TABLE OF CONTENTS
Executive Summary 2
Mission Statement 3
SWOT Analysis/Target Markets 3
Marketing Objectives 5
Marketing Activities 5
Lessons Learned 7
Supplemental Graphs 10
When you go to a drugstore because you are sick, you want the best medicine for
your money, you want something that will give you instant relief without any side effects.
Allstar Brands prides itself on the thoughtful consideration put into developing formulas
for products that will meet our customers’ needs and wants. Our first product Allround,
targets the areas of aches, fever, nasal congestion, chest congestion, runny nose, and
cough. This liquid dosage provides a multi-symptom relief for up to 4 hours. Our new
product, Allround+ provides the same basic relief but in a more convenient, long- lasting
12 hour dosage.
As leaders in the over the counter cold and allergy remedy industry, our long term
strategic plan for our two over the counter products was to pursue new opportunities in
the industry in order to gain market share and increase overall profitability for Allstar
Brands. Over a ten year period we implemented a competitive marketing strategy that
allowed us to successfully meet these two objectives.
The marketing activities we engaged in focused around distribution channels and
promotion activities. The company closely monitored the other brands in the market to
maintain competitive pricing and sales. Because of this we were able to keep Allround at
the top of the industry during each period. We introduced the Allround+ brand in the
fourth period in order to reach a different market segment and continue to gain market
share. After a few periods, the introduction of Allround+ s ignificantly increased our
profitability and Allround’s status as a high quality brand.
Overall our marketing activities were very successful. During the 10 periods, our
stock price had risen $62.95 to $109.55, our net income increased $113 million to $199.8
million, and our retail sales grew from 35.5 million to 1 billion.
The mission of the Allround Brand Management Team is to guide the
development, production, and marketing of the Allround Brand line of products to
become one of the top brands in the over the counter cold and allergy remedy market. In
achieving this goal, our main priorities will be to ensure the satisfaction of our customers,
growth of our employees, profitability of our shareholders, and the overall well-being of
the surrounding community.
SWOT ANALYSIS / TARGET MARKET
The following SWOT analysis captures key strengths and weaknesses within the
company and describes the opportunities and threats facing the Allround Brand
Allstar Brands has a strong market presence and a great reputation for high quality
Allstar Brands’ two over the counter products (Allround and Allround+) are market
share leaders in the cold and allergy remedy market.
Both Allround and Allround+ lead the market in consumer satisfaction at 66% and
The Brand Management Team, consisting of only three employees, is very small
compared to competitors and cannot as easily take on new products and/or markets.
Cost of goods sold for both over the counter products are very high, decreasing
gross margin and in turn, net profit.
The Research & Development Department is capable of formulating the Allround
Brand to the Brand Management Team’s exact specifications.
The Research & Development Department is working on formulations that are
currently restricted to prescription drugs and will be able to introduce these
products upon approval by the FDA.
A new plant is being built for use by the Allround product line that will allow an
increase in capacity.
FDA regulations may hinder the introduction of new products into the market and
cause extensive research efforts to be void.
Firms with bigger staffs may take advantage of the internet market which is
currently a prominent way to increase convenience for consumers.
Competitors are known to be working on the development of similar medications to
Allround and Allround+ which may lead to a decrease in the market share of
Allround’s customer base can be described as middle to upper class retired couples who
reside in Northern suburban areas prone to suffer from colds, aches, and chest congestion.
Allround+’s customer base can be divided into two distinct groups:
Middle class singles between the ages of 20 and 35 who reside in urban areas and
have at least a college education. This market benefits most from the non-drowsy
(no alcohol) aspect of Allround+.
Persons between the ages of 20-35 who engage in lots of physical activity,
especially extreme winter sports, who benefit from the convenience and simplicity
of a twelve hour multiple symptom cold caplet.
The company’s goal is to maintain long-term profitability and market share in the
context of an increasingly competitive and changing environment. The company uses the
available tools to perform a market analysis to help in the decision making processes
This process should be used repeatedely in order to continue the company’s status as
an established leader in both profitability and market share in the OTC cold and allergy
medication market. Marketing goals for the future should include:
1. Increasing brand awareness from 82.9% - 85% for Allround and from
72.6% - 80% for Allround+ (Figure 1 at end of report).
2. Increasing sales in the available channels of distribution between 5% -
20% (Figure 2).
3. Maintaining consumer satisfation between 50% - 70% (Figure 3).
4. Creating consumer brand loyalty towards company’s products (Figure 4).
5. Increasing the difference between intended purchases and bought
purchases from 0.2% to 1% for both products (Figure 5).
In order to achieve the company’s set marketing objectives, the Brand
Management Team should engage in several activities.
Prices should be increased annually at a rate slightly higher then the inflation rate
in order to keep up with production costs. Also, use the trade-off graph annually to help
in the pricing process since it provides a comparison of symptom relief and price between
the Allround brands and its competitors.
It is helpful to purchase marketing statistics in order to compare performance
against competition. These statistics also provide insight into our competitors marketing
strategies, which can be used to improve our own performance.
The Brand Management Team should support its products, Allround and
Allround+, throughout their different life cycles and engage in a strategy that secures
market share and profits for Allstar Brands.
Marketing Objective 1: Increase brand awareness.
In order to achieve this objective, the Team must concentrate heavily on primary
and benefit advertising during the introduction stages of a product to help create
familiarity of the brand with the consumers.
As the product grows and matures, the Team’s emphasis should shift first to
comparison and then reminder advertising, while slowly diminishing first primary and
then benefit advertising. The type of advertising used should always coincide with the
life cycle of the product. This strategy can be used for the entire product life cycle and
for each new product in order to ensure maximum brand awareness with consumers. The
advertising budget should also vary according to the current brand awareness statistics for
the particular product and the life cycle of the product.
Marketing objective 2: Increase sales.
In order to achieve this objective, the Team must review the distribution process and
sales force allocation. Sales force should be allocated to each channel depending on the
percentage each channel contributes to the company revenue and more sales force should
be provided to channels showing higher growth in order to increase market penetration as
much as possible.
To gain shelf space, the Team should provide competitive volume discounts to all
of its channels of distribution. It is thought that higher volume discounts should be given
to wholesalers and merchandisers to encourage bulk buying as this creates a better profit
benefits for both the customer and the Allstar Brands.
Marketing Objectives 3-4: Consumer satisfation and brand loyalty.
This part of the company marketing strategy was interrelated with the first two
strategies described above. In order to achieve this objective, the Team should
reformulate products and develop new products that are specific to needs of customers
within a product’s target market. The Team should use marketing statistics to research
the needs and wants of potential and current customers and gear the marketing mix
towards these needs and wants.
As prices are increased due to inflation and manufacturing costs, relief should be
provided to consumers by means of coupons. This helps in maintaining old clients while
at the same time creating opportunities for consumers to switch from a competitor’s
brand to Allround.
Marketing Objective 5: Increase bought purchase percentage.
In order to achieve this objective, the aspects advertising and promotion should be
utilized. Benefit and comparison advertising should be increased in order to emphasize
the benefits of the product and the advantages the product has over its competition. Co-
op ads and point of purchase displays should be the main promotional focuses in order to
encourage consumers to buy Allround instead of the preferred brand while at the store.
All in all Pharmasim taught us all valuable lessons in marketing. We started the
simulation, none of us knowing much about executing the concepts of marketing and now
we are all marketing geniuses. The simulation started out with Allstar, our company, as
the leading company in the field of pharmaceuticals. We endured some rocky paths and
struggled at first, as would most that are new to the marketing field. We fell to third in
stock price, far behind the top two companies but by the end we were second with only a
few dollars separating us and our top competition. Had we had an extra period or two,
we are confident that Allstar would have had the highest stock price in the
Price was our main focus going into the simulation. After all, every consumer
takes notice of how much they are paying for the product they are buying. Our strategy
was to keep Allround’s price above all of our co mpetitors. To do this we increased price
each period a few percentage points above inflation. We felt this was the way to go
because we had a high satisfaction rating and high brand awareness. Consumers were
comfortable enough and trusted our product enough that they were willing to pay a little
extra for higher quality. Eventually we added a new product, Allround+. We then
lowered our price for Allround and put Allround+ at a modest price level until we built
brand awareness for Allround+. We found it was not a good idea to lower our prices as
this was the period in which we began to see a drop off in sales. Once you establish a
product as elite, you should maintain its price range in that elite status and never give
your customers the thought that quality was sacrificed in production.
Whenever we had the opportunity to change our formula, we took advantage of it.
Even when we had a high satisfaction rating, we understood that there are always ways to
improve our product. We concentrated on what symptoms were most often reported and
added and subtracted ingredients based on those statistics. When Allround+ was
introduced, we were the only twelve hour multi-symptom cold pill on the market. It was
important for us to give our customers what they wanted and needed. If we can invent a
new product that is better and more effective to our consumers, we must do it. As our
new products developed, we did in no way neglect our old products. We wanted to push
Allround+ and show that it was the best product available, however we realized that there
are consumers who favor and prefer Allround and we want to keep them satisfied.
Our biggest mistake of the whole simulation was that we were not utilizing our
assets to the fullest. Our strategy for distribution was to load the shelves with our product
assuming people would buy it wherever it was sold. We put our product everywhere,
from independent drugstores to mass merchandisers, in excess. One of the most
important aspects, as we learned, was to utilize our retailers to the best of their capacity.
If independent drugstores only account for a small percentage of our sales then there is no
need to overload them with our product. We want our product to be primarily sold where
people are more likely to buy it. We started seeing the best success when we distributed
our product according to our sales figures; our stock price, capacity utilization and net
income all increased.
We used the aspect of promotion mostly to complement our changes in price.
When we had a rather large increase in price, we increased our promotional allowance
and put out more coupons, trial sizes, and point of purchase displays. This strategy was
an attempt to lessen consumer’s concern about the price increase by distracting them with
the discounts. At times when we had too much promotion and too many discounts, the
diminished effect was reflected in our stock price. It was better to keep promotion fairly
consistent with only gradual increases each period than to fluctuate our promotiona l
allowance between highs and lows. Doing the former would offset our price increases,
but at the same time foster an increase profit. Advertising is where we put most of our
budget. We wanted to make consumers aware of our products, make sure they did not
forget our products, and make it known that our product is best. Whenever we had any
leftover budget after all our decisions were made we put it into advertising. Our
advertising techniques worked out pretty well for us as we maintained high brand
awareness and retention rates.
Every decision we made, we kept the consumer in mind. We wanted to give them
exactly what they wanted and exactly what they needed. We never sacrificed customer
satisfaction or needs. Whenever we made a price increase, we ra n more promotions to
help keep our product affordable for our customers. We took great pride in the
accomplishment of having the highest satisfaction and highest retention rates.
As stated before, we went into the simulation with price being our main foc us.
We learned that all of the P’s were equally important. It was not to the benefit of our
consumers to focus on one as apposed to another. We did not dominate the
pharmaceutical field as we had all hoped, however we were successful and we did see an
improvement as the simulation went on. That being said we made the right adjustments
and Pharmasim definitely was a learning experience that will help us all in any future
FIGURE 1 – Brand Awareness
FIGURE 2 – Sales
FIGURE 3 – Consumer Satisfaction
FIGURE 4 – Consumer Loyalty
FIGURE 5 – Consumer Purchase Intentions