Markstrat Strategy Guide: Mastering Brand Perceptions and Ideals for Success

Looking to dominate in your Markstrat simulation? This Markstrat strategy guide continues our series on winning tactics by exploring the critical relationship between brand perceptions and ideals—key factors that can make or break your virtual company’s success.

Markstrat Semantic Scales and Multidimensional Scaling: Understanding Customer Preferences

In Markstrat, two essential market research tools help you understand what customers want: Semantic Scales and Multidimensional Scaling. Each offers unique advantages for your strategy:

Semantic Scales directly connect to product characteristics and are essential when designing new products—you must use these Ideal Values as your blueprint.
Multidimensional Scaling simplifies multiple characteristics into three groups, making it easier to shift brand perceptions through advertising by focusing on just two of these three dimensions.

Remember that Ideal Values constantly evolve, requiring accurate forecasting. Your advertising spend directly influences these perceptions, creating a dynamic market environment.

Graph showing how Savers segment ideal values change over multiple periods, with each product characteristic evolving at different rates — Changing Savers segment ideal values tracked across multiple periods, showing varied evolution rates

When plotting Ideal Values for a segment (like Savers), you’ll notice each characteristic evolves at its own pace. Using current period values for product development would result in outdated products. By adding linear trend lines, you can predict future Ideal Values with greater accuracy.

Comparison between forecasted ideal values using 4-period trend data versus actual period ideal values in Markstrat — Comparison between 4-period trend forecasts and actual period ideal values

The graph above reveals significant deviations between Processing Power and Design Index trends, likely influenced by the importance ranking of characteristics. Companies typically focus advertising on high-importance characteristics, which subsequently shifts Ideal Values.

No. of Features	Design Index	Battery Life	Display Size	Processing Power	Price
1.2	2.7	1.5	3.0	5.7	10.0

The same forecasting approach works with Multidimensional Scaling. The graph below shows trends using three data points compared with actual period ideals:

Multidimensional scaling comparison showing trend predictions from 3 periods versus actual ideal values — Multidimensional scaling trends using 3-period data versus actual values

Generally, the more historical periods you include in your analysis, the more accurate your predictions become.

Designing Perfect Markstrat Products: Matching Ideal Values

Once you’ve predicted ideal values, you can determine the optimal product characteristics to meet segment preferences. For example, when creating a product for the Shoppers segment, remember development takes one period—meaning you need to forecast the next period’s ideals. For Vodite products with longer development cycles, you’ll need to forecast even further ahead.

Using a simple two-period historical example, Excel’s TREND formula can calculate next-period values. The LINEST function helps determine directional trends (positive or negative), which is crucial for rounding decisions.

	No. of Features	Design Index	Battery Life	Display Size	Processing Power	Price
Period 0	1.75	5.20	2.95	3.95	3.13	3.30
Period 1	1.81	5.24	2.89	4.04	3.30	3.41
Est Period 2 (TREND)	1.87	5.28	2.83	4.13	3.47	3.52
Gradient/Direction (LINEST)	0.1	0.0	-0.1	0.1	0.2	0.1

There are two methods to convert ideal values into actual product characteristics:

The Range Method for Markstrat Product Design

Knowing ideal values exist on a 1-7 scale and understanding each characteristic’s range, you can calculate the optimal specification using this formula:

Range_min + (Range_max – Range_min) × (Value_ideal – 1) / 6

This yields the following calculated characteristics:

	No. of Features	Design Index	Battery Life	Display Size	Processing Power
Ideal Char.	1.87	5.28	2.83	4.13	3.47
Calc Char.	7.18	7.99	45.96	22.78	44.11
Trend	+ve	+ve	-ve	+ve	+ve
Rounded	8	8	45	23	45

Note that this method can’t determine price since the range is unknown.

The Trend Method for Complete Specifications

Alternatively, you can trend ALL market product perceptions against actual characteristics:

Scatter plot showing relationship between customer perceptions and actual product specifications in Markstrat — Relationship between product perceptions and actual specifications

Using Excel’s TREND function again, you can calculate these characteristics:

	No. of Features	Design Index	Battery Life	Display Size	Processing Power	Price
Ideal Char.	1.87	5.28	2.83	4.13	3.47	3.52
Calc Char.	6.90	7.75	45.72	22.52	44.25	306.25
Trend	+ve	+ve	-ve	+ve	+ve	+ve
Rounded	7	8	45	23	45	307

This method’s advantage is that it also calculates the Recommended Retail Price (RRP). For premium products, consider using an exponential trend rather than linear, as price increases are typically more dramatic at the high end.

The main difference between methods is the “No. of Features” value—both hover around 7, but the Range method rounds up to 8. In this case, using 7 might be more appropriate.

Stay tuned for our next Markstrat strategy guide post where we’ll explore effective advertising and commercial team management to maximize your simulation success.

For more business simulation resources, check out Stratx Simulations’ official Markstrat page or explore Harvard Business Review’s business education resources.