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PharmaSim Analysis
Marketing Plan

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Joseph Burke

December 5th, 2019

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Table of Contents

Company Overview​………………………………………………..……………………....3

Product Description​…………………………………………………………..…………...5

SWOT Analysis​……………………………………………..……………..………………..4

Marketing Strategy​..………...…………………………..…………………………...........7

​Target Markets/Customers​…………………...…..…….……….………....8

​4 P’s of Marketing​…………………………………..……………………..9

Projected Changes​ ………..…………………………………………..……………….....11

Financial Projections​………………………………………………………………..…....12

Executive Summary​……………………………………………………………………....15
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Company Overview

Allstar company provides a different formulation of cold and allergy medications that are

proven to give a competitive advantage in the medicine industry. Allstar Brands’

provides consumers, mass retailers, physicians, and wholesalers with pricing and

promotional allowances that are movable and friendly to the market. The products the

company offers is effective and chemically efficient as proven in research markets and

consumer reports. Allstar Brands’ is a reliable and sustainable company that has been

in business for nearly 96 years. The company maintains a competitive advantage and

shows profitability by introducing new products like “Allright”.(“PharmaSim”, p. 7) Allstar

Brands management team makes decisions based standings in each industry and

market research.

Allstar already had an established product in the market at the beginning of the

simulation. The company developed a reputation from its cold medicine “Allround” as

“one of the most effective brands on the market at reducing multiple cold symptoms,” as

well as being more successful than average product in a financial sense. There were a

number of strengths and weaknesses to the company both before and during the

simulation that contributed to and influenced our brand strategy. From there, Allstar

introduced the allergy product “Allright” in period 6.

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Since “Allround” was already an established product with very high product awareness,

we did not need to create anymore promotion around the product, other then developing

it beyond the point to which it had already grown. As previously stated, the Allstar brand

had been very successful financially with its Allround product, and the amount of

revenue that the company had at the start of this simulation significantly affected the

strategy as well. Because of the financial situation the business started of with, our

group was able to invest in the 2nd most expensive advertising agency. We believe that

this helped us to stay ahead of the industry in a promotional sense, at the start of the

year one our business already had more promotional support than any other brand on

the market. This financial stability also allowed us to employ a large sales force, totaling

nearly 215 employees by the end of the simulation.(“Interpretive Simulations”, 2019)

When staffing the sales force we focused on two of indirect channels, which had proven

successful in the trial periods. This also meant that much of the business was being

done before the product even got to the consumer. With the added income, we were

later able to add employees in direct sales channels where we best saw fit based on the

market industry outlook distribution.

Strengths, Weaknesses, Opportunities, Threats

Strengths-

● One of the highest market shares in “Cold” product category

● Leading in price in the OTC market, with no negative impact on sales

● Increased revenue to fund new products(“PharmaSim”. P. 19)

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● Highest brand awareness among OTC medicine brands

● Highest purchased OTC medicine brand

Weaknesses-

● Very limited product line(only 2 products)

● Bad placement, certain channels misallocated

● No market share in Cough and Nasal categories

Opportunities-

● Budget savings, increase by switching to a different ad agency since awareness

is high for Allround

● No product as of now for child-specific products in medicine market

● Growing consumer trend for products without negative side-effects

Threats-

● Declining market share and profitability, because of increased OTC market

competition

● Increase in consumer preference for convenience of capsule over liquid medicine

● Ethik Inc.’s triple-threat cold spray, liquid, and capsule line

● B&B Healthcare’s double-threat allergy and cold capsule line

● Driscol Corp.’s diverse allergy, cold, and multi-symptom line

Product Description

Allright:
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Allright is the second product from Allstar company. It was developed and is advertised

on it’s allergy relief capacities. This new product was introduced during year six and has

been generating revenues for 4 years straight. Allright is composed of Antihistamine

and decongestant offering a four hour relief after taking a capsule. As mentioned above

Allround which is our main product has had some complaints of alcohol use. By

introducing Allright our company decided to enter the niche market for allergy medicine.

Doing so, introduced a new competitor “Defogg” and reintroduced an old competitor

with “Believe” from the B&B Healthcare brand. Even though this product was new we

were able to better provide a relief perception to consumers than the rest of the market.

This has helped us keep our sales at a steady growing pace. (“PharmaSim”, p. 6)

Allround:

Allround is the main product offer by our company Allstar. Allround has been introduced

almost 11 years ago in the Cold medicine business. Allstar believed in their product

composition from the start and never changed the formula. It is composed of Analgesic,

decongestant, cough and also alcohol. Alcohol, for example raises questions in the

consumer’s mind about it’s negative impact on their health. It may only be used by

adults because of the alcohol composition but also helps the patient get more relief.

Just like Allright, Allround effects last for four hours but is administered in liquid. Despite

being so chemically complex this product has had the best satisfaction rate in the cold

market according to consumers. Allround being a cold medicine has the advantage of

providing relief mostly for aches, nasal congestion, coughing and runny noses.Our
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satisfaction rate was the highest with 51% we can therefore assume that our brand

perception was improved due to the efficiency of our product. (“PharmaSim”, p. 6)

Marketing Strategy

Our objective as a company is to create value for our stakeholders. To measure our

performances we have had access to Income, stock prices, manufacturing sales,

market shares. Our company was able to achieve its objective with a constant growth in

revenues and sales but also by reaching a capacity utilization of near 100%. Thanks to

Allround, we were able to develop Allright faster by using parts of resources (ie: funds,

distribution, advertising) previously allocated to Allround and to better compete with

B&B Healthcare. We have noticed however that Allright was also eating Allround’s

profits due to both being perceived as an allergy relief at the same level. Allright was

however not discontinued at anypoint because of its help to our market focus strategy to

solidify our company’s assets (“Pharmasim”, p 36). Our product formula is the best in

the cold medicine market. With Allround we were able to adopt a differentiation strategy

as we noticed prices for BestHelp were perceived to be high but their sales were still

high.

Target market

Allround is a product of multiple usage as talked about in the product description. This

has helped Allround gain market share in markets it was not even in. Allround is
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advertised as a cold medicine and there are multiple relief agents that can be used to

treat other conditions with similar symptoms. Allround provides relief for aches, nasal

congestion, chest congestion, runny nose, coughing and allergies. This makes it a direct

competitor of cold medicine products like ColdCure, BestHelp and Dryup but also of

allergy, nasal and cough medicine at a lower intensity. Allright on the other hand, was

our ticket to enter the allergy market which was growing at a fast rate providing great

returns to B&B as well as Driscol. (“Imperative Simulations”, 2019)

Target customers

Our company competes in two different markets and that gives us two different target

customers for each product. We have tried differentiating the two products so that they

would be complementary of each other. That is the only way to escape self-cannibalism

of our allergy relief product. Allround has been a very polyvalent product as mentioned

below with many ingredients including alcohol. This has made us reconsider a more

narrow customer target of young adults with cold symptoms and who don’t want to pay

the highest price tag to get relief. Our prices are perceived to be lower than that of our

top competitor’s product Besthelp but our product efficiency is at the same level pushing

us to use pricing as an advantage. The introduction of Allright with it’s non alcoholic

composition combined and its allergy relief capacities, we were able to also include

young families as part of our target customers. (“PharmaSim”, p. 49)

Distribution channels

From using our “shopping habits” report we noticed that allergy and cold medicine were

purchased more into grocery stores and chain drugstore but very poorly for
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convenience store. (“Interpretive Simulations”, 2019)This has increased the need for

salesforce to these distribution channels in order to have additional support services

from salespeople (“PharmaSim”, p. 38). Mass merchandisers are also well performing

points of purchase for cold medicine therefore requiring a slightly higher discount as

opposed to increasing salesforce.

Product, Pricing, Promotion, Place

As said previously, the company started off the first period with the product Allround.

This general cold product already had 27.8 percent of the market share in the industry.

Allround also already had solid brand awareness at 69.3 percent as proven by the

consumer comments, reviews, and most importantly the customer surveys.

(“Interpretive Simulations”, 2019) This number was the second highest in the industry

only behind competitor “Besthelp”. From here. We only had to further improve the

product where we best saw fit, if it was price, promotion, or digital marketing. Looking

back on the simulation, the one thing we missed doing was removing the alcohol from

the product which would have further opened up the market and attracted new

consumers to it.

We then introduced Allright in Period 6. The reasoning behind introducing the product

was to penetrate the allergy relief sector that the company had previously been lacking.

Our advertising for Allright focused on relieving allergy symptoms with minimal side

effects. Promoting the allergy relief was something that were not promoted for Allround.
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Since the Allright and Allround products addressed separate sectors in the industry,

allergy relief and cold symptoms, our company was confident that the addition of Allright

would not hurt our cash cow product which is Allround. We were confident in our

decision to introduce this new product because of our positive sales from existing

products. Having a strong company performance and brand awareness in prior rounds

made us even more confident that we were prepared to launch an allergy product. The

strong brand awareness of 76%, existing sales support, and large budget of $18M

resulted in a 10.7% market share in Allright’s first period on the market. (“Interpretive

Simulations”, 2019)

Our pricing strategy throughout the course of the simulation followed the trend of the

trial periods and results of the first couple periods.The results of the trials showed that

starting at $5.29 MSRP maximized net income, retail and manufacturing sales. At this

point we also offered minimal discounts to the wholesale sector and the 250-2500 unit

section. This was to try and force higher volume sales. We looked at the market

conditions in each period and base our decisions on pricing and promotion on the

market in general as well as inflation. (“PharmaSim”, p. 38)

For advertising we used, the Tier 2 advertising firms in the starting periods. With

increased budgets in later rounds, we had the additional funds to use BMW, the better

advertising firm. As mentioned above, young families were our primary advertising

target with primary and reminder messages especially for Allround. Benefit messages
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and trial budgets were increased when the Allright product was introduced. Point of

purchase promotions also proved to increase brand awareness, market share, and unit

sales the most.(“Interpretive Simulations”, 2019) We did not see an increase in

response to coupons so we kept the budget the same and at a minimal. Since Allround

was already an established product we found that offering free trials would have no

impact and would be a waste of budget. However, we set budget aside to offer free

trials for Alright since it was a new product and just entered the market. We also found

the digital marketing did help our brand awareness and helped our new product Allright

penetrate the market.

For place we changed our salesforce every period based on what was trending during

the period. By period 10 we found that chain drug stores were bringing in the most

amount of business so ultimately we put the majority of our salesforce in this area for for

direct. For indirect sales force, we put the most amount in wholesale support which

seemed to bring the most amount of revenue. (“PharmaSim”, p. 39)

Projected Changes

Period 9 was a really good year for Allstar as a whole. Our stock prices went up 15.3%,

Net income 56%, marketing efficiency 59% and an increase of 6 millions units to the

Unit sales. These outstanding growths are due to a misallocation of resources causing
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sales to go down for Allround with less promotion and visibility. Prices for Allright were

perceived to be low even though our strategy was to introduce Allright as a more

expensive alternative with high benefits. Another issue we’ve been having is operating

overcapacity which can bring more negatives than benefits to our Net income.

Advertising spending for Allround had been consistently decreased for the profit of

Allright. We can now stop considering Allright as a new product and re equilibrate

Advertising spending for both. Accounting has reported that Allround and Allright’s

prices are too low. This can be explained by our decision to reallocate more promotional

funds more towards Allround and Advertising funds more towards Allright. For period 10

we will have to lower both Allright’s advertising expenses and Allround promotional

advertising. We expect that this will make up for the lost in sales for Allround as

Allright's brand awareness is growing at a steady pace. We will also have to reallocate

more co-op advertising allowance for Allright to push more consumers to try it. To solve

our overproductivity we will need to raise the price accordingly and make up for the lost

in profit. Discontinuing Allright will not be an option for us this year as we’re still gaining

more market share but a reformulation of Allround’s composition will be necessary to

avoid self-cannibalization. Lastly, we will go back to using “Brewster, Maxwell, &

Wheeler” as our advertising agency for Allround ("Interpretive Simulations", 2019).

Financial Projections

By period 10, we raised our MSRP for Allround from $5.79 to $5.95. The reason for this

was to balance out what we were spending on special decisions, which in turn added
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value to the company as well as the product. In addition to raising the MSRP for

Allround, we also lowered our discount we offered to consumers to balance our budget

as well. The promotional cost for Allround was $1.9 million and advertising costs were

$3.9 million. We also decided to utilize digital marketing to some extent, in which we

spent $0.3 million. The unit sales for Allround were 64.6 million, it’s gross margin was

$102.8 million and manufacturer sales were $250.4 million. From this, Allround had a

share of 9.2% for retail prices in the market, as well as a 9.3% share for manufacturer

sales and a 10.4% share for unit sales. (“Interpretive Simulations”, 2019)

For Allright, we increased the MSRP from $5.99 to $6.09 in period 10. Since this was a

fairly new product, we did not want the price to remain low. We decided to keep the

same discount offered to customers during period 9 in period 10, which was 32.6%.

Since this was a new product and because we raised the price, we wanted to maintain

this percentage based on customer satisfaction. The promotional costs were raised

from $1.9 million to $2.3 million. The reason for this increase was due to it being a new

product and to make it easier for consumers to locate the product when shopping.

Advertising costs increased from $4.6 million to $4.9 million, which also was purposely

raised in order to make it easier for the customers to find. Digital marketing costs

remained the same at $0.4 million since we put more money into promotion and

advertising. The unit sales for Allright were 21.4 million and it’s gross margin was $28.9

million. At the end of period 10, Allright’s share of retail sales were 3.3%, as well as it’s
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share of manufacturing sales were also at 3.3% and it’s share of unit sales in the market

was 3.5%.

Based on period 10, our projections for period 11 would be to leave the MSRP for

Allround at $5.95. Since unit sales remained at 64.6 million during period 9 and 10, it

would be best to leave the price the same. Based off of feedback from the customer,

they were somewhat satisfied with the product, therefore the price should remain the

same and consumer promotion should increase. The customer discount for period 11

would be raised from 32.6% to 35% in order to satisfy consumers. More money would

be put into promotion rather than advertising in period 11. We would raise promotional

costs to $2.9 million and lower advertising to $3 million. By doing this we hope unit sales

would increase from 64.6 million to 66.3 million in this period. This would hopefully

increase the gross margin to $105.2 million and manufacturer sales to $254.1 million.

Allround’s share in the market regarding retail price will increase in period 11 to 9.4%,

it’s share in manufacturer sales to 9.5% and it’s share in unit sales will increase to

10.7%. (“Interpretive Simulations”, 2019)

For Allright, we would increase the MRSP in period 11 to $6.15. The customer

discounts offered would finally be lowered to 30%. We would continue to raise

promotional and advertising cost by $1.8 million individually and raise digital marketing

costs from $0.4 million to $1.1 million. At the end of period 10, customers were still

having difficulty locating the product, therefore increasing cost throughout all channels
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should resolve this issue in period 11. This hopefully will increase unit sales from 21.4

million to 23.4 million, since customers were happy with the product and made frequent

purchases based on feedback from period 10. From this, we are projecting that the

manufacturer sales will increase to $90 million and the gross margin will increase from

$28.9 million to $30 million in period 11. Allright’s share in the market based on retail

sales are projected to increase from 3.3% to 3.6%, the share of manufacturing sales

from 3.3% to 3.6% and an increase in it’s share of unit sales from 3.5% to 4%.

(“Interpretive Simulations”, 2019)

Executive Summary

Overall, our group found that listening to the consumers and following the reports and

surveys best helped to make decisions each period. Also, if we could do it over again

we would have removed the alcohol from Allround product to open up the Medicine to

more consumers. We also would have waited a little longer to introduce a new product

since the Allright product did not have much impact on the market to start off. Next we

found that since our company started off with a product that already controlled a large

amount of the industry we could lower the advertising budget and use the money

elsewhere. Another big part was pricing. We figured out that it was very important to

keep the premium high pricing for Allround to ensure the product would stay the

company's “Cash Cow”. From there we could lower the promotion budget for Allround

and focus the money on other areas like product development.

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Graph 1: Brand Awareness

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Graph 2: Satisfaction Survey (Customers)

Graph 3: MSRP
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References

Kinnear, T. PharmaSim. Retrieved from

https://schools.interpretive.com/fsui2/data.php?token=0&c=filedl&id=ugohfu/mnmxohy_nugohf

um_1w3-&z=1575586209100​.

Interpretive Simulations. (2019). Retrieved 4 December 2019, from

https://schools.interpretive.com/fsui2/index.php?token=0

Vu, S. Pharmasim (Marketing & Branding Simulation). Retrieved from

https://portfolium.com/entry/pharmasim-marketing-branding-simulation​.