $40,000.00
Tianjin $30,000.00
Guangzhou $31,000.00
Beijing $40,000.00
TOTAL $141,000.00
PART III:
B. Brand Strategy
1. The Research and Design that we are planning to buy is Office software-
word, spreadsheets - new release and the High speed network/Internet
connection. The costs are roughly around 1.5 million for each item.
R&D Item Quarter Qtr Cost Per Unit Replacement If yes, Net
Item Will Avail. Quarter to Production Item Original Change
be Purchase Cost (y/n) Item and in Unit
Ordered Cost Cost?
Office software- 5 6 $1,705,542 64 Y 48 16
word, /qtr. for
spreadsheets – which
new release quarters?
High speed 5 6 $1,421,285 105 Y 52 53
network/Internet /qtr. for
connection which
quarters?
Q5 Q6 Q7 Q8
Total Costs to $3,126,827
Purchase R&D
by Quarter
2. The new components will be mainly promoted on the two main segments
that we have been targeting: cost cutter and workhorse. These
components may also be used on our new brands in later quarters,
depending on the surveys and research obtained.
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Office software- Q6 (+$16) Q6 (+$16)
word,
spreadsheets –
new release
High speed Q6 (+$53)
network/Internet
connection
Quarter 5
Page
% Market 2.35% 4.9% 0.36% 0.6%
Share in
Segment
that
Projected
Sales
Represents
Projected 1500 2000 250 250
Sales in
Units
Projected $2,712,000 $5,266,000 $837,500 $800,000
Sales
Revenue
Projected $2,236,500 $3,918,000 $752,000 $534,750
Total COGS
Projected $31,875 $41,600 $6,250 $8,250
Total
Rebates
Projected $445,125 $1,298,400 $79,250 $257,000
Total Gross
Margin ($)
Quarter 6
Page
Marketplace
for this
Segment for
all Cities
being
Targeted
% Market 2.5% 5.9% 2.1% 2%
Share in
Segment
that
Projected
Sales
Represents
Projected 2,000 5,000 999 999
Sales in
Units
Projected $3,530,000 $12,955,000 $3,296,700 $3,126,870
Sales
Revenue
Projected $3,014,000 $8,240,000 $2,995,002 $2,130,867
Total COGS
Projected
Total
Rebates
Projected $516,000 $4,715,000 $301,698 $996,003
Total Gross
Margin ($)
Quarter 7
Page
Unit Gross 15% 36.3% 19% 42%
Margin (%)
Total 78,496 84,523 47,860 49,662
Annual
Market
Demand in
Units
Projected
by
Marketplace
for this
Segment for
all Cities
being
Targeted
% Market 5.09% 9.46% 4.1% 4%
Share in
Segment
that
Projected
Sales
Represents
Projected 4,000 8,000 2,000 2,000
Sales in
Units
Projected $7,060,000 $20,728,000 $6,600,000 $6,260,000
Sales
Revenue
Projected $6,028,000 $13,264,000 $5,342,000 $3,626,000
Total COGS
Projected 0 0 0 0
Total
Rebates
Projected $1,032,000 $7,464,000 $1,168,000 $2,634,000
Total Gross
Margin ($)
Quarter 8
Page
(Average)
Unit Rebate 0 0 0 0
(average)
Base Unit $1,137 $1,748 $2,671 $1,813
COGS
Unit Gross $628 $843 $629 $1317
Margin ($)
Unit Gross 35.5% 32.5% 19.06% 42%
Margin (%)
Total 78,496 84,523 47,860 49,662
Annual
Market
Demand in
Units
Projected
by
Marketplace
for this
Segment for
all Cities
being
Targeted
% Market 7.6% 11.8% 6.26% 6%
Share in
Segment
that
Projected
Sales
Represents
Projected 6,000 12,500 3,000 3,000
Sales in
Units
Projected $10,590,000 $32,387,500 $9,900,000 $9,390,000
Sales
Revenue
Projected $6,822,000 $21,850,000 $8,013,000 $5,439,000
Total COGS
Projected 0 0 0 0
Total
Rebates
Projected $3,768,000 $10,537,500 $1,887,000 $3,951,000
Total Gross
Margin ($)
Page
Total Projected Gross Margin ($) for Quarter 8: $20,143,500
C. Geographic Expansion
1. Sales offices opened in all cities in China during quarter 4. During quarter
5, these offices will become active. During quarter 5 sales offices will
open in LA, Atlanta, Paris, Rome, and all cities in Brazil. These offices
will become active in quarter 6. Sales offices in the Canadian cities will
open in quarter 6, and be active in quarter 7.
City to Open Cost to Open Quarterly Lease Quarter Office Quarter Office
Costs will be will be Active
Purchased
Atlanta $90,000 $60,000 Q5 Q6
Paris $110,000 $70,000 Q5 Q6
Rome $110,000 $65,000 Q5 Q6
Curitiba $50,000 $35,000 Q5 Q6
Rio de Janeiro $60,000 $38,000 Q5 Q6
Sao Paolo $60,000 $36,000 Q5 Q6
Belo Horizonte $40,000 $30,000 Q5 Q6
Montreal $70,000 $50,000 Q6 Q7
Toronto $70,000 $51,000 Q6 Q7
Calgary $60,000 $41,000 Q6 Q7
Vancouver $60,000 $44,000 Q6 Q7
Q5 Q6 Q7 Q8
Total Costs by $520,000 $260,000 $0 $0
Quarter to Open
New Offices
Quarterly Lease $141,000 $334,000 $186,000 $0
Costs New
Page
Offices
Quarterly Lease $308,000 $449,000 $783,000 $969,000
Costs Existing
Offices
Quarterly Lease $449,000 $783,000 $969,000 $969,000
Costs All
Offices
Net Change In Salespeople Total Cost to Hire New Cost to Hire Per
Per Region Salespeople Per Region Salesperson Per Region
1 $6,000 $6,000.00
2 $12,861 $6,430.50
3 $20,090 $6,696.67
4 $27,569 $6,892.25
5 $35,239 $7,047.80
6 $43,064 $7,177.33
7 $51,022 $7,288.86
8 $59,095 $7,386.88
9 $67,269 $7,474.33
10 $75,536 $7,553.60
11 $83,885 $7,625.91
12 $92,310 $7,692.50
13 $100,807 $7,754.38
14 $109,368 $7,812.00
15 $117,992 $7,866.13
16 $126,673 $7,917.06
17 $135,408 $7965.18
18 $144,195 $8,010.83
19 $153,031 $8,054.26
20 $161,914 $8,095.70
21 $170,841 $8,135.29
22 $179,811 $8,173.23
23 $188,822 $8,209.65
24 $197,872 $8,244.67
25 $206,959 $8,278.36
1.
Quarter 5
United States
Page
$300 $2000 $3000 $4000 $200 $300
0 0 0
Sales Annual Quarterl Total Sup- Cost Inno- Mer- Work Tra- Total Qtrly
Office Salary y Salary Staff port Cutte vator cedes Hors veler Salaries
r e Per City
New York $100,0 $25,000 10 2 2 1 0 4 1 $250,000
00
Chicago $90,00 $22,500 9 2 1 1 0 4 1 $202,500
0
Total Quarterly Salaries For the Region $452,500
# Staff Per Segment 4 3 2 0 8 2
Total Quarterly Training Costs $46,000
$12,000 $6,000 $6,000 $0 $16000 $6000
Quarter 5
Europe
Page
Total Salary Costs for Region 2, Q5: _________$400,000_______
Quarter 5
China
Total Sales Personnel Costs (Salary, Training and Hiring) Across All Regions for Quarter
5: $1,600,069.31
Page
Quarter 6
United States
Quarter 6
Europe
Page
Total Quarterly Salaries For the Region $775,000
# Staff Per Segment 8 8 4 0 16 4
Total Quarterly Training Costs $80,000
$24,00 $16,00 $12,000 $0 $16,00 $12,00
0 0 0 0
# New Salespeople Hired 20
Cost of Hiring per Salesperson $8,095.7
0
Total Cost of Hiring Salespeople $161,914
Quarter 6
China
Page
Total Salary, Training, and Hiring
Costs, Region 3, Q6: ______$308,861______
Quarter 6
Brazil
Total Sales Personnel Costs (Salary, Training and Hiring) Across All Regions for Quarter
6: $3,162,471
Quarter 7
United States
Page
Sales Annual Quarterly Total Sup- Cost Inno- Mer- Work Tra- Total Qtrly
Office Salary Salary Staff port Cutter vator cedes Horse veler Salaries
Per City
New York $100,000 $25,000 10 2 2 1 0 4 1 $250,000
Chicago $90,000 $22,500 10 2 2 1 0 4 1 $225,000
Atlanta $80,000 $20000 10 2 2 1 0 4 1 $200,000
Total Quarterly Salaries For the Region $675,000
# Staff Per Segment 6 6 3 0 12 3
Total Quarterly Training Costs $72,000
$18,000 $12,000 $9,000 $0 $24000 $9000
# New Salespeople Hired 1
Cost of Hiring per Salesperson $7,553.60
Total Cost of Hiring Salespeople $7,553.60
Quarter 7
Europe
Page
Total Costs of Hiring New Salespeople,
Region 2, Q7: _______$0__________
Quarter 7
China
Quarter 7
Page
Brazil
Quarterly Training Costs
$300 $2000 $300 $4000 $200 $300
Sales Annua Quarterl Total 0Sup- Cost 0
Inno- Mer- 0
Work 0Tra- Total Qtrly
Office l y Salary Staff port Cutte vato cedes Hors veler Salaries Per
Salary r r e City
Curitiba $ 60,000$15,000 10 2 2 1 0 4 1 $150,000
Rio de $ 65,000$16,250 10 2 2 1 0 4 1 $162,500
Janeiro
Sao $ 65,000 $16,250 10 2 2 1 0 4 1 $162,500
Paolo
Beijing $ 48,000 $12,000 10 2 2 1 0 4 1 $120,000
Total Quarterly Salaries For the Region $595,000
# Staff Per Segment 8 8 4 0 16 4
Total Quarterly Training Costs $96,000
$24,00 $16,00 $12,000 $0 $32,00 $12,00
# New Salespeople Hired 0 0 0 0 0
Cost of Hiring per Salesperson $0
Total Cost of Hiring Salespeople $0
Quarter 7
Canada
Page
# New Salespeople Hired 40
Cost of Hiring per Salesperson $8691.50
Total Cost of Hiring Salespeople $ 347,660
Total Sales Personnel Costs (Salary, Training and Hiring) Across All Regions for Quarter
7: $3,715,213.60
Quarter 8
United States
Page
Quarter 8
Europe
Quarter 8
China
Page
Total Quarterly Salaries For the Region $200,000
# Staff Per Segment 8 8 4 0 16 4
Total Quarterly Training Costs $96,000
$24,000 $16,000 $12,000 $0 $32,000 $12,000
# New Salespeople Hired 0
Cost of Hiring per Salesperson $0
Total Cost of Hiring Salespeople $0
Quarter 8
Brazil
Page
Region 4, Q8: _______$0__________
Quarter 8
Canada
Total Sales Personnel Costs (Salary, Training and Hiring) Across All Regions for Quarter
8: $2,589,000
E. 1. Ad Designs
Page
Ad Designs for Quarter 5
In Quarter 5, Compustar took two strategic routes for ad design. The primary change was in a
paring down of the ad features that would be included in each ad. It was felt that the
advertisements used in Quarter 4 included too many features, and resulted in a cluttered
presentation. The second strategic move was to add new ads which were designed to mimic
the top rated ads in each respective segment. The WH Euro was eliminated from rotation.
Ad Name/Segment Cc WH * TR*
Cost Cutter Workhorse Traveler
Priority 3 1 2
Ad Features
Mention brand name 6 4 5
Lowest price in town 2
Do a wide variety of tasks 2
Local sales/service
Bookkeeping/budgeting 5
applications
Word processing applications 1 1
Easy to use, simple design 3 3
Link PC to local 3
network/Internet
Picture office setting 4
Picture business professionals 6
Page
New & improved brand, claim 1 5
time
Picture people in travel setting 4
Small footprint/size 2
Rugged design for portability 1
Page
Bookkeeping/budgeting 5
applications
Word processing applications 1 1 2
Easy to use, simple design 3 3 5
Ready to use, bundled 3
software
Link PC to local 3
network/Internet
Picture office setting 4
Picture business professionals 5
New & improved brand, claim 1 6
time
Picture people in travel setting 2
Small footprint/size 4
Rugged design for portability 1
Local Advertising:
Quarter 5
United States
Page
Europe
AD 1 AD 2 AD 3 AD 4 (a) Total (b) Total (c) Cost Total Media
CC/ WH CC Copy WH Copy Frequenc Frequenc Per Ad Cost per
Costcutter Workhorse Costcutter Workhorse
y per City y per City City
^.9 (b * c)
Quarter 6
United States
Europe
AD 1 AD 2 AD 3 (a) Total (b) Total (c) Cost Total Media
CC WH TR Frequenc Frequenc Per Ad Cost per City
Costcutter Workhorse Traveler
y per City y per City (b * c)
^.9
Quarter 7
Page
United States
AD 1 AD 2 AD 3 AD4 (a) (b) (c) Cost Total
CC WH TR IN Total Total Per Ad Media
Costcutte Workhors Traveler Innovator
r e Freque Freque Cost per
ncy per ncy per City
City City ^.9 (b * c)
Chicago 10 12 11 13 46 36.5390 $7000 $255,773.6
9 3
New York 10 12 11 13 46 36.5390 $12000 $438,469.0
9 8
Atlanta 10 12 11 13 46 36.5390 $7000 $255,773.6
9 3
Total $950,016.3
4
Europe
AD 1 AD 2 AD 3 AD4 (a) Total (b) Total (c) Cost Total Media
CC WH TR IN Frequenc Frequenc Per Ad Cost per City
Costcutter Workhorse Traveler Innovator
y per City y per City (b * c)
^.9
Quarter 8
United States
Page
AD 1 AD 2 AD 3 AD4 (a) (b) (c) Cost Total
CC WH TR IN Total Total Per Ad Media
Costcutte Workhors Traveler Innovator
r e Freque Freque Cost per
ncy per ncy per City
City City ^.9 (b * c)
Chicago 9 12 11 11 43 34.1561 $7000 $239,092.7
1 7
New York 9 12 11 11 43 34.1561 $12000 $409,873.3
1 2
Atlanta 9 12 11 11 43 34.1561 $7000 $239,092.7
1 7
Total $888,058.8
6
Europe
AD 1 AD 2 AD 3 AD4 (a) Total (b) Total (c) Cost Total Media
CC WH TR IN Frequenc Frequenc Per Ad Cost per City
Costcutter Workhorse Traveler Innovator
y per City y per City (b * c)
^.9
Page
Brazil, China, and Canada will be advertised regionally.
Regional Advertising
Quarter 5
China
Page
MEDIA AD 1 AD 2 AD 3 AD 4 (a) Total (b) Total (c) Total
CC WH CC Copy WH Copy Frequenc Frequen Cost Media
Costcutter Workhors Costcutt Workhors
e er e y Per cy Per Per Cost
Media Media^. Ad (b*c)
9
Business $ $
Newspapers
General 13 13 26 20.6525 $6800 $140437
Business
Magazines
Computer $ $
Magazines
General $ $
News
Magazines
Leading 7 7 6 6 26 20.6525 $3200 $66088
Trade
Journals
New Venture $ $
Magazines
Sports 13 13 26 20.6525 $1050 $216851.2
Magazines 0 5
Executive $ $
Business
Magazines
Science and $ $
Technology
Daily $ $
Newspapers
Leisure & $ $
Entertainme
nt
Total $423376.2
5
Quarter 6
China
Page
Business
Magazines
Computer $ $
Magazines
General News $ $
Magazines
Leading Trade 12 12 24 19.0638 $3,200 $61004.16
Journals
New Venture 13 13 26 20.6525 $10,50 $216851.25
Magazines 0
Sports $ $
Magazines
Executive $ $
Business
Magazines
Science and $ $
Technology
Daily $ $
Newspapers
Leisure & $ $
Entertainment
Total $407489.25
Brazil
Page
Newspapers
Leisure & $ $
Entertainment
Total $483268.95
Quarter 7
China
Brazil
Page
MEDIA AD 1 AD 2 AD 3 Ad 4 (a) Total (b) Total (c) Total
CC WH TR IN Frequen Frequen Cost Media
Costcutt Workhors Traveler Innovator
er e cy Per cy Per Per Cost
Media Media^. Ad (b*c)
9
Business 10 10 20 15.8656 $7000 $111059.2
Newspapers 0
General $ $
Business
Magazines
Computer $ $
Magazines
General News $ $
Magazines
Leading Trade 12 12 13 27 21.4468 $2900 $62195.72
Journals
New Venture $ $
Magazines
Sports 10 10 10 13 43 34.1561 $9000 $307404.9
Magazines 0
Executive $ $
Business
Magazines
Science and 13 13 10.3263 $6000 $61957.60
Technology
Daily $ $
Newspapers
Leisure & $ $
Entertainment
Total $542617.4
MEDIA AD 1 AD 2 AD 3 AD 4 (a) Total (b) Total (c) Total
2
CC WH TR IN Frequen Frequen Cost Media
Costcutt Workhors Traveler Innovator
er e cy Per cy Per Per Cost
Media Media^. Ad (b*c)
9
Business $ $
Newspapers
General $ $
Business
Magazines
Computer 13 10.3263 $4000 $41305.20
Magazines
General News $ $
Magazines
Leading Trade 13 13 26 20.6525 $6000 $123915.0
Journals 0
New Venture 13 13 10.3263 $ $
Magazines
Sports 13 13 13 39 30.9788 $1500 $464682.0
Magazines 0 0
Executive $ $
Business
Magazines
Science and 13 13 10.3263 $1200 $123915.6
Technology 0 0
Daily $ $
Newspapers
Leisure & $ Page $
Entertainment
Total $753817.8
0
Canada
Quarter 8
China
Page
MEDIA AD 1 AD 2 AD 3 Ad 4 (a) Total (b) Total (c) Total
CC WH TR IN Frequen Frequen Cost Media
Costcutt Workhors Traveler Innovator
er e cy Per cy Per Per Cost
Media Media^. Ad (b*c)
Leisure & 9 $ $
Business
Entertainment 10 10 20 15.8656 $7000 $111059.2
NewspapersTotal 0
$516947.80
General $ $
Business
Magazines
Computer $ $
Magazines
General News $ $
Magazines
Leading Trade 12 12 13 27 21.4468 $2900 $62195.72
Journals
New Venture $ $
Magazines
Sports 10 10 10 13 43 34.1561 $9000 $307404.9
Magazines 0
Executive $ $
Business
Magazines
Science and 13 13 10.3263 $6000 $61957.60
Technology Brazil
Daily $ $
Newspapers
Leisure & $ $
Entertainment
Total $542617.4
2
Page
Canada
Page
F. Sales Promotion Strategy By Quarter - use of POP. (Duplicate tables for quarter
6, 7 and 8).
Quarter 5
Quarter 6
Quarter 7
Quarter 8
Page
Total $8000
G. Financial Strategy
1. Profitability
Rebates $0 $0 $75,817
Cost of Goods sold $0 $0 $800,584 $3,348,700 $6,036,552 16,379,869 28,260,000 $42,124,000
Gross margin $0 $0 $279,364 $1,775,000 $3,503,131 $6,528,701 12,298,000 $20,143,500
$0
Sales office leases $0 $0 $175,000 $308,000 $449,000 $783,000 $969,000 $969,000
Sales force expense $0 $0 $405,310 $761,742 $1,600,069 $3,162,471 $3,715,213 $2,589,000
Sales force $0 $0 $0 $0 $0 $0 $0 $0
promotions
Sales force $0 $0 $0 $0 $0 $0 $0 $0
programs
Ad creation/revision $0 $0 $60,000 $90,000 $120,000 $120,000 $90,000 $90,000
POP expenses $0 $0 $800 $1,600 $3,200 $6,400 $6,400 $6,400
Local Advertising $0 $0 $97,506 $236,668 $1,287,532 $0 $0 $0
expenses
Regional $0 $0 $0 $0 $417,014 $890758.20 $1,813,383 $1,813,383
Advertising
Expenses
Engineering cost for $0 $120,000 $0 $0 $180,000 $180,000 $180,000 $180,000
new brands
Market research $72,800 $0 $40,000 $60,000 $100,000 $100,000 $100,000 $100,000
Miscellaneous $0 $0
Operating $72,800 $120,000 $778,616 $1,458,010 $4,165,600 $5,242,629 $6,873,996 $5,747,783
expenses
Operating profit -$72,800 -$120,000 -$499,252 $316,990 -$662,469 $1,286,072 $5,424,004 $14,395,717
Research and $0 $3,126,827 $0 $0 $0
development costs
Set up costs for new $0 $300,000 $260,000 $350,000 $670,000 $260,000 $0 $0
sales offices
Net profit -$72,800 -$420,000 -$759,252 -$33,010 -$4,459,296 1,026,072 $5,424,004 $14,395,717
Cumulative net -$72,800 -$492,800 -$1,252,052 -$1,285,062 -$5,744,358 -$4,718,286 $705,718 $15,101,435
profit
Page
Cashflow Statement
Page