THE MARKETING GAME

 

Here is an example of a simple business game of the type that you might get at an assessment centre either individually or to solve as a group. This exercise tests your decision making, analytical reasoning skills and your ability to put forward a persuasive case - all important management skills. In a real life selection centre you would be given about 30 minutes to study the problem which follows and to produce recommendations for action and the reasons behind your decision. This would probably be a group exercise with other candidates with each candidate given the role information for one manager, but could also be given as an individual exercise in which you had to produce a report.

 

Kent Airlines are considering adding a newly discovered tropical island to their list of destinations. The island is 3,000 miles away in mid-Atlantic. The islanders have a potent drink called 'OROS' which they think will go down well in European markets and consequently are building a new international airport to expand the drinks and holiday business. The name of the island is Atlantis.

A group of eight managers has been gathered to decide whether the destination is viable, what type of aircraft to use and what profits might be expected.

You have 30 minutes to discuss the issue before the Marketing Director arrives to hear you put your case to him.

If you decide to go ahead then:

The team is:

  • FUTURES AUDIT MANAGER
  • MARKET RESEARCHER
  • PRICING MANAGER MARKET
  • CARGO MANAGER
  • ENGINEERING MANAGER
  • LOGISTICS MANAGER
  • PLANNING MANAGER
  • SCHEDULING MANAGER

CARGO MANAGER

We could probably make £10,000 profit per trip using a 747 for the transport of "OROS" or £8,000 using a Tristar in addition to passenger income.

ENGINEERING MANAGER

We would need to station one overseas engineer permanently on Atlantis. We would also need to have spare parts such as tyres and engine components available there. We have a 747 available for a Thursday flight only and no other days, or a Tristar Series 200 available for a Saturday flight.

LOGISTICS MANAGER

The costs of fuel, engineering, food for passengers, salaries, loading and unloading and refueling etc. would be £80,000 for a 747 and £65,000 for a Tristar.

FUTURES AUDIT MANAGER

The politics of island seem stable. The island will get enough money from selling "OROS" to pay for the building of the airport and hotels.

RESEARCHER

The island has an excellent climate and good beaches, but there is a lack of nightlife at present. There is great interest from both leisure and business customers in going to the island. A Saturday departure would give us sufficient demand for us to use a Boeing 747, but departures on other days would generate a much lower demand and make the Boeing unprofitable to use.

PRICING MANAGER

We would need to put on flights with special cheap rate tourist fares as well as the standard business fare, but using these we could probably generate £90,000 of income per trip using a 747 or £72,000 using a Tristar

MARKETING PLANNING MANAGER

This can be a profitable route looked at in both the short term and the long term.

SCHEDULING MANAGER

The flight could depart at 21.00 hours on Saturday if an aircraft is available: this would be convenient for passengers and would also fit in with loading, catering and engineering staff.

AVAILABLE AIRCRAFT

BOEING 747 (Jumbo Jet)

On long haul routes where traffic levels are heavy, the 747 continues to be the mainstay of the fleet. Its exceptionally low fuel-consumption gives it a very low seat/mile costs.

 

TRISTAR SERIES 200

Routes: The Series 200 flies medium haul routes with heavy traffic.

 

PRESENTING YOUR CONCLUSIONS

You might be asked to give a short presentation of your case in front of the selectors. This would test your public speaking skills, ability to present an argument etc.

This type of exercise might also be given in the form of a group exercise . Here, as part of a group of 8 candidates you would be given about 30 minutes to come to a consensus on which option to choose. Here your skills of verbal communication, team working, persuasiveness and time management would be looked for. A good starting point might be to decide on the criteria (cost, logistics, publicity) you will use to decide and to rank these in order of importance. Keep an eye on the time as you would be marked down if you didn't finish.

 

SOLUTION

As in real life there is no single correct answer to this exercise and most others like it. Any solution could be persuasively argued for, and the final solution you choose is not important. You would be assessed on how logically and eloquently you made your case for whichever scheme you decided to support. Below are a few hints on points selectors might be looking for.

Is the destination is viable?

Yes. There are enough passengers and a viable cargo, acceptable costs, an available aircraft and a healthy profit (see below).

What type of aircraft should be used?

The detailed aircraft information is actually a red herring: apart from the aircraft range it is not required to solve the exercise!

Both aircraft have sufficient range. A 747 is available for a Thursday flight and no other days, or a Tristar Series 200 is available for a Saturday flight. A Saturday departure would give sufficient demand for a Boeing 747, but departures on other days would generate a much lower demand and make the Boeing unprofitable to use. The flight could depart at 21.00 hours on Saturday if an aircraft is available: this would be convenient for passengers and would also fit in with loading, catering and engineering staff. From this information it is clear that the Tristar is the better choice.

What profits might be expected?

 
747
Tristar
Fares
90,000
72,000
Cargo
10,000
8,000
Costs
-80,000
-65,000
Profit
20,000
15,000

What sort of customers would you try to attract?

It's an expensive destination in terms of fuel, so high income middle class passengers would be best targeted. Also winter sun seekers as the climate is good all year round as it's in the tropics. Could perhaps be used for business conferences or as a reward for sales executives?

How would you publicise the destination?

Climate, drink and beaches!

Television is usually too expensive for a specific destination. Could produce a brochure and advertise in quality newspapers and the internet would be important. Talk to tour operators to arrange packages and staff could be send to high street travel agencies. Competitions could be arranged around the OROS drink

How would you deal with competitors (other airlines)?

Increase revenue by extra advertising. Offer cheap hotel accommodation packages. Use as a stopover on the route to American destinations?

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