Nov 15, 2012 - Markstrat.6 – Small change in Market Report

A new release of Markstrat.6 has been posted this week.

The column Price in the chart Brand Characteristics of the Market Report has been changed. This column used to show the Average Retail Price, calculated as (Retail Sales / Volume Sold). This price is usually lower than the Recommended Retail Price because it includes the discounts offered by distribution channels.

The fact that we are publishing the average price instead of the recommended one in the market report is creating issues for two reasons. First, participants are regularly asking to their professor where the difference between the price they set in their decisions and the one they read in the market report is coming from. Second, because participants are comparing the average prices of their competitors to their own recommended price (the price set in the decision form), they believe that their brand is more expensive than the ones of competitors; this leads to price wars, especially in the Savers and Shoppers segments.

As of now, the column Price in the chart Brand Characteristics of the Market Report is showing the Recommended Retail Price. Note that this will only affect industries created after November 15th 2012.