SALES MIX

1
SALES MIX

• This simulation challenges your ability to make
  business decisions affecting the sales for
  several periods.
• The group is divided into teams, each of which
  form a sales and marketing team.
• You will be responsible for selling two products
  into two sales areas.
• To keep all then numbers manageable, all prices,
  costs and profits are measured in a universal
  currency - the Account Unit (AU)

2
The Products

• The products that you sell are imaginatively
  called Product A and Product B
• Product A is well established but has
  considerable competition.
  
• It has been sold at 20 AUs per unit.
• Product B is new but has few competitors.
• It should sell for between 25 and 30 AUs/unit
• Both products sell to the same types of customer
  but for different use.

A
B
3
THE SALES AREAS

• The two sales areas are called Area 1 Area 2.
• Currently, you only sell into Area 1 but are
  about the enter Area 2.
• Both areas are believed to be similar in terms of
  potential and mix of customers.
• Promotion for Area 1 is currently 40,000 AUs

4
COSTS

• Product A costs 13 AUs.
• Product B costs 16 AUs
• Fixed Overheads are 20,000 AUs each period
• Promotion is decided by you for each area
  separately.

AUs
5
USING THE COMPUTER

• Enter team name (up to six letters)
• Enter decisions
• price for each product
• promotion for each area
• Period Results
• Unit Sales for each product, area and totals
• Sales Revenue for each product, area and totals
• Income Statement for period and cumulatively
• Unit Sales Forecast for next period
• Go away to review, think and make next decisions.

6
ROLES TASKS

• Product Managers
• authority to set prices for the products
• responsible for unit sales volumes
• Sales Managers
• authority to set promotion expenditures
• responsible for area revenues
• Marketing Manager
• co-ordination of the team
• responsible for profit

7
OBJECTIVES

• Discover how to successfully set prices and
  promotion to meet your goals.
• Work as a team.
• Have fun!