Marketing Plan
Marketing Plan
Marketing Plan
PharmaSim Analysis
Marketing Plan
______________________________________________
Joseph Burke
Table of Contents
Company Overview………………………………………………..……………………....3
Product Description…………………………………………………………..…………...5
SWOT Analysis……………………………………………..……………..………………..4
Marketing Strategy..………...…………………………..…………………………...........7
Target Markets/Customers…………………...…..…….……….………....8
4 P’s of Marketing…………………………………..……………………..9
Financial Projections………………………………………………………………..…....12
Executive Summary……………………………………………………………………....15
3
Company Overview
Allstar company provides a different formulation of cold and allergy medications that are
provides consumers, mass retailers, physicians, and wholesalers with pricing and
promotional allowances that are movable and friendly to the market. The products the
company offers is effective and chemically efficient as proven in research markets and
consumer reports. Allstar Brands’ is a reliable and sustainable company that has been
in business for nearly 96 years. The company maintains a competitive advantage and
Brands management team makes decisions based standings in each industry and
market research.
Allstar already had an established product in the market at the beginning of the
simulation. The company developed a reputation from its cold medicine “Allround” as
“one of the most effective brands on the market at reducing multiple cold symptoms,” as
well as being more successful than average product in a financial sense. There were a
number of strengths and weaknesses to the company both before and during the
simulation that contributed to and influenced our brand strategy. From there, Allstar
Since “Allround” was already an established product with very high product awareness,
we did not need to create anymore promotion around the product, other then developing
it beyond the point to which it had already grown. As previously stated, the Allstar brand
had been very successful financially with its Allround product, and the amount of
revenue that the company had at the start of this simulation significantly affected the
strategy as well. Because of the financial situation the business started of with, our
group was able to invest in the 2nd most expensive advertising agency. We believe that
this helped us to stay ahead of the industry in a promotional sense, at the start of the
year one our business already had more promotional support than any other brand on
the market. This financial stability also allowed us to employ a large sales force, totaling
When staffing the sales force we focused on two of indirect channels, which had proven
successful in the trial periods. This also meant that much of the business was being
done before the product even got to the consumer. With the added income, we were
later able to add employees in direct sales channels where we best saw fit based on the
Strengths-
Weaknesses-
Opportunities-
Threats-
competition
Product Description
Allright:
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Allright is the second product from Allstar company. It was developed and is advertised
on it’s allergy relief capacities. This new product was introduced during year six and has
and decongestant offering a four hour relief after taking a capsule. As mentioned above
Allround which is our main product has had some complaints of alcohol use. By
introducing Allright our company decided to enter the niche market for allergy medicine.
Doing so, introduced a new competitor “Defogg” and reintroduced an old competitor
with “Believe” from the B&B Healthcare brand. Even though this product was new we
were able to better provide a relief perception to consumers than the rest of the market.
This has helped us keep our sales at a steady growing pace. (“PharmaSim”, p. 6)
Allround:
Allround is the main product offer by our company Allstar. Allround has been introduced
almost 11 years ago in the Cold medicine business. Allstar believed in their product
composition from the start and never changed the formula. It is composed of Analgesic,
decongestant, cough and also alcohol. Alcohol, for example raises questions in the
consumer’s mind about it’s negative impact on their health. It may only be used by
adults because of the alcohol composition but also helps the patient get more relief.
Just like Allright, Allround effects last for four hours but is administered in liquid. Despite
being so chemically complex this product has had the best satisfaction rate in the cold
market according to consumers. Allround being a cold medicine has the advantage of
providing relief mostly for aches, nasal congestion, coughing and runny noses.Our
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satisfaction rate was the highest with 51% we can therefore assume that our brand
Marketing Strategy
Our objective as a company is to create value for our stakeholders. To measure our
market shares. Our company was able to achieve its objective with a constant growth in
revenues and sales but also by reaching a capacity utilization of near 100%. Thanks to
Allround, we were able to develop Allright faster by using parts of resources (ie: funds,
B&B Healthcare. We have noticed however that Allright was also eating Allround’s
profits due to both being perceived as an allergy relief at the same level. Allright was
however not discontinued at anypoint because of its help to our market focus strategy to
solidify our company’s assets (“Pharmasim”, p 36). Our product formula is the best in
the cold medicine market. With Allround we were able to adopt a differentiation strategy
as we noticed prices for BestHelp were perceived to be high but their sales were still
high.
Target market
Allround is a product of multiple usage as talked about in the product description. This
has helped Allround gain market share in markets it was not even in. Allround is
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advertised as a cold medicine and there are multiple relief agents that can be used to
treat other conditions with similar symptoms. Allround provides relief for aches, nasal
congestion, chest congestion, runny nose, coughing and allergies. This makes it a direct
competitor of cold medicine products like ColdCure, BestHelp and Dryup but also of
allergy, nasal and cough medicine at a lower intensity. Allright on the other hand, was
our ticket to enter the allergy market which was growing at a fast rate providing great
Target customers
Our company competes in two different markets and that gives us two different target
customers for each product. We have tried differentiating the two products so that they
would be complementary of each other. That is the only way to escape self-cannibalism
of our allergy relief product. Allround has been a very polyvalent product as mentioned
below with many ingredients including alcohol. This has made us reconsider a more
narrow customer target of young adults with cold symptoms and who don’t want to pay
the highest price tag to get relief. Our prices are perceived to be lower than that of our
top competitor’s product Besthelp but our product efficiency is at the same level pushing
us to use pricing as an advantage. The introduction of Allright with it’s non alcoholic
composition combined and its allergy relief capacities, we were able to also include
Distribution channels
From using our “shopping habits” report we noticed that allergy and cold medicine were
purchased more into grocery stores and chain drugstore but very poorly for
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convenience store. (“Interpretive Simulations”, 2019)This has increased the need for
from salespeople (“PharmaSim”, p. 38). Mass merchandisers are also well performing
points of purchase for cold medicine therefore requiring a slightly higher discount as
As said previously, the company started off the first period with the product Allround.
This general cold product already had 27.8 percent of the market share in the industry.
Allround also already had solid brand awareness at 69.3 percent as proven by the
(“Interpretive Simulations”, 2019) This number was the second highest in the industry
only behind competitor “Besthelp”. From here. We only had to further improve the
product where we best saw fit, if it was price, promotion, or digital marketing. Looking
back on the simulation, the one thing we missed doing was removing the alcohol from
the product which would have further opened up the market and attracted new
consumers to it.
We then introduced Allright in Period 6. The reasoning behind introducing the product
was to penetrate the allergy relief sector that the company had previously been lacking.
Our advertising for Allright focused on relieving allergy symptoms with minimal side
effects. Promoting the allergy relief was something that were not promoted for Allround.
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Since the Allright and Allround products addressed separate sectors in the industry,
allergy relief and cold symptoms, our company was confident that the addition of Allright
would not hurt our cash cow product which is Allround. We were confident in our
decision to introduce this new product because of our positive sales from existing
products. Having a strong company performance and brand awareness in prior rounds
made us even more confident that we were prepared to launch an allergy product. The
strong brand awareness of 76%, existing sales support, and large budget of $18M
resulted in a 10.7% market share in Allright’s first period on the market. (“Interpretive
Simulations”, 2019)
Our pricing strategy throughout the course of the simulation followed the trend of the
trial periods and results of the first couple periods.The results of the trials showed that
starting at $5.29 MSRP maximized net income, retail and manufacturing sales. At this
point we also offered minimal discounts to the wholesale sector and the 250-2500 unit
section. This was to try and force higher volume sales. We looked at the market
conditions in each period and base our decisions on pricing and promotion on the
For advertising we used, the Tier 2 advertising firms in the starting periods. With
increased budgets in later rounds, we had the additional funds to use BMW, the better
advertising firm. As mentioned above, young families were our primary advertising
target with primary and reminder messages especially for Allround. Benefit messages
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and trial budgets were increased when the Allright product was introduced. Point of
purchase promotions also proved to increase brand awareness, market share, and unit
response to coupons so we kept the budget the same and at a minimal. Since Allround
was already an established product we found that offering free trials would have no
impact and would be a waste of budget. However, we set budget aside to offer free
trials for Alright since it was a new product and just entered the market. We also found
the digital marketing did help our brand awareness and helped our new product Allright
For place we changed our salesforce every period based on what was trending during
the period. By period 10 we found that chain drug stores were bringing in the most
amount of business so ultimately we put the majority of our salesforce in this area for for
direct. For indirect sales force, we put the most amount in wholesale support which
Projected Changes
Period 9 was a really good year for Allstar as a whole. Our stock prices went up 15.3%,
Net income 56%, marketing efficiency 59% and an increase of 6 millions units to the
Unit sales. These outstanding growths are due to a misallocation of resources causing
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sales to go down for Allround with less promotion and visibility. Prices for Allright were
perceived to be low even though our strategy was to introduce Allright as a more
expensive alternative with high benefits. Another issue we’ve been having is operating
overcapacity which can bring more negatives than benefits to our Net income.
Advertising spending for Allround had been consistently decreased for the profit of
Allright. We can now stop considering Allright as a new product and re equilibrate
Advertising spending for both. Accounting has reported that Allround and Allright’s
prices are too low. This can be explained by our decision to reallocate more promotional
funds more towards Allround and Advertising funds more towards Allright. For period 10
we will have to lower both Allright’s advertising expenses and Allround promotional
advertising. We expect that this will make up for the lost in sales for Allround as
Allright's brand awareness is growing at a steady pace. We will also have to reallocate
more co-op advertising allowance for Allright to push more consumers to try it. To solve
our overproductivity we will need to raise the price accordingly and make up for the lost
in profit. Discontinuing Allright will not be an option for us this year as we’re still gaining
Financial Projections
By period 10, we raised our MSRP for Allround from $5.79 to $5.95. The reason for this
was to balance out what we were spending on special decisions, which in turn added
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value to the company as well as the product. In addition to raising the MSRP for
Allround, we also lowered our discount we offered to consumers to balance our budget
as well. The promotional cost for Allround was $1.9 million and advertising costs were
$3.9 million. We also decided to utilize digital marketing to some extent, in which we
spent $0.3 million. The unit sales for Allround were 64.6 million, it’s gross margin was
$102.8 million and manufacturer sales were $250.4 million. From this, Allround had a
share of 9.2% for retail prices in the market, as well as a 9.3% share for manufacturer
sales and a 10.4% share for unit sales. (“Interpretive Simulations”, 2019)
For Allright, we increased the MSRP from $5.99 to $6.09 in period 10. Since this was a
fairly new product, we did not want the price to remain low. We decided to keep the
same discount offered to customers during period 9 in period 10, which was 32.6%.
Since this was a new product and because we raised the price, we wanted to maintain
this percentage based on customer satisfaction. The promotional costs were raised
from $1.9 million to $2.3 million. The reason for this increase was due to it being a new
product and to make it easier for consumers to locate the product when shopping.
Advertising costs increased from $4.6 million to $4.9 million, which also was purposely
raised in order to make it easier for the customers to find. Digital marketing costs
remained the same at $0.4 million since we put more money into promotion and
advertising. The unit sales for Allright were 21.4 million and it’s gross margin was $28.9
million. At the end of period 10, Allright’s share of retail sales were 3.3%, as well as it’s
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share of manufacturing sales were also at 3.3% and it’s share of unit sales in the market
was 3.5%.
Based on period 10, our projections for period 11 would be to leave the MSRP for
Allround at $5.95. Since unit sales remained at 64.6 million during period 9 and 10, it
would be best to leave the price the same. Based off of feedback from the customer,
they were somewhat satisfied with the product, therefore the price should remain the
same and consumer promotion should increase. The customer discount for period 11
would be raised from 32.6% to 35% in order to satisfy consumers. More money would
be put into promotion rather than advertising in period 11. We would raise promotional
costs to $2.9 million and lower advertising to $3 million. By doing this we hope unit sales
would increase from 64.6 million to 66.3 million in this period. This would hopefully
increase the gross margin to $105.2 million and manufacturer sales to $254.1 million.
Allround’s share in the market regarding retail price will increase in period 11 to 9.4%,
it’s share in manufacturer sales to 9.5% and it’s share in unit sales will increase to
For Allright, we would increase the MRSP in period 11 to $6.15. The customer
promotional and advertising cost by $1.8 million individually and raise digital marketing
costs from $0.4 million to $1.1 million. At the end of period 10, customers were still
having difficulty locating the product, therefore increasing cost throughout all channels
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should resolve this issue in period 11. This hopefully will increase unit sales from 21.4
million to 23.4 million, since customers were happy with the product and made frequent
purchases based on feedback from period 10. From this, we are projecting that the
manufacturer sales will increase to $90 million and the gross margin will increase from
$28.9 million to $30 million in period 11. Allright’s share in the market based on retail
sales are projected to increase from 3.3% to 3.6%, the share of manufacturing sales
from 3.3% to 3.6% and an increase in it’s share of unit sales from 3.5% to 4%.
Executive Summary
Overall, our group found that listening to the consumers and following the reports and
surveys best helped to make decisions each period. Also, if we could do it over again
we would have removed the alcohol from Allround product to open up the Medicine to
more consumers. We also would have waited a little longer to introduce a new product
since the Allright product did not have much impact on the market to start off. Next we
found that since our company started off with a product that already controlled a large
amount of the industry we could lower the advertising budget and use the money
elsewhere. Another big part was pricing. We figured out that it was very important to
keep the premium high pricing for Allround to ensure the product would stay the
company's “Cash Cow”. From there we could lower the promotion budget for Allround
Graph 3: MSRP
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References
https://schools.interpretive.com/fsui2/data.php?token=0&c=filedl&id=ugohfu/mnmxohy_nugohf
um_1w3-&z=1575586209100.
https://schools.interpretive.com/fsui2/index.php?token=0
https://portfolium.com/entry/pharmasim-marketing-branding-simulation.