Minnesota Micromotors, Inc. (MM) is located in Minneapolis. The company is widely known for producing orthopedic medical services products. The development in the service provision and customer satisfaction for Minnesota Micromotors is a critical aspect as it is an internationally competing company. If the company manages to run a successful quarter, then it means that the reaming quarters will run smooth with minimal hindrances. According to Turbesi (2015), the objective of such a move is to increase sales, revenue and still be in a position to offer employment of profound importance. The ongoing concerns of the company being the primary goal during incorporation mean that the company will be able to retain its employees. Companies should be in a position to maintain high-profit margins and in return enjoy more revenues. The main issue under scrutiny in this case is to retain the existing customers and acquired new ones.

Minnesota Motors segmentation is in four parts; Segment A is the one that has the higher emphasis on motors power to the size performance and is involved in a high level of support in sales for customization. The other Segment B has a greater importance in that it is concerned with thermal resistance performance and high level of the knowledge of the sales representatives (Turbesi, 2015). The third Segment C is the least in being price-sensitive and must ensure high motor performance for both the thermal resistance and power to size. The final Segment D is one that is highly price sensitive and is distributed to those more interested in the economic rates of individual members. A minor observation indicated that customers that require small volumes of vehicles would prefer those that can be integrated with their surgical tools while the vendor’s product literature would end up being comprehensive.

The marketing strategy in coming up with the decisions for the first quarter was that the company should be in a position to invest enough money in the available departments. So the simulation comprised of ensuring product quality, reviewing the customer’s relations, examine the product pricing strategies and engage in employees training. If the company engages in investing in all the departments it is a significant step, but then not all the money from the budget should be spent (Bradford, 2014). Therefore, this would involve making important decisions such as the distribution of resources in various departments such as the sales representatives and the market research department. To ensure standardization in the resource distribution then it would mean that resources have to be distributed equally to both departments. The most optimal strategy thus includes increasing the market share and income levels by ensuring that attention is laid on the right segment. The Orthopower motor department was priced at $142 in the list, the discounts off the list varied from an average of 4% to 16% this being for the large volume purchases from the online simulation.

Generally, in this quarter I opted, to begin with, a list of prices of $142. For distribution discounts, we assigned a 13%. The other area of concentration was areas with large discounts that were based on the segments A, B, C and D. For segment A; we allocated 12% discount since they result to great volumes of sale. Segment B took up 10%, Segment C 8% and 12% in discount. The first quarter a different approach for discounts was put in place whereby; Segment A was set at 11%, Segment B at 9.5%, Segment C at 5% and Segment D took up 9.5%. This was to evaluate how it would result by increasing the discounts in segment C and D. The final quarter the sales force was altered instead; segment A was set at 50%, segment B was set at 30% while decreasing the sales force in segments C and D to 24% and 25% respectively. Then the sales force was equalized for all segments by dividing it equally into four proportions of 25% to see the segment that would eventually result in the highest results possible.

The other segment that would have needed a deeper insight was determining the customer segments whereby it entailed splitting between the large-scale customers and small-scale customers. The large volume customers require high-powered motors while the others are not willing enough to compromise the level of performance with any lower prices. It was, therefore, important to consider the price sensitivity and the discount rates for distributors and customers. Price sensitivity refers to the degree by which price change affects the consumption behaviors of the customers (Blythe & Zimmerman, 2005). It is measured with the price elasticity of demand. For instance, with Minnesota Motors, we find that there was a high range of high-end customers and lower purchasing power clients. By considering the four segments, we find that Segment A and Segment B are only concerned with quality while Segment C and D are least and high price sensitive respectively. This means that prices under segment A and B can be altered but to our simulation the prices cannot be altered by any percentage higher than 5% since it would greatly compromise the discount rates. Segment C being least sensitive to price changes according to the simulation; they still cannot be increased by any percentage higher than 2%. On the other hand, a decrease of the same would greatly affect the profitability margins leading to losses. Segment D is not subject to consideration for price decrease or increase as the current customers have identified the current prices as the market prices.

According to Narayandas (2010), product positioning is a fundamental component of a marketing strategy and thus should be a top priority under market simulation. Therefore, market research data was examined to help understand the customer’s perceptions of the performance of products about prices and how the products for the company compete against rival products. Financing for respective developing products was thus allocated in different proportions to evaluate response towards the company’s products. The finding was that customers’ expectations change regularly with product development and competition variance in the market.

Managing customer relations was a simulation that was conducted by allocating sufficient sales force into each segment. Then time spent by each team in each segment is determined, and then a platform for retaining the existing customers and acquiring new customers was established and set. The customers had online platforms and quick notepads in places of operation to provide a response on the level of satisfaction for services offered. Finally, in the completion of the simulation, we ensured that we prioritize the project that could sustain the revenue streams and maximize the current gross profit. We based the simulation scores based on profit, revenue, market share, cumulative trend performance and customer satisfaction. There would be minimal future changes except for prices as they adjust in accordance to the pace set by the market forces of demand and supply. This means that the future customer levels or rival product development would alter the current price ranges and customer behaviors thus the need for adjustment.

References

Blythe, J., & Zimmerman, A. S. (2005). Business to business marketing management: A global perspective. Cengage Learning EMEA.

Bradford, K. (2014). Minnesota Micromotors Simulation. prezi.com. Retrieved 3 July 2016, from            https://prezi.com/itggmszaamgz/minnesota-micromotors-simulation/

Narayandas, D. (2010). Marketing Simulation: Managing Segments and Customers. Online           Simulation, HBP for Educators, Copyright.

Turbesi, K. (2015). Minnesota Micromotors Amy – Dave – Keith. prezi.com. Retrieved 3 July         2016, from https://prezi.com/huonzxocaauy/minnesota-micromotors-amy-dave-keith/

 
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