Advertising budget

[Berbe]

I gave another tried to the Subsidiary DLC will the freshest v5.7.10 of Capitalism Lab.
Starting a new game, I decided to test how the AI behaved. I chose a CEO having 80 on Retail/Marketing, on top of 80 in its Product Class (20 eveywhere else).

Having allowed the subsidiary to expand in specific product classes (5-6), avoiding dangerous options like generating stock options or selling technology, but allowing it to expand in anything (from retail to media), I then saved & let the clock running. The AI would not builg any single building for a year. Competitors AI did plenty of stuff meanwhile. Why is the subsidiary AI behaving differently ?

I decided to reload to the savepoint, built a couple retail stores selling re-labeled Seaports products in order to build my own Range Brand for products to be later crafted in-house.
The AI had full control over Training & Advertisement budgets.
I immediately noted the AI went crazy on advertising, spending more in it than it had... revenues! The cursor profit margin <-> market share was untouched in its original middle position. How can anyone, anything decide to spend more on something it has revenues? The bank credit line was dry.
Heck, at some point, with merely 3 retail firms generating $8M revenue annually, loss were $10M over the same period. Crazy. It shows intent, as mere mistake cannot lead to such a dreadful situation.
I then did a test: stripping AI from control over the Advertisement budget, I put it to 0 in the 3 firms and I moved the aforementioned cursor on 100% profit margin. Instant profitable business. Thus there was a solution, and the optimum one probably in-between.

This AI going full-steam on advertisement to build brand awareness without taking into account the money line (cash + profit + credit line) available to it looked like I put a no-brainer as CEO of my subsidiary.
What is the point of that expensive DLC if I have to micromanage such basic things myself?

[David]

I would suggest that you look for an executive with a lower preference value on "Spending on Advertising" to run your business - see the attached screenshot.

[Berbe]

He had indeed a high tendency to spend on advertising:

Personality.png (31.39 KiB) Viewed 6725 times

It's not the problem I am poiting out though, that merely means he is eagier to spend on that rather than on other things.

What I do not get is how spending decisions are made, whatever type they are.
How come anyone could spend more than revenue on advertising/PR? I am not even talking profits, but revenue.
How come anyone does not scale spending decision depending on static values like the 'money line' available: cash + profits + available credit line? I am not even mentioning the dynamics there, either profits are shrinking, credit line is drying or cash has been recently been burnt in high volumes.

It seems subsidiary AI is very different than AI one. It just stands idle with $20M in cash and possibilities open.
Why doesn't it take the decision to build anything, even a simple retail store merely selling authorized products?

[David]

I would suggest that you create a poll asking if other players experience the same issue and their thoughts.

Since changing this will impact all players, we cannot make the change just based on a single opinion.

In the real world, there are not without examples of startup companies spending a fortune on advertising while having little incomes. So there are no absolutely right or wrong ways when it comes to advertising.

In my opinion, the easy solution to this is to just hire someone with a low tendency on advertising if you don't like excessive spending on advertising.

[Berbe]

Well, if I understand correctly, AI makes decisions based on individual personality values without taking care of a global overview or paying attention to the global state of the company being run. It would then be a design decision having deep consequences.

So far, what is called modding in this game is merely the ability to add/change product tables and/or starting game parameters (or initialization vectors).
Would it be possible to add scripting abilities, ie access to company/staff characteristics in a scripting system (input), as well as being able to trigger decisions (output)? That would allow one to program/drive AI making his/her business follow a logic (s)he would prefer.

[David]

I would suggest that you create a poll for your suggestion. If there is a large enough number of users interested in it, there will be a higher chance that the development team will consider it.

You could see some examples in the Suggestion forum.

For example, the special dividend suggestion has gathered enough interests and it will be implemented for the next major post-release update.

[dudetim]

I have the opposite problem to this I don't know if anyone can advise. The CEO of my subsidiary company won't do advertising and so i thought maybe this maybe i need marketing officer. I hired a good one cost $5m per year and hd them for 6 years. In the 6 years of employment the company spent nothing on marketing my products are now falling behind competitors can someone advise?

[David]

What is the type of product that you intend to have your CMO advertise for?

[dudetim]

I have asked them to advertise everything the company sells. currently:
Tablet computers
Smart phones
Desktop computers
Printers
Air conditioning
Compact camera
Washing machine
Television
Hi-Fi
Wine
Bath lotion
Bed
Sofa
Chair
I could probably keep going but i think this covers most of it.

[dudetim]

Could it be the fact that the products on sale are made by the parent company at the manufacturing plant rather than the subsidiary company?

I have 4 companies types
Parent = manufacturing
Subsidiary 1 = Retailing
Subsidiary 2 = investment and property
Subsidiary 3 = Media

Therefore subsidiary 1 only buys products from parent company and therefore has none of it's own products to advertise? If this is the case may I recommend a patch whereby a subsidiary can advertise other group company products?

Also i have a bug bare with the balance sheet with granting money but maybe this should be for a different forum page.