MAJORITY FALLACY GAME WITH INDEPENDENT STUDENT SIMULATION AND A CASE Developments in Business Simulation & Experiential Exercises, Volume 11, 1984 14 MAJORITY FALLACY GAME WITH INDEPENDENT STUDENT SIMULATION AND A CASE Gary McCain, Boise State University Clair N. Bowman, Boise State University ABSTRACT A refinement of the majority fallacy game to allow independent student trial runs and final decision input without involving the game administrator in receiving, recording, and managing decision inputs. A case to provide a plausible environment is included. INTRODUCTION A competitive simulation game to illustrate the majority fallacy product positioning concept was developed by Smead and Finn [3] to isolate the competitive positioning issues from other marketing environmental influences. Students designed a product position by making decisions regarding three product characteristics, choosing one of six levels for each characteristic. All decisions were then submitted through the instructor who ran the programs and provided results to show the shares of market earned by each competing t earn. This revision allows students to simulate their product environment, repeatedly, on a trial basis, from a computer terminal prior to making a final game decision. Final student decisions are submitted to a central control program from the terminal, which is run at the instructor’s discretion. A case is included to provide students with a plausible setting for the simulation. THE MAJORITY FALLACY When a new product is developed, decisions must be made regarding the quantity or intensity of each product characteristic or attribute (e.g. sweetness). Preference levels for light, medium, and heavy levels can be estimated through product research. The decision to introduce any specific brand at the most demanded level might, however, be a strategic error. If a given level of an attribute or attribute set is highly demanded it is very likely that the market has already responded and products have already been introduced to satisfy those needs. The possibility of a new competitor or existing competitors new product introductions being profitable in the high demand product attribute set may be quite low. However, a Bet of attributes demanded by somewhat fewer people may have less competition. The unsatisfied demand that would be met by introduction of a product with attributes designed to fit that market may be larger than the demand for an additional product competing for the more common Bet of needs. [2] CURRENT MODEL EXPERIENCE The Smead and Finn model of the Fallacy simulation [3] was used in the authors’ undergraduate and graduate marketing principles courses. The demand functions were set; these differed in each dimension. Functions were constructed to provide different demand environments between games. Teams were formed, decisions submitted, simulations run, reports presented, and results handed back and evaluated. In general the experience did meet the educational objective of conveying the meaning of the majority fallacy. [1] Educationally the game was a success. On the other hand, the experience of the game administrator was not such a success. Some course sections were quite large. This necessitated multiple computer decks, large volumes of printouts, time-consuming paper shuffling, special rules, for submission of marketing position decisions, and, in general, administrative chaos. Several rounds of the game were required for students to understand the mechanics of making a decision in three dimensions with six levels each (a bonus learning experience of the game of perhaps equal value to the majority fallacy concept). An additional concern was that, although the competitive environment was being simulated to provide “real world” experience, the power of simulation as a strategic planning technology was not demonstrated. THE CASE A concise case was developed (Appendix A--Carinaugua Jamaica) to present a hypothetical soft drink with three attribute dimensions (flavor/extract, sugar/ sweetness, and carbonation) with six levels each. Preconceived notions of correct or proper attribute mixes have caused students to “know” good strategies rather than analyze the data given in trials with familiar product. To avoid this problem a situation was invented in a foreign market with an unfamiliar product. The drink, Jamaica, is a fantasy variation of a drink by that name actually sold by street vendors in Mexico. The unfamiliar nature of the product allows the instructor the option of creating multiple games with different market characteristics to handle large or multiple sections. Each game may this have a unique competitive environment without changing the case. THE STUDENT GAME As in the original, the game is inaugurated in the classroom by introducing the competitors to a consumer preference map. For each of the three product characteristic decision variables the map shows how many consumers reported preferences in each of six possible levels according to a research survey in the case. A sample competitive situation is shown in a market share map as well. Market share maps graphically portray market shares controlled by each competitor and summaries of market share percents by competitor. Sample of both maps are shown in Figure 1. A copy of the Carinaugua Jamaica Case is then given to each student or team. They are instructed to read the Developments in Business Simulation & Experiential Exercises, Volume 11, 1984 15 Developments in Business Simulation & Experiential Exercises, Volume 11, 1984 16 case and plan their first round strategy. A deadline for final decisions in each round of play is Bet. Subsequently, instructions are given to each student in how to log on to a computer terminal and call up the Fallacy Simulation. The Fallacy Simulation Consists of two FORTRAN programs representing slight modifications of the Smead and Finn original and two COBOL programs added by the authors. Copies of each are in Appendix B. Together, the programs permit competitors to make trial product positioning decisions (with the capability to manipulate suspected positioning of their competitors) and view the results of their trials immediately via printed Consumer Preference Maps and Market Share Maps. When satisfied with a positioning decision, an unalterable final decision is recorded for the instructor’s use. Password protection allows each team to record only its own final decision. Once all final decisions are recorded and the instructor has executed the master program (see Appendix B), each student/team receives a Market Share Map and a Consumer Preference Map which shows what positions were selected by each team and what shares were captured by that position. THE INSTRUCTORS RUN Before any play, the instructor runs one program to initiate the game, Bet demand functions and prepare for the number of teams that will be participating for each simulation. After the deadline for recording final decisions in each round, the instructor then runs the master program. Final decisions for teams that did not record a final decision by the deadline default to the last previously entered final decision. This program prompts for number of copies to be printed, performs the Fallacy Simulation, prints the results, and prepares files for the next round of play. DISCUSSION The use of the Carinaugua Jamaica Case has greatly facilitated the introduction of the majority fallacy situation. Particular advantages of the foreign environment is the reduction of the instances of complaints of deviation from a preconceived “reality” such as “these numbers cant be right,” “this just can’t be,” and “this doesn’t make any sense- -nobody would want that.” It allows a distinctive demand environment to be used at the same time or changes from term to term without creating situations of dubious credibility. The independent student input/output trial program allows students to gain valuable experience and greater understanding of their market without tying up class time or involving a games administrator. The focus of decision making in early rounds turns from figuring out how to read a three-dimensional map to anticipation and analysis of competitors’ moves--the purpose of studying the majority fallacy in the first place. The instructor’s master program allows the instructor to control when the final decision is due and the Fallacy Simulation run without having to handle or transpose any student input. This minimizes the effect of problems such as “my partner has our decision; he’ll be here Boon,” “that wasn’t what we submitted," “we didn’t know when you wanted it,” etc. The computer management side is reduced to calling up the program when decisions are due and handing out copies of resulting maps. This frees instructors for more productive instructional activities such as review of students' analyses and interpretation of their results. CONCLUSIONS These refinements of the Smead and Finn [3] majority fallacy game strengthen the learning experience by greatly increasing students’ opportunities to experiment with and learn from simulation as a strategic planning tool. In addition, the instructor is freed from burdensome game administration tasks. APPENDIX A CARINAUGUA JAMAICA When foreign investors were permitted to invest in Carinaugua they found that in addition to soft drinks, citizens were fond of a fruit drink made of crushed flower petals called Jamaica. This was made by street vendors, each of whom claimed to have a "secret recipe. Product research showed that the only ingredients were the extract from the flowers, sugar, and water. While each secret recipe had its advocates, the only differences were the amounts of extract, sugar, and carbonation in the water, The University of Carinaugua home economics department found that there were about six levels of each ingredient, from weak to strong, which would combine to make almost all recipes known in the country. Demand for each mixture was determined in a national preference test. Results are shown in the top half of the Consumer Preference Map (Planes = extract; Rows - sugar; columns carbonation). When the Department of Economic Development decided to allow bottlers to open plants in Belie, the capital of Carinaugua, they decided to limit the market to six competitors. Applications were taken and the following were accepted. Ace Bottling - a Texas soft-drink company Brusco Limited - a firm which made Jamaica ext r act Coma Todo - a Belie Supermarket chain Distillery Specialty Company - a California bottle manufacturer Epoca - a Carinauguan conglomerate Fabricos International - a Central American manufacturer All have the ability to enter the market on the first day permitted. Each may select whichever formula is believed best. Consumers will purchase the flavor closest to their preference. Equally distant brand split markets evenly. You are the product manager of one of these firms and will determine the recipe [e.g. (2 extract, 3 sugar, 2 carbonation) or (4 extract, 1 sugar, 6 carbonation)]. Once a decision is made the product will enter the market for one period. After each period a government report will describe the resulting shares of the Carinauguan Jamaica market. The product formula may be changed, however to avoid Developments in Business Simulation & Experiential Exercises, Volume 11, 1984 17 government intervention from the Department of Economic Development revisions may not exceed a maximum of a combined total of four levels (e.g., +1 extract, -l sugar, +2 carbonation). Developments in Business Simulation & Experiential Exercises, Volume 11, 1984 18 Table of Contents Volume 11, 1984 Simulation Gaming as a Means of Researching Substantive Issues: Another Look A Further Test of the Group Formation and its Impacts in a Simulated Business Environment Impact of Economic Patterns on Student Performance in Computer Business Simulation Games Majority Fallacy Game with Independent Student Simulation and a Case Introducing the Marketing Channel Laboratory A Comparative Evaluation of a Marketing Game A Study of Comparative Effectiveness of Problem-Solving Technologies The Impact of Hierarchical and Egalitarian Organization Structure on Group Decision Making and Attitudes Risk-Free Decision Making The EX-STRA Export Strategy Game Computer Education for Management Students Developing a Computer Game/Job Simulation to Teach Functional Literacy Skills Experiencing Socialization First Hand: An Experiential Exercise in Organizational Socialization Networking Distributive Versus Integrative Approaches to Negotiation: Experiential learning Through a Negotiation Simulation Managerial Education and the Real World: Foudations for Designing Educational Tools Diagnosing Group Climate to Improve Supervisory Effectiveness Student background as a Factor in Simulation Outcomes: The Collective bargaining Example The Use of Pre-Plays in Management Education Experiencing the Process Debrief: A Workshop ABSEL Megatrend Roots MEGATRENDS for Business Simulation and Experiential Learning The Effects and Consequences of the Megatrends on Simulation Gaming: One View Opportunities for the Future: ABSEL's Role Experiential Learning-Based Discussion vs. Lecture Based Discussion: A Comparative Analysis in a Classroom Setting An Evaluation of the Minitab Package in Teaching Business Statistics Concepts A Path Analytic Study of the Effects of Alternative Pedagogies Developing and Using Weighted Application Blanks: An Experiential Exercise Building Airplanes Individual vs. Group Grade: An Exercise in Decision making A Marketing Plan Exercise: Development of Interteam Cooperation Using a Coordinated Experiential Approach Using Student Experience as the Basis for a Consumer Behavior Learning Exercise Student Evaluations of Instructors: What do Students Believe? A Description of the SOFTCAT Computer Assisted Teaching System Comparisons of Practitioners' and Professors' Perceptions of Business Policy Content and Learning Methods The Perceived Relationship Between Pedagogies and Attaining Course Objectives in the Business Policy Course The Use of Simulation in the Teaching of Business Policy A Research Study on Strategic Decisions in a Business Simulation Strategic Management Decision Making Researched Via Simulation Gaming Using Simulation to Investigate Factors in Competitive Bidding Combining Experiential Learning and management Assistance A Model for Teaching Management Skills Putting Experience Back into Experiential Learning: A Demonstration The Teaching and Behavioral Measurement of Managerial/Organizational Competencies: Developing Experiential Exercises and Simulations A Simulation Game Model for Conglomerates QCLAB - A Microcomputer Laboratory in Quality Control CTSS: A Commodity Trading Simulation System Problem Solving: An Exercise on Learning, Coaching, and Operant Conditioning A Demonstration of the Effects of Feedback as a Category of Reinforcement The Assessment of Feedback and Disclosure in Interpersonal Relations: An Experiential Exercise A Study to Determine Whether the Teaching of Basic Grammar Skills in Business Communication Classes Improves Students' Business Letter Writing Corporate Maladies Through the Eyes of the Memo Writer: A Seldom Used Experiential Tool Executive Bailout at Shake & Spear, Inc. The H.E./L&P Merger Intercultural Nonverbal Communications: An Experiential Exercise The Evolving Business Policies Course - Is Management Gaming the Logical Pedagogy? The Use of Decision Simulations in Management Training Programs: Current Perspectives Humanizing the Business of Medicine: The Use of Simulated Patients to Train medical Students Systematic Integration of Simulation Methods in a Graduate Management Curriculum Modeling Non-Price Factors in the Demand Functions of Computerized Business Using Spacial Relationships to Estimate Demand in Business Simulations Two Algorithms For Redistribution Of Stockouts In Computerized Business Simulations Leadership And Strategic Behavior A Comparison Of Two Business Strategy Simulations For Microcomputers Incorporating Decision Support Systems Into Management Simulation Games: A Model And Methodology Using Micro-Computers To Support The Analysis Of Complex Cases: It's As Easy As 1-2-3 Strategic Formulation Consistent With Pims: A Micro-Computer Application