Capsim Simulation Tips
Capsim is a market simulation tool that enables one to be in charge of a company. One can perform different manipulation to ensure the performance of the company they are managing is high. This article will focus on the customer survey score in Capsim. The score is calculated monthly and the score in December is recorded in the Capstone Courier Segment Analyses pages. Are you looking for Capsim Simulation Tips? Worry no more! We got you covered!
The score shows how the product meets its market segment buying criteria. These scores are only calculated one in every month. Research and Development revise products during the year which affects the segmentation and positioning of the product. It is possible for a product to have very high scores during December and very low scores on the other months.
Buying Criteria and the Customer Survey Score
The customer survey process begins by matching and comparing every customer with their buying criterion. The assessment is assigned weights according to how important they ar. For instance, positioning is 43% important in the High-End Segment which differs from 16% in the Low-End Segment. This implies that a product that is well positioned in the High-End Segment will have a higher score than the one which is positioned in the Low-End Segment.
Also, a score is said to be perfect, if it scores 100 percent. This implies that the product is ideal positioned within its appropriate segment at the appropriate time. It also means that the product has an optimum age at that segment and the MTBF specification is at the top of the expected range.
The main problem to be solved in the simulation is issuing the customers the best product and at the same time being able to produce very high profits from the products. All companies including the competitors are faced with the same issue.
A product is placed in a particular segment by the customer. The markets should find out what exactly the customer wants so that more sales on what they want can be made. Perceptual map shows the idea of product positioning by use of circles. Every segment is represented with a solid circle in the inside, a dashed outer circle, and a dot known as the ideal spot.
The dashed outer circle shows the outer limit of the segment. This is whereby customers state that they will not purchase the product outside this boundary. This circle is also referred to as the rough-cut circle. This is because once a product falls beyond this circle, it is no longer considered for purchasing.
If a product is close to the outer boundary, then it is badly positioned. The products positioned near the outer limit boundary are at a higher disadvantage since a customer is unlikely to consider purchasing them. Their survey scores are low.
The solid inner circle is the core of the segment. Customers are willing to purchase the product. The circle is also referred to as fine cut since it falls within the range which a customer can consider to purchase the product.
In sensor industry, customers in the high technology segments prefer sensors which are ideal for their purpose. They would prefer sensors that are minimized in size and have a high performance. With this kind of sensors, then the customers are likely to purchase the sensors more than if they were large in size and had high performance. The minimization and high-performance places the product in the inner circle at the ideal spot.
Low technology customers would prefer sensors that are of low technology and low priced. Their main intention is to purchase the sensor they prefer at a low price with no regards to the technology. This will place them at the ideal spot of low prices in the segment.
The pricing range in each segment is $10. In the sensor industry, the Low Technology customers in the beginning of the first year before Round 1, they can be $15 to $25 for a sensor while the High Technology Customers it can be $30 to $40. There is a correlation between the segment prices and the positioning of the segment. Segments of high technology with high performance will have a higher price than segment of low technology and low performance.
The price range will decrease by $0.5 annually. The price in Round 1 of the Low Technology Customer will be $14.5 to $24.5.
Pricing Rough Out
The products that have a price higher than $5 of the given range in the segment will not be considered for purchase. The product will be cut out of consideration since there is no demand at this point. Products that have a price of $1 either above or below the segment range, they end up loosing 20% of their customer score. The loss of $1 continues until it loses $4.99 then the score reduces by approximately 99%.
Pricing Fine Cut
There is an economic demand curve for each segment whereby different customers are willing to purchase the products that are within their segments. The curve indicates that when the prices reduce, the price score increases.
The Mean Time Before Failure is set at 5,000-hour range for every segment. This is the amount of time in hours that a product is expected to work, before it malfunctions.
MTBF Rough Cut
The demand score reduces when the products are below the segment threshold of MTBF. Products with MTBF 1000 hours below the threshold, are given a 20% cut below the survey score. 20 % of the survey score is lost for every reduction of 1000 hour of MTBF. When it reaches 4999 hours, the segment loses 99% of the survey score. The products that are below the range, have a demand tending to zero.
MTBF Fine Cut
If the product is within the segment guidelines on MTBF, then the demand is likely to be high. Although, the cost of material increases the MTBF by 1000 hours of reliability. Sometimes, the customers will ignore the reliability aspect if its above the expected range.
There is no rough cut for the age criteria. For a sensor, one cannot state that its too young or too old to be put into consideration for purchase. However, customers in the High Technology segment will opt for newer products since the have been improved from their prior versions and are more likely to have higher performance. The ideal age of a sensor is between 0 and one and half years.
The Low Technology Customers prefer products that have been in the market since they are low prices compared to the new ones. These customers do not regard the technology; therefore newer devices are not of high importance to them. The ideal ages for their product are seven years. Every year customer state the age preference of the products and award an age score for each of them. Traditional customers may prefer sensors that are only two years old.
The ideal spot is when there is maximum demand of the product when all other factors are held constant. Most of the customers are willing to purchase the product at that particular point. The company should do its best in maximizing the ideal spot when it presents itself as an opportunity.
In a perfect environment, product can be positioned above the ideal spot in January, slightly on top in June and at the ideal spot in December. This will open up the project at the ideal spot in January and will have successfully accomplished the R&D mission.
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