Welcome to Marketing Simulation:

Managing Segments and Customers

Marker Motion, Inc. (MM) manufactures inertial motion capture sensors. Customers
utilizing MM's solutions are typically analyzing human movement for applications
which include improving manual work processes in order to improve employee safety
and/or efficiency, designing automation on production floors, and various types of
ergonomic product development.

With 45 employees, MM's revenues grew at an average rate of 5.5% over the prior
three-year period; however, the most recent quarterly financial data showed a decline
in revenue. Although senior management was pleased that MM had just turned a
modest profit after several years of losses, there was concern about recent potential
market share loss.

The inertial motion capture sensors in which MM specialized offered several

advantages over optical systems, which use two tracking cameras and match-moving
software to track movement visually. Both methods are commonly used to create
character movement in the movie and video game industries. Non-optical systems,
like that of MM, provide a capture rate up to 70 times faster than that of the optical
method and, after running a calibration protocol to measure study subjects' body
dimensions, can accurately measure joint angles, reach distances, and other body
kinematics with high precision.

Purchasing Criteria
The most critical sensor package purchasing criteria include the following:

Size and weight. Since sensors need to be able to send data about both large position
changes and tiny micro-movements, it is essential that they be positioned securely
during a study. Bulky sensors can feel awkward to the subject, resulting in unnaturally
affected data. If a sensor is poorly affixed or loose, the data is corrupted by its own
micro-movements. Ideally, you need smaller, lighter sensors.

Battery life. When researchers need to capture motion over long periods of time,
battery life is an important strength in non-optical sensors. Stopping to replace sensors
or charge batteries results in wasted time and resources. Furthermore, the motion
being captured would be interrupted as well, affecting the integrity of the data.
Cost. Because inertial motion sensors contain accelerometers, a battery, and a
complex electronic controller, they cost more up front than passive optical sensors.
However, inertial motion sensors could often be a less expensive than optical
packages, as they don't require an extensive camera setup.

Customer Base
Approximately 70% of Marker Motion's revenue comes from customers that place
large-volume orders. The balance is generated from customers that ordered in smaller
volumes from distributors. Customers placing large-volume orders were roughly
divided into four sub-segments (A–D), distinguishable by their purchasing behavior
and the relative importance they assigned to specific product features.

Segment A places a premium on the sensors' battery life and generally requires a high
level of sales support due to the requirement for customization.

Segment B places a premium on small and light sensors, and also values the market
and technical knowledge of a manufacturer's sales representatives.

Segment C, the least price-sensitive of large-volume customers, requires superior

battery life as well as small, easy-to-affix sensors. These customers conduct
sophisticated research for highly technical applications, therefore their technical
standards are stringent.

Segment D is price-sensitive. They buy sensors in bulk for large scale studies.

Finally, small customers who purchase through distributors are also quite price-
sensitive. Since small-volume purchasers generally have to buy off-the-shelf sensor
packages from a distributor's catalog, they are concerned that the product would be
easy to integrate into their software and that the vendor's product literature would be
comprehensive.

As the newly appointed chief executive officer of Marker Motion, Inc., you are now
responsible for designing the company's marketing strategy. This includes
determining all aspects of the company's go-to-market approach (including sales-force
deployment and distribution-channel strategy) and associated elements of product
policy, including pricing and market positioning of the company's inertial motion
sensor line. You will need to make critical decisions regarding how marketing
resources such as sales-force time and market-research funds should be allocated. You
will also need to determine how MM will meet the needs of the market and its
intended customer base. In doing so, you should understand how market segments
value MM's product offering, and you will need to decide whether and how MM's
positioning relative to segment needs and behaviors should change.

A note from your facilitator: In this scenario, your competitor will react to the
strategy that you set in the marketplace. If the company's performance suffers you run
the risk of being fired. Your overall performance will be judged on the following
metrics: cumulative profit, cumulative revenue, overall customer satisfaction, and
market share. Good luck!