Geniusalert92

-Priority #1 -- FOCUS ON THE CONSUMERS NEEDS!

--Increase point-of-purchase in grocery stores

--Increase co-op advertising

--Increase sales force, specifically increase indiret sales force (merchandisers and detailers)

--Remove alcohol to remove overmedicating/side effect concerns along with little interest in benefit of sleep assistance

--Work to target families with kids

--Introduce an allergy specific product

--Focus on primary and reminder advertising

Period 4 Decisions.

Sales Force: Justification – Continue to strengthen both the indirect sales force and direct sales force to continue growth and provide adequate customer support for possible extension. Strengthening the sales force has been positive thus far (we have the highest manufacturer sales, cumulative manufacture sales, share of manufacturer sales, and stock price out of the other teams).

Direct: Increase 15% from 213 to 245 overall

Independent Drugstores: No Change

Chain Drugstores: 60 to 68

Grocery Stores: 95 to 105

Convenience Stores: 6 to 7

Mass Merch: 39 to 43

Indirect: Increase 21% from 165 to 200 overall (indirect/wholesalers are the bulk of our sales)

Wholesaler support: 36 to 44

Merchandisers: 50 to 64

Detailers: 74 to 92

Pricing: Increase MSRP $0.10 to adjust with inflation. Justification: this is a conservative increase since an increase $0.20 would be equal to inflation. Also, I ran a test market and it raised our contribution margin considerably without a loss of market.

Volume Discounts: Justification – Drop <2500 & <250 discounts to increase sales volume in 2500+ and Wholesale categories (refer to “Sales Report”)

< 250: Drop to 23% to push more people towards <2500 category

<2500: Drop to 28% to push more people towards 2500+ category

2500+: Keep the same (35%)

Wholesale: Keep the same (40%)

Advertising: Justification – keep Advertising Budget the same (I ran a test market and it raised our contribution margin considerably without a loss of market).

Ad Message: reallocate to model Believe, Besthelp, Coughcure, and End.

Primary: 30% to 10%

Benefits: 15% to 10%

Comparison: 15% to 40%

Reminder: Keep the same

Promotion:

Promo Allowance: consider lowering to 16% since we are still above average (15.75%).

Trade Promotion: keep the same

Consumer Promotion:

Point-of-Purchase: increase $1M

Trial Size: increase $1M for children’s product

Coupon: keep the same

Special: Suggest we wait to offer line extension next period to see how competitors fair with their line extensions. If we do an extension I only suggest the child dosage as the other two options would simply be cannibalization of our current brand.

Period 3 Decisions

We came out positive and on top despite a down market!

Sales Force: Continue to strengthen the sales force, particularly the indirect sales force, with the dropping of alcohol and the likely future release of our new line extension. Strengthening the sales force has been positive thus far (we have the highest manufacturer sales, cum. manufacture sales, share of manufacturer sales, and stock price out of the other teams), but we should reallocate our sales force to increase detailers and merchandisers for our goal of increasing retention through brand placement. Also, the industry is projected for high growth in the “Industry Outlook” report so we should continue to grow with.

Direct: Increase 15% from 185 to 213 overall (breakdown below with largest percentage increase to independent drugstores)

Independent Drugstores: 12 to 22

Chain Drugstores: 55 to 60

Grocery Stores: 86 to 95

Convenience Stores: 5 to 6

Mass Merch: 27 to 39

Indirect: Transfer 50% of wholesaler support to merchandisers and detailers (25% each) and then increase 10% from 150 to 165 overall

Wholesaler support: 67 to 33, then 33 to 36

Merchandisers: 33 to 50, then 50 to 55

Detailers: 50 to 67, the 67 to 74

Justification: For transferring of employees, from the “Messages” report under the “Market Update” link there is a message that says, “Check the Company Sales Report to see if your sales for allocation could be improved.” This is because we now have the ability to divvy up how many people are in each position. After checking the “Sales Report” under the “Company” link, it looks like most of our direct sales come from grocery stores and chain drugstores, respectively, as well as indirect/wholesalers. With that said, for direct sales force we should look to increase our sales force support for grocery stores and chain drugstores. Additionally, for indirect we should look to transfer wholesaler support to detailers and merchandisers, respectively, while still bumping the indirect sales force up overall. At this point, we do not need to increase like the last periods as we have a strong sales force, but must continue to grow. All of this will allow us to increase retention ratio through strong placement and in-store support.

Pricing: No changes.

Justification: We should not increase the price since we took out an ingredient. Increasing the price after taking and ingredient out that saved us $0.10 per would be an insult to their intelligence. I am comfortable with the wholesale volume discounts at this point. For future consideration, from reviewing the “Sales Report”, we could stand to gain more income with a better volume discount in the 2500+ category.

Advertising: After running a few test markets, we should only increase advertising if we decrease promotion as increasing advertising had a negative effect on our contribution margin. I think keeping it at $19M is fine considering our advertising is already the highest, combined with the fact our brand awareness is already high.

Ad Budget: $20M only if we decrease Promotion (justification above)

Ad message: Primary (30%), Benefits (15%), Comparison (15%), Reminder (40%)

Justification: we as a brand are the market leader in brand awareness, consumer perceived effectiveness, and satisfaction so I do not believe focusing on benefits or comparison will serve us well since folks already know us and what Allround can do for them. Instead, I think we should focus on primary and reminder advertising

Promotion: Consider lowering promotions since “Promotion Report” shows low participation rate. Money saved here can increase budget for increasing advertising and sales force. My suggestions below save us $1M in promotion so we can increase advertising by $1M.

Promotion Allowance: Consider lowering to 16.5% since we are currently second highest. The average is 15.56%.

Co-op Advertising: Keep the same ($2.64M)

Point of Purchase: Increase 100% from $1,500 to $3,000 by taking from Coupon Budget

Justification: Most effective promotion to increase sales

Trail size: Do not utilize

Coupons: Decrease approx. 75% from $4.5M to $1M

Creative Design:

Company Add for inputs?

Special: No changes.

Week 2 Decisions

***If you all look at Ethik on the “Operating Statistics” link under “Market,” you will see we should consider modeling some of their attributes as their stock price is excellent***

***“Industry Outlook” indicates sales will lower this period***

Sales Force: Continue to increase sales force (primarily indirect, secondarily direct) as Ethik did the same (60% overall increase in sales force).

Direct 141 to 185 (increase 25%)

Indirect 99 to 150 (increase 50%)

Justification: Same as last week and in email below to the group on July 14th:

I came to that decision after reading in the case that although we have the greatest brand awareness, we did not get good placement in stores (Excerpt from case: "The group wondered why Allround did not consistently receive the best placement, since the brand typically generated higher volume than any other OTC medication."). As such, merchandisers, which are part of the indirect sales force, focus on channel activities such as checking special promotions, improving shelf location, and performing other in-store support. In addition, when we were allowed to practice the first two periods, both weeks I got feedback that buyers were complaining than in-store support was low, which led me to believe we should increase our sales force every period. During my simulation for my bachelor's level marketing, we had to grow the sales force every single year since we were introducing new brands and line extensions. I'm pretty confident we will need to increase our sales force every period in this simulation as well.

Pricing: Stay the same or increase slightly ($0.05) to increase with increasing inflation

Advertising: Raise to $19M

Promotion: Increase trade promotions 10% to 2,640. Increase consumer promotions 70% to 6,000.

Trade promotions - Increase trade promotions to provide incentive to channel to feature a specific brand in their own advertising

Consumer promotions - Increase point-of-purchase

Justification - Increase co-op advertising (feature Allround in store advertising) and point-of-purchase vehicles (special displays that promote the brand in the store that encourage brand switching)

Creative Design: Below are four logos we can use if everyone approves. I figure we will get extra points in the simulation for actually creating one. I created a Photobucket account and already uploaded #1 below, but can change with no opinion either way. Please let me know. Also, I plan to develop a company add as well unless anyone else wants to take that on.

1.

Special: Consider dropping alcohol to increase usage among daytime workers and children

Justification: “Some consumers view alcohol as a negative attribute,” and “Drowsiness due to antihistamines or alcohol is the most often mentioned negative side effect, especially when these products are used during the day” comments.

Week 1 Decisions

Sales Force: Increase sales force (primarily indirect, secondarily direct)

Indirect 33 to 99 (increase 300%)

Direct 94 to 141 (increase 150%)

Justification - Increase indirect more than direct since according to the case, Allround is not receiving consistent brand placement. Merchandisers are part of the indirect sales force and focus on channel activities, such as checking special promotions, improving shelf location, and performing other in-store support. Allround is already leading in brand awareness cold/allergy segment and sales in the cold category so we just need to increase purchases/retention.

Pricing: MSRP should stay the same ($5.29) or be reduced; Justification - From the case, "Allround's sales have not suffered because of the higher price," plus the "Perceived Price" is already "High" compared to the "Perceived Effect" from of the available "Tradeoffs" survey. If we reduced the price we could balance the perception price vs. sympton relief. If we lower the price I suggest $0.10.

Advertising: Drop slightly since Allround is already leading the cold and allergy segment in brand awareness ($18M)

Promotion: Increase trade promotions ($2.4M) and consumer promotions ($3.5M)

Trade promotions - Increase trade promotions to provide incentive to channel to feature a specific brand in their own advertising

Consumer promotions - Increase point-of-purchase

Justification - Increase co-op advertising (feature Allround in store advertising) and point-of-purchase vehicles (special displays that promote the brand in the store that encourage brand switching)