Pharmasim round 3 and 6

1. Allstar : Round 3 & 6 Done by: Anoud Almutlak Arwa Alnahdi Baraa Alafif Khlood Soma Mashael Alotaibi

2. Round 3 Period #2

3. Company Overview Revenue (M$) 406.2 -5.2% Gross Margin (M$) 196.5 -5% Net Income (M$) 81.3 -15.8% Stock Price $41.64 CGS (M$): 140.7 Capacity Utilization : 92.2%

4. Market Situation Prices increased an average of 2.0% compared to an inflation rate of 3.2% Total advertising spending is up $7.9 million while promotional spending increased $3.3 million... Mass merchandiser sales showed the strongest growth this period with an increase of 14.1%... Retail sales grew by $67.6 million, or 2.8%...

5. Competitors Situation

6. Special Incident: Cannibalization OPTIONS REASONS a- 12-hour multi capsule * Decrease sales for our original 4-hour multi liquid. * Not attracting new customers ( only adults). * Different in time of using. B- cough formula * Decrease sales for our original 4-hour multi liquid. * Not attracting new customers. ( only adults). C- children’s liquid cold medicine * New target customers. ( Children) * Not affecting the sale of the original brand. ( Different users)

7. Special: Reformulation During this round, we had the choice to either Drop Alcohol (1.20) switching from cough suppressant to expectorant(1.31) Leave the brand as it is (1.31) Reason: Lowest cost, and we wanted to cut down our costs.

8. Special: Reformulation

9. Decision: Pricing Before MSRP: 5.58 Prices increased avg 2% Inflation 3.2% After Increase price by 2% New price: 5.69

10. Report Used: Pricing Allround has the fourth highest MSRP therefore we felt okay to increase the price(due to inflation) because we would still be in the industry range.

11. Decision: Advertising Before Budget: $20 million Ad Agency: BMW (15%) Primary: 5% Benefits: 45% Comparison: 45% Reminder: 5% After Budget: $ 16.0 Million Ad Agency : Sully and Rogers (10%)  Primary10 %  Benefits45 %  Comparison35%  Reminder10%

12. Report Used: Advertising Highest among competitors, therefore we needed to decrease it relative to the industry. Reason: to decrease costs.

13. Decision: Sales Force Before Mass merchandiser sales showed the strongest growth this period with an increase of 14.1 % Mass Merchandise: 20 Total Sales Force: 189 After Increase SF by increasing Mass Merchandise Opportunity: MM sales growth Also, we had the lowest SF in the industry. New MM: 40 New Total SF: 209

14. Report Used: Sales Force

15. Results Revenue (M$) 412.8 1.6% Gross Margin (M$) 209.4 6.6% Net Income (M$) 95.2 17.1% Stock Price $44.45 CoGS (M$): 133.2 Capacity Utilization : 91.8% CoGs

16. Customer Satisfaction increased from 57.6% to 63.7%

17. Growth of sales according to symptoms increased except for Cough. This increase might be due to the reason of dropping the alcohol in the formulation.

18. Round 6 Period #5

19. Company Overview Revenue (M$) 511.3 8.7% Gross Margin (M$) 259.4 12.6% Net Income (M$) 115.3 32% Stock Price $63.12 CGS (M$): 179.7 Capacity Utilization : 118.6%

20. Company Overview CGS (M$): 179.7 Capacity Utilization : 118.6%

21. Market Situation Ethik announced the introduction of End+ this period... Prices increased an average of 3.2% compared to an inflation rate of 3.6% Total advertising spending is up $13.4 million while promotional spending increased $7.1 million... Mass merchandiser sales showed the strongest growth this period with an increase of 14.6%... Retail sales grew by $255.1 million, or 9.4%...

22. Competitors Situation

23. Special: Creative Marketing Fund street artists in major cities to act out a " commercial” ($ 500,000 ) Place your product in a movie expected to be popular with young adults ($ 100,000 ) Sponsor a racecar driver ($ 2 million ) Advertise in a crossword puzzle ($ 50,000 ) Run an ad contest ($ 1 million )

24. Reasons Option 1 * Not related to our product. * Not helpful. Option 2 * Focusing on a specific group of people. Option 3 * To costly. Option 4 * Not being used or played anymore * People may don’t have time Option 5 * Seems the most reasonable . *Attract customers to participate which will create a relationship between buyers and the firm. * Activate the website. * Knowing what customers like and prefer.

25. Decision: Promotion Before Lack of consumer promotion for all round (market update) Consumer promotion : $ 1.65 m After Consumer promotions: $ 2.5 m

26. Decision: Pricing Before Price of Allround : $ 5.53 Price of Allround +: $ 5 After Price of Allround : $ 5 Price of Allround +: $ 5.7 Reason: Decreasing Allround : To encourage sales Increasing Allround +: Already beimg advertised and tried.

27. Decision: Sales Force Reallocate our sales force based on benchmarking ( curall company) : Direct (#SF) Indirect (#SF)    Indep Drugstores 30 Wholesaler Support 36    Chain Drugstores 66 Merchandisers 24    Grocery Stores 93 Detailers 24    Convenience Stores 6   Mass Merch 30 Total sales force 309

28. Report used: Sales Force The sales force report showed that we Ranked the 4 th ( insufficient allocation ).

29. Decision: Advertising Before: Advertising budget: $ 8 m Advertising options percentages: -Reminder: 10% -Comparison: 35% After: Advertising budget: $ 5 m Advertising options percentages: -Reminder: 15% -Comparison: 30% Reason: * Not a new product any more, Already being advertised a lot. * Increase: To remind and attract. * Decrease: Not a new product to be compared to others.

30. Results