I need two full detailed paragraphs based of two papers. Here are the questions that need to be answered fully: 
One strategy used in their report that would have been beneficial for your strategy that your team did not do.
One strategy that your team did that was better than their team.GROUP C FINAL SIMULATION REPORT
Group C Final Simulation Report
Saint Leo University
MBA 565
March 3, 2020
Student Signature:
Executive Summary …………………………………………………………………………………………………… 3
Final Simulation Report …………………………………………………………………………………………….. 4
Manufacturer’s suggested retail price …………………………………………………………………………. 4
Volume discounts and promotional allowances …………………………………………………………… 5
Advertising budget …………………………………………………………………………………………………… 7
Selected advertising agency ………………………………………………………………………………………. 9
Promotion’s budget with allocations to cooperative advertising and the three types of
consumer promotions ……………………………………………………………………………………………… 11
Sales Force ……………………………………………………………………………………………………………. 12
Segmentation…………………………………………………………………………………………………………. 12
Conclusions: Net Income & Cumulative Net Income …………………………………………………. 14
References ……………………………………………………………………………………………………………….. 16
Appendix A – Decisions …………………………………………………………………………………………….. 17
Decision 1 – Year 0………………………………………………………………………………………………… 17
Decision 2 – Year 1………………………………………………………………………………………………… 20
Decision 3 – Year 2 ………………………………………………………………………………………………… 23
Decision 4 – Year 3………………………………………………………………………………………………… 23
Decision 5 – Year 4………………………………………………………………………………………………… 26
Decision 6 – Year 5………………………………………………………………………………………………… 30
Decision 7 – Year 6………………………………………………………………………………………………… 31
Decision 8 – Year 7………………………………………………………………………………………………… 32
Decision 9 – Special Decision – Year 8…………………………………………………………………….. 34
Appendix B – Initial Strategy Report ………………………………………………………………………… 35
Initial Strategy Report …………………………………………………………………………………………….. 35
Initial Strategy Report Feedback & Reaction …………………………………………………………….. 42
Executive Summary
This paper seeks to focus on a PharmSim analysis regarding the Allstar Brand and its
marketing efforts during an 8-phase period. The brand’s leading product, Allround, is an over the
counter (OTC) cold and allergy medicine that had been reformulated and strategically marketed
to our assumed market segment. To remain competitive, we assumed the role of the marketing
management team and were responsible for, but not limited to, evaluating the market climate,
reports, line extensions, promotions, advertisements, etc. to ensure the Allstar Brand held a
competitive advantage. The goals of the marketing team were to increase sales, brand awareness,
brand loyalty, and customer satisfaction. Throughout the simulation, our efforts will further be
explained throughout the paper for learning purposes.
Page 3 of 42
Final Simulation Report
PharmaSim is a simulation strategy for marketing management groups that is designed
around the over-the-counter cold medicine industry. The focus of the simulation is for each
marketing team to make decisions about their over-the-counter product to include product
ingredients, pricing, distribution, advertising, and promotion for Allstar Brands (Kinnear, James,
& Deighan, 2019). As our team began the simulation, we focused on taking Allstar Brands
product of Allround cold medication and make it a success. In the next several paragraphs we
will explain how came up with the Manufacturer’s suggested retail price, Volume discounts and
Promotional allowances, Advertising budgets, the Selection of advertising agencies, our
Advertising messages, Promotional budgets, Sales force, Segmentation, Line extensions, and our
overall cumulative net income and final stock prices.
Manufacturer’s suggested retail price
When setting prices for each product, our team took into account the manufacturer’s
suggested retail price. Allround began with a default price of $5.29; yet our objective was to
incrementally increase the price by $0.15 each year, per our Initial Strategy Report, see
Appendix B. With the introductions of AllroundPlus and Allright, the incremental increase of
$0.10 was used, the price increase objective was based on the average increases of inflation of
$0.05 and also takes into consideration that AllroundPlus is a new product and may not have the
following that the main product has to keep customers buying at a higher price. However, in
phase 6, we decided to break with our planned increase and half the incremental increase of each
product’s manufactured retail price to reduce the constraints in our marketing budget as the
Allright product was incorporated in phase 5. As a result, Allright began the manufactured
suggested price retail price with a more restricted approach with an incremental charge of $0.05
to our prices since our stock price decreased between phases 4 and 5.
However, after evaluating our performance compared to our competing teams, we felt this
approach would hold us back from achieving our targeted stock price of $119. Yet, we remained
optimistic for the next two decisions (7 and 8) and returned to the previous doubled incremental
pricing amounts as follows: Allround $0.15, AllroundPlus $0.10, and Allright parting in this
trend at $0.10.
Volume discounts and promotional allowances
Volume discounts and promotional allowances are one of the many types of sale
promotions included in a company’s price deal (Winer & Dhar, 2017). During the beginning
phases of the Allstar Brand, the volume discounts began as a percent of MSRP for Allround as
for the category < 250 is as follows beginning with previous 25% and current 25% to get a discount price of $3.97; for < 2500 the labels include previous 30% and current 30% to get a discount price of $3.70; 2500+ the labels appear as previous 35% and current 35% to get a discount price of $3.44; and last but not least, at wholesale, volume discounts displayed as previous 40% and current 40% to get a discount price of $3.17. In year 3, the AllroundPlus line extension was introduced, and the labels were as follows: < 250 current 25% and discount price of $4.13; < 2500 current 30% with a discount price of $3.85; 2500+ had current 35% and discount price of $3.58; and wholesale with current 40% with a discount price of $3.30. Additionally, in year 5, another line extension was included, Allright. Again, the labels were as follows: < 250 current 25%, discounted price $4.39; < 2500 current 30%, discounted price $4.10; 2500+ current 35%, discount price $3.80; and wholesale current 40%, discounted price $3.51. Each year the amount for discounted prices increased without making adjustments to the GROUP C FINAL SIMULATION REPORT 6 Allstar’s products’ volume discounts. Moreover, throughout each of the eight decisions, no changes were made to any of the AllStar products’ volume discounts as we did not want to affect our steady incline in sales. As for promotional allowances, the simulation began with a default for Allround’s trade promotion with an allowance of 10-20% allocation to the various categories namely independent drugstores (18%), chain drugstores (19.5%), grocery stores (19%), convenience stores (18%), mass merchandisers (18.5%), and wholesalers (17%). Also, the co-op advertising budget was set at $1.7 million for Allround. Regarding the allowances, these amounts were set after gauging and assessing a purchased Promotion Report and were designed to be more competitive than our main competition, Besthelp. Our goal was to be higher in our anticipated major distributors: grocery stores, chain drug stores, and mass merchandisers. However, with wholesalers' distributors, our decision was to allocate less than other retailers to this industry, since they were purchasing at a higher amount. This decision was based on the idea that wholesalers did not need an additional discount on top of the discount it was already receiving due to their bulk purchases. Nevertheless, as the simulation ran, adjustments were made to our promotional allowances when our team noticed an increase in sales for the next four decisions. In year 2, a change was made to independent drugstores as we increased trade promotional allowance by 0.4percent to correspond as 18.4-percent distributed to this supply chain. As we included the AllroundPlus medicine, we set our promotional trade allowances at independent drugstores (15%), chain drugstores (15.5%), grocery stores (15%), convenience stores (15%), mass merchandisers (15%), and wholesalers (15%); as well beginning our co-op advertising at 1 billion dollars. Furthermore, in decision 4, AllroundPlus increased grocery stores’ trade GROUP C FINAL SIMULATION REPORT 7 allowance budget percentage by 0.5-percent (15.5%), in an effort to remain maintain a slightly higher rate than our biggest competitor. This was put into effect to keep our products wellstocked as well as have better placement on grocers’ shelves. In the next phase, phase 5, Allright was incorporated in the AllStar brand with a co-op advertising budget at $1 million to mimic the AllroundPlus line extension co-op advertising budget as appeared in phase 3. Likewise, as follows, trade allowances in the following categories were set as independent drugstores (17%), chain drugstores (17.5%), grocery stores (17%), convenience stores (17%), mass merchandisers (17.5%), and wholesalers (17%). Also, in the same phase, both products experienced an increase in its co-op advertising budget with an increase in Allround by $0.3 million ($2 million) and AllroundPlus with a $0.5 million increase. The increases in our co-op advertising strategies were reflective of our objective to increase incremental revenue as well as boost our marketing budget. We noticed that this had played a role in the increase of our brand, AllStar’s stock value. Advertising budget Advertisement plays a key role in marketing sales, brand awareness, and increase the purchase intentions of our consumers. Advertising has traditionally been defined as any paid form of non-personal communication about an organization, product, service, or idea by an identified sponsor (Winer & Dhar, 2016). Every period we had during the simulation, we had an advertising budget, which helped assist us in making our decisions. When we first started, our advertising budget was $24.8 million in year 0, with Allround being our main product for cold and cough. It targeted young families, singles, mature families, empty nesters, and retired for the relief of aches. It clears nasal congestion, reduces chest congestion, dries up runny nose, suppresses coughing, and helps you rest. By year 1, we changed the effect to help individuals rest and reduce the effect of causing drowsiness due since we had GROUP C FINAL SIMULATION REPORT 8 an option of reformulating Allround. At year 2, our advertising budget went to $29.9 million. No other changes, there was a feeling that advertisement was the biggest way of putting the product out there so that the consumers would know our product better. In the third year, we did make some changes, and our budget went up to $34.6 million with the addition of AllroundPlus. With AllroundPlus in year 3, our budget was $9.8 million to get a new product off the ground and to inform our consumers what it brings. We still targeted all demographics and only targeted the symptoms for cough due to Allround covering cold and cough. The relief you will get from AllroundPlus is it reduces chest congestion, suppresses coughing, and won’t cause drowsiness. During year 4, we decided to keep everything the same for Allround. As far as our targets were concerned, we did go up to $35 Million on our budget to keep advertising Allround product. For AllroundPlus, our budget stayed at $9.8 Million, but we did remove the effect of reduction of chest congestion due to competition with Besthelp. In the 5th year, Allround budget went up to $37.1 Million while everything else stayed the same. AllroundPlus also went up to $10.3 Million while everything else stayed the same. This year we did add Allright product with at starting budget of $6.5 Million. Allright product targets cold and cough for young and mature families. The common effects of the Allright product are: relief of aches, clearing of nasal congestion, reduction of chest congestion, drying up of runny nose, and don’t cause drowsiness. In the 6th year, the Allround budget went down to $35.8 Million, when we added Allright product in year 5. We wanted to expand our advertisement for all the three products to get the most for our money. AllroundPlus budget went down also to $8.3 Million because, as a group, we felt that our budget could go towards something a little more useful like buying an advertising report to see where we were as a company. Allright product budget went down to $6.1, again as a group, we decided to use some of the budget to get the reports to make sure we GROUP C FINAL SIMULATION REPORT 9 were going in the right direction with advertising. In year 7, Allround budget stayed the same as well as AllroundPlus and Allright. In year 8, all the three products (Allround, AllroundPlus, and Allright) remained the same as in year 7. We felt comfortable where we were at as a team. When we adjusted our budget, we wanted to meet the demands of each one of our three products to allow our group to maintain higher brand awareness. Selected advertising agency For each year of the Pharmasim simulation, we selected Brewster, Maxell, & Wheeler as our advertising agency from year 1-8. BMW charges 15% of our budget, and therefore, it was a high risk as a group we all thought, but in the end, it worked out in our favor. There were two other agencies: Sully and Rogers, charging 10% of the budget, and Lester Loebol and Company for 5% of the budget, but the group did not want to low ball our advertisement due to potential damage to brand reputation. So, we all agreed to stay with BMW and pay 15%. We thought as a group that BMW would be more successful due to its reputation of being known for its highquality work (PharmaSim, 2019). BMW delivered in the quality of its product to maintain the Allround product high brand awareness, as evident through continued brand awareness increase for all Allstar products throughout the simulation. BMW helped us market our products more efficiently to the target consumers. Relative emphasis on the four type of advertising messages: Primary, Benefits, Comparison, Reminder For Allround, we started with percentages of Primary (8%), Benefits (9%), Comparison (41%), and Reminder (42%) as an established product the target audience would need more reminders that Allround is the best product and comparison to show that cheaper products aren’t always the best. For AllroundPlus, the same percentages were used, as the product is very GROUP C FINAL SIMULATION REPORT 10 similar to Allround and can ride the products established brand. For Allright, we compared it to its main competitor and matched it, which focused more on advertising the primary message and benefits. Our group decided what message we wanted to bring out to our customers and prove we are the best for them. In the third year, Allround already had a cough suppressant, so some users who were taking it for cough may just switch to the new product (PharmaSim, 2020). With this message, our group had decided that we wanted to change some of the main targets of Allround since we had a new product AllroundPlus, which targets cough too. We chose to keep Allround for cough but decided to rearrange what it targets, which was removing chest congestion and adding it to AllroundPlus. By year 4, some of our decisions for AllroundPlus to be in comparison to Cough Cure in year 3 was not a great choice for our group. In year 4, we decided to change it to Besthelp due to the purchased salesforce report; our competition was Besthelp in year 4. Allright was introduced in year 5, where we decided to use EndPlus as the main competitor for comparison, it was selected on the basis that it was also a 4-hour child cold liquid. EndPlus was later changed to Besthelp due to alerts in the company dashboard that reported EndPlus was not the right comparison. With Allround brand and the new addition of AllroundPlus, it was well known for great products and marketing strategies that we had a great customer base that we did not need to dilute demand for our already known products. Although we struggled with determining the right competitor for each product, we strategically tried to match the four types of advertising messages: primary, benefits, comparison, and reminder to chosen competitors per round. This was done in an effort to perform at or better than the competition. GROUP C FINAL SIMULATION REPORT 11 Promotion’s budget with allocations to cooperative advertising and the three types of consumer promotions Allstar’s promotion budget for each of our products was significantly lower than the advertising budget. Coupons, available in print, digital and checkout, were a mainstay for all of our products and had the highest allocation (up to $5 million for Allround) for each of Allstar brands, being that our products were typically higher in price, showing quality and prestige, the coupons gave a discount of $0.50. In second for consumer promotions were Co-op Advertising and Point of Purchase, for the more established Allround product Co-op tended to be slightly higher, but for newer, less established, products the Point of Purchase budget was higher at times, to promote the newer lesser-known products. Allowances were based on our main competitors for each Allstar product and reports were purchased in decision 4-6 to ensure we maintained on par with competitors for each line. As discussed in the Initial Strategy Report, trial sizes would be used to help open the door to new customers, implemented in decision 3, our main concern was losing existing customers of Allround to our new product AllroundPlus. Our secondary goal was to introduce our newer products to consumers that may not otherwise notice it. Trade rating for Allstar products remained between 6.6 to 7.8 throughout the scenario. Although, after year 6 the trends were downward, which is attributed to budgetary challenges and the inability to contribute significantly to the promotions budget, however, the decreases were slight, and overall trade ratings were decent. In future decisions, a careful balance should be maintained to improve consumer promotions by continually adding funds to the promotion budget, proportionally to the advertising budget, and some consideration can be given to lower the promotional allowance slightly, reducing the impact to the overall budget. GROUP C FINAL SIMULATION REPORT 12 Sales Force Allstar’s sales force started with an initial allocation of 241 sales force personnel, as shown in Appendix A Decision 1. The top three channels were Grocery Stores (82), Chain Drug Stores (54), and Wholesaler Support (28). The goal of increasing or decreasing the sales force was to ensure that our sales force was bigger than our main competitor B&B. Throughout the decision process, we ran reports to see how we were doing compared to B&B. Our sales forces’ impact was that they pushed our product, through promotion or information, to the different channels that they were assigned to. By maintaining a bigger sales force than our competitor, this helped to increase our sales compares to B&B and to ensure our product received more favorable placement in each channel to increase sales. In decision 7, we had to contract our sales force due to a reduction in our budget, in trimming our sales forces we cut the lower performing channels first and were very careful not to pull too many of our sales force personnel. Segmentation “Market segmentation breaks mass markets into segments that have different behaviors or needs. In grouping customers by many different variables or characteristics, the aim is to group customers that differ from one another but show considerable similarity within the group” (Winer, & Dhar, 2011). For the first year of our Allround brand we carefully considered the reformulation of our product and decided to remove alcohol as an ingredient. The decision to remove alcohol was made so that our customers would have the ability to use the product during the day without the effects of drowsiness and so that the product could be used by children. Next, we decided that Allround brand should target a demographic of Young Singles, Young Families, Mature Families, Empty Nesters and Retired individuals (Kinnear, James, & Deighan, 2019). The decision to target all of the demographics was made because our product is a multi-symptom GROUP C FINAL SIMULATION REPORT 13 cold relief for all ages and relieves or reduces symptoms with cold and cough and promotes the benefits of relieving aches, clears nasal congestion, reduces chest congestion, dries up runny nose, suppresses coughing and won’t cause drowsiness (Kinnear, James, & Deighan, 2019). The second product we created was AllroundPlus. For the AllroundPlus product, we decided to focus our attention on the demographics that consisted of Young Singles, Young Families, Mature Families, Empty Nesters, and Retired individuals (Kinnear, James, & Deighan, 2019). We targeted this demographic because we believed families and individuals desired a cold medication that relieved specific symptoms such as cough, and they could take it every four hours if desired or reduce the amount taken daily. The advertising for AllroundPlus four-hour cough liquid was advertised to promote the reduction of chest congestion, suppress cough, and not cause drowsiness (Kinnear, James, & Deighan, 2019). The third product we created was called Allright. For our Allright product, we targeted the demographic of young and mature families. For our advertising decision, we decided to target an audience that was looking for a cold medication that helped relieve or reduce cold and cough symptoms with the expectation to relieve aches, clear nasal congestion, dry up runny nose and not cause drowsiness (Kinnear, James, & Deighan, 2019). Line Extension “A product line extension is a new product that is slightly different to a company’s existing range” (Linton, 2020). Our first line extension occurred in year three, and we created a four-hour cough liquid called AllroundPlus. The decision to develop this cough liquid was made so that we could target customers who wanted a medication that focused on only a few cold symptoms and could be taken a few times a day if needed (Kinnear, James, & Deighan, 2019). In year four, we had the option to keep Allround cold medication and AllroundPlus four-hour GROUP C FINAL SIMULATION REPORT 14 cough medication or discontinue one. We choose not to discontinue either of our products because both of our products were doing well, and our stock price was increasing to $82.52. The overall social media feedback for both products were positive such as for Allround “really good value, easy to find, good value” for AllroundPlus social media stated “good value, great for coughing” but on AllroundPlus we also had negative and okay comments, so we had room for improvement for our newest brand (Kinnear, James, & Deighan, 2019). Our second line extension occurred in year five. We had the option to introduce a new product or wait until year six. Our team decided that due to the success of our two previous products that we wanted to go ahead and expand our cold medicine line. We decided to introduce Allright, a Child 4hr Cold liquid. Although our two previous products were okay for children to take, neither was specifically formulated for children. Therefore, we wanted a product that was designed for children, and at the time of our development, there was only one other child product on the market. We decided to keep all three products Allround, AllroundPlus, and Allright throughout the remainder of the simulation, and we are glad we did because our products continued to produce in customer satisfaction, increase sales and stock prices. Conclusions: Net Income & Cumulative Net Income Our team had an overall successful simulation. In fact, we were able to achieve $759 million in manufacturer sales, 5,079 million in cumulative manufacturer sales, $151 million in net income, $1,006 million in cumulative net income, 29.4 million in share of manufacturer sales and our stock price was $110.94. Out of the 5 teams that competed in the same simulation we ranked number 5. Although we did not meet our initial goals of having a final stock price greater than $119.00, we did meet our goal of having at least $950 million in net income, in fact, we had 1,006 million in cumulative net income. Throughout the simulation, we carefully considered GROUP C FINAL SIMULATION REPORT 15 every decision we made and although not every decision was the best choice we really did work hard to make adjustments when needed, buy reports and review the data, and we continued to strive for the best possible outcome. After advancing in year 8, we were left with a budget of $2.6 million. We plan to allocate this funding amount by continuing to add personnel to our sales force, adding to the advertising budget and promotions budget. We would closely evaluate the promotional allowances and volume discounts to see if some of them can be slightly reduced to increase profits. We plan to purchase additional reports to determine allocation amounts to remain competitive in the OTC industry. Additional profits would increase our ability to reinvest those funds into advertising and promotions for our main product Allround to improve sales for that line. As long as we continue prioritizing putting our product out there in terms of sales force, advertising, and promotions Allstar will continue its upward trend in performance. GROUP C FINAL SIMULATION REPORT 16 References Kinnear, T. C., James, S. W., & Deighan, M. (2019). PharmaSim: The marketing management simulation. Charlottesville, VA: Interpretive Software, Inc. Linton, I. (2020). What is a product line extension? Retrieved from: https://smallbusiness.chron.com/product-line-extension-24225.html. PharmaSim. (2019). Retrieved February 24, 2020 https://app4.interpretive.com/ps6s20/index.php Winer, R. S. & Dhar, R. (2016). Marketing management (4th ed.). Boston, MA: Pearson Learning Solutions. GROUP C FINAL SIMULATION REPORT 17 Appendix A - Decisions Decision 1 – Year 0 Sales Force No changes were made to the initial configuration of the sales force, total size of 241. The initial sales force distribution is as follows: Direct Sales Force: (total 178) - Independent Drug Stores: 12 Chain Drug Stores: 54 Grocery Stores: 82 Convenience Stores: 4 Mass Merchandisers: 26 Indirect Sales Force: (total 63) - Wholesaler Support: 28 Merchandisers: 14 Detailers: 21 Brands No changes made Pricing For this section the Mfr. Suggested Retail Price was maintained at $5.29. Advertising Allround’s advertising budget of $24.8 million was maintained. The advertising agency Brewster, Maxwell, & Wheeler were hired at a 15% fee. In selecting this ad agency, the firm determined it to be in the best interest to hire the most established ad agency to support the high quality and established brand of Allround. Symptom targets selected for Allround were Cold and Cough. For demographic targets our firm chose all demographic targets, although our product doesn’t necessarily meet the desires of all target groups the reputation and brand support GROUP C FINAL SIMULATION REPORT 18 the quality of product and could inspire all demographics to purchase our product. For the Ad Message our firm selected the following: • • • • Primary (8%) Benefits (9%) Comparison (41%) with Besthelp Reminder (42%) Promoted Benefits were the following: • • • • • Relieves aches Clears nasal congestion Reduces chest congestion Dries up runny nose Suppresses coughing Promotion Trade promotion was set with an allowance for each channel as follows: • • • • • • Independent Drug Stores (18%) Chain Drug Stores (19.5%) Grocery Stores (19%) Convenience Stores (18%) Mass Merchandisers (18.5%) Wholesalers (17%) These allowances were based on a purchased Promotion Report and were designed to be higher that our main competitor Besthelp and be higher in Grocery, Chain Drug Stores and Mass Merchandisers, as these were expected to be major players in the sale of our product. Wholesalers are also a major seller but as they already receive discounts for purchasing in bulk, the amount allocated was less than that of other retailors purchasing at a higher price. Co-op Advertising was set at $1.7 Million. Consumer promotions for Allround consisted of a Point of Purchase budget of $1.7 Million, with participation for all merchants, a trial size budget of $0, and a coupon budget of $5 Million offered in $0.50 Print, Digital and Checkout coupon forms. GROUP C FINAL SIMULATION REPORT 19 For consumer promotions we wanted to ensure that the product was easily seen and considered a great buy with coupons by customers. Digital Marketing The firms Digital Marketing budget was placed at $0.5 Million, utilizing Display Advertising, Search Engine Marketing, and Social Media. Keywords selected for Allround included: Allround, Cold, Cough, Rest, Congestion, and Besthelp. Special Decision The Special decision was in regards to packaging, the package had not been updated in a long time and was considered dated. To stand out among other products, the firm decided that is was best to revise the look of the packaging (cost $1 Million) and in addition considerations were chosen to redesign the bottle for easier use ( cost $1 Million), make packaging materials more eco-friendly (cost $1.2 Million), and change packaging for more efficient distribution (cost $1.5). Although the total cost for the changes summed up to $4.7 Million dollars the firm decided that it wanted to act ecologically responsible, make the product easier for use within its customer base and to use the changes as an opportunity to create additional efficiency in distribution. Results for Decision 1 & Interpretation Decision 1 resulted in a slight increase of our stock price by 0.9% to $36.58, unit sales increased 9.9%, revenue increased 10%, net income decreased by 14.9% to $58.8 Million, and cumulative net income increased by 85.1% to $128 Million. Social media posts were positive, brand awareness increased to 87.1% and customer satisfaction increased to 56.9%. We didn’t expect too many changes from decision 1, the slight stock price increase was expected, all other areas were increasing in favorable ways, we felt that we were on the right track. GROUP C FINAL SIMULATION REPORT 20 Decision 2 – Year 1 Sales Force In year 1 we purchased the sales force report and compared our sales force with our major competitor B&B. As shown in Figure 1 below, B&B’s sales force was smaller than Allstar’s but we wanted to make sure increases ensured we stayed above proportionally and our goal was to be just above them to ensure their sales force didn’t out perform ours. The following increases were made: Independent Drug Stores: Increase by 2 Convenience Stores: Increase by 4 Detailers: Increase by 4 All other channels did not have an increase or decrease. Figure 1 – Sales Force Report Decision 2 Brands In this decision we had the option to drop alcohol. Based on our previous trials we decided that the consumer desired a product that can be used during the day without the drowsiness that comes with alcohol. GROUP C FINAL SIMULATION REPORT 21 Pricing For this section the Mfr. Suggested Retail Price was increased by $0.15 and raised to $5.44. Inflation increase for this period was $0.08. Advertising Allround’s advertising budget of $24.8 million was maintained. Promoted Benefits were modified to remove “Helps You Rest” and added “Won’t Cause Drowsiness”. We purchased the Advertising report, as shown in Figure 2 below, and we compared Allround to Besthelp and determined no changes were required, as we were targeting roughly the same percentages in the different areas. Figure 2 – Advertising Report Decision 2 Promotion No changes were made to Trade promotion or Co-op Advertising. The change for Consumer promotions for Allround was adding a trial size budget of $0.1 Million, being that we are an established product we felt that we could use trial size to help push the product to new consumers. Digital Marketing GROUP C FINAL SIMULATION REPORT 22 The firms Digital Marketing budget was increased by $0.1 Million to $0.6 Million, and due to change in formula the keyword “Rest” was removed and the key word “Non-Drowsy” was added. Special Decision The Special decision was in regarding a batch that was going to expire within 6 months. The three options were: 1. Ship the product and deal with any returns (Cost: Unknown) 2. Dispose of the expiring batch (Cost: $100,000) 3. Sell the batch to a jobber at a loss (Cost: $50,000) We decided that the best decision was to dispose of the expiring batch as selling a batch that is close to expiring would do more harm to the brand than good, in the concern with public image and fair business practices. Results for Decision 2 Stock price increased by 49.1% to $54.52, unit sales increased to 9.5%, revenue increase 12.7%, net income increased 63.5% and cumulative net income increase by 75.2% to 224.2 Million. Social media feedback was positive, brand awareness was 89.1%, and customer satisfaction increased to 60.4%. The huge increase in stock price and increases in all other areas reassured us that we were on the right track. We felt that we just needed to keep focusing on the areas that would keep us in the lead, advertising and sales force. GROUP C FINAL SIMULATION REPORT 23 Decision 3 - Year 2 • We Purchased Operating Statistics Report and Purchased Consumer Survey Reports to see how to move forward with our next decision and to have a better idea where we were at compared to our competitors. • We did not change the formula due to our current sales, the increase in customer satisfaction and the trend we saw in our practice runs. • We made the decision to include screen shots of customers satisfaction in our final report so that we are able to show our progress. • We made the decision to increase our Digital Marketing Budget from .06 to 1.0 million to help close the gap between us and the competition. • We also made the decision to add our remaining budget to Advertising in order to increase brand awareness, therefore, our budget increased from 24.8 to 29.9. • Decision Criteria-Special Decision- the team chose Cough Formula in our special decision due to similar decisions made in our practice run and because it did not have an overall effect on reducing sales in our original Allround product. • We added 2 on the floor for Mass Merchandising to help with concerns for being over capacity. Decision 4 – Year 3 Beginning the simulation phase, we checked the special decision and per this question we decided to respond to this question by claiming to check the page often and respond to comments. We believed this is an action of business ethics and is morally correct. New Line Extension • We decided to spend money on current product. GROUP C FINAL SIMULATION REPORT 24 Reports • We purchased a Conjoint Analysis report to guide us in our line extension decision. The interpretation of the purchased Conjoint Analysis helped us to determine our target marketing segments. Based on respondents this is where we decide what we want and looked at the first column of Rank Products at. • Product doesn’t focus on Allergy • With all demographics selected of cough and cold will give us (88%) in the cross section. We know this will hurt the sale of the original product but have chosen to market it aggressively. • 1st Allround and 2nd AllroundPlus 4hr cough liquid • Didn’t limit demographics because want to serve all the community Purchased Sales Force • We purchased the sales force to copy B&B because they are a close competitor. We decided that the Grocery Stores needed more people because it is our main seller and added 17. As such we did the same to Mass Merchandisers because they were acknowledged as our top sales growth distributor of 16.1% add 7 last year (2nd year). To the detailers, we added 10, Merchandisers 3, and Wholesale 3. However, apart of our aggressive market strategy, we decided to c heck the company sales report to i ncrease our percent in independent drugstores and chain drugstores because they showed the lowest. Analysis Test Market Study 1 • Test product and promotion level and advertising level GROUP C FINAL SIMULATION REPORT • Increase 15 cents 5.74 • Advertising 29.9 million with 5.1 in the budget to 35 million • Promotional 8.7 million increase to 10 million 25 o Awareness increased by 1.4% o Unit Market Share Decrease 24.2 – 23.9 o Share of Mfr. Sales increase .1 Study 2 • Just changed Promotion to 8.7 million and not 10 million o Awareness 1.3% o Unit Market Share decreased 24.2 to 23.8 o Share of Mfr Sales increase .1% Advertising • Comments about “Okay for chest congestion” • check chest congestion • Dump the rest of but 29.9 add 4.7 remained 34.6 • Promote benefits: took off reduce chest congestion Advertising report • We dedicated to move one from primary and move to reminder then ultimately left as is to copy Besthelp. Promotion • Brands We decided to keep the same numbers because Besthelp is the main competitor. GROUP C FINAL SIMULATION REPORT • 26 We had a Line Extension 4-hr cough liquid and had to set the price of the product and purchased a Pricing Report for the new product. We compared to the other products similar to our 4-hr cough liquid to determine our numbers and strategy. We decided to price it at $5.50 because it was cheaper to make. We then matched the Allround volume discounts to not compete with our original product and decide to compare our promotion competitor to be Coughcure for AllroundPlus. We then increased the coupon amount to .50 and added to our trial size. We targeted our advertising to target cough as a result of comments and had our match advertising message to Allround’s promotional report compared to CoughCure: Reduces chest congestion, reduces cough and won’t cause drowsiness. • Allround clears nasal congestion because of comments. We then decided to make our digital marketing similar to brands advertising. We also added to sales force because of the new products for a total of 52 changes left us with 9.8 million before we wanted to put the rest in the advertising budget. After advance we went up to 82.52 in stock price value. Results: After we advanced, all components increased: stock price, unit sales, revenue, net income and cumulative net income. As shown stock price increased about 26.2% from $65.41 to $82.52, unit sales increase 15.2%, revenue 17.8%, net income 9% and cumulative net income 36.5%. We focused more our stock price as our main objective of increase. Decision 5 – Year 4 Reviewed Social Media Feedback: AllroundPlus GROUP C FINAL SIMULATION REPORT 27 • Negative Comment: Doesn’t work well for congestion • Want to change the comparison advertising marketing from Coughcure for AllroundPlus to BestHelp Discussed special question: Detailing Changes “Although most consumers choose their own over-the-counter medicines for cough, cold, and allergy symptoms, some rely on doctor and pharmacist recommendations when choosing a product to relieve their symptoms. Detailers on your sales force contact doctors and pharmacists to provide information about your brands, introduce new products, and encourage them to recommend your brands to consumers. While Allstar believes its detailers have been pretty effective at influencing recommendations, some changes may help make your indirect sales force more effective” (PharmaSim, 2019). Chose to the options: • Conduct clinical studies to show product effectiveness (PharmaSim, 2019). (Cost: $4.0 million) • Customize promotional materials to leave behind on visits (PharmaSim, 2019). (Cost: $100,000) • Add e-detailing to your website to improve communication between detailers and healthcare professionals (PharmaSim, 2019). (Cost: $1.5 million) Choose option 1 first because we believe that product effectiveness is the most important. Market Update Message • Consumers are increasingly turning from drugstores to grocery stores and mass merchandisers for OTC products. GROUP C FINAL SIMULATION REPORT • 28 Thought about convenience and have discussed to put our product in grocery stores and mass merchandisers. • More of our target market Purchase Reports Promotional Report: • Don’t compete with Believe because we are competing more so against Best Help • Increase promotion discount because our products are competing against themselves. Sales Force • Want to increase by 10 people because of the previous year trend. • Add one to convenience stores to match competitors • Mass merchandisers and grocery added 2 • 1 in detailers • 2 wholesaler support • 2 merchandisers Pricing increase by: • 15 cents Allround • 10 cents AllroundPlus o Not an established product yet Promotional Marketing • AllroundPlus o No trial sizes • Between growing and mature o Goal: get more people to try product to encourage use. .1 or .2 more. GROUP C FINAL SIMULATION REPORT • Increase Allround trial size to .5 convert rate • Add to AllroundPlus trial size .3 29 Rest of money into advertising. o We don’t feel like it could hurt us and we don’t have enough to invest in digital marketing. Advertising o AllroundPlus is a new product and doing well with the budget they have and Allround should have it. o AllroundPlus change to Besthelp The budget was small and not much to do. Digital marketing AllroundPlus- Branding add nasal congestion. Results: The results of this year included two declines in stock price and net income; however, we were prepared for such changes due to a budget fluctuation and level of capacity. The stock price decreased 2.7% from $82.52 to $80.29 while net income decreased 1.5% from $122.8M to $121M. However, unit of sales (1.8%), revenue (4.2%) and cumulative net income (26.3%) have steadily been increasing. GROUP C FINAL SIMULATION REPORT 30 Decision 6 – Year 5 Our final line extension (Allright) was added this period. We decided on Allright product due to the need in the market for young and Mature families for a 4-hour children’s liquid. GROUP C FINAL SIMULATION REPORT 31 Decision 7 – Year 6 Due to being over budget we decided to reduce our salesforce from areas that were not producing well. In the table below you will see that our group decided to make some minor changes to Independent drugstores, Convenient store, Mass merchandising, and Total direct. We did not want to discontinue any products because they were all doing well for the market. Pricing: This period we only went up $0.08 as our norm we would have done $0.15 but due to budget we had to change that. GROUP C FINAL SIMULATION REPORT 32 Digital Marketing: Our decided to keep Allright at a budget of $0.05 million, Allround at $2 million and Allound Plus at $1 million. We felt our digital marketing strategy was working well for all three products. Special decision: We decided not to add an addition discount being that they were given a nice discount already. Decision 8 – Year 7 During this decision we noticed we were over budget by $4.1 million, also our new product line performance went down. Sales Force: We had to trim down on some things, so we decided to change Convenient stores from 11 employees to 9, Independent drugstores from 19 to 17, and Mass merchandisers from 38 to 37. Pricing: This period we only went up $0.15 which was our normal for the duration of the simulation. So, Allround went to $6.27, AllroundPlus $5.05, and Allright to $6.00. As a group we thought it was best to cut something due to our budget being over and this helped by cutting our pricing down. GROUP C FINAL SIMULATION REPORT 33 Promotion: Allround we changed to 35.8, Allround Plus Changeed to 8.3m and Allright changed to 6.1. Our changes were due to our budget being in the negative. Once we calculated pricing, promotions, and salesforce also looking at our different surveys and market made us agree to change something. Digital Marketing: Our group decided not to touch anything due to the need we want to market our customers. Special decisions: Our group decided to select Issue a statement expressing sympathy to the victims and promising to assist the police in finding the perpetrator. (Cost: none), Contact retailers in the area to have them return any product that has had the shrink- wrap removed. (Cost: $100,000), Remove all product from the shelves in the area, and suspend sales there for 30 days. (Cost: $1.5 million), Offer assistance and compensation to all victims of the tampering. (Cost: $500,000), Modify the packaging to make it clearer that consumers should not use a GROUP C FINAL SIMULATION REPORT 34 product when the shrink-wrap is missing and to instruct them to make a careful check of the inner seal before using. (Cost: $1.0 million). Decision 9 – Special Decision – Year 8 For our special decision we decided to Redefine the territories based on workload, we made this decision so that Sally had a fair chance to improve her overall business sales and so that Steve’s territory would not lose a lot of business he worked hard to obtain. Our stock price ended at $110.94 and although we did not meet our initial goal, we were happy that our stock had increased from year 7 and so did our overall net income. GROUP C FINAL SIMULATION REPORT 35 Appendix B - Initial Strategy Report Initial Strategy Report PharaSim is a simulation strategy for marketing management groups that is designed around the over-the-counter cold medicine industry. The focus of the simulation is for each marketing team to make decisions about their over-the-counter product to include product ingredients, pricing, distribution, advertising, and promotion for Allstar Brands (Kinnear, James, & Deighan, 2019). Allstar Brands is one of five firms in the “over-the-counter (OTC) cold and allergy remedy market,” and currently, their Allround product is the market leader (Kinnear, James, & Deighan, 2019). The success of the Allround product and their continued growth in sales and productivity is vital to Allstar Brands’ long-term strategic plans. Management anticipates that Allround will continue to grow its sales and finance the ability for Allstar to seek new business opportunities in new upcoming markets. However, the division manager in charge of the Allround product is cautious with his optimism for continued growth and increased sales due to the competitive market for OTC cold remedies. He recognizes that over the last several years there has been an increase in similar products and a demand for competitive promotions and advertising strategies. Therefore, it is our job as the marketing team to recognize where changes need to be made and implement them to continue the success of Allround (Kinnear, James, & Deighan, 2019). Over the next several paragraphs, our team will explain our business definition to clearly define who we want to serve and why our competitive advantage, performance objectives, and what we believe are our key success factors. Business Definition GROUP C FINAL SIMULATION REPORT 36 For Allstar Brand’s Allround, product the primary consumers are individuals aged 12 years or older with cold symptoms. These groups are based on the PharmaSim Student manual and are grouped as follows: • Young Singles – made up of young adults living on their own without children. This consumer is highly active at work, a high social media user and wants to rest and recover when there are not at home. • Mature Family – made up of households where the majority of children are aged 12 or older. This type of household would frequently consult the internet for remedy advice with few side effects and has potential for a high number of users. • Empty nester – older households with no children at home and search for remedies online without many side effects, although drowsy medication that promote rest can be considered a positive effect. • Retired – older individuals with a preference for liquid medicine. Conduct research on the internet for health-related questions, often loyal to OTC brands, but do heavily weigh the cost in their decision (Kinnear, James, & Deighan, 2019). Additionally, a secondary group is the Young Family group which consists of a household where the majority of children are under the age of 12 and parents may use our product to provide a remedy for children by using partial doses. This group uses trusted websites to search for products that are effective and convenient for their families (Kinnear, James, & Deighan, 2019). Depending on the demand development of an additional product for this group may be advantageous to gain market share. In the different groups, Young Singles and Empty Nesters, are generally similar in needs and Mature Family’s and Young Family’s are identical, as they both have children under 12 years of age. GROUP C FINAL SIMULATION REPORT 37 Competitive Advantage Due to a decline in the performance of Allstar Brand’s Allround product, the company is under intense scrutiny; therefore, to alleviate such pressures, our team will consult management on precautions to take. Our goal is to utilize several marketing management strategies including situation analysis, the 5 C’s, SWOT analysis, marketing strategy, and the 4 Ps. By doing so, Allstar Brands will be able to keep its competitive advantage. In the OTC cold and allergy market, the competition includes Allstar Brands, B&B Health Care, Curall Pharmaceuticals, Driscol Corporation, and Ethik Incorporated. Each company offers a total of 10 brands in the following five categories: cold liquid, cough liquid, allergy capsule, cold capsule, and nasal spray (Kinnear, James, & Deighan, 2019). Ethik Incorporated has been able to out-perform other competitors with Allstar Brands in second, B&B Health Care in third, Driscol Corporation in fourth, and Curall Pharmaceuticals in last. Ethik Incorporated produces three products: Effective, End, and Extra. Ethik Incorporated’s brands offer a variety of relief; a nasal cold spray (Effective), a 4-hr cough liquid (End), and a 12-hr cold capsule (Extra) (Kinnear, James, & Deighan, 2019). The company’s manufacturing sales generate $477 million (Kinnear, James, & Deighan, 2019). In second, Allstar’s Brands’ Allround product is a 4-hr multi-symptom cold liquid, with manufacturer sales of $361 million (Kinnear, James, & Deighan, 2019). The product has been able to perform high against other competitors with a single product; however, B&B Health Care’s products, Believe and Besthelp, have been shy of $13 million in comparison. The two products are capsules with Believe being a 4-hr allergy capsule and Besthelp being a 4-hr cold GROUP C FINAL SIMULATION REPORT 38 capsule (Kinnear, James, & Deighan, 2019). Besthelp has been noted as Allstar’s Brands’ top competitor throughout the simulation due to their similarities. With manufacturing sales of $272 million, Discole Corporation’s brands include a variety of cold and allergy relief offering Defogg (4-hr allergy capsule), Dripstop (nasal cold spray), and Dryup (4-hr multi-symptom cold capsule) (Kinnear, James, & Deighan, 2019). However, the company remains in the fourth position. Yet, coming in last is Curall Pharmaceuticals. The brand is similar to Allstar Brands as it produces a single product, Coughcure. Coughcure is a 4-hr cough liquid with manufacturing sales of $219 million (Kinnear, James, & Deighan, 2019). With the competitors in mind, Allstar Brands’ Allround product is seen as the most effective product due to its multi-symptom relief and mediational strength at an affordable price (Kinnear, James, & Deighan, 2019). Not including promotional allowances, Allround’s discounts have remained high, with a range of 25% and 40% (Kinnear, James, & Deighan, 2019). Additionally, the product has a high brand awareness of 83.2% outdoing the competition by nearly 20% (Kinnear, James, & Deighan, 2019). Therefore, the company should continue to raise brand awareness through advertising techniques to keep brand satisfaction. Our strategy will include three coupon types: print, digital and checkout to be inclusive of all consumers. In the foreseeable future, Allstar Brands should market an additional product through advertising efforts. With an already highly recognized product, Allround, additional products, such as AllroundPlus and Allright, will increase revenues and brand satisfaction. Additionally, to keep a competitive advantage, it is advised Allround reformulate its product to remove the alcohol and, to keep pace with market increases, increase this product’s price by $0.15 per round. Since Allround is in the mature phase of the product life cycle, marketing must be aggressive; therefore, to achieve this, promotional allowances are set high by allotting 18- GROUP C FINAL SIMULATION REPORT 39 percent for all merchants and 19-percent for target merchant consumers, grocery stores (Winer and Dhar, 2011). Additionally, to attract competitors’ consumers, we’ll offer a small trial sample size. Performance Objectives As previously, stated the main objective of Allround brand management team is to maintain long-term profitability and market share in “an increasingly competitive and changing environment” (Kinnear, James, & Deighan, 2019). To meet this objective, our team’s 10-year goal will be to maintain a valued market price for a top-tier product, to continually increase the sales force to keep the product on the forefront and to increase advertising and promotion. This is to keep our product in the lead by increasing cumulative net income to an amount greater than $950 million dollars or a stock price greater than $119. More specifically, by round 8, our goal is to have a stock price of roughly $119.00 and a net income of $950 million. To achieve this longterm objective, the brand management team will add a 4-hour cough syrup, as previous Conjoint Analysis all demographics combined prefer a 4-hour cough liquid and subsequently to meet the needs of the Mature Family and Young Family groups, representing 55.9% of the entire demographic, a child 4-hour cold liquid will be introduced to meet the demand. Expanding into new sectors within the cold market will allow Allstar Brands to grow and achieve a greater market share to meet cumulative net income and share price goals. Key Success Factors A well-developed and effectively executed market strategy is essential in determining the success of business firms because it serves as the guide throughout the actual marketing. Effective marketing strategies help firms define their visions, missions, goals, and the necessary steps needed to succeed. Planning and designing a marketing strategy require the engagement of GROUP C FINAL SIMULATION REPORT 40 various organization teams since it affects the way a company operates its business. Successful execution of a marketing strategy involves the consideration of multiple factors such as product development, first in the market, and dealing with the competition in the market. The Allstar Brands understands the significance of the successful execution of a marketing strategy considering the steps undertaken in comprehensive market research for their products. Product development requires extensive market research that will help in predetermining the marketing strategy (Taft, 2019). A good understanding of the market enables firms to develop products that meet market needs. Allstar Brand develops products that provide remedies for colds based on essential symptoms, including fever, runny nose, cough, chest, and nasal congestion. The company understands various market needs by its clients, so they exclusively formulate products that relieve colds and allergies. Allstar Brand also understands that having an effective marketing strategy helps in defining their business goals and the activities needed to achieve success. The company identified a market problem then did something about it based on well-targeted market research. Providing the first-in-market products gives firms a market advantage and a strategic marketing positioning (Kumar, 2016). The company considers the aspect of time in its marketing strategy and understands that it could take a longer time to achieve its long-term marketing plans. Successful execution of an effective marketing strategy requires a comprehensive understanding of market competition. Allstar Brand must ensure that all the operational and the sales teams perform effectively to remain competitive in the market. At the moment, the Allstar brand faces four main competitors in the pharmaceutical sector that has become a more demanding sector due to the financial crises and economic recession (Kinnear, James, & GROUP C FINAL SIMULATION REPORT 41 Deighan, 2019). Awareness creation through advertising the new products helps in promoting competitive sales and improves brand satisfaction. Conclusions As mentioned above our team is focused on the success, profitability, and longevity of our Allround product. Our team is willing to make aggressive decisions if needed however, any decision that is made about our product will be well thought out and we will be able to provide a reason why we decided to go a particular route. Our team plans to be proactive in the marketplace. Being proactive gives our team a better chance of staying ahead of the competition and the ability to come up with new innovative advertising ideas. We recognize the success of Allround relies on our team and the decisions we make; therefore, we take our decisions seriously and will do our very best to grow and expand our product. References Kinnear, T. C., James, S. W., & Deighan, M. (2019). PharmaSim: the marketing management simulation. Charlottesville, VA: Interpretive Software, Inc. Kumar, D. (2016). Enterprise growth strategy: vision, planning, and execution. Rutledge. Taft, M. S. (2019). Small business research and development investment strategies in a competitive market. Winer, R. & Dhar, R. (2011). Marketing management (4th ed.). Boston, MA: Pearson Learning Solutions. GROUP C FINAL SIMULATION REPORT 42 Initial Strategy Report Feedback & Reaction Initial feedback was “You got 93 points for the initial strategy report. Overall, you addressed all key issues very well. You needed more details on your pricing, sales force and promotional strategies. Overall, this was a good report and I am looking forward to seeing how you will implement your ideas in the game.” For pricing, we planned to use pricing reports to help set the product price to be comparable to the major competing product for each line. For sales force, we planned to use sales force reports to ensure our sales force was proportionally allocated and a higher number of sales force personnel compared to our main competitor B&B. For promotional strategies, this section is the most challenging, our promotional allowances would be set higher than the competition using the promotion report as a basis for comparison. Purchase answer to see full attachment

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