Music2go Simulation Final Report
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Music2Go Simulation Final Report[Type the document subtitle]Executive SummaryOur company, Axes of Awesome’s vision is to be the market leader in the MP3 player market. We offer 3 unique MP3 products, which target 3 different market segments. Axes of Awesome (AoA) represents a fun, stylish, yet highly functional brand image for our products. We wanted our products to exhibit a stylish characteristics, which was supported by our advertising and promotional efforts. Not only did the marketing efforts support this, but the order in which we launched our products and the name of the product also represented our fun, stylish, and functional theme. In three consecutive years, we launched Sonic 1 for the standard segment, Bang for the youth segment, and lastly, Awesome for the sports segment. AoA set a clear strategy from the outset that in creating a firm presence in the mainstream market. Our key products were the Sonic 1 and Bang. We position Sonic 1 as our Cash Cow and Bang as our Star in our product portfolio. While profitable, Awesome was not intended to be a key product in our portfolio. We wanted to leverage Awesome to create presence in the sports segment and diminish our competitor’s market share.Our pricing strategy followed our aim to have a presence in the mainstream market, we priced our products to what would be most appealing to our customer base. This was also represented from our drop in price in Sonic1 after Awesome was launched, in effort to further differentiate between the two markets. We also focus most of our advertising dollars in the Television and Radio segments, which proved to be most effective for our target markets. In comparison with advertising, we spent fewer promotional dollars, as building awareness through advertising was deemed more important. Moving forward, as our products enter the later years of their mature stage, we look to invest more money in sales promotion. AoA is a company of energy, we have great potential ahead. We are currently ranked second in Net Marketing Contribution against 4 other competitors. When compared with the market leader, we have one more product and reach in an additional market – our future possibilities are tremendous. Company and Market OverviewOur company, AoA vision is to be the market leader in the MP3 player market. We offer 3 unique MP3 products, which target 3 different market segments. Market OverviewThe market for MP3 players is divided into three market segments – standard, youth, and sports -with each segment carrying its own unique characteristics, including customer needs, price sensitivity, market size, etc. After evaluating the overall market situation, and in line with our company vision, it was apparent that we needed to enter all 3 market segments with targeted products and marketing strategies to capture a significant position in each segment. The strategies will be outlined in later sections of the report. We compete in a market with 4 other firms who carry similar product ranges. The threat of substitutes is high and competition is fierce. However, with our targeted marketing efforts and efficient management of inventory, we were able to exceed the performance our competitors in key metrics. As of 2018, our company is ranked second among our competitors in cumulative net marketing contribution.  Our Value Proposition & ObjectivesWe at AoA wanted to create a fun, stylish, yet highly functional brand image for our products. In addition to a great device used to listen to music, we created an additional value proposition for our customers. We wanted our customers to feel stylish when using our product and promote our product to appeal to their avant-garde character. With this in mind, after the standard Sonic 1 product, we launched Bang for the youth segment, and one year later, Awesome for the sports segment. The names of our products, carefully selected to reflect how we want our customers to feel when walking the streets wired up to our exciting range.
Company’s General Marketing StrategyAoA set a clear strategy from the outset that leveraged upon establishing a firm foot-hold in the mainstream market. Without a broad base (and revenue stream) as well as sound brand recognition, any chances of success with higher margin products would be futile. As such, our standard product Sonic 1, was released first, before the introduction of Bang for the youth segment, and one year later, Awesome for the sports segment. The names of our products reflect how we want our customers to feel when carrying our product.   We recognised that the sports segment is the most active yet with the highest margin in the whole industry. It is clearly the juiciest slice of the cake, but we didn’t chose Sport as our prime target since we believed many other companies would be taking a similar approach – competition would be fierce. Taking into consideration the limited marketing budget available we saw the second year of the project as the ideal opportunity to enter the youth segment, as a good testing ground for our market entry and product development strategies.Business Strategy and Market MixBusiness Strategy for Standard, Youth and Sport Segments Sonic 1: our base offeringWe position Sonic 1 as Cash Cow in our product portfolio. Standard segment are slow-growth, high-share of our product portfolio. It is a key source of cash and is typically core to our overall business. It has a strong competitive position but is in a mature market. It generates profits and provides investment funds for other products. Bang: for the dynamic youth marketThe youth segment is representative of the fashion conscious youth customer. Youth customer has medium price sensitivity and high emphasis on style feature. Their purchase decision is usually done in impulse motion, which is heavily influenced by Television and Radio Media.Because the youth customers are not willing to afford higher price, the product margin in youth segment is relative lower comparing to sport segment and standard segment with the price range from $20 to $80. However, the growth of market youth is highest among three segments. From year 2015 to 2019, the market size of youth segment can be forecasted to be increased from 4.5m to 8m. Firm Axis of Awesome’s strategy is to enter the youth market as soon as possible to be ready to launch the youth product.