Marketing StrategyPharmaSim Decision #2-5 11/10/2015 Team 4: Brynn Cummings Jenna Goitiandia Maddy McDermott Marketing Objectives ● ● ● Be the most profitable team! Cold medicine for all: mass-marketing Maintain quality & increase awareness Period 2 Decision 1 2 Details Sales Force 85:42 No change Keeping some variables the same will allow us to see what is directly affecting profit Pricing $5.29 $5.49 Increased price of product in response to inflation Advertising $15 million $12 million Decreased advertising due to high recognition and brand loyalty Promotion 17.0% No change Creative Design Friendly design No change Special Google AdWords Quality assurance & formula Period 2: Formula Change ● ● ● Don’t take out cough suppressant because many people complained of a cough All other brands don’t use alcohol, so we will jump on bandwagon Remove alcohol to appeal to all Period 3 Decision Period 2 Period 3 Details Sales Force No change 96:49 Allocated throughout different types of stores Pricing $5.49 $5.49 Changed volume discounts on <2500 to 32%, 2500+ to 38% Advertising $12 million Sully and Rodgers, Primary 20%, Benefits 30%, Comparison 5%, Reminder 45% Less effective ad agency, didn’t increase budget with introduction of new product Promotion No change No change Creative Design No change No change Special Quality assurance & formula Children’s Liquid Cold Medicine Added a children’s product & changed back to original formula (with alcohol) Period 3: Line Extension ● ● Introduced new product: ○ AllRound + (child 4 hour liquid) Appeal to a larger amount of people Period 4 Decision Period 3 Period 4 Details Sales Force 96:49 88:42 Reverted to amounts that were closer to the original numbers Pricing $5.49 $5.69, volume discounts stay the same Pricing increase in response to inflation, 3.7% ($5.49*1.037=$5.69) Advertising Sully and Rodgers, Primary 20%, Benefits 30%, Comparison 5%, Reminder 45% Increase budget to $17million Primary 20%, Benefits 40%, Comparison 10%, Reminder 30% Increased budget to account for new product, increased reminder to strengthen older customers Promotion 17% 19%, raised trial and coupon budget by $500k each Raised levels because of new product introduction Creative No change No change Special Children’s Liquid Cold Medicine Social Media Problem - respond to comments Brands that do this are more trusted, added a child line (4 hour liquid) Period 4: Social Media ● Respond to comments on social media ○ ○ ○ Increase the brand’s digital presence Create more brand awareness Allow consumers to trust the brand Sales Force Report- Purchase for $22,880 ● Realized we needed to reallocate and increase the Sales Force Period 5 Decision Period 4 Period 5 Details Sales Force 88:42 176:69 Bought the Sales Force report & used information to re-allocate & significantly increase Sales Force Pricing $5.69, volume discounts stay the same $5.69 for Allround, $4.99 for Allround+ Advertising increase budget to $17million Primary 20%, Benefits 40%, Comparison 10%, Reminder 30% $10m for Allround, $20m for Allround+ Promotion 19%, raised trial and coupon budget by $500k each Special Social Media Problem respond to comments Increased advertising budget on Allround+ to increase awareness of new product, decreased budget on Allround Period 5: Discontinue? ● ● ● Kept AllRound+ to give it a chance in the market Not in market long enough to discontinue High brand awareness, need to increase product line awareness Net Income Statement Decision 1 Decision 2 Decision 3 Decision 4 Decision 5 Net Income $95.8 $107.2 $80.7 $63.9 $73.8 % Change 42.7% 11.9% (24.8%) (20.8%) 15.5% Stock Price $50.86 $51.12 $40.76 $38.55 $43.69 Summary End of Decision 5 Thank you!