1. Introduction
The marketing simulation requires our team to assume the role of Chief Executive Officer of Minnesota Micromotors, Inc. (MM) and design the company’s marketing strategy. MM manufactures the Orthopower Micromotor™ used in orthopaedic medical devices. MM had just turned a modest profit after several years of losses. However, it faced challenges in recent potential market share loss and a decline in revenue in the most recent quarter.
2. Market Assessment
The segment of the motor industry in which MM operated was highly competitive, with over 100 participants. With MM’s significant investment in the product line’s power-to-size and efficiency — the two features cited most often by original equipment manufacturers (OEMs) as sources of differentiation for MM’s medical motors – MM’s motors delivered the highest efficiency among all miniature direct current motors.
Over 70% of MM’s revenues were generated from customers that placed large-volume orders. In particular, Segment A placed a premium on the motor’s power-to-size ratio and contributed to approximately 33% of MM’s revenues. However, MM’s market share of Segment A had fallen from 24% to 19% over the three quarters preceding the simulation.
The relationship between MM and its customers was a close one, involving a constant dialogue between many participants. The quality of these relationships and the benefits gained by both sides were critically important to MM. However, customer interviews suggested that large customers were starting to be dissatisfied with the quality of MM’s sales team.
3. Business Goals and Strategy Overview
Given MM’s market share and revenue challenges, our team determined the short- and long-term business goals for MM as follows: (a) Short-term goal: Acquire high market share in primary market segments (b) Long-term goals: Attain consistently high profit