We have added a new playable scenario to our Cesim SimBrand marketing management simulation game, focusing on fast moving consumer goods. The student teams are put in charge of the marketing activities of a company that produces soft drinks and juices that come in many flavors and sizes, catering to a very broad customer base. The Cesim FMCG case is perfect for illustrating the marketing decisions needed in a rapidly developing modern FMCG business environment. Read on to find out what makes this case a unique addition:
The marketing simulation game begins by taking charge of the marketing functions of a fast moving consumer goods company. The product offering consists of soft drinks and juices with a variety of attributes. The products to be sold are ordered from a production company of the group and thus, actual production decisions are not part of this simulation. However, the costs are driven by the product definitions made by the teams running their FMCG marketing companies.
The company can operate in two markets: Mature and Emerging. The markets are of different size and have different growth rates. Depending on the case applied to your course, one market can be larger than the other in the beginning. It is important to identify the underlying sizes and growth rates of markets in order to time market entries and set marketing effort sizes correctly.
There are four different customer segments in both markets: Easy Living, Experiencers, Hedonistic and Thinkers. The segments react in different ways to your actions, that is, they have different sensitivities to price and advertising. Customer segments also appreciate product features differently and tend to use different distribution channels to purchase products.
The company is able to offer 0-6 differentiated products in both markets, Mature and Emerging. The fast moving consumer goods have a variety of attributes, i.e. the levels of product variety and product quality, type of either soft drink or juice, and additional features. With every product, the team is able to decide whether it will be sold in Mature, in Emerging, or in both markets. If a product is sold in both markets concurrently, economies of scale that are achieved will be reflected in a somewhat lower unit cost. On the other hand, some compromises might have to be made because of different sensitivities to product attributes between segments in Mature and Emerging market.
The success of the companies is evaluated by their performance in the equity markets. Therefore, share price at the end of the game is the recommended winning criteria. Share price is, for the most part, affected by the level of earnings. The detailed calculation of share price is based on discounted cash flow valuation.
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