Pharmasim Presentation.ppt

PharmasimPresentation Group2 MissionStatement AllrightisaleadingPharmaceuticalcompanyfoundedinprovidingaqualityproductatacompetitivevalue Oursuccessisattributedtoanongoingcommitmentfromourmanagementteamandsupportfromourstockholders Providingovertenyearsofrelieftoourcustomershasbeenourhighestpriority Ourmarketshareshaveincreasedannuallyandresearchhasyieldedanewproducttointroduceevery4years Allrightcontinuestoprovidepromotionalitemsforitsretailersandclientelealiketohelpreducecostsandbringinnewcustomers Lookingtowardthefuture Allrightwillcontinueitssuccesswithawellbalancedmarketingplanandremainanindustrybenchmarkforyearstocome MarketingObjectives IncreaseBrandTrialsforAllroundto85 ThecompanyshouldfocusonreachingthatgoalwithinthreeyearsBrandTrialsforAllroundisat59 7 andourmostfrequentlypurchasedisat21 8 IftheBrandTrialsareincreasedto85 theninratiotohowmanypeoplemostfrequentlypurchaseAllroundnow wecanexpectittobearound31 04 Howevertheretentionratioisstillthesameinthiscasesoyoushouldfocusonhavingthemostfrequentlypurchasedtobeat35 whichmakestheresultingretentionratio41 2 Reachastockpriceof 150 00 TryandaccomplishthisinthreeyearsTherehasbeenasteadyincreaseinourstockpriceoverthelastsixyearsAllstar sstockpricewentfrom 30 94to 110 00inthattime Allright sBrandAwarenesstobeat75 andtheBrandTrialstobeatleast40 SinceAllrightisaproductthatisinafairlynewcategoryofthemarket andwehavethesamesymptomreliefasDefogg weshouldgettheBrandAwarenessandBrandTrialsforAllrighttobothbeincreasedThisshouldbeexpectedtooccuroverthenextfiveyearsIfAllstarcanreachthesenumbers thenthemostfrequentlypurchasedforAllrightshouldhopefullyincreasetoaround20 ThiswouldhelpingettingAllstartobealeaderinthe4hrAllergyCapsulesegmentofthemarket especiallysincethisisanewarea Putcompetitionoutofbusiness OurmaincompetitorsforAllrightareBelieveandDefoggBelieveisnotasstrongasAllrightorDefoggwhichhavethesameingredientsYoushouldfocusonputtingBelieveoutofbusinesswithintwoyearsandDefoggoutofbusinesswithinfiveyears Increasesalesforce OurcompanyjustopenedupanewplantWithinthefirstyearthetotalsalesforceshouldbeincreasedfrom260to300Onewaytofigureouthowtodispersedirectsalesforceistobuythechannelofsalesreportdividethesalesineachcategorybythetotalsalesandmultiplythatnumberbythetotalnumberofpeopleinthesalesforce IncreaseManufacturersalestoabilliondollarsayear Thisshouldoccurinthenexttwoyears OurtotalManufacturersalesourcurrentlyat836 9milliondollarsayearWithproductionup ifthesalesforceisintherightplacethenitshouldnotbehardtoaccomplishthisgoal NewProduct WithrespecttotheProductLifeCycle anewproductshouldbeintroducedwithinthenext2 4yearsdependingonhowthingsaregoingwithAllround andAllrightWecanputmoneyformAllroundwhichisastarintheBCGMatrixandintothenewproductandhopefullygetacashcoworanotherstartocomeoutofit IncreasePrice ThepricesofAllround Allstar AndAllround shouldallbeincreasedannually incorrelationtoinflationInflationshouldnotoutweighthepriceincreaseforAllroundatallbecauseitisstillourleadingproductandhasthehighestpercentageofmostfrequentlypurchasedalongwithhavingthemostsymptomreliefThepricesforAllround andAllrightshouldnotbeoutweighedbyinflationeither butbemorecarefulinhowmuchthepricesareraisedeachyear becausetheseproductsarestillfairlynewanduntiltheMostfrequentlypurchasedpercentageisatleast40 thepriceshouldstayclosertoinflationincrease SWOTAnalysis Strengths Allstarbrand swell knownbrandnamehasbrandawarenessof76 1 andAllround hasanawarenessof57 3 15 9 purchasedAllround 5 8 purchasedAllround and5 7 purchasedAllrightResearchanddevelopmentteamAllroundleadinginsymptomrelief Allround isthirdandAllrightinthetopAllstarbrands have3ofthehighest6retentionratiosat36 5 32 5 and44 3 StrengthsCont Promotionsoverall especiallytrialsizesandcouponsAllroundhasthehighestconversionratioForallthreebrands abouthalfofourcouponswereredeemedHigherpercentageofpeoplepurchasedallofourproductsthanintendedHighcapacityutilizationof105 9 DecreasestheperunitcostHigherthanthatofcompetingcompaniesHelpsbalanceoutourhighfixedcostsDirectsalesforceHighestaveragesquarefeetofshelfspaceallchannelsAllstarbrands havehighestpercentageofretailsalescomparedtoproductsintheircategories Weaknesses Allstar spricingDoingwellinsymptomreliefandhavethehighestRetailandManufacturersalesHighestpromotionalallowanceandcostofgoodsoldGrossmarginislowerthanbothB BandEthik Allright sbrandawarenessat28 5 OtherbrandsinthesamecategoryhavehigherawarenesspercentagesOurretentionratioishigherthanBelieve DefoggHighunitcost thusahigherbrandawarenesswouldhelpmakeprofitObtaininginvolvementfromcustomersinco opadsandpointofpurchasedisplaysAllroundhas0 4 participatinginco opads 1 3 pointofpurchaseAllround has0 5 inco opads 3 1 inpointofpurchaseAllrighthas0 8 inco opads 4 2 inpointofpurchaseHigherpercentagesresultwhenweputinmoremoney WeaknessesCont OCMgroup sdecisiontodrasticallyloweradvertisingexpendituresonAllroundfrom20millionto5millionbetweenperiods4and7Besthelpraisedtheiradvertising andtheirbrandawarenessroseto6 7 higherthanusAllroundisastar Opportunities ConsumerdemandtorelievesymptomsProducteffectivenessisthemostimportantindecision makingInthepastyeartheworstsymptomswereaches chestcongestion andcoughingAllroundistheonlyproductwithanalgesics expectorants andcoughsuppressantsProduceacoughliquidAllstardoesnothaveavailableNoneofthecoughliquidshaveexpectorantsandcoughsuppressants61 6 peoplereportedcoughingasasymptom OpportunitiesCont Industrygrowthrateisat10 1 HealthisabigtrendNoinventionisunderwaythatwouldeliminatetheneedforOCMAllround Allround andAllrighthave16 7 5 6 and5 4 respectivelyAllroundisastarintheBCGMatrix butAllround andAllrightarequestionmarksHigherpercentageincreaseinsalespricesthantheinflationrateof4 4 OurpricesarealreadyrelativelylowChancetomakeupforourhighpromotionalcostsandfixedcostswithoutmakingahugepricejumpcomparedtootherbrands Threats EthikisathreattoAllstarTheyhavethehighestgrossmarginandnetincome andtheirstockpriceissecondtooursEnd andExtracombinedarereceivingdoubletheamountofmanufacturesalesthanAllround EthikmaycreateproductsinothercategoriesBesthelpisaspecificthreattoAllroundItssymptomrelieffourth butitis 1 20cheaperthanAllroundNotasmanypeopleintendtopurchaseBesthelpasAllround buttheyareequalinpercentageofsalesBesthelphasagreaterbrandawareness ThreatsCont DefoggisathreattoAllrightHavethesameingredientsinthesameform andthesamesymptomreliefDefogghasahigherpricethanAllright buttheyhavebetterbrandawarenessandahigherconversionratio TheclosetofullcapacityutilizationofEthik B BandevenCurallMaytrytopriceaggressivelyorincreasemarketingtoacquiremoremarketshare MarketingActivities IncreaseBrandTrialsforAllroundto85 InordertoachieveanincreaseinbrandtrialsforAllroundto85 wemustusemarketingtoolstoraiseawarenessandcreateademand Couponsareeffectiveforconvertingourcompetitors customerstoourownproductbyofferingacomparableproductatareducedpriceTrialsizesareanefficientwayofgettingourproductintothehandsoftheconsumer Reachastockpriceof 150 00 Inordertoachieveastockpriceof 150 00inthenextthreeyears AllstarmustpromoteisproductsproportionatetoitssalesAllroundhasnowreceivedanewformulationandwillneedtobepromotedagainasnew improvedThiswillrevitalizeAllround ssalesandimprovetheoverallconditionofthecompanyasawholeTakingthisopportunityintoconsideration aswellastwonewproductsbeginningtoascendthroughtheindustryanincreasedstockpriceiswithinreason Allright sBrandAwarenesstobeat75 andtheBrandTrialstobeatleast40 InordertoachieveourobjectiveofmakingAllrighttheindustryleaderin4hrAllergyCapsules wemustdivertasmuchsalesaspossiblefromtheothertwocompetingproductsBelieve sbrandformulationconsistsofonlyfourunitsofAntihistamine whereasAlrightconsistsoftheAntihistamineandadecongestant ThereforecomparisonadsbeingrunonBelieve slackofeffectivenessandtheinferiorformulationshouldbebeneficialtoAllright sshareofthemarket AlrightandDefogghavesimilarbrandformulationsandsimilarsymptomrelief thereforewemustcompareonthebasisofpriceandbenefitDefoggiscurrentlyoverpricedandcontinuestomatchinflationtoconsistentlybejusthigherthanthemarketaverage Increasesalesforce InorderforAllstartoremainanindustryleaderandcontinueitsgrowthandprofit itssalesmustalsoincreaseeachyeartoconsumeitsavailablemarketshareOursalesforceiscrucialtoourproductssuccessinthemarketplaceandinordertosupportthemcorrectly theremustbeaproportionateamountofpersonneltohandlethegrowingvolumeofordersUsingtheinformationfromthechannelofsalesreport aproperdecisioncanbemadetoallotthecorrectamountofsaleagentstoeachteamhandlingthedifferentsectors IncreaseManufacturersalestoabilliondollarsayear Inordertoincreasetotalmanufacturersalestoonebilliondollarsayear astrategyofincreasingplantsizeandsalesforcemustbefollowed Forthepastfouryears Allrighthasbeenrunningitsplantsatorabovecapacity TwiceinthepastfouryearsAllrighthasseenanoverageincapacityof4 5 ThisoverageneedstobeconvertedtoincomeusedtobuildlargerandmoreefficientfacilitiesGrowthinsalesforceaswellasproperallotmentofsalesforcehasaccountedforthesubstantialboostinAllstar sincome IntroduceNewProduct Inaccordancewithrelativeproductlife cyclesanewproductshouldbeintroducedwithinthenextfouryearsinordertosustainmarketcompetitivenessandbroadengrowththroughouttheindustryPossiblenewproductscouldbeareformulatedversionofAllroundwithadecreasedamountofalcoholmarketedtowardchilduse IncreasePrice InorderforAllrighttorecoverprofitslosttoinflation thepricesofitsproductsmustbereevaluatedannuallyInflationhastypicallyincreased3 6 yearlyforthepasttenyearsWehavefoundthatthebeststrategyistoadjusteachpricetothepreviousyear sinflationrate ThisallowsAllrighttoremaincompetitivewhilerecoveringanypotential losses duetorisinginflationOurindustrytrade offgridhasshownourpriceshaveremainedintheoptimalzoneforseveralyearsOurcustomersarereceivingaqualityproductatacomparablevalue LessonsLearned StockPrice ThemostobviouswaytotellhowwellthecompanyisdoingisthechangeinthestockpricePoordecisionswillcausethestockpricetodrop andaswellastheoppositePoordecisionsmadebyusearlyallowedustoratifythesituationandmakeourstockpriceclimboutofthebasement StockPriceCont Earlypoordecisionscausedourstockpricetodropfrom48 13allthewaydownto30 94Duringfifthyear figuredoutproblemandpricerosefrom30 94allthewayto110 54overthepastfiveyears FirstYearMistakes LoweredPriceWefiguredthatifweweretheleadingcompanyinthemarketforsymptomreliefweneededtolowerourpriceinordertotryandraiseourmostfrequentlypurchasedpercentage ultimatelyraisingsales Notonlydidsalesdecrease butloweringpricecausedashortageinbudgetdowntheline IncreasedSalesForcebutnotAdvertisingBudget Wedidn tputanymoneyintoAdvertisingforAllroundCausedustomissoutonsalesDecreasedPromotionalAllowanceShouldhaveneverdecreasedpromotionalallowanceforanewproduct Allroundwasstillanewproduct Shouldhavetakenopportunitytogetnameoutinthemarketbutdidn t SecondYearMistakes Mademanyofthesamedecisionsasyearone ShouldhavelearnedformmistakesearlyIncreasedPriceIncreasedtheprice butnotevenenoughtodealwithinflationsoultimatelyservednopurposeIncreasedPromotionalAllowanceShouldhavebeendonetheyearbefore resultedinacatchupratherthancompanygrowth YearThree DecidednottostartanewproductThiswasnotnecessarilytheincorrectthingtodo butitdidcontributetothelargedropinourstockpriceovertheyearStartinganewproducttakesalotofmoneyandwedidn tthinkitwouldbebeneficialtothecompanyifwespentmoneywedidn tknowweatherornotwewouldmakebackquickly DidnotchangePricingDiscountsOurdiscountsweren tlargeenoughtomakeitworthbuyinglargerquantitiesLostalotofwholesalerbusinessasaresultofthis YearFour FinallyintroducedAllround TookmoneyfrombudgetofAllroundinordertoincreasethepromotionandadvertisingofAllround WechangedourdiscountpercentagestotryandmakeupforthelossweincurredtheyearbeforeChangedwasoursalesforcelayout Whenlookedatothercompanies foundwewereconcentratingonlittleareaslikeconveniencestoresandnotasmuchongrocerystoresandwholesalers YearFourCont DispersedAdvertisingBudgetaccordingtowheretheproductfellintheProductLifeCycle WemadesuretopushcouponsforAllroundbecauseithadbeenonthemarketforawhile andpushtrialsizesforAllround becauseitwasabrandnewproductandwewantedpeopletotryit Didn traisethepriceofAllrounditwasalreadyonthebestfitlineforpriceandsymptomreliefCausedustohavealossthefollowingyearbecausedidn trecoverinitialcostoflaunchingAllround YearFive ForcedtomakebudgetcutsTookmoneyawayfromtheadvertisingbudgetofAllroundbutnotAllround becauseitwasstillanewproduct Decreasedoursalesforceaslittle