If we also have data for another point, say at a time that was offering a substantial discount on their product or from another geography, then we would have more than enough data to completely tune a model as simple as the one we are starting with.Because the Market Model uses a proprietary statistical algorithm to impute customer distribution data, the data collection problem becomes much easier and cost effective.
Once the base model has been constructed and tuned the user can think about how they might change the conditions in the market.
Here are some strategic ideas for could make this adjustment to the Market Map: In fact, Pepsi did introduce a large 12 oz bottle early on in the Cola Wars to compete with Coke’s 6.5 oz bottle.
We know the Price for , we know their Market Share, and we have a pretty good idea of the Profit Margin (or Marginal Cost) of both from their public financial reports.
With these 6 data points we can start to tune our model.
When first starting to use the Market Model for market simulation, it is easier to think about this famous competitive battle when there were only two competitive products (the 6.5 oz Coke in their famous bottle, versus Pepsi’s product).
When had about an 80% market share, and Pepsi had a 20% market share – we can ignore the other competition which has since evaporated.
For Pepsi, the Market Model could evolve to look something like this: Pepsi could then evaluate whether creating a very broad product portfolio, and launching each of these products into the market over time, would be a successful strategy.
A dynamic timeline might look something like this:“According to the case study of coke and pepsi both of the companies have great brand in market but this survey tells us that pepsi has a great market demand and high market shares because of its taste and market developing plans but if they follow these steps they can become more effective in markets “.
Unlike with other statistical techniques, the user does not have to commission an expensive market research report just to tell them what they already know about the existing market.
The Market Model allows the user to integrate their own knowledge, and then focus on understanding just those new changes relative to the existing state of the market.