A Simulation Game

1. A Simulation Game • Most games simulate a business environment “inside” the computer (by entering a series of decisions and pushing “Go”). • This exercise allows you to simulate the buying, selling, and sales management environment “outside” of the computer. • Why might this be beneficial? | UNIVERSITY OF MINNESOTA, Department of Bio-based Products

2. SalesSim Objectives • Get off your seat… • Get over hesitancies associated with sales presentations • Build relationships over time • Find mutual value • Begin to see the complexities of sales relationships • Gain a better understanding of the sales process across vantage points. • Sales Managers • Sales People • Purchasing • You will determine if your firm meets its quotas, if you obtain your bonus, and if your customers remain satisfied with your products and services. • Sales managers will have to motivate sales people to meet both volume and profit objectives. • Sales people will have to communicate the value of their products, negotiate the sale of their products, and manage relationships the relationships that evolve throughout the game. • Purchasing managers will have to manage volume, product mix, and customer satisfaction. | UNIVERSITY OF MINNESOTA, Department of Bio-based Products

3. The Players… • The setting for this simulation is the U.S. window industry. • Three suppliers compete for the business of three large business buyers of windows and other building materials • Window Suppliers: • American Windows • Martin Windows • Parade Windows • Window buyers: • Lumberton Inc. • Pullerton Corp. • Harris Building Products | UNIVERSITY OF MINNESOTA, Department of Bio-based Products

4. The Products… • Three product options are to be considered within the market: • Impact Resistant Glass: Impact-resistant glass is created by “making a sandwich”—multiple laminates are placed between two pieces of glass. The result is as clear as glass, but much tougher. Parade does not promote hurricane resistant glass. • Extruded Clad Exteriors: Windows made from highly dent-resistant extruded composite cladding - not roll form aluminum - are more substantial in look and feel and less likely to be damaged by weather or anything else. American Windows currently produce windows with roll form aluminum exteriors, not an extruded product. • Easy Clean/in-glass blinds: Easy cleaning and maintenance features are promoted by some manufactures through combinations of in-glass blinds (eliminating the need to dust/clean blinds) and tilting window designs allowing for easy cleaning. Martin’s products DO NOT currently compete along this dimension. | UNIVERSITY OF MINNESOTA, Department of Bio-based Products

5. Glass and laminate layer(s) are placed in a high temperature, high pressure autoclave that produces an incredibly strong hybrid. It allows StormPlus’s impact-resistant products to look like glass, but protect like a shield. (Single-glazed shown here.) Impact Resistant Windows Impact Resistance Windows meet the tougher, high-performance criteria of new building codes. Energy efficiency. Added features, depending on code requirements, may include: storm clips, laminated glass and a greater amount of wood in the window structure to handle the intense forces of hurricane wind and rain. Laminated glass and rigorous testing mean Marvin StormPlus impact-resistant products help reduce the risk of injury and property loss. Broken glass adheres to the bonded laminates, reducing the risk of injury and maintaining your home’s building envelope. | UNIVERSITY OF MINNESOTA, Department of Bio-based Products

6. Extruded Exteriors A seamless one-piece, pre-formed extruded rigid composite frame cover secured to the exterior of the frame to maintain an attractive appearance while minimizing maintenance. The rigid extruded exterior vinyl cover extends 1-3/8"(35) around the perimeter of the unit. This creates an anchoring flange for securing the unit to the structure. Wood frame members are treated with a water-repellent wood preservative for long-lasting protection and performance. Radii are made of laminated, continuous maple select hardwood(without finger joints),offering improved strength and appearance. Natural wood interior stops are made of clear pine that can be finished to match the interior decor. Also available with a low-maintenance prefinished white interior. Rigid composite encases the entire sash. A vinyl weld protects each sash corner for superior weathertightness to maintain an attractive appearance and minimize maintenance. Natural wood core members provide excellent structural stability and energy efficiency. Flexible bulb weatherstripping or black PVC closed-cell foam weatherstripping is factory-installed on the perimeter of the sash. | UNIVERSITY OF MINNESOTA, Department of Bio-based Products

7. Easy-Clean Features: Between Glass ShadesBetween glass shades and blinds help reduce sound transmission and increase energy efficiency. Available in six decorator colors. Cordless operator gives a streamlined look and is safer for children and pets. Between glass shades and blinds are available as Tilt-Only or Raise-and-Lower. Tilting sashes Upper and lower sashes tilt in, making it easy to clean the exterior glass from inside. Architect Series® and Designer Series® Double-Hung Windows have a center pivot that balances itself while washing. ProLine® Double-Hung Windows use a bottom tilt requiring you to balance the sash while washing. Tilting Sashes | UNIVERSITY OF MINNESOTA, Department of Bio-based Products

8. Environmental Certifications Green Seal is an independent, non-profit organization that strives to achieve a healthier and cleaner environment by identifying and promoting products and services that cause less toxic pollution and waste, conserve resources and habitats, and minimize global warming and ozone depletion. Green Seal has no financial interest in the products that it certifies or recommends nor in any manufacturer or company. Green Seal's evaluations are based on state-of-the-art science and information using internationally recognized methods and procedures. Thus, Green Seal provides credible, objective, and unbiased information whose only purpose is to direct the purchaser to environmentally responsible products and services. The Sustainable Forestry Initiative (SFI®) program is a comprehensive system of principles, objectives and performance measures developed by foresters, conservationists and scientists, that combines the perpetual growing and harvesting of trees with the protection of wildlife, plants, soil and water quality. There are currently over 136 million acres of forestland in North America enrolled in the SFI program, making it the world’s largest sustainable forestry program. | UNIVERSITY OF MINNESOTA, Department of Bio-based Products

9. The Game • You will be provided the information you will need to get started. • Each quarter you will receive additional information, providing any changes in pricing, volume, or industry information impacting your decisions. • Some information is public, some is private. Be careful about what you tell people! • Information is specific to your role in your company: • Sales Management • Sales Personnel • Purchasing | UNIVERSITY OF MINNESOTA, Department of Bio-based Products

10. Purchasing Managers • Purchasing mangers are provided with: • A specified target purchase volume (number of windows to purchase) • Product mix targets (you may not be interested in purchasing with will all of the above characteristics) • Customer satisfaction data. • Your primary objective is to obtain the right mix of products, from the right suppliers, at the right price. • You will be provided with an “average equipment purchase price” target and an acceptable range allowable. • Purchasing managers are compensated based on acquisition cost reduction and achieving volume targets. A bonus of $1000 is available for staying within 5% of your purchase quantity target, and $2000 is available for not exceeding a 2.5% buffer around your targeted acquisition price. | UNIVERSITY OF MINNESOTA, Department of Bio-based Products

11. Sales Managers • All information available to the sales organization is provided to Sales Managers. • Sales managers can distribute information to the sales staff in any way it sees fit. You may disclose information (pricing guidelines, margin, etc.) to sales people in any way you see fit. • It is your responsibilities to coach sales staff to effectively meet your firm’s objective. • Managers are compensated and promoted based on profitability. A bonus will be paid to sales managers based on their ability to meet profit targets. A $3000 bonus is available for meeting margin targets and has the ability to increase if higher margins are achieved. | UNIVERSITY OF MINNESOTA, Department of Bio-based Products

12. Sales Personnel • Product and pricing information will be provided to you by your management team. • Sales People are compensated based on a commission plus bonus pay structure. Commissions are paid out on a unit volume basis. Commissions are paid on a point system equivalent to $2 per unit sold. Quota is set at 95% of available production for the quarter. Quota must be met before bonuses will be paid. Sales people can earn an additional $1/unit on all products sold, if quota is met. All monetary compensation for sales people is incentives-based; sales people receive no salary. • Don’t forget to sell all of your benefits; each buyer is looking for certain attributes. Establishing relationships with the right customer firms will prove helpful. • Sales people make it all happen. They negotiate and construct the deals (within the confines established by management). • Do not divulging confidential information with customers or competitors. | UNIVERSITY OF MINNESOTA, Department of Bio-based Products

13. Nuts and Bolts • Management teams (sales and purchasing) will be required to submit all information back to the instructor. Forms are provided. • Sales people, along with management, will be required to develop sales presentations to be presented to buying groups. • A copy of this presentation (materials, demonstrations, etc.) is to be provided to the instructor. • Purchasing Managers are responsible for developing purchasing and negotiation strategies. • They will also be assessing the quality of each sales teams’ presentations (forms will be provided). • Finally, on the last day of class purchasing managers will need to prepare a 10 minute presentation addressing their strategies and performance. • Sales managers are responsible for developing sales strategies in line with the goals of the organization and effectively managing their sales personnel. • In addition to developing sales and negotiation strategy, on the last day of class purchasing managers will need to prepare a 10 minute presentation addressing their strategies and performance. | UNIVERSITY OF MINNESOTA, Department of Bio-based Products