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Pharmasim

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Contents

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1 Pharmasim

1.1 Executive Summary

1.2 Objectives

1.3 Company

1.4 Competitors

1.5 Customers

1.6 Overall Strategy

1.7 Value Proposition

1.8 Product

1.9 Price

1.10 Promotion

1.10.1 Channels

1.10.2 Customers

1.10.3 Advertising

1.11 Distribution

1.12 Overall Learning Experience

[edit]Pharmasim

Sections of report:

1. Executive summary: Summarize your objectives, strategy, key outcomes and overall learning.

2. Explain the objectives that you set for yourself. These are based on the information provided by the case but explain how your viewed them and which ones you focused on, etc.

3. Explain the overall marketing strategy that you adopted and why. Explain your decisions based on the context of the situation; as well as sequential learning over periods. Explain how your strategy worked over the course of simulation, any adaptation or changes to strategy, your overall insights regarding the strategy adopted.

4. Explain the overall marketing mix (the marketing program) that you used and why. In other words, which tools or combination of tools did you use the most, how, why. Explain your insights about the marketing mix that you used and its effects. Do not summarize per period.

5. Your overall learning from the marketing planning and implementation experience: Including how this learning related to and/or extended the overall course learning.

[edit]Executive Summary

In the ten year time period that we were managing the AllStar brand, we had to make numerous strategic marketing decisions based on the information available to us. Our task at hand was not only to revitalize AllRound but consider extending the line and launching a new product. What made it very interesting was that our competitors would counter our every move, just like in the real world and so we had to constantly track their activities.

Before we began the simulation, we collectively decided on a few guiding principles to help us in our decision making. One of them was to broaden our portfolio when given an opportunity, to preserve our reputation as a quality brand, and to work in incremental steps towards long term gains.

AllRound was our flagship product and our superstar. We removed the alcohol content to give it a broader appeal. The extension we launched in the 4th period, AllRound+, gave us a focused window into the cough market and helped us diversify our risk. In response to a growing demand for cold liquid for children and to stem the growing clout of ColdCure and End+ we launched AllRight with expectorant to distinguish us.

Ultimately, we wanted our customers to come to AllStar for all their cold medication needs. We delivered this strategy by offering our products at great value, sustaining our brand image with quality advertising and selling through the channels that customers were most buying from. The dynamic nature of the market and our customers changing preferences made finding the right mix of product, price, promotion and distribution a challenge. Changing some variables would dramatically change the income, while some others would hardly move the needle. We tried to keep track of what our competitors were doing and learning from the mistakes they made.

We were not always the highest over the first few periods but we did not lose hope and kept using innovative strategies to garner market share. In the long run, our plan was so successful that we made 1.238 billion dollars in cumulative net income over the ten periods, the highest among our peers. We were able to put all our marketing skills to work in this simulation - it truly was an exciting learning experience.

[edit]Objectives

The OCM group is confronted with a number of decisions in the ten year timespan under consideration. Its brief is to re-examine and revitalize the marketing strategy of Allstar Brands' Allround and decide on whether or not to reformulate, extend the line and introduce a new product. If extensions and products are launched, decisions about the formulation and marketing strategy would be required and segments to be targeted would need to be identified. The aim is to maximize the cumulative income over the ten periods. We chose to create a multi-product company moving from a broad target to specific niches while maintaining high margins to maximize the long-term wealth of AllStar..

[edit]Company

Allstar Brands' Pharmaceutical division is managed by the OCM group. Our task was to ensure and maintain the long-term profitability and market share in a environment of budding competition and a changing market. Given the dynamic situation, every year the company would need to examine its portfolio and make strategic marketing decisions in the areas of product choice, distribution, promotion and pricing in order to establish Allstar Brands as the leader in both profitability and market share in OTC medication.

Financially, the Allround product is a successful and profitable one already racking up sales of $355.3 million in the period before we began to manage the product. The net contribution of Allround is $67.2 million after shouldering some of the corporate overhead. Fixed costs are of some concern because as we increase sales, production must accordingly increase which sometimes necessitates a doubling in fixed costs.

However, despite being the market share leader, Allround is viewed by some as overkill because it contains the maximum allowable quantity of all the possible components of cold medication (with the exception of expectorant). In addition, Allround is Allstar's flagship and only product while the majority of the competition has either two or three products.

[edit]Competitors

Despite