Incorporating the MARS Sales Management Simulation into a Sales Management Course

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1 Incorporating the MARS Sales Management Simulation into a Sales Management Course Joe Chapman, Ph.D. Ball State University Miller College of Business Dept. of Marketing & Management Muncie, IN Russell G. Wahlers, D.B.A Ball State University Miller College of Business Dept. of Marketing & Management Muncie, IN Thomas R. Baird, Ph.D. Ball State University Miller College of Business Dept. of Marketing & Management Muncie, IN

2 Incorporating the MARS Sales Management Simulation into a Sales Management Course ABSTRACT The MARS sales management simulation is designed to give students a hands-on learning experience. Students compete with other students by managing and motivating five salespeople, submitting quarterly decisions, analyzing quarterly reports, and purchasing market research. Students make decisions regarding such topics as sales supervision, pay, quotas, contests, recognition, and account management. The way the simulation has been developed makes it ideal to intertwine with a sales management course. The professor can begin the simulation before actually covering most sales management topics due to the comprehensive student manual included with the game. Not only will the paper discuss the game itself as a learning tool, but the authors will also present how other management tasks can be incorporated in the class as part of the gaming process. For example, students can be required to write annual reports for each year of the simulation game. Requiring annual reports aids students in learning how to properly prepare reports for upper management, aids in developing writing skills, aids in developing word processing skills, aids in developing chart preparation and chart analysis skills, and forces students to assess the strengths and weaknesses of their company and make management decisions based on the company analysis. The authors will also discuss how students view the simulation game as part of a sales management class, and the authors will present their assessment of the MARS simulation as a learning tool. THE MARS SIMULATION GAME The MARS sales management simulation game is a web-based simulation game where the participants manage five sales representatives and compete against other participants that are also managing five sales representatives. The game was developed so that each manager or management team manages the exact same sales people. Therefore, when participants compete against each other, performance depends on management decisions, not on having better sales representatives to begin the game. Each manager or management team begins the game with exactly the same sales representatives as all the other teams in the simulation and at exactly the same starting point in the game. The sales representatives are selling electronic computer games and the participants in the game are the newly appointed district managers to these sales reps. The district managers (managers or management teams) make quarterly decisions for the simulation in the following areas: salary, commissions, bonus, quotas, supervision time, account management, recognition, contests, and whether or not to buy competitive research reports from a list of reports containing competitive and/or strategic market information. The professor/instructor determines the length of the simulation (the authors suggest between three to five years), and the number of management teams/participants. The authors of this paper suggest running the simulation for at least three years because it seems that less than a three year period does not really give the students adequate time to analyze and assess how to make good decisions on all the decision input variables of the game. The authors also recommend not running the simulation for more than five years due to the fact that it is difficult to work more years into a semester and still adequately cover the course material. Plus, it has been found that the simulation game may start to get too repetitive for some students if it is run much over the

3 five year suggested period. Each competitive district for the simulation can contain anywhere from 2 to 10 teams/companies competing against each other. The professor can choose how many students will make up each management team. Since the professor/instructor can set-up as many districts as he/she wishes, the simulation can be a useful learning tool for any class size. Management teams can consist of any number of students; therefore, a management team could be anywhere from one student to a large number of students. Teams larger than four or five student are not really recommended due to the potential problem of not having all students participate in the game. The professor/instructor could let the students decide on the number of participants for each team (again recommending a 5 student limit per team); therefore, if a student wanted to manage his/or her own team because of potential problems in meeting with other group members due to an extremely busy schedule or simply because he/she would prefer to work on the project alone, this is possible with the MARS simulation game. Since the simulation access cost is $100 per team, a student doing the simulation alone would be responsible for the entire fee. The professor/instructor also would need to keep in mind that any student working alone would not be learning about working as a team in small groups. Once the professor/instructor has gained access to the simulation, there are several useful supplements available to assist the professor/instructor. The simulation includes an instructor s manual, a student manual, multiple choice test questions related to the student manual, power point slides related to the simulation game, and three videos that students can view which are related to the simulation. The videos are 1) An Introduction to Simulations which explains the basic nature of a simulation game to students, 2) The Mars Sales Management Simulation which provides an overview of how the simulation is used in class, and 3) The George Bassmaster Welcome Video which is a video showing the regional manager, George Bassmaster, welcoming the students as the new district manager. While the videos are sometimes humorous and good basic tools for introducing the simulation to the class, the key supplements are the instructor s manual and the student manual. The instructor s manual is very well-written and has everything in it that the professor/instructor would need to be able to implement the Mars simulation into his/her classroom. The student manual is also well-written and contains all the information students need to make their first quarterly decision and should be used throughout the simulation by the students to help refresh their memory on key issues related to decision-making for the simulation game. The student manual has numerous helpful/strategic tips for the students who really read through it carefully. Careful reading of the student manual is really a key to management teams getting off to a good start in the simulation. The management teams that don t take the time to carefully read the manual will have a difficult time being competitive in the simulation, particularly early in the game. The professor/instructor may want to emphasize the importance of preparing and studying not only the simulation student manual, but also the wide variety of simulation reports available after each quarterly run of the simulation game. Given the nature of the simulation, students can make decisions for each quarter easily and quickly; however, making good decisions takes work and analysis by the students. Overall, the MARS simulation is a fun, competitive game for the students. It is easy for students to register and to make quarterly decisions, and it is easy for the instructor to run and supervise. The following section will present others projects you can do in conjunction with the simulation to help teach sales management tasks and responsibilities to the students.

4 ADDITIONAL TOPICS, PROJECTS, AND ASSIGNMENTS THAT CAN BE USED WITH THE MARS SALES MANAGEMENT SIMULATION An advantage to the simulation game is that the game can be started before the professor/instructor covers many of the sales management topics included in the game, such as setting quotas, compensation, supervision, motivation, etc. The reason the game can be started before coverage of these sales management topics is due to the comprehensive student manual included in the simulation. The students should be instructed to read the manual before making their first quarterly decision for the simulation game. One way to help ensure that a majority of students read the manual is to have a substantial quiz or a test prepared and included in the course grade. Prior to incorporating a scheduled exam, the authors found (through the use of a pop quiz) that several students in each class would not even read the manual before meeting with their groups to make the first quarterly decision; therefore, they were not prepared to contribute to the group decision. Group evaluations can be used to assess each member s contribution throughout the simulation; however, even with students knowing that they would be evaluated by group members, there were still several students in each class that did not prepare for the first quarter decision by reading the simulation manual even though they were given over two weeks to read and study the manual, and the professor constantly emphasized the importance of being prepared for the first decision by studying the manual. To measure the importance of studying the student manual, the authors compared the average score of the pop quizzes to the 1 st quarter performance for the teams in the simulation game over a 4 semester period of conducting the game in sales management courses. While the results showed that there were a small number of groups that had high average scores on the quizzes, yet still performed poorly in the first quarter of the simulation, the results also showed that there weren t any groups with low average quiz scores that performed well in their first quarter simulation decisions over the four semester period. In other words, the results supported the fact that students needed to study the simulation manual to get off to a good start in the simulation. Requiring a test over the simulation manual would help ensure that a majority of the students would study the simulation manual. Professors/instructors could use the test as just another test of class material or they could use the individual tests scores as part of each individual s final grade for the simulation project in the class. Another project the authors have found to be worthwhile in conjunction with the simulation, is to have each management team prepare annual reports and a final report based on the simulation game. These reports would help develop report writing skills for the students, check their knowledge of the simulation game, help develop their word processing skills, help teach them or reinforce skills on how to prepare tables and charts for reports as well as how to use these tables and charts to show and explain company performance. This is something often required of sales managers and would help better prepare students for the real world. One suggestion for the annual reports, assuming you have the students work in groups for the management teams, would be to have each individual on the management team prepare one of the annual reports. Therefore, if you had a 4 student management team, each student would be responsible to prepare an annual report for a four year run of the simulation. Having each student prepare an annual report is another way for the professor/instructor to measure each student s knowledge of the simulation and the quality of work for each student on the management team. These reports help a professor know who really knows what is going on in the simulation and who doesn t and, therefore, helps

5 when assigning individual grades to each member of the group (along with the previously discussed test and group evaluations). However, if preferred, the professor/instructor could just have each management team turn in annual reports prepared by the entire group and assess contributions with group evaluations. The problem with group evaluations is that the students don t always provide an accurate assessment of each group member s contribution to group projects. An example of guidelines for annual reports is provided in Appendix A. These are just suggested guidelines that have been used successfully by the authors and can easily be adjusted to fit the preferences of other instructors/professors. A final report following the end of the simulation is also a good project to help measure the management team s decision-making knowledge. A suggested format for a final report (used by the authors) is to have students prepare tables showing how the company performed for the entire simulation game, i.e., usually a 3, 4, or 5 year period. Another section of the report could be to have the students discuss how they made decisions throughout the entire simulation for each of the decision criteria variables, i.e., supervision, account management, quota setting, etc. Along with the quarterly decision submission sheets that the professor can access for each team from the simulation, the professor could use this section of the report to help assess the students knowledge of how to make each decision. In other words, the professor will be able to see whether or not the students determined the best way to make decisions for each of the decision variables in the game. The authors have always assigned this as a group report to be submitted by the end of the semester; however, if class size was small enough to make grading feasible, the professor/instructor could have each student prepare a final report to assess each individual s knowledge of the game having completed the simulation. A possible format for a final report for the simulation game is presented in Appendix B. STUDENTS ASSESSMENT OF THE MARS SIMULATION GAME Students have found the game to be a very competitive, hands-on learning tool. Most students enjoy this type of learning environment compared to the normal lecture/exams and/or case analysis process used in most classes. The competitive nature of the game makes it a fun learning process for most, but it can also be a frustrating process for those who cannot figure out how to make good decisions in the game. Professors can use the decision topics and situations presented in the simulation to help support their explanations of how these management strategies are applied in real life. Students have commented that when examples from the simulation are combined with information from the lectures, it makes it easier to understand the lecture material. Some students will complain that it is frustrating that they can t hire and fire sales reps, that they can t actually communicate with the sales reps to get feedback if a rep is performing poorly, that they shouldn t run out of training, and that the simulation is non-realistic. These concerns are not really concerns given the nature of the simulation. The professor simply needs to explain to students that simulations are not exact replicas of real-life. It is designed to teach them certain aspects of sales management that they will be able to use later on in actual sales management positions. Students need to realize that they do not need to communicate with the reps or hire and fire reps because the solutions to them doing better in the simulation are available through their analysis of information in the game itself. Students also have complained that it is hard to find time to get group members together outside of class, not everyone in the group contributes equally, and group members don t listen to suggestions for improvement.

6 These comments are typical when professors run any type of group project and can be handled however professors typically handle those situations. Having group members evaluate each other throughout the simulation can help reduce group conflicts. The authors actually have students evaluate each other at the end of each year of the simulation, i.e., every four quarters. Any potential problems can be addressed by the professor with the group as soon as the problem is uncovered; therefore, the problem can be corrected during the course of the simulation project. In upper level classes, it is not uncommon for students to work in small groups. Determining how to interact and be productive in small group situations is also part of the learning process for students. PROFESSORS ASSESSMENT OF THE MARS SALES MANAGEMENT SIMULATION The authors feel that the Mars Sales Management Simulation is an excellent learning tool to incorporate into a sales management course. It makes the course more enjoyable for most students, and it can be useful in helping to teaching numerous sales management concepts and tasks. The authors feel that the main benefit to the simulation is that it helps students develop analytical skills and problem solving skills. Students must learn to study market reports, figure out what information is useful, and determine how to combine information from a variety of reports to make good decisions in a competitive marketplace. Students learn a method for setting quotas and must crunch the numbers themselves to set the quotas. The simulation helps to teach students the importance of monitoring competition in a competitive marketplace and using market and company information to make educated, competitive decisions. Since the simulation is on-line, the amount of work by the professor to run and supervise the simulation is very minimal. Also, the professor can use the simulation to help teach other sales management tasks not addressed in the simulation such as preparing reports for upper management (as shown in Appendix A and Appendix B). Professors can use the simulation to help reinforce topics taught during the semester and can also give helpful hints for decision-making in the simulation during class lectures. One problem the authors have encountered is that some management teams never seem to figure out how to solve their team s problems so that they begin making good decisions. For example, management teams should be able to figure out the best prize to use for contests fairly early in the simulation game (at least within the first couple of years; however, there are some teams that end up not having it figured out even at the end of the game. In order to make sure students are learning analytical skills and problem solving skills, it might be necessary to work with some groups and ask questions of the groups to get them thinking about how to solve the problems of their district. The professor can ask thought provoking questions to help steer groups in the right direction without actually telling them how to make the decisions. However, the problem is that providing that direction can be unfair to other teams that have already figured out what to do. Another problem encountered is that students tend to talk to other students that have already taken the class. Students could share strategic information with other students which would enable some management teams to get off to better starts in the simulation compared to others. Overall though, the MARS Sales Management Simulation is a useful learning tool to incorporate in a sales management course and is recommended by the authors.

7 APPENDIX A Annual Report Guidelines for the Simulation Project Your annual report is an individual project. The report will be graded on the quality of the report (spelling and grammar) and the quality of the information contained in the report. Spelling and/or grammar errors will have a significant impact on your final report grade; therefore, make sure you prepare and edit your report carefully. The report should look professional. The report should be double spaced, left justified, 1 inch margins, and 12 point font. The report should include page numbers with page one being the first page following the cover page of your report. The front (cover) page of the report should include your team name, your name, and the date the report is to be submitted. Your report should be printed back to back to save on paper usage. Failure to follow these guidelines will result in a reduction of your grade for the report. There is no page limit for the annual report. Your annual report should cover one year of the simulation with the year to be decided by you and your group members. This section should include tables of the year=s performance followed by an explanation of each table. The tables should show how your company performed as well as information as to why the company performed as it did. At a minimum, each annual report should include 3 tables that are set-up like the example table below. You can (and should) use additional tables to help explain the company performance for the year; however, please create your own tables (do not print tables off the simulation game). Tables should be completed based on yearly totals (not cumulative totals for the game). The three required tables: Sales Volume Year 1 Company Name Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Company 1 Company 2 Company 3 Etc. You should have tables like the one above for sales volume, profitability, and market share for your annual report. On the market share table, instead of total you should have annual market share for the year. If you do not include these 3 tables, you will not receive a passing grade on the report. The tables discussed above are a minimum you should have in your report. District Managers in the past have also included tables of more specific information to help explain the performance of their company. For example, if your company performed poorly the first year of the simulation based on the basic table discussed above, what contributed to that? A group might include a table showing how their Bob and Emily performed poorly compared to the other Bobs and Emilys in the industry showing the impact it had on the company performance. A group might include a table or chart showing their company s compensation rankings over the year compared to the other companies (if the group felt compensation was one of the key reasons they did not perform well that particular year). If you have any questions regarding these guidelines or your annual report, please see me.

8 APPENDIX B Final Report Guidelines for the Simulation Project The final report is a group project. The report will be graded on the quality of the report (spelling and grammar) and the quality of the information contained in the report. The report should look professional and flow together as if written by one person. Spelling and/or grammar errors will have a significant impact on your final report grade; therefore, make sure you prepare and edit your report carefully. The report should be double spaced, left justified, 1 inch margins, and 12 point font. The report should have a table of contents and the pages should be numbered beginning with the first page following the table of contents (page 1). The front page of the report should include your team name, each group member=s name, a signature line next to each member=s name with each group member=s signature approving the content and quality of the final report, and the date the report is to be submitted. Failure to follow these guidelines will result in a reduction of your grade for the report. There is no page limit for the final report. Your report should be printed back to back to save on paper usage. Your report should include the following sections in this order: 1. Front Cover 2. Table of Contents 3. Company performance for the entire simulation - These tables should show the performance totals for each year as well as the cumulative performance totals for the entire simulation period (4 years). At a minimum, the overall summary tables presented on the following page should be included. There should be a discussion explaining each table presented. 4. Decision Criteria - explain in detail what you learned about each of the areas below through the simulation game. In other words, what kind of impact did these areas have on the game, the sales reps and/or the profitability of your company? A. Compensation Plans (Salary, Commission, Bonus) B. Quotas C. Training D. Supervision E. Time Management (A, B, C Accounts) F. Recognition G. Contests H. Research Reports 5. Summary - This should be your overall assessment of the sales management simulation as a learning tool. What were the advantages and the disadvantages of using the simulation as a learning tool? Would you recommend it for further classes, why or why not? What was your experience like using the sales management simulation?

9 Final Report Guidelines for the Simulation Project (continued) The following is an example of one of the tables you should have to show the cumulative results for your company over the simulation. Final Total Sales Volume Company Name Year 1 Year 2 Year 3 Year 4 Total Company 1 Company 2 Company 3 Etc. You should have a table like the one above for sales volume, profitability, and market share. If you do not include these 3 tables, you will not receive a passing grade on the report. Also, if the information provided in all 3 tables is not accurate, your paper will be deemed average at best. The 3 tables discussed above are a minimum you should have in your report. District Managers in the past have also included tables of more specific information to help explain the performance of their company. For example, if your company performed poorly the first year of the simulation based on the basic table discussed above, what contributed to that? A group might include a table showing how their Bob and Emily performed poorly compared to the other Bobs and Emilys in the industry showing the impact it had on the company performance. A group might include a table or chart showing their company s compensation rankings over the simulation compared to the other companies (if the group felt compensation was one of the key reasons they did not perform well that particular year). If you have any questions regarding these guidelines or your final report, please see me.

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