Pharmasim highest stock price

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

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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.