MARKETER: A MICROCOMPUTER SIMULATION IN A HIGH TECH INDUSTRY Developments in Business Simulation & Experiential Exercises, Volume 13, 1986 157 MARKETER: A MICROCOMPUTER SIMULATION IN A HIGH TECH INDUSTRY Jerald R. Smith, University of Louisville ABSTRACT MARKETER is a micro-computer simulation game that is targeted at the Principles of Marketing and Marketing Strategy segment of the business school market. The game and player’s manual follow the table of contents of appropriate textbooks for these classes. There- fore, the play of the game addresses such issues as the legal and social environment of marketing, the marketing mix and strategies, marketing planning, organizational aspects of marketing and market information. INTRODUCTION MARKETER is a micro-computer based simulation written for the Apple Il-Plus series and the IBM-PC and its compatibles. It can be used with a minimal configuration consisting of system unit, 40 or 80 character display, one disk drive, and printer. From the user perspective, MARKETER involves a one-time initialization and creation of a decision-set file for each period of play. Scenario Students take over as the management team of a moderate size firm selling home computers. The firm has been in business only a short period of time and therefore does not have a great deal of historical data for students to go on. In fact, the game was designed specifically this way in order that students not bring a preconceived mind set into their decision making process. The student team will be making several quarterly decisions and the game is usually played for from 7 to 12 quarters. Decision Variables Teams w111 make the following decisions: 1. The quantity of computers ordered from a Japanese supplier 2. The price to dealers of the product 3. The level of advertising 4. The sales promotion budget 5. Research and development budget 6. Sales force incentive program 7. Size of the salesforce 8. Physical distribution budget 9. Market research studies A second product, a complete home software program, is available to add to the decision set at the option of the instructor. The same basic decisions shown above for the computers are also made for the second product. Each decision period also has a mini-case (termed incidents) that involve the social responsibility of marketing and various environmental issues one might find in the marketing arena. The instructor has the ability to manipulate the impact of key variables to allow changes in the simulation from semester to semester or from class to class. The output includes a student report for each team, a recap of decisions, and a “acquisition” index that indicates the favorability of purchase of the operation by a third party. Decision Set and Reported Information The student decision set consists of twenty variables that reflect: a. Inventory purchasing b. Marketing strategies c. Salesperson staffing and compensation d. Marketing research e. Research and Development f. Ethical and social responsibility considerations The student report contains a profit and loss statement calculated on a cash-accounting basis, and decision-support information including: a. Economic index b. Market research as purchased c. Staffing and inventory levels d. Inventory information e. A discretionary instructor’s message f. Response to a mini-case included in each decision set dealing with social responsibility or the market environment A unique feature of this simulation is the “incident” or mini- case feature that encourages discussion of real issues facing the sales management team. The example shown in Figure 1 is discussed by the student team and their choice is entered on the student decision form. This response by the team can affect the firm’s operation in either a negative or positive way in some succeeding period of play. Other student activities available as optional projects include: a. Internal Marketing Management Audit b. Breakeven Analysis c. Establishment of Corporate Mission & Coals d. Establishment of Marketing Policies e. Calculation of selected financial ratios f. Unit profit and cost analysis g. Advertising campaign (results can be entered as a sales calculation factor) Conclusion The MARKETER simulation is a rather simple game to administer and yet has several important marketing variables for students to make decisions on. While designed for college level marketing classes, it has potential for use as a management development training tool as a catalyst for training in group process, decision making, team building, and negotiation. Developments in Business Simulation & Experiential Exercises, Volume 13, 1986 158 FIGURE 1 Example of One of the Incidents Today’s mail brought bad news! The Deputy Commissioner of the Federal Communications Commission (FCC) notified you that your computer is marginal in meeting federal standards for radio wave leakage. The microcomputer industry has experienced this problem in the past; other companies have responded either by repairing the problem or ignoring it. Occasionally, consumer advocacy groups have brought adverse publicity concerning interference with normal radio broadcasting and the resulting bad publicity has affected sales in the targeted company. Your F & D staff estimates that repair of the computers in transit and in stock will cost $100,000 to bring the units well within compliance. They also believe that this problem does not affect every unit. How should your company proceed? 1. Fix the computers in transit and in stock. This will cost $100,000 and this amount will be charged to Other Expenses. 2. Test every fourth unit in stock and in transit. Repair only those necessary. This action will give a better estimate of the magnitude of the problem but would allow some potentially unsafe products to be sold. $25,000 will he charged to Other Expenses. 3. Ignore the warning until formal legal action is taken by the government. 4. Appoint a committee to study the problem and submit a report within nine months. Enter your decision 1, 2, 3, or 4 on the decision form. The incidents stimulate student teams to consider some of the behavioral aspects of marketing management as well as the pure quantitative decisions such as pricing, inventory, etc. ***MARKET RESEARCH*** BUSINESS INDEX FORECAST FOR NEXT PERIOD IS 101 ***NEWS MESSAGES*** Business conditions appear to he favorable for a good Christmas season. Some industry observers are forecasting that sales could be twice as high as a normal quarter. Table of Contents Volume 13, 1986 How to Use Microcomputers in Human Resource Management Courses What's My Line? An Exercise in Job Analysis, Description and Classification Relationships Between Team Cohesion Dimensions and Business Game Performance Four Factors Affecting Group Performance in Business Policy Simulations Enhancing Strategic Management Goal-Setting Skills in the Business Policy Course Using a Business Simulation in the Principles of Management Course - Learning Outcomes and Perceptions Personal Computers: Drexel's Experience Using Psychological Type to Enhance Negotiation Skills The Effects of Conflict Handling Styles on Negotiation Behavior: An Analysis of an Experiential Exercise An Experiential Test of Bargaining Decisions and Representation Self-Grading of Examination by Students, A Viable Alternative to Traditional Procedures Perceived Instructor Enthusiasm and Student Achievement An Experiential Approach to Teaching Subordinate-Oriented Communication Assessing the Effects of a Computerized Study Guide in Macroeconomic Principles: A Statistical Analysis A Sales Management Simulation for the PC an Integrative Tool for the Sales Management Course Teaching Re-evaluation of Salespersons Through the Use of a Simulation Game A Test of Student Performance and Attitudes and Performance Under Varying Game Conditions Developing and Testing Airways: A Marketing Simulation Experiential Learning Revisited: Some Thoughts on Designing More Adaptive Management Education Programs Developing the Competencies of Creativity and Accurate Self-Assessment Self-View and Norms: Some Longitudinal Laboratory Results Strategic Planning with an Experiential Case The ABSEL Research Consortium: Preliminary Steps and Position Papers An Analysis of ABSEL Conference papers (1974-1985) The Creation and Operation of a Data-base System for ABSEL Research Funding for a Research Consortium on Simulation and Experiential Learning Simulation - Indoctrination or Learning The Dilemma In Evaluating Classroom Innovations Personality Variables on Group Cohesion, Team Participation and Total Learning Justifications for and Problems in Developing and Using Computerized Experiential Activities Management Competency Models and the Life-Long Learning Project: What Role for ABSEL External Validity of Business Games Restructuring the University - An Experiential Exercise The Surrogate Class Exercise Images of Effectiveness: A Classroom Exercise The Algebran Industry: A Tutorial Framework Another Chance: A Multi-Leveled, Macro Business Game for Micro-Computers A Water Quality Management Simulation Game Acquisitions? Divestitures? Progress Report on a Conglomerate Game Enterprise: A Multi-Purpose Management Development Simulation Marketer: A Microcomputer Simulation in a High Tech Industry A Pedagogical Analysis of Alternative Tax Elections for Exploration Costs in the Mining Industry Using of Multiple Microcomputers Application Programs to Teach Fundamental Business Concepts and Practices Demonstrating the Role of Simulation in Strategic Operations Planning: A Case Study in Bank Check Processing Location Analysis The Subjective Side of the Decision Support System: A Pitfall for the Panacea A Group-Based Procedure for Revealing Judgmental Heuristics and Biases An Experiential Exercise in Bayesian Decision-Making Values for Selected Parameters in Physical Distribution Simulation and Games Computerized Business Management Simulations for Tyros The Management Decision Laboratory at New York University An Example: The Use of Management Games on Microcomputers by Computer Novices Enhancing Mainframe Simulation Via Microcomputers: Designing Decision Support Systems Integrating Personal Computers Into a Course as a Decision Support Tool A Decision Support System for Capital Funds Forecasting Performance and Attitudinal Affects of a Decision Support Package in a Business Game Using the Real World: Interviews with Woman Mangers The Cooperatively-Authored Student Handbook International Buying: An Experiential Exercise The Research/Teaching Interface: Turning a Pretest into an Experiential Exercise Building Microcomputer Business Simulations Simulation with Discrete and Continuous Mathematical Modeling An Interpolation Approach to Developing mathematical Functions for Business Simulations The Design of Simulation Models Using Thought Organizers The Assessment Center as a Teaching/Learning Device An Approach to Meeting the AACSB Guidelines for Introducing Skills and Personal Characteristics (SACs) Using an Interclass Simulating and Role-Playing Pedagogy Experiential Learning about the World of Work: A Program for Primary and Secondary School Educators Assessment of Relevant Personal Characteristics of Potential Entrepreneurs