New York University Stern School of Business Langone Program Strategic Marketing & Planning (Summer I, 2010) (TENTATIVE SYLLABUS)

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1 New York University Stern School of Business Langone Program Strategic Marketing & Planning (Summer I, 2010) (TENTATIVE SYLLABUS) Professor Sunder Narayanan Sat 9-12; 1-4 (May 15 - Jun 26, 2010) Office: 901 Tisch Hall B Stern sunder.narayanan Classroom: KMC Office Hours: By appointment TF: TBA Course Description A marketing orientation drives strategic decision-making in most companies today. The business press is constantly discussing the efforts of companies to get close to their customers or to meet their needs better than the competition. Indeed it is impossible to understand the current and potential financial success of companies today without a thorough understanding of their target markets, customer relationships, product development skills, and competitive advantages and disadvantages. Marketing is all about creating, capturing, and delivering value. By delivering superior value to customers, companies enhance their own value. This course is designed to help you develop the knowledge and skills necessary to develop marketing strategy at the business (in contrast to product) level. Rather than just focus on creating value propositions for customers, the emphasis in this course will be more strategic and focus on designing value creation and delivery systems. Therefore, the course will target the interface between customer value, marketing decisions, business strategy, and the operations of the organization. Material will be particularly relevant to students who expect to be responsible for developing and/or assessing marketing strategy as owners, employees, and consultants. Another key element of this course is Markstrat, the marketing simulation game. Through the development and implementation of a marketing plan in the context of Markstrat simulations, the course attempts to simulate the marketing manager s job. Required Course Material Evaluation 1. Course Pack. 2. Markstrat Online Student Manual, by Larréché, Gatignon and Triolet, StratX International, ISBN: (available in the bookstore and also at 1. Class participation 20% (individual) 2. Markstrat individual report 20% (individual) 3. Project presentation 20% (group) 4. Markstrat simulation 40% (group) a. Strategy report 10% b. Presentation 10% c. Performance 20% 1

2 Class Schedule Date Time Topic Readings and Assignments May Designing Value Creation and Delivery Systems (VCDS) Competing Through Business Models (A) Case: Irizar in 2005 May Introduction to Markstrat Markstrat Manual May 20 No scheduled class meeting Decision 1 by 4 pm May Markstrat Meetings Decision 2 by 11 am May Case: Airbus vs. Boeing (A) May Case: Linux vs. Windows May Markstrat Meetings Decision 3 by 4 pm May 29 No Class Memorial Day Weekend Jun 3 No scheduled class meeting Decision 4 by 4 pm Jun Markstrat Meetings Decision 5 by 4 pm Jun Case: Finland s S Group Strategy Report by 11 am Jun Case: Launching Telmore (A) Jun Markstrat Meetings Decision 6 by 4 pm Jun 10 No scheduled class meeting Decision 7 by 4 pm Jun Markstrat Meetings Decision 8 by 11 am Jun Case: Betfair vs. UK Bookmakers Jun Case: Lan and Southwest Airlines Jun Markstrat Meetings Decision 9 by 4 pm Jun 17 No scheduled class meeting Decision 10 by 4 pm Jun Markstrat Meetings Decision 11 by 11 am Jun Cases: Greenpeace, WWF Jun Project Discussions Jun 24 No scheduled class meeting Decision 12 by 4 pm Jun Markstrat/Project Discussions Jun Project Presentations Project Slides by 11 am Jun Project Presentations Markstrat Presentations The Markstrat Simulation Website The Markstrat website is and the course ID is A You can use this website to (1) purchase the Markstrat manual, (2) create your account, (3) enter your group decisions for each period, and (4) receive your results. The website also contains instructions on entering decisions. All students taking this course are required to purchase the manual and be registered on the website in order to participate in the simulation, and receive a grade for the course. What is Markstrat? Markstrat Slides by 1 pm Individual Report by 1 pm Markstrat is a strategic simulation game that is designed to teach you Strategic Marketing concepts such as brand portfolio strategy, segmentation, and positioning strategies. Just as a flight simulator allows flight crews to practice in a risk-free setting, Markstrat will allow you to 2

3 practice strategic marketing skills in a concentrated amount of time before trying them out in a real-business environment. In the experience-based learning approach available through Markstrat, you will learn to go beyond strategy formulation and implement your strategic plans through decisions at the tactical level. In particular, the possibility of assessing the success or failure of a marketing strategy over time is an important benefit offered by Markstrat. Course participants will work in teams of and meet in direct competition against other teams. While working on Markstrat, consider yourselves as a Strategic Group created to make strategic decisions on your brand portfolio. As the game is played over 12 periods (years), you need to have a long-term strategic perspective on the decisions. Focusing too much on short-term gains may cost you in the long-term. The game will help you formulate, implement, and adapt your strategies in a dynamic, competitive environment. Each team is assigned to a firm that starts off in a certain position in the industry. Your task is to make key decisions regarding Research & Development Meet with the R&D department to specify new research projects. Specifications cover the physical characteristics and the target unit cost for future projects. Brand Portfolio When completed, R&D projects can be used to launch new brands, to target new segments in existing markets or to enter new markets. Production, Price & Advertising A number of tactical decisions must be made for each marketed brand. Teams must plan production batches carefully in order to avoid stockouts while minimizing inventories. Prices must be set according to the expectations of the target segments. Finally, communication budgets must be allocated to each marketed brands according to their position in the product life cycle, to their sales potential, etc. Sales Force & Distribution Sales force decisions include the size of the sales force, and its allocation on distribution channel. Guidelines can be set regarding the effort to dedicate to individual brands. Market Research Studies More than twenty market studies can be ordered per period. Teams must select the most appropriate studies to purchase in order to avoid information overload. Collusion among teams within an industry is illegal and strictly prohibited. Also, teams are not allowed to discuss their strategies with teams from a different industry. The appropriate time for discussing your strategies is during the final class after all the simulations are over. The grade for Markstrat will be based on (1) a strategy report due (maximum 3 pages double-spaced, excluding appendices), (2) a final presentation at the end of the simulation (10-15 minutes per team, excluding Q&A please submit your presentation slides), and (3) your group performance. Markstrat Reports and Performance Strategy Report (10%) Your group is required to submit a strategy report at the end of the fourth decision period. The purpose of this report is to help you analyze the market conditions and propose a strategy for the next three periods that aims to maximize your performance. It will also allow me 3

4 to keep track of your progress and give feedback if necessary. You are encouraged to perform this analysis for every period; however I only need to see the one at the end of the fourth period. Your analysis should lead you to identify and address questions like: What opportunities and threats does your firm face? What are your firm's strengths and weaknesses? What are some viable strategic alternatives? What should be your firm's long-term objectives? What brands should your firm promote? What brands should your firm harvest? What is the sustainable competitive advantage for your firm? Who are your major competitors? What strategies and responses do you anticipate from competitors in future periods? What growth directions are most attractive? How should your firm's resources be allocated across the various brands? Markstrat Presentation (10%) The presentation (10-15 minutes plus Q&A) should contain the following sections: 1. A description of your objectives and strategy (period-by-period) for the twelve periods, and a summary of key insights you learned about the market during the game. 2. A complete situation analysis (including the customers, competitors, market, and other important elements) at the end of the 12 th period. 3. Objectives and strategy recommendation for the next three periods. Individual Report (10%) This report (maximum 3 pages, typed and double spaced) is to be submitted individually by each student. The report should be a record of your experiences with the simulation game. In particular, the report should cover following questions: 1. What were your general and specific areas of responsibilities and your contributions to the decisions in the game? What were some unique contributions that you made to your team s strategy? What were some unique contributions that your team members made to your team s strategy? 2. What are your overall impressions of your group dynamics? How did the group dynamics help or hinder your decisions? What specific suggestions do you have for improving your group dynamics in future decisions? 3. What did you learn about your personal decision making style compared to that of your team members? Are you likely to be more or less risk-averse? Are you more analytical or intuitive in your decision making? Did you discover any biases in your decision making style that needs some work on your part? 4. What else did you learn from your Markstrat experience? 4

5 Markstrat Performance (20%) All teams will start out in identical positions on all aspects of the game. A team's performance will be assessed based on the Stock Price Index (SPI) at the end of the 12 th period (all teams will start with an SPI of 1000). The team that ends with the highest SPI will get 100%. All other teams will be scaled to the highest SPI team. For example, if the highest SPI is 2000 and your team finishes with an SPI of 1500, then your Markstrat performance score will be (1500/2000)*100 = 75%. Group Project (20%) The group project is a presentation on the last day of class. Each team is required to select any existing company, analyze its Value Creation and Delivery System (VCDS), and share the analysis with the rest of the class in the form of a 20 minute presentation (excluding Q&A). The presentation should include an analysis of the strengths and weaknesses of the firm s VCDS, and how it interacts with the firm s competitors, partners, complementors, and customers. Several of the readings and cases assigned for this course will attempt to understand and analyze a firm s VCDS, and your team can use that as a basis for analyzing your chosen company. No written reports are required for this project only the presentation slides are due before the presentations. More details on the project will be provided on the first day of class. 5