The PharmaSim Case - Tezir



STRATEGIC PLAN

FOR

PHARMASIM

Present to:

Janet Haist

Marketing Program Professor

George Brown College

Presented by:

Nik Rentas

Turgut Tezir

Business Marketing Analysis Program Students

George Brown College

June 29, 2006

OUTLINE

|Mission Statement…………………………………………. |2 |

| | |

|Environmental Analysis…………………………………... |2 |

| | |

|Competitive Analysis……………………………………… |3 |

| | |

|Strategic Alternatives……………………………………... |4 |

| | |

|Goals and Strategies……………………………………….. |5 |

| | |

|Control and System………………………………………... |6 |

1. Mission Statement

“Your family’s health is #1 at Allstar; the Industry leader in over the counter cough cold and allergy medicines.”

2. Environmental Analysis

Strength

▪ Have biggest market share

▪ Have good public image, brand awareness

▪ Better quality product

Weakness

▪ Have side effect

▪ Have high price

▪ Have one product

▪ Have lower retention rate

Opportunity

▪ Brand available three forms

▪ Line extension and development of new medicine

▪ Reduce Cost

Threat

▪ Competitors with lower prices

▪ Value brands

▪ Large number of competitor

▪ Growing industry

▪ Customers preference to single symptom products

3. Competitive Analysis

|Factors to Analyze |Competitor 1 |Competitor 2 |

| |Allround |Besthelp |

|Products |4 hour multi-liquid medicine contains an analgesic, |4 hour cold capsule containing an antihistamine and a |

|key features/benefits |an antihistamine, a decongestant, a cough |decongestant. |

| |suppressant, and alcohol. | |

| | | |

|Positioning |For night time relief due to the strength of the | |

| |medication, alcohol and antihistamine. #1 Brand on |For daytime relief of colds due to the decongestant and|

| |the market, advertised as a cold medicine. |lack of alcohol. #2 Brand on the market for colds. 10% |

| | |higher recommendation by Physicians and Pharmacists. |

| |Young singles, young families, mature families, empty| |

| |nesters, retired. |Young singles, young families, mature families, empty |

|Target market (s) | |nesters, retired. |

|Price |$5.49 MRSP, higher end price justified by brand |$5.29 MRSP, higher than the average, 2nd to Allround in|

| |awareness and popularity. |awareness and popularity in the cold medicine market. |

|Promotion Strategy |Sold in mainly in chain drugstores and grocery stores|Steadily climbing to near equal levels of shelfspace. |

| |with less of a focus on independent drugstores and |2nd in promotion activity. No trial campaigns but run |

| |convenience stores. Also involved in a trial |a comparable coupon campaign. |

| |campaign and coupons. Retains highest amount of | |

| |shelf space. | |

|Competitive Advantage – key |Strongest most well known brand. Multi-Liquid allows|All time leader in professional recommendations as a |

|differentiator |for many promotional advantages. |cold medication. |

|Strengths |- Market leader. |- New product released with more potency. |

| |- Versatile multi-liquid. |- Highest recommended product. |

| |- Highest market share based on sales. |- Gaining popularity over periods. |

| |-Highest distribution. |- Industry leading operating statistics. |

|Weaknesses |- Low retention rate. |- Product is too focused |

| |- Only one product. |- High satisfaction in cold segment, well below |

| |- Trends leading to capsules. |Allround in cough and cold. |

| |- 2nd in recommendations. | |

4. Strategic Alternatives

In examining the data over the last number of periods it become evident that Allround is losing ground in all aspects. Various changes have been made to the budgets and promotional expenses to try to curb spending and streamline things while keeping inline with industry standards. A few items stand out as major problems, they are,

1. Retention problem still exists after increases in marketing and sales channel distribution

2. Competitors introducing new brands and reformulating

3. Misallocation of funds nearly every period, i.e. poor sales and industry forecasting

These 3 problems can be fixed. The 3rd problem will take time as the marketing department becomes more experienced. Bold moves in the past will become smaller more calculated ones in the future. The 2nd problem will also be solved when, in upcoming periods Allstar Brands will introduce an all together new product. Reformulations will also be looked at as trends are pointing to single symptom medications being preferred over multi-symptom medications. The 1st problem will have to be dealt with through some in-depth analysis of spending rates in the promotions and sales department. More work needs to be done in allocating resources to the right areas. Looking for that competitive edge over the competition might have to replace the current philosophy of following industry standards and adjusting accordingly.

5. Goals and Strategies

Goal:

Allstar Brand’s goal is to further expand over-the-counter market position by developing and marketing high-quality products.

Objective:

To obtain a total market share of 30% of the OTC cold cough and allergy remedy market end of 2007 and to penetrate the cough market.

Strategies:

1. Promotion: Increase brand awareness by continuing tester sampling and coupon campaigns making minor adjustments that fall inline with industry trends

2. Launching new product in capsule format to go inline with industry trends.

3. Launch new product with opposite attributes to take on the other end of the spectrum.

4. Expand Distribution channels.

5. Reduce side effects.

6. Control and System

Marketing control and system should be tested end of each year and end of each promotion time period. Company’s performance will be measure with industry standard and previous year. Below calculation will help us to plan better strategies for the future.

1. Calculate the percentage gain or loss in sale

2. Calculate the markdown percentage

3. Calculate Stock turn rate

4. Calculate Market Share

5. Calculate gross margin percentage for each product line

6. Calculate debt equity ratio

7. Break even analysis

8. Response Rate Analysis:

9. ROI: Test various list to ensure decreasing marketing costs and then increasing ROI.

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