Pharmasim Presentation

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BCG Matrix, but Allround + and Allright are question marks * Higher percentage increase in sales prices than the inflation rate of 4.4% Ð Our prices are already relatively low Ð Chance to make up for our high promotional costs and fixed costs without making a huge price jump compared to other brands * Threats * Ethik is a threat to Allstar Ð They have the highest gross margin and net income, and their stock price is second to ours Ð End + and Extra combined are receiving double the amount of manufacture sales than Allround + Ð Ethik may create products in other categories * Besthelp is a specific threat to Allround Ð Its symptom relief fourth, but it is $1.20 cheaper than Allround Ð Not as many people intend to purchase Besthelp as Allround, but they are equal in percentage of sales Ð Besthelp has a greater brand awareness Ð Threats Cont. * Defogg is a threat to Allright Ð Have the same ingredients in the same form, and the same symptom relief Ð Defogg has a higher price than Allright, but they have better brand awareness and a higher conversion ratio. * The close to full capacity utilization of Ethik, B&B and even Curall Ð May try to price aggressively or increase marketing to acquire more market share * Marketing Activities * Increase Brand Trials for Allround to 85% * In order to achieve an increase in brand trials for Allround to 85%, we must use marketing tools to raise awareness and create a demand. Ð Coupons are effective for converting our competitorsÕ customers to our own product by offering a comparable product at a reduced price Ð Trial sizes are an efficient way of getting our product into the hands of the consumer * Reach a stock price of $150.00 * In order to achieve a stock price of $150.00 in the next three years, Allstar must promote is products proportionate to its sales * Allround has now received a new formulation and will need to be promoted again as new & improved Ð This will revitalize AllroundÕs sales and improve the overall condition of the company as a whole Ð Taking this opportunity in to consideration, as well as two new products beginning to ascend through the industry an increased stock price is within reason. * AllrightÕs Brand Awareness to be at 75%, and the Brand Trials to be at least 40% * In order to achieve our objective of making Allright the industry leader in 4hr Allergy Capsules, we must divert as much sales as possible from the other two competing products Ð BelieveÕs brand formulation consists of only four units of Antihistamine, whereas Alright consists of the Antihistamine and a decongestant. Therefore comparison ads being run on BelieveÕs lack of effectiveness and the inferior formulation should be beneficial to AllrightÕs share of the market. Ð Alright and Defogg have similar brand formulations and similar symptom relief, therefore we must compare on the basis of price and benefit * Defogg is currently over priced and continues to match inflation to consistently be just higher than the market average * Increase sales force * In order for Allstar to remain an industry leader and continue its growth and profit, its sales must also increase each year to consume its available market share * Our sales force is crucial to our products success in the market place and in order to support them correctly, there must be a proportionate amount of personnel to handle the growing volume of orders Ð Using the information from the channel of sales report, a proper decision can be made to allot the correct amount of sale agents to each team handling the different sectors Ð Increase Manufacturer sales to a billion dollars a year * In order to increase total manufacturer sales to one billion dollars a year, a strategy of increasing plant size and sales force must be followed. * For the past four years, Allright has been running its plants at or above capacity. Twice in the past four years Allright has seen an overage in capacity of 4-5% Ð This overage needs to be converted to income used to build larger and more efficient facilities Ð Growth in sales force as well as proper allotment of sales force has accounted for the substantial boost in AllstarÕs income * Introduce New Product * In accordance with relative product life-cycles a new product should be introduced within the next four years in order to sustain market competitiveness and broaden growth throughout the industry Ð Possible new products could be a reformulated version of Allround with a decreased amount of alcohol marketed toward child use * Increase Price * In order for Allright to recover profits lost to inflation, the prices of its products must be reevaluated annually Ð Inflation has typically increased 3-6% yearly for the past ten years Ð We have found that the best strategy is to adjust each price to the previous yearÕs inflation rate. This allows Allright to remain competitive while recovering any potential ÒlossesÓ due to rising inflation Ð Our industry trade-off grid has shown our prices have remained in the optimal zone for several years Ð Our customers are receiving a quality product at a comparable value * Lessons Learned * Stock Price * The most obvious way to tell how well the company is doing is the change in the stock price * Poor decisions will cause the stock price to drop, and as well as the opposite * Poor decisions made by us early allowed us to ratify the situation and make our stock price climb out of the basement * Stock Price Cont. * Early poor decisions caused our stock price to drop from 48.13 all the way down to 30.94 * During fifth year, figured out problem and price rose from 30.94 all the way to 110.54 over the past five years * First Year Mistakes * Lowered Price Ð We figured that if we were the leading company in the market for symptom relief we needed to lower our price in order to try and raise our most frequently purchased percentage, ultimately raising sales. Ð Not only did sales decrease, but lowering price caused a shortage in budget down the line. * Increased Sales Force but not Advertising Budget. Ð We didnÕt put any money into Advertising for Allround Ð Caused us to miss out on sales * Decreased Promotional Allowance Ð Should have never decreased promotional allowance for a new product. Ð Allround was still a new product. Should have taken opportunity to get name out in the market but didnÕt. * Second Year Mistakes * Made many of the same decisions as year one. Ð Should have learned form mistakes early * Increased Price Ð Increased the price, but not even enough to deal with inflation so ultimately served no purpose * Increased Promotional Allowance Ð Should have been done the year before, resulted in a catch up rather than company growth. * Year Three * Decided not to start a new product Ð This was not necessarily the incorrect thing to do, but it did contribute to the large drop in our stock price