Lemonade Standoff

Demand curves tell us a lot. But they say as much about the marketer as they do about the customer. Jeff Sandefer, a breakthrough thinker in business education, wants his students to understand this. “The demand curve – like the market it describes – is not something you measure. It is something you build.”

Players of Lemonade Stand Off discover this quickly. They learn to build a market – customer by customer. Each customer has a unique profile of needs. The goal of the marketer is to present a product that addresses a need that is important enough to enough people that they will pay enough to make the business profitable, despite the products offered by competing marketers. This might be a low margin but a lot of customers – or a high margin from a dedicated few.

Each of three players has a lemonade stand in the same marketplace. Every ‘day’, each chooses a price. Every ‘week’, the player selects a lemonade speciality: Ice Cold, Real Sweet, All Natural or Fast Service. Each specialty has different fixed and variable costs and there is a penalty for switching midweek. Individual characters enter the marketplace daily. Each customer places different values on sweet, cold , fast or natural. Each marketer assesses all of the customers, the undecided ones, his own, and those of his rivals, in order to offer a product that will build a business and earn a profit. After ten weeks, in which weekly news alters demand, the summer is over and each player’s score is tallied up.

Lemonade Stand Off is played to study entrepreneurship by graduate students at the Acton Institute for Entrepreneurial Excellence. It is also played by the ten year old entrepreneurs of the celebrated Acton Academy.

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