Report on the jetpack business simulation | Business Game Report | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

VIETNAM NATIONAL UNIVERSITY, HO CHI MINH CITY INTERNATIONAL UNIVERSITY BUSINESS GAME
Report on the jetpack business simulation
Course: Business Game, group 01
Lecturer: Mr. Ngo Hoai Son
Semester: Semester 2, 2021-2022 Group members Đặng Giang Bảo Như BABAIU19278 Nguyễn Thị Ngọc Sâm BABAIU19086 Table of contents About the simulation 3 Market segmentation 3 Marketing mix 4 Product 4 Price 5 Place 6 Promotion 6 Key takeaways 7
1. About the simulation
The simulation is about launching a business that sells jetpack, a future vehicle to travel that is
widely used. The business will have $150,000 in advance as the initial investment to conduct
the business. There are four available departments: Marketing, Sales, Engineering, and Human
Resources. The simulation runs in four consecutive quarters and reports the ûnal result at the
end of quarter 4. Through each quarter, the 8entrepreneurs9 must complete the task in each
department, make ûnancing and product decisions to boost the business proûtability. 2. Market segmentation
The simulation provides us with information such as proûle, values, interests and attitudes of
three potential segmentations for the jetpack products, which are Elderly, Teen Boys and Hipster.
Based on these data and descriptions, our job is to analyze and decide which segment is the most proûtable to target.
Firstly, the elderly are men and women over 60 and live on pensions, so they are pretty price-
conscious. They do not care much about appearance or social status. Instead, they look for the
safety and the quality of an affordable product. This market segment is estimated to include
30,502 people, generating a market size of $1,830,120.
Secondly, teen boys are the segment aged between 16 and 24 with low income as they probably
live on the money offered by their parents until they can independently afford themselves.
However, they want customized products, something unique to represent themselves, to show
their special personality. The market size of this segment is $1,453,920, generated by 22,368 people.
Thirdly, hipsters are women and men aged 25-35 with bachelor or master degrees so they own
an upper-middle income level. Being in the competent workforce creates the need to show their
social status through their appearance and the things they use. Thus, they want some products
with recognized brand name and high-standard quality. This segment includes 18,301 customers
with a sales volume of $1,464,080.
It can be seen that the elderly are a potential market in terms of the customer pool and the
generated sales volume. Therefore, even if our company just gets a small piece of the elderly
market share, we can still receive a considerate proût. The willing-to-pay price range of the
elderly and teen boys are approximately the same as they both have low income and live on
humble money so we can reach another segment besides the elderly, thus improving the cash
üow and enhancing the revenue.
In reality, after the products are introduced to the market, the margin earned per unit of the
elderly is signiûcantly higher than teen boys and hipsters. These ûgures once again conûrmed
that our company is using the right target customers to serve. It is a good signal that we should
continue to focus on the elderly and nonstop improve our products to further please the customer needs. 3. Marketing mix a. Product
As the need for an ideal jetpack differs among different segments, we will prioritize our target
customers and please their demand ûrst. There are ûve main characteristics that our company
can consider to put into the jetpack, including comfort, design, environmental, engine power and safety.
Our target segment, the Elderly, is the generation that favorably values comfort and safety
characteristics. This can be because they are in a sensitive phase that wants to live ordinary lives
without worries, anxiety and ups and downs. They are no longer in the age of experiencing new
things and taking adventures. Speciûcally, this group of citizens prefers vehicles that move at a
moderate speed and bring comfortable feelings during the traveling. In addition, their daily
routines involve babysitting and driving grandchildren to school and related places, so
transportation with signiûcant safety features is highly required. From their emphasis on
comfort and safety and their using purpose, we can infer that their need for engine power is not
strong. A full racing mode of engine power is unnecessary or even useless, as they just travel for
a short distance and want to minimize injuries.
While the elderly show eager attitudes towards comfort and safety, unfortunately, they reveal
adverse perceptions of design and environmental elements. They can not grasp a sense of why
the youngsters become obsessed with and chased after state-of-the-art design, meaning that
they do not put the design feature as a top priority when making buying decisions. However, we
do believe that design enhancing the level of comfort will be the add-in characteristics that the
elderly look for. Concerning the environmental issues, this group believes that the government
should not impose taxes on fossil fuels which are on the verge of exhaustion and emit harmful
gases to the environment when burning. This proves that they do not pay much attention to
whether the vehicle causes the pollution and refuse to pay more to get eco-vehicles. From these
initial analyses, it is suggested that we should focus on developing a product that emphasizes
mainly on comfort and safety and a piece of pleasurable design amongst the ûve factors provided by the simulation.
After ûguring out which features to add in, we will proceed through the creation of jetpacks. In
quarter two, there is only one speciûc feature that we can choose under each broad category.
Therefore, under comfort and safety, we will select fur-lined straps and 10-point straps,
respectively. Fur-lined straps will ensure that the customers are in the state of being closely
strapped to shield themselves. But the real fake fur will replace the tight sufferings with a more
pleasant mode. 10-point straps will increase the protection and make sure even the little ûnger
is strapped in tight. Among the three remaining options including leather seats, pollution ûlter
and sport modes, leather seats are the best choice. Despite the fact that leather seat represents
good design which is the factor that our target do not crave for, this element can enhance the
soothing level of seats and bring the comfortable feelings. Finally, we name the product as
FlyingSafe Jetpack, which clearly shows its nature and signature characteristics. After adding
these three detailed elements, the cost per unit will rise to $30. Two available competent
engineers are assigned to take charge of the ûrst product development. The process is expected
to take the whole quarter two to ûnish and will be launched in quarter three.
Time passes, moving us to quarter three. In this quarter, FlyingSafe Jetpack is oýcially introduced
and received massive attention from the public. The sales and reports show optimistic ûgures,
giving us a sense of satisfaction. We are in second place in terms of sales volume, most of which
are generated from our target customers, which is deûnitely a pleasure for a new startup like
us. Besides that, our company is the dominant player and make up for a signiûcant percentage
of market share amongst competitors aiming at serving the elderly segments. These ûgures
suggest that we should continue to focus on our chosen target group and improve our jetpack
to impress them further. Therefore, in this quarter, we spend $10,000 and assign two new
engineers hired and trained last quarter to research and develop a new feature, Parachute. This
add-in feature will strengthen the protection and act as a shield if customers are in danger and
need a solution to take off safely. We believe that this characteristic will take us one step closer
to break the perception that jetpack is too dangerous a transportation for the elderly to experience.
The last quarter observes the launch of FlyingSafe Pro, an upgraded version of FlyingSafe Jetpack
with the addition of Parachute. The favorable reactions from our target customers continue to
be our primary motivation to research a new feature,
Back Heater, which is expected to gain success like the previous one. b. Price
The price range that the elderly are willing to pay is from $24 to $120, of which $60 is the sales
price that we decide to go with. If we raise the price more than that price, the customers will
seek for other substitute products provided by our rivals. In contrast, if we sell lower than that
price, we cannot cover the costs of research, development, promotion, and distribution. With a
high production cost, our margins will be smaller, but we can have a better product to offer
customers. As $60 is quite a standard price offered by many companies aiming at the elderly,
higher quality can bring higher satisfaction to the customers and differentiate us from these
competitors. However, although the margin is low, we still earn reasonable proûts due to the
more signiûcant number of willing-to-pay people. Doing a little calculation, we will have
expected proût equals the percentage of the people willing to pay multiplied by the number of
potential buyers multiplied by proût margin. At the price of $60, 32% of the elderly, which are
30,502 people, are eager to buy our jetpack. In addition, when selling at $60, we can approach
teen boys whose willingness to pay is slightly higher at $65. c. Place
Focusing on the elderly as the target audience, the company needs to consider their habits,
behaviors, interests and attitudes to make the geographical decision for distributing the product.
Being at the age above 60, not having much income, and living in the suburbs imply that they
hardly go to high-end stores to spend on luxury products. Moreover, with the price set above
$60/jetpack, it is not reasonable for such standard-price products to appear in a luxury shop.
Trade fairs could hardly be one of their destinations when considering buying a jetpack. This is
because a trade fair is a crowded and noisy environment and usually not suitable for the elderly
to come. The temporariness of the trade fair is also hard for the old customers to catch up. They
would also not like going a long way hustle in the midst of the crowd looking for things due to
their health condition. So, trade fair would not be their chosen point.
In terms of online distribution on an intermediary e-commerce site or a website, it may
contribute to the sales ûgure as the elderly have the interest to share their thoughts and pictures
on social media sites, usually on Talkbook. Putting suitable advertisements on those sites will
attract them and increase their awareness of the product. Moreover, the network of social
media also enables the spread through the friend list of users. They can see the product, then
share it with their friends to discuss it and they may decide to buy it together at the end. Thus,
online distribution should be a reasonable source.
Another channel for distribution that we can reach the elderly is via low-cost chain as the elderly
would prefer to buy items with affordable prices. Low-cost chain would be the right destination to seek for on-sale items.
Finally, the department store should be the focus for the distribution. This channel is the best
ût with the characteristics of the group of the elderly. Firstly it is the traditional shopping style
that most of the elderly have been used to. They do not need technology like an online
distribution, or go to a crowded place like trade fairs, where everything is usually very rushed
and overwhelmed. At the traditional store, they can be comfortable with a moderate pace, they
can also invite friends to go together or take pictures and share it on Talkbook. The price at
department stores, although not as affordable as low-cost chains, is usually reasonable enough
for them to come up with the buying decision before leaving. d. Promotion
There are six possible channels for marketers to advertise the product, namely internet
advertisements, Pictagram, Talkbook, TV and movies, radio, and trade fairs.
Online advertisements campaigns on some search engines like Chrome or Edge may randomly
work for the elderly who actively want to buy a jetpack. A better method is to advertise through
the websites or blogs that review the products, or a platform for people discussing their
experiences. Other open platforms like Youtube will also work when the customers want to hear
real sharing about the product and the experience that people can have after a while using the
product. However, the attraction gained from these sources will not be so great, as the interests
and hobbies of the target audience do not fall much into this area.
Talkbook can be considered a good source for acknowledging the brand as well as the product.
The customers have the habit of sharing pictures and thoughts on this social media site. They
probably also share it with their friends. Therefore, if one customer sees the product and has
interest in it, they can spread it to others by the effect of Buzz Marketing or World of Mouth,
from which the company could improve sales without paying for extra marketing activities.
The most inüuential channel for the elderly is TV and movies. It affects them much ûrstly
because of their hobby of watching television. Everything appearing on television should be
standardized and qualiûed. Via this traditional channel, it is easier to gain the trust from the
audience, indirectly giving them the guarantee of authenticity and quality. Secondly, when they
hear about the advertisement repeatedly, they can have a perception for the product in their
head. By giving them some more hints through sale activity can empower their buying decisions.
Three remaining channels are Pictagram, radio, and trade fairs. Marketing in these three
channels will not bring about proûtability as they are not suitable for the elderly. Pictagram is
the social media site for teenagers and youngsters to show off their unique personalities and
career achievements, the elderly do not join this platform, they will do Talkbook instead. Their
hobby and everyday activities also do not relate to radio, so their advertising through radio could
not reach our target customers. Finally, old people will not go to trade fairs and the company
will not put any distribution in trade fairs so there will also be no promotion activity for this channel. 4. Key takeaways
To start a business, entrepreneurs must ûrstly understand their customers, that is who they want
to serve, what their customers expect in a product and where to reach them. Market research
and market segmentation can help the business to identify their target customers. The
engineering team will then receive the product feature they need to develop, start to conduct
the R&D stage to design and ûnally build the product. Simultaneously, the marketers in the
company also begin to reach their potential customers through feasible channels, create the
need and the want in the market and give the audience a perception of the product. After
launching the item, the sales team can go straight to meet their customers at selling points and
empower their buying decisions to boost sales index. Along the process, if there are some
signals warning that the company has some wrong ideas of the customers, for example the
chosen marketing channels or sales channels do not reach the audience, actions need to be
taken immediately to redirect the business to the right way and avoid heavy loss in the future.