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TABLE OF CONTENTS
1. Mission Statement: Page 2
2. Marketing Objectives: Page 2
3. SWOT Analysis: Pages 2-4
4. Target Market: Page 4-5
5. Marketing Activities: Pages 5-7
6. Lessons Learned: Pages 7-15
a) Year 1
b) Year 2
c) Year 3
d) Year 4
e) Year 5
f) Year 6
g) Year 7
h) Year 8
i) Year 9
j) Year 10
7. Summary: Pages 16-17
1. MISSION STATEMENT:
To establish Allstar Brands as a market leader of Over-The-
Counter multi-symptom cold/allergy relief, while maintaining
the highest level of customer satisfaction through product
effectiveness, quality and affordability.
2. MARKETING OBJECTIVES:
· To increase the stock price by 3 points every 2 years
· To maintain a combined direct/indirect sales force of no less
than 140
· To increase net income to $40 million in the next 2 years
· To increase brand awareness by 5% yearly for all products of
Allstar toward a long-term goal of 85%, thereafter any increase
is found sufficient
· To maintain advertising budget expenditure above $26 million,
minimum $10 million toward Allround, Allround+ and minimum
$9 million toward Allright
· Introduce one new product within every 3-year period
according to appropriate market trends and characteristics of
demand
· To keep promotional allowance at or above 14% for all
products
· To increase customer satisfaction to 60% for all Allstar Brand
products within the next 2 years
3. SWOT:
Strengths:
· Allstar Brands have a competitive advantage which is based on
the lowest price in the cold/allergy market
· Brand awareness for the products of Allstar Brands is one of
the highest among the competitors
· Product mix targets variety of ailments (Allround – multi-
symptom, Allround+ - cold and allergy, Allright – cough and
cold)
· Customer satisfaction for Allstar products ranges from 54% to
61%
· Allround is the second highest brand purchased among the
OTC medicine and has the second largest market share of
manufacturing sales
· Allround Brand perception of cough and ache medicine is the
highest among the competitors
· Steady rise of product contribution for Allright and Allround+
· Allstar offers relief for all of the most frequent symptoms of
ailments: aches, coughing, and chest congestion
· Allright attains largest market share based on manufacturing
sales of 14.9% in the cough medicine market
Weaknesses:
· Low sales force
· Steep drop off of stock price after year five
· Allround has the lowest net income among the competitors
· Advertising budget for every product is not sufficient for
leading a proper advertising campaign to increase brand
awareness
· A stronger competitor Besthelp keeps Allround from being the
leader of brands purchased
· Low budget allocated to promotional mix of all 3 products
· Current customer’s intentions to buy Allround, Allround+ and
Allright are larger than Allstar can produce
· Annual fall of Allround’s total sales and product contribution
since year 5
· Constant fall of trade ratings for Allright and Allround+
· Allstar Brands takes third place in retail sales
· Medium quality of advertising due to advertising agency S&R
hired
Opportunities:
· Introduction of new products in the future
· Investment in Research and Development to improve
composition of existing and new products
· Becoming the highest brand purchased among OTC medicine
and reaching the highest marketing share in manufacture sales
· Changing brand formulation of products according to existing
market needs
· Population growth rate of 1.6%
· Industry growth rate 5.9%
· Penetrating international markets
Threats:
· Strong competition in cold/allergy market
· Loss in stock price and net income of Allstar brands
· Economic instability
· Unfavorable market fluctuations
· Poor choice of advertising agency to lead advertising
campaigns for the Company products
· Inflation rate increase
· Unfavorable Governmental regulations toward OTC products
· Competitor advantage in Research and Development
· Lack of adequate sales force
4. TARGET MARKET:
Providing Over-The-Counter medicine Allstar targets people
who have common health problems. The best way to segment
Allstar’s customers would be by the following two major
categories: illness (cold, cough, allergy) and demographics
(young singles, young families, mature families, empty nesters,
retired). Allstar Brands invests in marketing research to learn
about the ever changing preferences and trends of the market.
The information the Company gathers from this research is then
used to make according decisions to satisfy each particular
category of customer.
5. MARKETING ACTIVITIES:
In order to achieve our first marketing objective, we recommend
the following activities: Keep producing high quality, positive
image products that satisfy customer’s needs.Secondly, the team
must maintain direct and indirect sales force of no less than 140
and plan in advance in order to have the budget to do so. We
also recommend offering employee fringe benefits to encourage
long term positions in the company.
For the next objective, which is to increase net income to $40
million in the next two years they must choose and maintain the
suitable marketing/promotional mix. Offer diversity of
products to meet every customer’s need and keep promotional
allowance above 14% to encourage stores to carry our product.
Give out trial sizes for new and existing products to increase
brand awareness by 5% yearly which is objective number four.
Also the advertising agency should be chosen carefully to
ensure the highest quality of advertising campaign and strategy.
The composition of the advertising message must be created
according to the stage of the product’s life cycle. The key to
achieving all of these advertising goals is to make sure the
current and future budget will be great enough to cover these
critical needs.
The key to reaching the objective of maintaining an advertising
budget expenditure at least or above$26 million, $10 million
and $8 million for Allround, Allround+ and Allright
respectively is to keep up closely to the designed marketing
plan. Spending no less than the minimal of what the plan says.
Good quality forecasting is a useful tool to keep away from
sudden changes in the market which could put the Allstar out of
business. The company should maintain a miscellaneous budget
to deal with sudden surprises that will occur.
To be able to introduce a new product within every 3 year
period, Allstar Brands has to maintain existing profitable
products so that there is an opportunity to put money into the
development of new products. Unsuccessful products must be
removed from Allstar production lists as well to keep an
abundance of disposable income. For successful products
already existing, advertising and promotion budget should not
be cut as well as the sales force. In fact, while introducing a
new product the sales force must be raised in proportion to the
planned volume of the new product. It is essential to have a
deep knowledge of the market, its characteristics and trends,
customer needs and preferences, as well as economic and legal
issues that might influence the product’s success. Thus a certain
amount of money must be invested into marketing research
concerning information about the marketing mix to be created.
From our experience, we can say that the amount of promotional
allowance matters greatly to the overall promotional status as
well as to the overall success of the product. To encourage the
stores to carry out the product, promotional allowance must be
maintained at 14% or above among all the products. The
Company budget should be balanced in a way to dedicate the
amount of money corresponding to the allowance percentage
without disturbing regular budget distribution to products and
activities of Allstar Brands. Maintaining a favorable cash flow
is a key condition to reach the identified objective.
To increase customer satisfaction of the Allstar Brands products
by 60%, firstly, the appropriate information should be collected
on the product featured and benefit expectations of the current
and potential customers. This information will help management
make decisions for developing a new product image, features,
and benefits to meet the current demand. The last objective
implemented is advertising, which should be stressed to attract
and inform the customers about the changes made. Trial sizes
should play a big role in the improvement process. By receiving
free trials, the customers will be more likely to experience the
innovated product and see its advantages over other brands.
6. LESSONS LEARNED
0
5
10
15
20
25
30
35
40
45
50
1st
Qtr
3rd
Qtr
5th
Qtr
7th
Qtr
9th
Qtr
Allround
Allright
Allround +
Prediod
Retai
Promo
Adv
SF
Incom
Util%
Stock
Shelf
Allow
1
532.2
7.0
20.5
6.5
91.1
96.2
48.01
1.30
15.0
2
539.0
8.5
21.1
8.8
79.9
97.8
43.77
1.37
15.0
3
536.9
9.0
21.6
8.9
71.8
93.8
39.12
1.52
15.0
Year 1-3
Coming into the first period of our new company there were
many uncertainties. We noticed that the price for Allround
before we had acquired Allstar was set at $5.29. We decided to
only raise the price by one cent putting it at $5.30, our
justification for doing this was that we had seen how good the
company was doing prior to our involvement so we left the
price close to what it had been. We also kept our distribution
relatively the same at 97 for Direct Sales and 40 for Indirect
sales compared to 94, 33 respectively. We cut our Promotion
allowance from 17% to 15%. We came to this decision due to
our product being carried by many distributors for several
years. Our product was not new and did not need a Promotion
Allowance that was higher than 15%. We kept our consumer
promotion at 5.6 and trade promotion at 1.4 and raised
advertising from 20 to 20.5 million in hope to get our name out
there more, since we were going to introduce a new product
relatively soon in the future.
After the first period we were doing great. We were number
one in the class for stock price and it looked like we knew what
we were doing. Our income was 96.2 million and our sales
force was a mere 6.5. We realized that making a few slight
changes had made a positive influence on the company. Cutting
our Promotion Allowance back 2% did not decrease sales at all
and the $500,000 increase in advertising budget must have
urged consumers to buy our product. We left our advertising
agency at what it had been prior to our ownership, being the
middle quality agency we figured it would be directed toward
everyone and would also help us keep the MSRP low.
Going into round two we basically had to make the same
decisions as round one. We still did not have much freedom to
make many choices, so we focused on what we could. We
noticed that convenience stores were showing the strongest
growth and from this we decided to increase our direct sales
from 97 to 118 and our indirect sales from 40 to 55. We left
Allround’s product price at $5.30, focusing on making this year
a sales growth period. Instead of raising the price, we focused
on keeping our current loyal customers and hopefully gaining
others through reasonable pricing. We left our Promotion
Allowance at 15%. We increased our Trade Promotion from 1.4
to 2. We had also increased our Consumer promotion from 5.6
to 6 and our advertising up from 20.5 to 21.1 million. Once
again all of these decisions were based on increasing our market
share/sales growth which we hoped to obtain by increasing all
promotional aspects.
After putting much money into promotion and waiting to see our
income steadily rise we were shocked to see that it had fallen
more than 10 million dollars. Our stock price also droped from
48.01 to 43.77. Our sales force had also risen from 6.5 to 8.8.
The only change we saw that could be affecting our sales so
greatly was the threats of the economy in which purchasing
potential had dropped. Inflation had risen and customer’s
disposable income had dropped since last year. Another factor
that may have affected our decline in income was the increase
in Sales Force and the failure to raise our MSRP.
Moving into round 3 we had the freedom to direct exactly how
much Sales Force we wanted in each channel. This period
forecasted a growth in Independent drugstores so we rasied our
old SF of 7 in independent Drugstores to 12. We lowered our
chain drugstores from 36 to 30 because we had risen
independent drugstores so drastically. Grocery stores seemed to
be giving us the biggest return so we increased our SF from 55
to 60. Our wholesale SF we saw as a great potential so we
increase it from 25 to 40 in hopes to regain our number one spot
in the class. This period we also raised the price of Allround
from $5.30 to $5.40 once again in hopes that we could bring in
some more income so that we could put it toward our future
goal of introducing another product. We have left our sales
promotion basically the same as period two which should be
sufficient, considering that it worked the first period. This
period we had control of what our advertising would be focused
on. We left our primary advertising at 10% due to our product
having a stable market share already and having been
established several years prior. We raised our benefit from 10%
to 15% so that we could win over new customers by showing
how much better Allround was than our competitors. We
lowered our Comparison from 40% to 30% so that we could
raise our reminder from 40% to 45%. By raising our reminder
we hoped consumers would realize we our still a strong
competitor and have been in this business for many years.
Even after we increased our advertising budget from 21.1
million to 21.6 million we still are loosing money. Our sales
force had only risen from 8.8 to 8.9. Our income also droped
from 79.9 to 71.8 making us loose another nine million dollars.
That is not all the bad news. Our stock price dropped from
43.77 to an even lower 39.14. We found our main problem to
be our product discount which was not formulated properly. We
had a 23% discount for <250, 28% discount for <2500, 33.5%
discount for 2500+ and 38% discount for wholesale. We
realized that our wholesale discount should have been
somewhere around 42%, 2500+ around 39%, <2500 around 35%
and <250 around 30%. This would have given us a competitive
advantage over our competition for our retailers to carry our
product.
Stock Price
Year 4-6
Period
Retai
Promo
Adv
SF
Incom
Util%
Stock
Shelf
Allow
4
584.6
13.4
26.0
8.5
62.0
103.2
41.07
2.15
15.0
5
609.1
11.5
23.1
9.0
72.8
100.8
42.05
2.05
12.3
6
596.7
15.9
31.5
10.4
36.3
97.9
30.50
3.01
14.1
One of the greatest lessons learned during Year four was to
realize the importance of every part of the marketing mix while
introducing a new product. The product can be successful when
its 4Ps address current market demands and when the
possibilities are used to their highest extent. We introduced
Allround+ - 12hr Multi Capsule which contained: 1300 mg
analgesics, 8 mg antihistamines, and 100 mg decongestant. To
increase brand awareness, $9 was given to advertising budget,
$5.9million spent on promotion (trial sizes, coupons, co-op ads,
product displays). To make sure that the new product would
make a positive impression on the market, the most expensive
high quality performance advertising agency “Brewster,
Maxwell and Wheeler” was chosen to lead the advertising
campaign. The composition of our advertising message
consisted of: Primary 40%, Benefit – 30%, Comparison 20% and
Reminder – 10%. Allround+ was priced cheaply at $3 since it
was a brand new product. The stock price for Allstar Brands in
Year four rose from 39.12 to 41.07. This was strong evidence
that our marketing mix was composed correctly, leading us in
the right direction.
The sales force was agreed to be reduced so that a great amount
of money could be invested in advertising. Thus number of
employees in Chain Drug Stores, Mass Merchandisers and
Wholesales was decreased by 5, which brought down our total
ratio of Sales Force from 8.9 to 8.5. We learned later that the
reduction of our sales force hurted the company more than
anticipated.
The decisions must be made in a way to create the balance
within the company, between different products and areas of
activities. If we decrease price, we should also decrease
discounts to receive the same or larger amount of sales
depending on elasticity of demand. As the price for Allround
was reduced from $5.4 to $5.2 and average discounts were
lowered from 32.3% to 28.1%, manufacturing sales grew by 10
points.
Year 5 may be characterized as one of the most successful years
in the life cycle of the Allstar brand in relation to net income
earned and stock price attained, which accounted for $72.8
million, and 42.05 points respectively. Retail Sales rose from
$584.6 to $609.1 million.
These positive results followed after the corrective decisions
made concerning the marketing mix of the both products. The
major decisions of this period were to increase the prices for
both products: Allround ($5.2 to $5.3) and Allround+ ($3.0 to
$4.25) along with a slight decrease in discounting.
As the new product was on its growth stage and needed a lot of
input, we decided to increase the sales force from 8.5 to 9.0,
specifically increasing the number of employees in independent
drugstores, mass merchandisers, while decreasing chain drug
stores, wholesale, and detailers.
To promote Allround+, a certain amount of money was taken
away from promotional and advertising budget of Allround and
put into Allround+. That turned out to be a poor decision. By
strengthening the new product, we weakened the established
Allround. The lesson is to not sacrifice the product that
provides the major cash flow in the company for the sake of the
newly introduced one.
The largest event during Year 6 was the introduction of another
new product of Allstar Brands – Allright. Allright was
introduced as the medicine to cure the common cough. The
decision was made to set its price at $5.45 due to the product
being the most expensive to produce. Having another product
required having more personnel available to work on it; thus,
the sales force was increased from 9 to 10.4.
The drastic fall of net income for this period from $72.8 to
$36.3 million occurred because of the introduction of the new
product. A large increase in advertising, a decrease in
promotional and sales force expenditures caused this financial
regress in the company. The stock price fell from 42.05 to
30.50. The share of retail sales fell by 0.7%, and share of
manufacturing sales fell by 0.5%, although share of unit sales
stayed the same.
At that point Allright was the weakest product of Allstar
Brands, its product contribution consisted of -7.5, while
Allround+ had 13.4, and Allround 143.4. A lack of funding
caused there to be little room for advertising and promotional
growth making a successful development for the three products
impossible. The new product of Allright should not have been
introduced so early after Allround+ was introduced. The
Company needed some time to deal with changes, and to acquire
a stable flow of business. Investing into marketing research to
learn about the current market situation would have helped the
company stay away from unfavorable changes.
YEAR 7 & 8
Period
Retai
Promo
Adv
SF
Incom
Util%
Stock
Shelf
Allow
7
573.2
10.5
25.0
10.7
31.7
94.2
28.20
3.14
14.9
8
573.5
7.6
22.6
9.3
41.9
91.8
28.95
3.02
13.5
We fell to the bottom, now recovery is the only choice in the
years of seven and eight. Our goal was to pull through our
slumping stock price and performance. As year 7 began things
were getting worse. From year 6 to year 8 our retail price went
from 596.7 to 573.5 a drop of 22%. We had changed our
promotions from 15.9 to 7.6 which made our retail price drop.
We saw that the more promotion is dedicated to the product, the
higher the product awareness will rise. During this year we had
a small sales force at 10.4% due to the fact that our income was
always in the negative. Once we cut our promotion and
advertising, our stock price dropped from 30.50 to 28.95. After
the 7th decision, we realized that we were not utilizing the full
potential of our sales force. By the end of year 8 our sales
force got smaller. We learned that our MSRP was low in price,
we lacked the number of employees required in distribution
channels, had internal financial problems, and poor performance
causing the loss of market share. Our market strategy was poor
because of the inability to capitalize on product improvements
and retain or expand our customer base. In year seven and eight
we were cutting more money than we were investing into
improvement of our products. We focused more on advertising
than on sales force, which we cut every time when we needed
money to put to something else. By year seven, we increased
our sales force by about 0.3% and wanted to increase it in year
8, but due to negative budgets, we were forced to decrease it.
YEAR 9 & 10
Period
Retai
Promo
Adv
SF
Incom
Util%
Stock
Shelf
Allow
9
559.6
6.8
20.2
10.1
32.9
89.7
24.59
3.12
13.6
10
587.8
6.9
17.4
10.4
25.1
97.8
24.54
3.04
14.0
We changed directions somewhat in the last two years in an
attempt to recover our slumping stock price and over-all
performance. We restructured our pricing such that there was a
greater incentive in purchasing in larger quantities. We also
made changes to the incremental increases in discounts to
appropriately match the quantities purchased.
For example, in year seven for Allround+ we were giving
purchasers of +2500, a 28% discount and for wholesalers an
increase of only 2% rising it to 30%. We recognized the
potential loss in sales as a result and changed it to 32% and 38%
respectively. Had we done this years earlier, we may have
been able to significantly increase sales.
We also changed our outlook towards the reminder portion of
our advertising. As the years progressed and Allround and
Allround+ aged, we thought that putting a greater percentage of
the budget into reminder would serve us well and keep the
product fresh in the minds of the consumers. We now think that
we should have allocated more into benefit and comparison
earlier on. Both of these two functions as their names suggest
but also are reminders in themselves. Fortunately this was not
an extreme problem for Allround+ and Allright because they
were implemented later on.
Within the last two or three years we were faced with the task
of cost cutting due to low revenues. This recent activity acted
as a kind of downward spiral. In efforts to get ourselves out of
the red, we felt forced to cut back on promotional allowances
and even sales force. In this last year we didn’t have a single
element of promotions over one million dollars and our sales
force was cut to less than 140 from almost 160 in year seven.
We believe, however, that these two areas are crucial in
achieving strong sales growth. We hoped that if we could
increase the unit price without greatly hurting consumer sales
that we could make up a partial portion of our losses from the
previously mentioned factors.
Fortunately for the incoming management, our mistakes can be
their gains. We strongly recommend maintaining an adequate
sales force and paying close attention to the market trends and
acquiring the appropriate research.
Summary
Make decisions carefully based on entering a new market
because there may be an overabundance of other competitors
already in that product branch. We had introduced two products
after the well established Allround name. We introduced
Allround+ in year?????
Another major problem that we faced was choosing the right
MSRP for each product. Acquire competitor MSRP and price
Allstar products appropriately. We priced our products at a
minimum hoping to grab distributors attention but we
unfortunately did not give enough of a discount to succeed. We
lacked in this area where our competitors succeeded. We did
price our products at a lower price but did not divide the
discounts that the distributors would get accordingly.
We should have increased our MSRP to match our competitors
or even a little less. The big concern is in the discount offered
which is an incentive for our distributors to carry our brand.
The discounts should range from 44% for wholesales and down
to 25% for <250 having the percents split evenly over the rest
of the distribution market so that the more they buy the cheaper
it is for them per product. Also promotion allowance affects
our retailers. Allowances are to help you gain retail
distribution, shelf facing in retail outlets, and retail support for
brand advertisements.
Another way to get your product out to consumers is by
concentrating on the sales promotion. Things such as co-op ads
which makes money available to retailers to pay for a portion of
the retailers advertising when the relevant brand is promoted.
We suggest keeping this number in the one and a half to two
millions range especially if the product is being newly
introduced. Point of purchase discounts are special displays
such as retail sale racks.
We also suggest to keep this in the one and a half to two
millions range. Point of purchase discounts are focused at the
customer which usually gives the extra edge we need for a new
customer to try our product. Trial size promotions are a key to
get your new product out there and noticed. Trial sizes are
smaller packages of our product that are given out to consumers
in hope that they will like the result and purchase our brand
over the competitors. Trial sizes are not necessary unless you
are introducing a new product or you see a lag in brand
awareness. We suggest putting two million dollars toward trial
sizes when necessary.
The final sale promotion is coupons. Coupons are special
discounts off of the retail price of a product which is taken off
at time of purchase. You can find coupons in flyers,
newspapers and magazines. We suggest keeping this a major
focus on well established products as well as newer products.
You can plan on putting around five million into this promotion.
Overall, many of our decisions were well thought out and
worked towards the progress the company did have. However,
the errors we made outweighed, to some extent, the positive
decisions. Hopefully from our successes and failures Allstar
can have a profitable future under the new incoming team.
Distribution & Sales Force
0
20
40
60
12345678
Periods
# of
Employees
Ind Drugstores Chain Drugstores
Grocery Stores Convenience Stores
Mass Merchandisers Indirect/ Wholesalers
� EMBED MSGraph.Chart.8 s ���
PAGE
16
0
5
10
15
20
25
30
35
40
45
50
1st
Qtr
3rd
Qtr
5th
Qtr
7th
Qtr
9th
Qtr
Allround
Allright
Allround +
_1130863440.
PharmaSim
10f3
. Period f#"6" Brand ManagerIndustry: team:a
User: sain14343107-PLAYER
Decision Summary - Period 7
Decision Summary for Allstar, Input for Period 7
Summary of Decisions (Company)
Sales Force (#SF)
Indep Drugstores
Chain Drugstores
Grocery Stores
Convenience Stores
MassMerch
I
30 Wholesaller Support 35
65 Merchandisers 25
100 Detailers 35
11
30 Total Sales Force 331
% of Budget
Sales Force
Advertising
Promotion
33.4%
50.0%
16.7%
Reports Ordered
none
Brand Analg Antihist Decon ~OU9h Expec Alcoh Description
upp.
Allround 1000 4 60 0 200 2:0 4hr multi liquid
Allround+ 1300 8 100 0 0 I) 12hr multi capsule
Allright 0 4 60 0 0 I) 4hr allergy capsule NO
Period 1 2 3 4 5 6
Replays: 0 0 0 0 0 0
Restarts: 0
Summary of Decisions (Allround)
Pricing
Mfr Sugg Ret Price
< 250 vol. disc.
< 2500 vol. disc.
2500+ vol. disc.
Wholesaler vol. disc.
$5.99
25.0%
35.0%
39.0%
45.0%
Advertising
Budget (M$)
Agency
Symptom Targets:
cold, allergy
Demographic Targets:
young singles
$16.5
BMW
Primary % 0.0%
http://appl.interpretive.comlpss 12/i.php
•••'. .
9/29/2013 12:54 PM
PharmaSim
20f3
Benefit %
Comparison %
Reminder %
Promote Benefits:
relieves aches, clears nasal congestion, reduces chest
congestion, dries
up runny nose, helps you rest
50.0%
0.0% with Besthelp
50.0%
Promotion
Allowance (%)
Co-op Adv.(M$)
Product Disp.(M$)
Trial Size (M$)
Coupons (M$)
WS Ind
13.0% 15.0%
Chain
20.0%
Jf
/'J
Groc
20.0%
..;
..;
Conv MM
13.0% 15.0%
..;$1.0
$1.0
$0.0
$1.5 (0.75)
Summary of Decisions (Allround+)
Pricing
Mfr Sugg Ret Price
< 250 vol. disc.
< 2500 vol, disc.
2500+ vol. disc.
Wholesaler vol. disc.
$5.99
25.0%
35.0%
39.0%
45.0%
Advertising
Budget (M$)
Agency
Symptom Targets:
cold, allergy
Demographic Targets:
young singles, young families
$6.0
BMW
Primary %
Benefit %
Comparison %
Reminder %
Promote Benefits:
relieves aches, clears nasal congestion, relieves allergy
symptoms
20.0%
50.0%
20.0%
10.0%
with Besthelp+
Promotion WS Ind Chain Groc Conv MM
Allowance (%) 13.0% 15.0% 20.0% 20.0% 13.0% 15.0%
Co-op Adv.(M$) $0.5 ../ ..; ..;
Product Disp.(M$) $0.8 Jf ..;
Trial Size (M$) $0.0
Coupons (M$) $1.5 (0.75)
Summary of Decisions (Allright)
Pricing
Mfr Sugg Ret Price $6.99
< 250 vol. disc. 25.0%
< 2500 vol disc. 35.0%
http://appl.interpretive.comlpss 12/i.php
9/29/2013 12:54 PM
PbarmaSim
30f3
2500+ vol. disc.
Wholesaler vol, disc.
39.0%
45.0%
Advertising
Budget (M$)
Agency
Symptom Targets:
allergy
Demographic Targets:
young singles, mature families
$6.0
BMW
Primary %
Benefit %
Comparison %
Reminder %
Promote Benefits:
relieves allergy symptoms, won't cause drowsiness
30.0%
50.0%
0.0%
20.0%
with 84011:0
Promotion WS Ind Chain Groc Conv MM
Allowance (%) 13.0% 15.0% 20.0% 20.0% 13.0% 15.0%
Co-op Adv. (M$) $0.8 "if ../ ../
Product Disp.(M$) $1.0 "if ../
Trial Size (M$) $0.5
Coupons (M$) $1.0 (0.75)
Creative Design Decision
Company Logo Link
No link has been entered.
Company Ad Link
No link has been entered.
Incident
Incident: Price Discrimination
Choice: None Selected
http://appl.interpretive.comipss 12/Lpbp
9129/2013 12:54 PM
PharmaSim
Period # 6
Brand Manager
Industry: team:a
User: sain14343107-PlAYER
Product Contribution - Period 6
I
I Product Contribution for Allround
Unit Sales
Avg Retail Price
Retail Sales
115.6
$4.81
5~i6.2
425.6 100.0%
,·0.2 16.5%
169.7 39.9%
185.6 43.6%
3.5 0.8%
16.5 3.9%
20.0 4.7%
165.6 38.9%
Manufacturer Sales
Promotional Allowance
Cost of Goods Sold
Gross Margin
Consumer & Trade Promotion
Advertising
Total Marketing
Product Contribution
Note: Values (except Avg Retail Price) are in millions.
Allstar- Pr-oduct Contr-ibtJItion ~ I
200
Ixr V150
" 'rJ I-sr~ 100c IQ .6. Allright·004
I..-j V Allround..-j·004 50 -<>- Allround+:z: I~ -- <> I
1
.;.-
J!. I0 .---<>~
I
-50 I0 1 2 3 4 I) 6
Per-iod I
1 of 1
http://appl.interpretive.comlpss 12/i.php
9/29/2013 12:57 PM
PharmaSim
Period # 6
Brand Manager
Industry: team:a
User: sain143431 07-PuIl,.YER
Product Contribution - Period 6
i Product Contribution for Allround+
Unit Sales
Avg Retail Price
Retail Sales
Manufacturer Sales
Promotional Allowance
I Cost of Goods Sold
I Gross Margin
I Consumer & Trade Promotion
i Advertising
i Total Marketing
I Product Contribution
I
I
16.7
$4.80
80.4
61.7 100.0%
10.3 16.6%
17.5 28.3%
33.9 55.0%
2.8 4.5%
6.0 9.7%
8.8 14.2%
25.2 40.8%
Note: Values (except Avg Retail Price) are in millions.
Rllstar Product ContribUition
200
v V
150 ''l
~ 100c
0 6. Allright.""....•
J Allround....•
Ii 50 -<)- Allround+~{>-----
-.{>-
A0 .s-«:
I {> --
I
JI -50I 0 1 2 3 4 s 6PeriodL-..-
l of l
http://appl.interpretive.comlpss12/i.php
9/29/2013 12:57 PM
PharmaSim
Period # 6
Brand Manager
Industry: team:a
User: sain14343107-PLAYER
Product Contribution - Period 6
iI Product Contribution for Allright
I Unit Sales
Avg Retail Price
Retail Sales
7.9
$5.66
44.6
33.9 100.0%
5.7 16.8%
15.8 46.5%
12.5 36.7%
3.3 9.6%
6.0 17.7%
9.3 27.3%
3.2 9.5%
Manufacturer Sales
Promotional Allowance
Cost of Goods Sold
Gross Margin
Consumer & Trade Promotion
Advertising
Total Marketing
Product Contribution
Note: Values (except Avg Retail Price) are in millions.
I Rllstar Product ContribUition
!
200
I Tf VI 150 ';r
I
I -Tf
I~ 100
I·:: /:;.. Allright
I~ V Allround50 -~- Allround+I~ -- c-
-;>- ---
II 0 ~- aI "'-I JI -50I 0 1 2 3 4 !) 6Period,
l of l
http://appl.interpretive.com/pss 12/i.php
912912013 12:57 PM
PbarmaSim
Period #4
Brand Manager
Industry: team:a
User: sain143431 07-PLAYER
Decision Summary - Period 5
I Decision Summary for A1lstar, Input for Period 5
li,1 Summary of Decisions (Company)
Sales Force (#SF)
Indep Drugstores 20 Wholesaler Support 30
Chain Drugstores 60 Merchandisers 20
Grocery Stores 90 Detailers 25
Convenience Stores 9
MassMerch 30 Total Sales Force 284
% of Budget
Sales Force
Advertising
Promotion
35.3%
49.9%
13.9%
Reports Ordered
Purchase Survey $, Operating Statistics $, Sales Force $,
Advertising $,
Promotion $, Channel Sales $, Pricing $, Shopping Habits $,
Shelf Space
$, Recommendations $
Brand Analg Antihist Decon
Cough
Expec Alcoh Description
Supp.
AI/round 1000 4 60 0 200 20 4hr multi liquid
AI/round+ 1300 8 100 0 0 0 12hr multi capsule
Period 1 2 3 4 5 6
Replays: 0 0 0 0 0 0
Restarts: 0
Summary of Decisions (All round)
Pricing
Mfr Sugg Ret Price
< 250 vol. disc.
< 2500 vol. disc.
2500+ vol. disc.
Wholesaler vot. disc.
$5.39
25.0%
35.0%
39.0%
45.0%
Advertising
Budget (M$)
Agency
Symptom Targets:
cold, allergy
Demographic Targets:
young singles
$16.5
BMW
lof3
http://appl.interpretive.comlpss 12/i.php
9128/2013 7: 15 PM
PbarmaSim
20£1
Primary %
Benefit %
Comparison %
Reminder %
Promote Benefits:
relieves aches, clears nasal congestion, reduces chest
congestion, dries
up runny nose, helps you rest
0.0%
50.0%
0.0%
50.0%
Promotion
Allowance (%)
Co-op Adv.(M$)
Product Disp.(M$)
Trial Size (M$)
Coupons (M$)
WS Ind
15.0% 15.0%
$1.5
$1.5
$0.0
$1.0 (0.50)
Summary of Decisions (Allround+)
Pricing
Mfr Sugg Ret Price
< 250 vol. disc.
< 2500 vol. disc.
2500+ vol. disc.
Wholesaler vol. disc.
$5.19
25.0%
35.0%
39.0%
45.0%
Advertising
Budget (M$)
Agency
Symptom Targets:
cold, allergy
Demographic Targets:
young singles, young families
$6.0
BMW
30.0%
50.0%
10.0%
10.0%
with Besthelp
Chain
18.0%
..;
...;
Groc
20.0%
..;
...;
Conv MM
15.0% 15.0%
..;
Primary %
Benefit %
Comparison %
Reminder %
Promote Benefits:
relieves aches, clears nasal congestion, relieves allergy
symptoms
with Besthelp+
Promotion
Allowance (%)
Co-op Adv.(M$)
Product Disp.(M$)
Trial Size (M$)
Coupons (M$)
WS Ind
15.0% 15.0%
$0.5
$0.8
$1.0
$0.0
Creative Design Decision
Company Logo Link
No link has been entered.
Chain
18.0%
...;
..;
Groc
20.0%
...;
..;
Conv MM
15.0% 15.0%
...;
http://appl.interpretive.comlpss12/i.php
9/2R/2011 7: 1'i PM
PbarmaSim
30f3
Company Ad Link
No link has been entered.
Incident
Incident: Detailing Changes
Choice: None Selected
http://appl.interpretive.comipss 12/i.php
9/28/2013 7: 15 PM
PbarmaSim
Period # 4
Income Statement - Period 4
Brand Manager
Industry: team:a
User: sain14343107-PLAYER
! Income Statement for Alistar
Manufacturer Sales
Promotional Allowance
Cost of Goods Sold
Gross Margin
Consumer & Trade Promotion
Advertising
Sales Force
Administrative
Total Marketing
Contribution after Marketing
Fixed Costs
Net Income
Next Period Budget
406.3 100.0%
68.7 16.9%
177.0 43.6%
160.7 39.5%
15.4 3.8%
29.0 7.1%
11.1 2.7%
12.4 3.1%
67.9 16.7%
92.8 22.8%
72.5 17.8%
20.3 5.0%
45.1 11.1%
Note: Amounts are in millions of dollars.
90
80
70
~ 60•,...j
,...j
1"2 50
40
30
20
0
Rllstar Incone/EHpense
I
I " I",,", II
1 42
Period
3
1 of 1
http://appl.interpretive.comlpss 12/i.php
9/28/2013 7:25 PM
PharmaSim
Period # 4
Brand Manager
Industry: team:a
User: sain14343107-PLAYER
Product Contribution - Period 4
I Product Contribution for Allround
I
i
i
I
Unit Sales
Avg Retail Price
Retail Sales
120.0
$4.18
501.9
383.3 100.0%
64.7 16.9%
164.8 43.0%
153.8 40.1%
9.4 2.5%
19.0 5.0%
28.4 7.4%
125.4 32.7%
Manufacturer Sales
Promotional Allowance
Cost of Goods Sold
Gross Margin
Consumer & Trade Promotion
Advertising
Total Marketing
Product Contribution
Note: Values (except Avg Retail Price) are in millions.
I
RUstar Product ContrIbut.Lon
I 200
! a a
I 150
I
! a
I~ 100,0
I~ fJ. AllroundIi 50 '7 Allround+
0I V
I
-50
0 1 2 3 4
Period
1 of 1
http://appl.interpretive.comlpss 12/i.pbp
9/28/2013 7:26 PM

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TABLE OF CONTENTS1. Mission Statement Page 22. Marketing .docx

  • 1. TABLE OF CONTENTS 1. Mission Statement: Page 2 2. Marketing Objectives: Page 2 3. SWOT Analysis: Pages 2-4 4. Target Market: Page 4-5 5. Marketing Activities: Pages 5-7 6. Lessons Learned: Pages 7-15 a) Year 1 b) Year 2 c) Year 3 d) Year 4 e) Year 5 f) Year 6 g) Year 7 h) Year 8 i) Year 9 j) Year 10
  • 2. 7. Summary: Pages 16-17 1. MISSION STATEMENT: To establish Allstar Brands as a market leader of Over-The- Counter multi-symptom cold/allergy relief, while maintaining the highest level of customer satisfaction through product effectiveness, quality and affordability. 2. MARKETING OBJECTIVES: · To increase the stock price by 3 points every 2 years · To maintain a combined direct/indirect sales force of no less than 140 · To increase net income to $40 million in the next 2 years · To increase brand awareness by 5% yearly for all products of Allstar toward a long-term goal of 85%, thereafter any increase is found sufficient · To maintain advertising budget expenditure above $26 million, minimum $10 million toward Allround, Allround+ and minimum $9 million toward Allright · Introduce one new product within every 3-year period according to appropriate market trends and characteristics of demand · To keep promotional allowance at or above 14% for all products · To increase customer satisfaction to 60% for all Allstar Brand products within the next 2 years 3. SWOT: Strengths: · Allstar Brands have a competitive advantage which is based on the lowest price in the cold/allergy market · Brand awareness for the products of Allstar Brands is one of the highest among the competitors · Product mix targets variety of ailments (Allround – multi-
  • 3. symptom, Allround+ - cold and allergy, Allright – cough and cold) · Customer satisfaction for Allstar products ranges from 54% to 61% · Allround is the second highest brand purchased among the OTC medicine and has the second largest market share of manufacturing sales · Allround Brand perception of cough and ache medicine is the highest among the competitors · Steady rise of product contribution for Allright and Allround+ · Allstar offers relief for all of the most frequent symptoms of ailments: aches, coughing, and chest congestion · Allright attains largest market share based on manufacturing sales of 14.9% in the cough medicine market Weaknesses: · Low sales force · Steep drop off of stock price after year five · Allround has the lowest net income among the competitors · Advertising budget for every product is not sufficient for leading a proper advertising campaign to increase brand awareness · A stronger competitor Besthelp keeps Allround from being the leader of brands purchased · Low budget allocated to promotional mix of all 3 products · Current customer’s intentions to buy Allround, Allround+ and Allright are larger than Allstar can produce · Annual fall of Allround’s total sales and product contribution since year 5 · Constant fall of trade ratings for Allright and Allround+ · Allstar Brands takes third place in retail sales · Medium quality of advertising due to advertising agency S&R hired
  • 4. Opportunities: · Introduction of new products in the future · Investment in Research and Development to improve composition of existing and new products · Becoming the highest brand purchased among OTC medicine and reaching the highest marketing share in manufacture sales · Changing brand formulation of products according to existing market needs · Population growth rate of 1.6% · Industry growth rate 5.9% · Penetrating international markets Threats: · Strong competition in cold/allergy market · Loss in stock price and net income of Allstar brands · Economic instability · Unfavorable market fluctuations · Poor choice of advertising agency to lead advertising campaigns for the Company products · Inflation rate increase · Unfavorable Governmental regulations toward OTC products · Competitor advantage in Research and Development · Lack of adequate sales force 4. TARGET MARKET: Providing Over-The-Counter medicine Allstar targets people who have common health problems. The best way to segment Allstar’s customers would be by the following two major categories: illness (cold, cough, allergy) and demographics (young singles, young families, mature families, empty nesters, retired). Allstar Brands invests in marketing research to learn about the ever changing preferences and trends of the market. The information the Company gathers from this research is then used to make according decisions to satisfy each particular
  • 5. category of customer. 5. MARKETING ACTIVITIES: In order to achieve our first marketing objective, we recommend the following activities: Keep producing high quality, positive image products that satisfy customer’s needs.Secondly, the team must maintain direct and indirect sales force of no less than 140 and plan in advance in order to have the budget to do so. We also recommend offering employee fringe benefits to encourage long term positions in the company. For the next objective, which is to increase net income to $40 million in the next two years they must choose and maintain the suitable marketing/promotional mix. Offer diversity of products to meet every customer’s need and keep promotional allowance above 14% to encourage stores to carry our product. Give out trial sizes for new and existing products to increase brand awareness by 5% yearly which is objective number four. Also the advertising agency should be chosen carefully to ensure the highest quality of advertising campaign and strategy. The composition of the advertising message must be created according to the stage of the product’s life cycle. The key to achieving all of these advertising goals is to make sure the current and future budget will be great enough to cover these critical needs. The key to reaching the objective of maintaining an advertising budget expenditure at least or above$26 million, $10 million and $8 million for Allround, Allround+ and Allright respectively is to keep up closely to the designed marketing plan. Spending no less than the minimal of what the plan says. Good quality forecasting is a useful tool to keep away from sudden changes in the market which could put the Allstar out of business. The company should maintain a miscellaneous budget to deal with sudden surprises that will occur.
  • 6. To be able to introduce a new product within every 3 year period, Allstar Brands has to maintain existing profitable products so that there is an opportunity to put money into the development of new products. Unsuccessful products must be removed from Allstar production lists as well to keep an abundance of disposable income. For successful products already existing, advertising and promotion budget should not be cut as well as the sales force. In fact, while introducing a new product the sales force must be raised in proportion to the planned volume of the new product. It is essential to have a deep knowledge of the market, its characteristics and trends, customer needs and preferences, as well as economic and legal issues that might influence the product’s success. Thus a certain amount of money must be invested into marketing research concerning information about the marketing mix to be created. From our experience, we can say that the amount of promotional allowance matters greatly to the overall promotional status as well as to the overall success of the product. To encourage the stores to carry out the product, promotional allowance must be maintained at 14% or above among all the products. The Company budget should be balanced in a way to dedicate the amount of money corresponding to the allowance percentage without disturbing regular budget distribution to products and activities of Allstar Brands. Maintaining a favorable cash flow is a key condition to reach the identified objective. To increase customer satisfaction of the Allstar Brands products by 60%, firstly, the appropriate information should be collected on the product featured and benefit expectations of the current and potential customers. This information will help management make decisions for developing a new product image, features, and benefits to meet the current demand. The last objective implemented is advertising, which should be stressed to attract
  • 7. and inform the customers about the changes made. Trial sizes should play a big role in the improvement process. By receiving free trials, the customers will be more likely to experience the innovated product and see its advantages over other brands. 6. LESSONS LEARNED 0 5 10 15 20 25 30 35 40 45 50 1st Qtr 3rd Qtr 5th Qtr 7th Qtr 9th Qtr Allround Allright Allround + Prediod Retai Promo
  • 9. 15.0 Year 1-3 Coming into the first period of our new company there were many uncertainties. We noticed that the price for Allround before we had acquired Allstar was set at $5.29. We decided to only raise the price by one cent putting it at $5.30, our justification for doing this was that we had seen how good the company was doing prior to our involvement so we left the price close to what it had been. We also kept our distribution relatively the same at 97 for Direct Sales and 40 for Indirect sales compared to 94, 33 respectively. We cut our Promotion allowance from 17% to 15%. We came to this decision due to our product being carried by many distributors for several years. Our product was not new and did not need a Promotion Allowance that was higher than 15%. We kept our consumer promotion at 5.6 and trade promotion at 1.4 and raised advertising from 20 to 20.5 million in hope to get our name out there more, since we were going to introduce a new product relatively soon in the future. After the first period we were doing great. We were number one in the class for stock price and it looked like we knew what we were doing. Our income was 96.2 million and our sales force was a mere 6.5. We realized that making a few slight changes had made a positive influence on the company. Cutting our Promotion Allowance back 2% did not decrease sales at all and the $500,000 increase in advertising budget must have urged consumers to buy our product. We left our advertising agency at what it had been prior to our ownership, being the middle quality agency we figured it would be directed toward everyone and would also help us keep the MSRP low. Going into round two we basically had to make the same
  • 10. decisions as round one. We still did not have much freedom to make many choices, so we focused on what we could. We noticed that convenience stores were showing the strongest growth and from this we decided to increase our direct sales from 97 to 118 and our indirect sales from 40 to 55. We left Allround’s product price at $5.30, focusing on making this year a sales growth period. Instead of raising the price, we focused on keeping our current loyal customers and hopefully gaining others through reasonable pricing. We left our Promotion Allowance at 15%. We increased our Trade Promotion from 1.4 to 2. We had also increased our Consumer promotion from 5.6 to 6 and our advertising up from 20.5 to 21.1 million. Once again all of these decisions were based on increasing our market share/sales growth which we hoped to obtain by increasing all promotional aspects. After putting much money into promotion and waiting to see our income steadily rise we were shocked to see that it had fallen more than 10 million dollars. Our stock price also droped from 48.01 to 43.77. Our sales force had also risen from 6.5 to 8.8. The only change we saw that could be affecting our sales so greatly was the threats of the economy in which purchasing potential had dropped. Inflation had risen and customer’s disposable income had dropped since last year. Another factor that may have affected our decline in income was the increase in Sales Force and the failure to raise our MSRP. Moving into round 3 we had the freedom to direct exactly how much Sales Force we wanted in each channel. This period forecasted a growth in Independent drugstores so we rasied our old SF of 7 in independent Drugstores to 12. We lowered our chain drugstores from 36 to 30 because we had risen independent drugstores so drastically. Grocery stores seemed to be giving us the biggest return so we increased our SF from 55
  • 11. to 60. Our wholesale SF we saw as a great potential so we increase it from 25 to 40 in hopes to regain our number one spot in the class. This period we also raised the price of Allround from $5.30 to $5.40 once again in hopes that we could bring in some more income so that we could put it toward our future goal of introducing another product. We have left our sales promotion basically the same as period two which should be sufficient, considering that it worked the first period. This period we had control of what our advertising would be focused on. We left our primary advertising at 10% due to our product having a stable market share already and having been established several years prior. We raised our benefit from 10% to 15% so that we could win over new customers by showing how much better Allround was than our competitors. We lowered our Comparison from 40% to 30% so that we could raise our reminder from 40% to 45%. By raising our reminder we hoped consumers would realize we our still a strong competitor and have been in this business for many years. Even after we increased our advertising budget from 21.1 million to 21.6 million we still are loosing money. Our sales force had only risen from 8.8 to 8.9. Our income also droped from 79.9 to 71.8 making us loose another nine million dollars. That is not all the bad news. Our stock price dropped from 43.77 to an even lower 39.14. We found our main problem to be our product discount which was not formulated properly. We had a 23% discount for <250, 28% discount for <2500, 33.5% discount for 2500+ and 38% discount for wholesale. We realized that our wholesale discount should have been somewhere around 42%, 2500+ around 39%, <2500 around 35% and <250 around 30%. This would have given us a competitive advantage over our competition for our retailers to carry our product. Stock Price
  • 13. 10.4 36.3 97.9 30.50 3.01 14.1 One of the greatest lessons learned during Year four was to realize the importance of every part of the marketing mix while introducing a new product. The product can be successful when its 4Ps address current market demands and when the possibilities are used to their highest extent. We introduced Allround+ - 12hr Multi Capsule which contained: 1300 mg analgesics, 8 mg antihistamines, and 100 mg decongestant. To increase brand awareness, $9 was given to advertising budget, $5.9million spent on promotion (trial sizes, coupons, co-op ads, product displays). To make sure that the new product would make a positive impression on the market, the most expensive high quality performance advertising agency “Brewster, Maxwell and Wheeler” was chosen to lead the advertising campaign. The composition of our advertising message consisted of: Primary 40%, Benefit – 30%, Comparison 20% and Reminder – 10%. Allround+ was priced cheaply at $3 since it was a brand new product. The stock price for Allstar Brands in Year four rose from 39.12 to 41.07. This was strong evidence that our marketing mix was composed correctly, leading us in the right direction. The sales force was agreed to be reduced so that a great amount of money could be invested in advertising. Thus number of employees in Chain Drug Stores, Mass Merchandisers and Wholesales was decreased by 5, which brought down our total ratio of Sales Force from 8.9 to 8.5. We learned later that the reduction of our sales force hurted the company more than anticipated.
  • 14. The decisions must be made in a way to create the balance within the company, between different products and areas of activities. If we decrease price, we should also decrease discounts to receive the same or larger amount of sales depending on elasticity of demand. As the price for Allround was reduced from $5.4 to $5.2 and average discounts were lowered from 32.3% to 28.1%, manufacturing sales grew by 10 points. Year 5 may be characterized as one of the most successful years in the life cycle of the Allstar brand in relation to net income earned and stock price attained, which accounted for $72.8 million, and 42.05 points respectively. Retail Sales rose from $584.6 to $609.1 million. These positive results followed after the corrective decisions made concerning the marketing mix of the both products. The major decisions of this period were to increase the prices for both products: Allround ($5.2 to $5.3) and Allround+ ($3.0 to $4.25) along with a slight decrease in discounting. As the new product was on its growth stage and needed a lot of input, we decided to increase the sales force from 8.5 to 9.0, specifically increasing the number of employees in independent drugstores, mass merchandisers, while decreasing chain drug stores, wholesale, and detailers. To promote Allround+, a certain amount of money was taken away from promotional and advertising budget of Allround and put into Allround+. That turned out to be a poor decision. By strengthening the new product, we weakened the established Allround. The lesson is to not sacrifice the product that provides the major cash flow in the company for the sake of the
  • 15. newly introduced one. The largest event during Year 6 was the introduction of another new product of Allstar Brands – Allright. Allright was introduced as the medicine to cure the common cough. The decision was made to set its price at $5.45 due to the product being the most expensive to produce. Having another product required having more personnel available to work on it; thus, the sales force was increased from 9 to 10.4. The drastic fall of net income for this period from $72.8 to $36.3 million occurred because of the introduction of the new product. A large increase in advertising, a decrease in promotional and sales force expenditures caused this financial regress in the company. The stock price fell from 42.05 to 30.50. The share of retail sales fell by 0.7%, and share of manufacturing sales fell by 0.5%, although share of unit sales stayed the same. At that point Allright was the weakest product of Allstar Brands, its product contribution consisted of -7.5, while Allround+ had 13.4, and Allround 143.4. A lack of funding caused there to be little room for advertising and promotional growth making a successful development for the three products impossible. The new product of Allright should not have been introduced so early after Allround+ was introduced. The Company needed some time to deal with changes, and to acquire a stable flow of business. Investing into marketing research to learn about the current market situation would have helped the company stay away from unfavorable changes. YEAR 7 & 8 Period Retai
  • 16. Promo Adv SF Incom Util% Stock Shelf Allow 7 573.2 10.5 25.0 10.7 31.7 94.2 28.20 3.14 14.9 8 573.5 7.6 22.6 9.3 41.9 91.8 28.95 3.02 13.5 We fell to the bottom, now recovery is the only choice in the years of seven and eight. Our goal was to pull through our slumping stock price and performance. As year 7 began things were getting worse. From year 6 to year 8 our retail price went from 596.7 to 573.5 a drop of 22%. We had changed our promotions from 15.9 to 7.6 which made our retail price drop. We saw that the more promotion is dedicated to the product, the higher the product awareness will rise. During this year we had
  • 17. a small sales force at 10.4% due to the fact that our income was always in the negative. Once we cut our promotion and advertising, our stock price dropped from 30.50 to 28.95. After the 7th decision, we realized that we were not utilizing the full potential of our sales force. By the end of year 8 our sales force got smaller. We learned that our MSRP was low in price, we lacked the number of employees required in distribution channels, had internal financial problems, and poor performance causing the loss of market share. Our market strategy was poor because of the inability to capitalize on product improvements and retain or expand our customer base. In year seven and eight we were cutting more money than we were investing into improvement of our products. We focused more on advertising than on sales force, which we cut every time when we needed money to put to something else. By year seven, we increased our sales force by about 0.3% and wanted to increase it in year 8, but due to negative budgets, we were forced to decrease it. YEAR 9 & 10 Period Retai Promo Adv SF Incom Util% Stock Shelf Allow 9 559.6 6.8 20.2 10.1 32.9
  • 18. 89.7 24.59 3.12 13.6 10 587.8 6.9 17.4 10.4 25.1 97.8 24.54 3.04 14.0 We changed directions somewhat in the last two years in an attempt to recover our slumping stock price and over-all performance. We restructured our pricing such that there was a greater incentive in purchasing in larger quantities. We also made changes to the incremental increases in discounts to appropriately match the quantities purchased. For example, in year seven for Allround+ we were giving purchasers of +2500, a 28% discount and for wholesalers an increase of only 2% rising it to 30%. We recognized the potential loss in sales as a result and changed it to 32% and 38% respectively. Had we done this years earlier, we may have been able to significantly increase sales. We also changed our outlook towards the reminder portion of our advertising. As the years progressed and Allround and Allround+ aged, we thought that putting a greater percentage of the budget into reminder would serve us well and keep the product fresh in the minds of the consumers. We now think that we should have allocated more into benefit and comparison earlier on. Both of these two functions as their names suggest
  • 19. but also are reminders in themselves. Fortunately this was not an extreme problem for Allround+ and Allright because they were implemented later on. Within the last two or three years we were faced with the task of cost cutting due to low revenues. This recent activity acted as a kind of downward spiral. In efforts to get ourselves out of the red, we felt forced to cut back on promotional allowances and even sales force. In this last year we didn’t have a single element of promotions over one million dollars and our sales force was cut to less than 140 from almost 160 in year seven. We believe, however, that these two areas are crucial in achieving strong sales growth. We hoped that if we could increase the unit price without greatly hurting consumer sales that we could make up a partial portion of our losses from the previously mentioned factors. Fortunately for the incoming management, our mistakes can be their gains. We strongly recommend maintaining an adequate sales force and paying close attention to the market trends and acquiring the appropriate research. Summary Make decisions carefully based on entering a new market because there may be an overabundance of other competitors already in that product branch. We had introduced two products after the well established Allround name. We introduced Allround+ in year????? Another major problem that we faced was choosing the right MSRP for each product. Acquire competitor MSRP and price Allstar products appropriately. We priced our products at a
  • 20. minimum hoping to grab distributors attention but we unfortunately did not give enough of a discount to succeed. We lacked in this area where our competitors succeeded. We did price our products at a lower price but did not divide the discounts that the distributors would get accordingly. We should have increased our MSRP to match our competitors or even a little less. The big concern is in the discount offered which is an incentive for our distributors to carry our brand. The discounts should range from 44% for wholesales and down to 25% for <250 having the percents split evenly over the rest of the distribution market so that the more they buy the cheaper it is for them per product. Also promotion allowance affects our retailers. Allowances are to help you gain retail distribution, shelf facing in retail outlets, and retail support for brand advertisements. Another way to get your product out to consumers is by concentrating on the sales promotion. Things such as co-op ads which makes money available to retailers to pay for a portion of the retailers advertising when the relevant brand is promoted. We suggest keeping this number in the one and a half to two millions range especially if the product is being newly introduced. Point of purchase discounts are special displays such as retail sale racks. We also suggest to keep this in the one and a half to two millions range. Point of purchase discounts are focused at the customer which usually gives the extra edge we need for a new customer to try our product. Trial size promotions are a key to get your new product out there and noticed. Trial sizes are smaller packages of our product that are given out to consumers in hope that they will like the result and purchase our brand over the competitors. Trial sizes are not necessary unless you are introducing a new product or you see a lag in brand awareness. We suggest putting two million dollars toward trial sizes when necessary. The final sale promotion is coupons. Coupons are special
  • 21. discounts off of the retail price of a product which is taken off at time of purchase. You can find coupons in flyers, newspapers and magazines. We suggest keeping this a major focus on well established products as well as newer products. You can plan on putting around five million into this promotion. Overall, many of our decisions were well thought out and worked towards the progress the company did have. However, the errors we made outweighed, to some extent, the positive decisions. Hopefully from our successes and failures Allstar can have a profitable future under the new incoming team. Distribution & Sales Force 0 20 40 60 12345678 Periods # of Employees Ind Drugstores Chain Drugstores Grocery Stores Convenience Stores Mass Merchandisers Indirect/ Wholesalers � EMBED MSGraph.Chart.8 s ���
  • 23. Decision Summary - Period 7 Decision Summary for Allstar, Input for Period 7 Summary of Decisions (Company) Sales Force (#SF) Indep Drugstores Chain Drugstores Grocery Stores Convenience Stores MassMerch I 30 Wholesaller Support 35 65 Merchandisers 25 100 Detailers 35 11 30 Total Sales Force 331 % of Budget Sales Force Advertising Promotion 33.4% 50.0% 16.7% Reports Ordered none Brand Analg Antihist Decon ~OU9h Expec Alcoh Description
  • 24. upp. Allround 1000 4 60 0 200 2:0 4hr multi liquid Allround+ 1300 8 100 0 0 I) 12hr multi capsule Allright 0 4 60 0 0 I) 4hr allergy capsule NO Period 1 2 3 4 5 6 Replays: 0 0 0 0 0 0 Restarts: 0 Summary of Decisions (Allround) Pricing Mfr Sugg Ret Price < 250 vol. disc. < 2500 vol. disc. 2500+ vol. disc. Wholesaler vol. disc. $5.99 25.0% 35.0% 39.0% 45.0% Advertising Budget (M$) Agency Symptom Targets: cold, allergy Demographic Targets: young singles
  • 25. $16.5 BMW Primary % 0.0% http://appl.interpretive.comlpss 12/i.php •••'. . 9/29/2013 12:54 PM PharmaSim 20f3 Benefit % Comparison % Reminder % Promote Benefits: relieves aches, clears nasal congestion, reduces chest congestion, dries up runny nose, helps you rest 50.0% 0.0% with Besthelp 50.0% Promotion Allowance (%) Co-op Adv.(M$) Product Disp.(M$) Trial Size (M$)
  • 26. Coupons (M$) WS Ind 13.0% 15.0% Chain 20.0% Jf /'J Groc 20.0% ..; ..; Conv MM 13.0% 15.0% ..;$1.0 $1.0 $0.0 $1.5 (0.75) Summary of Decisions (Allround+) Pricing Mfr Sugg Ret Price < 250 vol. disc. < 2500 vol, disc. 2500+ vol. disc. Wholesaler vol. disc.
  • 27. $5.99 25.0% 35.0% 39.0% 45.0% Advertising Budget (M$) Agency Symptom Targets: cold, allergy Demographic Targets: young singles, young families $6.0 BMW Primary % Benefit % Comparison % Reminder % Promote Benefits: relieves aches, clears nasal congestion, relieves allergy symptoms 20.0% 50.0% 20.0% 10.0% with Besthelp+
  • 28. Promotion WS Ind Chain Groc Conv MM Allowance (%) 13.0% 15.0% 20.0% 20.0% 13.0% 15.0% Co-op Adv.(M$) $0.5 ../ ..; ..; Product Disp.(M$) $0.8 Jf ..; Trial Size (M$) $0.0 Coupons (M$) $1.5 (0.75) Summary of Decisions (Allright) Pricing Mfr Sugg Ret Price $6.99 < 250 vol. disc. 25.0% < 2500 vol disc. 35.0% http://appl.interpretive.comlpss 12/i.php 9/29/2013 12:54 PM PbarmaSim 30f3 2500+ vol. disc. Wholesaler vol, disc. 39.0% 45.0% Advertising Budget (M$) Agency Symptom Targets:
  • 29. allergy Demographic Targets: young singles, mature families $6.0 BMW Primary % Benefit % Comparison % Reminder % Promote Benefits: relieves allergy symptoms, won't cause drowsiness 30.0% 50.0% 0.0% 20.0% with 84011:0 Promotion WS Ind Chain Groc Conv MM Allowance (%) 13.0% 15.0% 20.0% 20.0% 13.0% 15.0% Co-op Adv. (M$) $0.8 "if ../ ../ Product Disp.(M$) $1.0 "if ../ Trial Size (M$) $0.5 Coupons (M$) $1.0 (0.75) Creative Design Decision Company Logo Link No link has been entered.
  • 30. Company Ad Link No link has been entered. Incident Incident: Price Discrimination Choice: None Selected http://appl.interpretive.comipss 12/Lpbp 9129/2013 12:54 PM PharmaSim Period # 6 Brand Manager Industry: team:a User: sain14343107-PlAYER Product Contribution - Period 6 I I Product Contribution for Allround Unit Sales Avg Retail Price Retail Sales 115.6 $4.81 5~i6.2 425.6 100.0% ,·0.2 16.5%
  • 31. 169.7 39.9% 185.6 43.6% 3.5 0.8% 16.5 3.9% 20.0 4.7% 165.6 38.9% Manufacturer Sales Promotional Allowance Cost of Goods Sold Gross Margin Consumer & Trade Promotion Advertising Total Marketing Product Contribution Note: Values (except Avg Retail Price) are in millions. Allstar- Pr-oduct Contr-ibtJItion ~ I 200 Ixr V150 " 'rJ I-sr~ 100c IQ .6. Allright·004 I..-j V Allround..-j·004 50 -<>- Allround+:z: I~ -- <> I 1 .;.- J!. I0 .---<>~
  • 32. I -50 I0 1 2 3 4 I) 6 Per-iod I 1 of 1 http://appl.interpretive.comlpss 12/i.php 9/29/2013 12:57 PM PharmaSim Period # 6 Brand Manager Industry: team:a User: sain143431 07-PuIl,.YER Product Contribution - Period 6 i Product Contribution for Allround+ Unit Sales Avg Retail Price Retail Sales Manufacturer Sales Promotional Allowance I Cost of Goods Sold I Gross Margin I Consumer & Trade Promotion i Advertising i Total Marketing I Product Contribution
  • 33. I I 16.7 $4.80 80.4 61.7 100.0% 10.3 16.6% 17.5 28.3% 33.9 55.0% 2.8 4.5% 6.0 9.7% 8.8 14.2% 25.2 40.8% Note: Values (except Avg Retail Price) are in millions. Rllstar Product ContribUition 200 v V 150 ''l ~ 100c 0 6. Allright.""....• J Allround....• Ii 50 -<)- Allround+~{>----- -.{>-
  • 34. A0 .s-«: I {> -- I JI -50I 0 1 2 3 4 s 6PeriodL-..- l of l http://appl.interpretive.comlpss12/i.php 9/29/2013 12:57 PM PharmaSim Period # 6 Brand Manager Industry: team:a User: sain14343107-PLAYER Product Contribution - Period 6 iI Product Contribution for Allright I Unit Sales Avg Retail Price Retail Sales 7.9 $5.66 44.6 33.9 100.0% 5.7 16.8%
  • 35. 15.8 46.5% 12.5 36.7% 3.3 9.6% 6.0 17.7% 9.3 27.3% 3.2 9.5% Manufacturer Sales Promotional Allowance Cost of Goods Sold Gross Margin Consumer & Trade Promotion Advertising Total Marketing Product Contribution Note: Values (except Avg Retail Price) are in millions. I Rllstar Product ContribUition ! 200 I Tf VI 150 ';r I I -Tf I~ 100 I·:: /:;.. Allright I~ V Allround50 -~- Allround+I~ -- c-
  • 36. -;>- --- II 0 ~- aI "'-I JI -50I 0 1 2 3 4 !) 6Period, l of l http://appl.interpretive.com/pss 12/i.php 912912013 12:57 PM PbarmaSim Period #4 Brand Manager Industry: team:a User: sain143431 07-PLAYER Decision Summary - Period 5 I Decision Summary for A1lstar, Input for Period 5 li,1 Summary of Decisions (Company) Sales Force (#SF) Indep Drugstores 20 Wholesaler Support 30 Chain Drugstores 60 Merchandisers 20 Grocery Stores 90 Detailers 25 Convenience Stores 9 MassMerch 30 Total Sales Force 284 % of Budget Sales Force Advertising Promotion
  • 37. 35.3% 49.9% 13.9% Reports Ordered Purchase Survey $, Operating Statistics $, Sales Force $, Advertising $, Promotion $, Channel Sales $, Pricing $, Shopping Habits $, Shelf Space $, Recommendations $ Brand Analg Antihist Decon Cough Expec Alcoh Description Supp. AI/round 1000 4 60 0 200 20 4hr multi liquid AI/round+ 1300 8 100 0 0 0 12hr multi capsule Period 1 2 3 4 5 6 Replays: 0 0 0 0 0 0 Restarts: 0 Summary of Decisions (All round) Pricing Mfr Sugg Ret Price < 250 vol. disc. < 2500 vol. disc. 2500+ vol. disc. Wholesaler vot. disc. $5.39 25.0%
  • 38. 35.0% 39.0% 45.0% Advertising Budget (M$) Agency Symptom Targets: cold, allergy Demographic Targets: young singles $16.5 BMW lof3 http://appl.interpretive.comlpss 12/i.php 9128/2013 7: 15 PM PbarmaSim 20£1 Primary % Benefit % Comparison % Reminder % Promote Benefits: relieves aches, clears nasal congestion, reduces chest
  • 39. congestion, dries up runny nose, helps you rest 0.0% 50.0% 0.0% 50.0% Promotion Allowance (%) Co-op Adv.(M$) Product Disp.(M$) Trial Size (M$) Coupons (M$) WS Ind 15.0% 15.0% $1.5 $1.5 $0.0 $1.0 (0.50) Summary of Decisions (Allround+) Pricing Mfr Sugg Ret Price < 250 vol. disc. < 2500 vol. disc. 2500+ vol. disc. Wholesaler vol. disc. $5.19 25.0% 35.0%
  • 40. 39.0% 45.0% Advertising Budget (M$) Agency Symptom Targets: cold, allergy Demographic Targets: young singles, young families $6.0 BMW 30.0% 50.0% 10.0% 10.0% with Besthelp Chain 18.0% ..; ...; Groc 20.0% ..; ...;
  • 41. Conv MM 15.0% 15.0% ..; Primary % Benefit % Comparison % Reminder % Promote Benefits: relieves aches, clears nasal congestion, relieves allergy symptoms with Besthelp+ Promotion Allowance (%) Co-op Adv.(M$) Product Disp.(M$) Trial Size (M$) Coupons (M$) WS Ind 15.0% 15.0% $0.5 $0.8 $1.0 $0.0 Creative Design Decision Company Logo Link No link has been entered.
  • 42. Chain 18.0% ...; ..; Groc 20.0% ...; ..; Conv MM 15.0% 15.0% ...; http://appl.interpretive.comlpss12/i.php 9/2R/2011 7: 1'i PM PbarmaSim 30f3 Company Ad Link No link has been entered. Incident Incident: Detailing Changes
  • 43. Choice: None Selected http://appl.interpretive.comipss 12/i.php 9/28/2013 7: 15 PM PbarmaSim Period # 4 Income Statement - Period 4 Brand Manager Industry: team:a User: sain14343107-PLAYER ! Income Statement for Alistar Manufacturer Sales Promotional Allowance Cost of Goods Sold Gross Margin Consumer & Trade Promotion Advertising Sales Force Administrative Total Marketing Contribution after Marketing Fixed Costs Net Income Next Period Budget
  • 44. 406.3 100.0% 68.7 16.9% 177.0 43.6% 160.7 39.5% 15.4 3.8% 29.0 7.1% 11.1 2.7% 12.4 3.1% 67.9 16.7% 92.8 22.8% 72.5 17.8% 20.3 5.0% 45.1 11.1% Note: Amounts are in millions of dollars. 90 80 70 ~ 60•,...j ,...j 1"2 50 40 30
  • 45. 20 0 Rllstar Incone/EHpense I I " I",,", II 1 42 Period 3 1 of 1 http://appl.interpretive.comlpss 12/i.php 9/28/2013 7:25 PM PharmaSim Period # 4 Brand Manager Industry: team:a User: sain14343107-PLAYER Product Contribution - Period 4 I Product Contribution for Allround I i
  • 46. i I Unit Sales Avg Retail Price Retail Sales 120.0 $4.18 501.9 383.3 100.0% 64.7 16.9% 164.8 43.0% 153.8 40.1% 9.4 2.5% 19.0 5.0% 28.4 7.4% 125.4 32.7% Manufacturer Sales Promotional Allowance Cost of Goods Sold Gross Margin Consumer & Trade Promotion Advertising Total Marketing Product Contribution
  • 47. Note: Values (except Avg Retail Price) are in millions. I RUstar Product ContrIbut.Lon I 200 ! a a I 150 I ! a I~ 100,0 I~ fJ. AllroundIi 50 '7 Allround+ 0I V I -50 0 1 2 3 4 Period 1 of 1 http://appl.interpretive.comlpss 12/i.pbp 9/28/2013 7:26 PM