add on for simulation paper

1. MISSION STATEMENT:

To provide our customers with the best medicines to help alleviate common cold and allergy symptoms in order to help you get through your day.

2. MARKETING OBJECTIVES:

· To emphasis grocery store sales and dominate this space

· Increase stock price $10.00 a share every year

· Increase the sales for to at least 300 people over the next five years

· To increase net income to $100 million in the next eight years

· To increase brand awareness to 85% for Allround.

· Spend no more than $22 million on Allround brand advertising.

· Increase promotional allowances to 20% for Grocery Stores over the next three years

· To keep cost of goods sold under 40%

3. SWOT ANALYSIS:

STRENGTHS:

· Brand awareness peaked at 85.8% for Allround, the highest of any competitors

· Allround is the most often purchased brand

· 18% of the market intended to buy Allround, 18.5% actually bought it

· Point of Purchase promotion strategy is working

· Allround dominates sales with 18.3% of the market

· On average, Allround have 1.7 square feet of shelf space. In many cases, this is three times that of competitors. All Allround products consistently control shelf space.

· Stock price has nearly tripled in 4 years and continues to show a path of growth

· Allround+ is the most recommended product of its kind

· Allright is the most recommended allergy medicine

· Allstar’s products lead the market in satisfaction across the board

· Allround dominates the retired market with the closest competitor holding half the share of Allround,

WEAKNESSES:

· MSRP fluctuation. At times the price failed to keep pace with inflation. At other times, the price was considered too high. The products’ price was not consistent during the first years (periods).

· The gross margin dropped so much in the first few years that is has just now recovered to its original percentage.

· Allstar’s sale force is large relative to competitors. Likely to be unnecessary due to the market dominance of Allstar’s products.

· The cost of goods sold is significantly higher than Allstar’s closest competitor, B & B.

· Allstar’s net income is significantly lower than B & B’s

· Allround+ trails Besthelp+ in every channel.

· Allround’s sales have dropped consistently over time to the point of matching Besthelp.

OPPORTUNITIES:

· Convenience stores’ growth is currently at 25.9%. Allstar’s focus on grocery stores may need to alter in order to capitalize on the growing convenient store market.

· Retail sales unceasingly increase by ~6%. A focus on retail and away from mass merchants could be beneficial.

· The trend among competitors is limited or no alcohol in products. An alcohol-free brand reformulation may be due.

· There are no 12-hour multi-liquid products on the market. A reformulation or brand extension into this market should be evaluated.

· Allright continues to be the only non-drowsy 4-hour capsule on the market. An expansion into a 12-hour non-drowsy capsule should be researched.

· Price is the number one decision criteria. A bargain product could be beneficial, but should be highly studied as to not cannibalize Allstar’s other products.

THREATS:

· Besthelp continues to be a close competitor. A close eye should keep on Besthelp’s actions.

· End dominates the cough market. Allstar should look at what End is doing and their brand formulation. There may be a substantial market share to be gained.

· Besthelp+’s brand formulation is close to Allround+’s. Besthelp+ already leads in sales against Allround+. Besthelp+ should be watched closely.

· End+ leads both Allround+ and Besthelp+ in brands purchased. Their brand formulation should be studied and an ad campaign comparing Allround+ to End+ may help close the gap.

· Cost of goods sold continues to grow exponentially. Efforts should be made to maintain or even lower it.

MARKETING ACTIVITIES:

To increase the profitability of Allstar Company there are several marketing strategies that need to be considered to ensure that the products and the services of the company still remain popular to the public eyes while still maintaining a certain level of efficiency within the organization.

This marketing objective is aimed at winning the investment of prospective shareholders and also popularizing the brand before the public eyes. Once the public discovers that the stock of Allstar is continuously increasing they will start to have confidence in its leadership and its future. This will also give them the confidence to use our drugs.

The first way to ensure an increasing in stock price is to become innovative and come up with new drugs which will help people to deal with allergies and even infections. The more innovative a company is the greater the public interest in the company and thus the more the desire the public will have to own the company and thus the stock prices will end up increasing.

Maintenance of quality of the products that are currently in the market is also one of the effective means of increasing the stock price every two years. Quality usually shows though indirectly the leadership and the determination of any company to serve the public. When a company decides to sell low quality products it soon loses its shareholders and its stock price is reduced to nearly nothing.

Employees are the most valuable asset that a company can have. Most companies depend on the marketing and sales team to propagate its ideas and even to convince the public to purchase its products. This is why Allstar desires to have a direct sales team of more than 140 at all times. This means that they have to find a way to motivate and retain their employees. The company has to apply two of the theories of motivation to make the employees to have job satisfaction and to stick to their job for a long time. The first way to motivate employees is to offer incentives. Job security can be one of the incentives. Allstar can guarantee a permanent job for any employee who has worked for two years while achieving all his targets. The other incentive can be bonuses and commissions based on the sales. The second way to motivate is to use the goal oriented approach whereby the employees are given goals to meet at the end of every month. On meeting they are recognized and appreciated by the management and their peers.

For a company to increase its net income it has to use its employees to reach to its market. The first way is creating a firm relationship with its customers through customer service and timely service delivery. In the case of Allstar service delivery means that if the drugs are supposed to alleviate the effects of an allergy they should do exactly that and they should actually not aggravate the situation. When customers discover that Allstar drugs deliver according to their specifications they will trust in Allstar and this is how a mutual relationship between a company and its customers is formed.

The second way to increase the sales is through marketing and advertising. One of the fastest ways to advertise is through the use of the internet and the social media. The company should thus create an online forum or even a website where interaction can exist between the company and its clients. The internet is not biased because it is global and unlike traditional forms of advertising it delivers its message to everyone regardless of the brand of the advertiser.

The other quite convincing way of increasing income is to do promotions and selling the drugs at a lower price to attract audience. Promotions and discounts tend to influence the market forces of supply and demand because when the supply is large and the company decides to lower the price more people will buy the drugs and thus in the long run the revenue of the company will increase.

The other way to increase the company’s revenue is to use the targeting strategy. This involves dividing the market into segments and creating products for each of the segment. This means there will be drugs for expectant mothers, the elderly, men and even infants. This kind of diversity will ultimately yield a lot of profit because the company will be creating drugs which can be used by the entire market regardless of their situation.

The ultimate goal of Allstar is to have a brand awareness of 85% of the entire market. This means that 85% of the market should at least know about Allstar even if they are not our customers. The first way to increase brand awareness is advertising. This can be done using the internet or through traditional means of advertising. Placing television or radio adverts especially during peak hours is the fastest way to drive the point home. The other way is placing billboards or even colorful notices in strategic point where the public can view them. Using the internet and the social media will also prove helpful. When the company decides to invest in the internet its brand awareness may even increase by more than 5% due to the fact that the internet is a global media thus the audience of the brand awareness campaign is simply the entire world.

The last but significant way of increasing brand awareness is to host or sponsor local events. Once events like music concerts or even book launches or any other events that may attract the public is hosted by Allstar the company will ensure that its posters and leaflets containing information about it are present in the concert thus increasing the brand awareness.

Allstar wants to maintain a minimum budget of $26 million for Allround, $10 million for Allround+ and $8 million for Allright. This is because the company has discovered the importance of advertising and the influence it has not only towards the factor of brand awareness but also towards the increase of net income of the company. The company desires that there should be a minimum of funds that should be used for advertising. This means that the advertising costs can be more than the minimum but the advertising should produce results that should justify the expenditure.

Before the company can come up with a new product it has to have a very competitive research and development department. In Allstar the R&D department will need to observe the market and determine if a gap exists that a new product could cover. The idea of product can even in most cases come from the public. This is because the public will be the ultimate user of the product and thus the public can present brilliant ideas according to their personal needs. Apart from the public the employees can also be a source of ideas due to their constant contact with the market. The idea of a new product can also be found by looking at the market trends and the technological situation of the time and which product can fit into the market trend.

After getting an idea, the company will investigate the competitors’ products and ideas. This will help the company to create unique products which will not be duplicating the ideas and product specifications of its competitors. After creating prototypes of the drugs Allstar should conduct trials to ensure that the products are fit for public usage.

With the company desiring to increase its brand awareness and ultimately it’s net income it has to ensure that it gives a good percentage of the product price as a promotional allowance to stores which sell its drugs. A promotional allowance symbolizes a partnership between the company and the store whereby the store will advertise and promote the products of the company internally thus convincing customers to buy the product. With a promotional allowance of about 14% the products of Allstar will be promoted and will with time gain a significant audience.

Customer satisfaction is imperative in ensuring a mutual relationship between the customers and the company. This is because dissatisfied customers rarely come back to be served again or to buy other products from the company. The first way to ensure customer satisfaction is to ensure that the products that the company produces are of a high quality and are up to the customers’ expectations. This will encourage them to come back because they know that the products will meet their needs fully.

The second way to increase customer satisfaction revolves around the customer service that the company offers. Firstly the company should listen to the customers’ complaints or even suggestions and act on them. This is because customer satisfaction generally increases when customers perceive that they are being listened to and that their suggestions and input is being valued.

The third way to increase customer satisfaction is to offer bonuses or post transactional services. This may include giving customers for free another complementing product like another drug which can work better with the purchased drug.

6. LESSONS LEARNED