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Quick Guide To RD Funding

This document provides an overview of additional funding available to support R&D projects and initial launches for Sonite and Vodite brands. It outlines the maximum contributions available for new brands, brand modifications, and marketing support. While teams can access this extra funding, the money cannot be added to budgets in advance and may result in overspending. Any overspending will be adjusted by reducing advertising spend in the simulation. Teams should use existing budgets for current brands and the additional funds for R&D and new launches.

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Melvern Salim
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50 views2 pages

Quick Guide To RD Funding

This document provides an overview of additional funding available to support R&D projects and initial launches for Sonite and Vodite brands. It outlines the maximum contributions available for new brands, brand modifications, and marketing support. While teams can access this extra funding, the money cannot be added to budgets in advance and may result in overspending. Any overspending will be adjusted by reducing advertising spend in the simulation. Teams should use existing budgets for current brands and the additional funds for R&D and new launches.

Uploaded by

Melvern Salim
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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QUICK OVERVIEW OF FUNDING ALLOWANCES FOR

SONITE AND VODITE R&D PROJECTS AND INITIAL LAUNCH

Extra funding is available to help support the development and improvement of your brand portfolios in both
the Sonite and Vodite product categories. To help reduce the impact on your budget for the next period – I
will only provide money for the overspend in your budget related to your R&D projects or brand launches.
So spend your current budget on your existing brands and I will make up the extra amounts needed if it is
for R&D projects or brand market launches after R&D is complete. Any questions email
phyra.sok@monash.edu

When planning R&D projects - DO NOT use your existing budget (particularly if you have small
budgets) – instead you can use the amounts shown below as a contribution towards funding your R&D projects
relating to decisions on whether to:
 Develop a NEW brand to better suit a target segment
 MODIFY a brand to strengthen its position it for a target market.
NOTE: it takes 1 simulation before your R&D project is ready, e.g. if you put the R&D project in with
decisions for D2 it will go through that simulation round. Then more funding is available to put the new brand
or modified brand into the market in D3.

SONITES – NEW BRANDS


 Up to $3.5 million for a NEW Sonite (per R&D project).
 $2.0 million for commercial team and advertising expenses for initial launch of a new Sonite*

SONITES – MODIFICATIONS to existing brands


Note - each brand can only be modified ONCE over the six decision periods (and you can only modify
THREE Attributes) - so make your decisions carefully.
 Up to $1.5 million for R&D project to MODIFY a Sonite (e.g. $1.5m contribution per project).
 $250,000 additional funding for initial re-entry of modified Sonite into market. *Teams would already
have some funding available for this brand from their own budget - so the additional funding helps to boost
the initial marketing activities (support for commercial team and advertising expenses) for modified brands.

VODITES - INNOVATIVE NEW PRODUCT CATEGORY


 Up to $10 million for initial R&D project for a Vodite (maximum contribution for first Vodite). With
your first Vodite - you can only do one R&D project in that decision period. This is so that your R&D
department gets experience with this product, meaning that your subsequent Vodites will be cheaper to
produce.
 $3.5 million marketing contribution (for commercial team expenses and advertising) for initial entry into
market for the first Vodite
Second and subsequent Vodites
 Up to $4 million contribution for second or subsequent Vodite R&D projects
 $2.5 million additional funding for marketing expenses (commercial team and advertising) for each new
Vodite entering the market.

VODITE – MODIFICATIONS to existing brands


 Up to $1.5 million to support Vodite modifications.
 $500,000 to support marketing expenses to put modified brand into the market.
*After the initial launch or relaunch of a Sonite or Vodite into the market the team will need to pay for the
ongoing marketing support for the brands from their own budget. No extra funds can be accessed to support the
brand after the initial launch/relaunch into the market.
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HOW DOES THE MONEY GET TO YOUR BUDGET ACCOUNT?

REMEMBER, you can do several projects in one decision round. For example: your team may decide to modify
a Sonite product, and to develop two new Sonites and/or develop a Vodite all in the same decision round. Each
R&D project is entitled to receive the relevant funding contribution as shown. Your team may also be
modifying one brand in the upcoming period but put a new or modified brand into the market (based on prior
R&D decision periods). So a team can use the relevant funding amounts available for their portfolio
development/management decisions and to cover initial entry of new/modified brands into the market. These
marketing funds must cover commercial team decisions to support the brand and advertising spending.

There is no way that I can get the money into your account in advance of your decision making for the
R&D projects or launches. This may mean that you will overspend your budget for the period when you have
made your R&D decisions – or your advertising/commercial team expenditure decisions to launch your R&D
projects when they are ready. As a result, when checking your budget screen you will see that you have
exceeded your budget. Additionally, when your DM is checking the Markstrat decisions – Markstrat will
warn you that you have overspent your budget. This is not a problem if you know that you have made
decisions that fit with the guidelines for the extra funding contributions noted in the first part of this
document. So over-ride the Markstrat budget overspend warning – and load up your decisions ready for the
simulation.

When I am preparing the simulation I do an audit of teams’ situations. At this point I check their R&D project
expenditure and/or expenditure on the marketing to launch the new or modified brands. As there are maximum
funding contributions set out in this Quick Guide document, teams need to ensure that they can fund any extra
expenditure if they wish to exceed these amounts.

Additionally, in order to reduce the impact on a team’s budget for the period after the simulation, I will only
put in the amount shown as being overspent – not the entire amount of the contribution available, if it is not
needed. For example, if you did a new Sonite R&D project – where the contribution is $3.5 million and you
have exceeded your budget by $2 million (once you have distributed your allocated budget across your existing
brands, and done your R&D project), I will only put in the $2 million overspent (not the $3.5m maximum
contribution that is available). However, if your budget is overspent by more than the $3.5 million when doing a
new Sonite – and I cannot see how that extra money is justified in terms of R&D work, then I would only fund
the $3.5m.

The Markstrat simulation then adjusts your excess expenditure (after I have put in relevant contributions) to the
relevant level. The simulation takes any addition overspends directly off your advertising spend which does
tend to impact on the effectiveness of your marketing program.

Where teams have limited budgets (e.g. your budget is reduced or stays at a low level) - but wish to do R&D
work to try to improve their situations - you MUST SPEND your existing budget allocation on supporting
your existing brands for that decision period (spend on purchasing reports, commercial team support and
advertising)- and use the extra funding provided for your R&D work. Do not neglect the marketing of your
existing brands to fund R&D as you are entitled to extra funds for this!

Any questions regarding these special funds or how the money gets into your account – email me on
phyra.sok@monash.edu

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