Michele DiPompeo, Tyler Fike, Brian Konyves, Rob Prusinowski

Marketing

Komal Kanari

5/17/06

Team 8

I. Mission Statement

Our mission is to strive to consistently improve the quality of people’s lives while ensuring the safest pharmaceutical enhancements of today. At Allstar Brands Corporation we aim to satisfy our customers, employees, and shareholders. We guarantee the safety of our products and do our best to provide an enjoyable working atmosphere to ensure our company’s financial success.

II. Objectives

  1. Keep price correlated with current inflation rate but always lower than the highest price of our competitor.
  2. Focus sales force on channels with the greatest growth
  3. Keep promotional allowances between 15-17% in order to keep expenses low.
  4. Keep the product formula consistent with what customers want and expect.
  5. Increase stock price by 30-50% within 4 years
  6. Introduce an allergy medicine to extend our product line and give our customer more variety.

III.  SWOT

-Strengths

When we came into the market, we were off to a good start with:

-  great brand awareness

-  a commanding presence in both the supermarkets and chain drug stores

-  high brand loyalty

The importance of brand awareness is extremely important because when a consumer goes out to shop for medicine, our name will already be an option before looking on the shelves. Also, we have a strong presence in both supermarkets and chain drug stores which are beneficial being that a lot of traffic runs through these stores. Along with these two strong factors already listed, we can keep our advertising expenses down due to high brand loyalty; meaning people would rather pay a little more and depend on our company. We are in complete domination coming into this cold relief market and plan to stay there.

-Weaknesses

Coming into the market,

- we did not have a presence in the allergy market

- needed to eliminate the negative side effects from the antihistamines and alcohol

- have a low retention rate.

Recognizing our weaknesses help us figure out where we need to improve. A presence in the allergy market will make Allstar Brands a more known name through its variety of products. Our customers’ feedback showed negative side effects from the antihistamines and alcohol. This is something we need to improve in our formula. We also need to get new customers’ attention and keep their attention.

-Opportunities

In order to become and stay a successful company, we must always be looking outside of our doors for new opportunities to please our stockholders, employees, and customers. This is vital to maintain a profitable company, because we must constantly adapt to the ever changing environment in order to take advantage of promising opportunities quickly and efficiently. The most important opportunities that we are looking at now are releasing new drugs into the market, creating more heath-aware drugs, and increasing our brand awareness.

Our customer base is always changing, and we always want to have the right medication for them. Within our target market, customers may be taking part in social or cultural changes that we need to adapt with. Releasing new drugs is no simple task, yet essential in keeping up to speed with our target markets. We need to listen for and analyze the changes occurring in society and make medication that suits their needs. For example, if the customer base feels they do not like alcohol in medication, then we should give them that option in order to keep them as a customer. The more customers we lose, the more our competition gain.

One specific change in culture that our company noticed is attention to health. More and more companies are using the health edge to capture the market share. We feel that to stay up to speed with such a popular, long lasting trend, we need to create more health-aware drugs. This can include providing medication with fewer side effects, or that provide additional, healthier additions to the body.

The nature of any pharmaceutical company is to maintain our existing customers by always having a high quality brand that people know and trust. In this respect, we always have the opportunity to increase brand awareness to reach those who have not tried our brand yet. Ideally, we would like to be the name people think of first when they set out to buy or recommend medication. The customer will not need to search the aisle deciding what brand to purchase since they will already know that they want ours. Given the proper budget, the opportunity to increase our name will always be important.

-Threats

In addition to identifying our opportunities, we also need to look outside our company for threats. This is another important aspect of a company that must be analyzed in order to maintain constant success. The most significant threats that we are currently examining are competition, safety, market conditions, legal and political changes, and specificity in medication.

Obviously our competition is the most direct threat to profitability and market share more than anything else. We constantly need to be aware of the competitiors’ prices. Ideally, we would like to be close to the top of the price range, because of our well know brand and assurance of quality. Also, we need to be aware of what kind of advertising they are running. Being aware of their advertising will tell us the specific target they are shooting for. Also, paying close attention to what benefits they are selling will allow us to develop similar medications if we see the opportunity is promising.

Safety is a constant threat for a pharmaceutical company. People look to us to help them feel better, and certainly not to make them worse. To ensure that we maintain a safe product, medications are tested for extensive periods of time. If we were to ever release a product that was not safe and had to be pulled off the market, it would certainly destroy our profitability, and more significantly, destroy our credibility. Safety also includes making the customer aware of possible side effects. Certainly every medication is sure to instigate effects, but we would like our customer to be aware ahead of time, resulting in no surprises.

Although listed as an opportunity as well, adapting to current market conditions can also be a threat. If we overlook these changes in society, we are potentially giving our competition full advantage of the situation. We constantly need to be aware of the market and specifically how, where, and when it is changing. Missing these transformations in society is a huge threat to our market share.

Political and legal changes can also pose a potential threat to our company. We need to be aware ahead of time of any new rules or regulations that may restrict medications or prescription medicines. We certainly do not want to spend millions of dollars on research, salaries, and development of a drug that is potentially going to be banned or deemed dangerous to society.

Specificity in medication is also a possible threat to our company. We cannot simply provide medication to consumers claiming it can cure their symptoms. Again, we need to listen to our target market and allow their attitudes and feedback to tell us what they need. Using extensive market research, we need to provide exactly what our market it looking for. When they look for a product that will cure their symptoms, we want them to find that our medication fits their needs perfectly. Steering in the wrong direction, however, can pose a huge threat to the company leading us into a dead end.

IV.  Achieving Marketing Objectives

Every company needs a marketing strategy to pursue their long term and short term goals. Yet, each company’s goals differ and so does their strategy. Allstar Brands Corporation’s objectives include the following: proper pricing of products, keeping a sales force with an edge, low expenses, consistent product formula, increasing the stock price, and extending the product line. The plan to achieve these aspirations has been created through trial and error and is currently doing moderately well.

In order to properly price a product one must compare their product to their competitor’s products and prices. Our approach involved raising the price according to inflation but remaining $0.10 to $0.20 below the highest price of our competition.

It is also important to focus on sales force. We found that it was best to have an idea of today’s market by looking at previous years results. Our results showed high revenue in grocery stores and chain drug stores. Based on these statistics, we focused most of our sales force on these stores.

Budgeting is a large part of growth in a company. It is relevant to watch revenue and expenses. In order to keep expenses low, we kept our promotional allowances between 15-17%. We had faith in our products and our customers’ loyalty to our products that we felt the customer would be willing to search on the shelves for our drugs.

Our customer’s satisfaction is extremely significant in the growth and profit of our business. If the customer is not happy with the product then we need to improve that product. After researching the Allround drug on the market we discovered that some negative symptoms were present. These symptoms included sleepiness from the alcohol. We listened to our consumer and took the alcohol out of Allround. This had an amazing positive effect on our stock.

We also helped increase our stock by modifying our product and giving our clients more variety. According to customer surveys, a new allergy medicine is what the consumer would most prefer, so we extended our product line by introducing a new allergy medicine to the market.

We believe that a 30%-50% stock increase over the next 4 years is not an extraordinary accomplishment. In Period Six our stock prices was $52.95 and at Period Ten our stock price had reached $87.27. By paying attention to our advice and learning from our mistakes, it will be relatively easy to increase your stock price to the desired amount. The stock increase from changing the drug’s formula and adding a new product helped us get closer to our stock goal. A strong publicly traded company can be noticed by their high stock value. Allstar Brands is a strong publicly traded company and deserves to be noticed. In order to increase our stock value we focused sales force in the areas that are producing the most and kept expenses down by using medium quality advertising firms and low promotional allowances. We have had our ups and downs these past few years in stock value, but overall our company seems to be growing.

V.  Lessons Learned

Our lessons learned can be separated into lessons learned about product, promotion, placement, and price. Our first major lesson was learned when we witnessed other companies failing to comprehend customer preferences. Dropping the alcohol was a pivotal step in ensuring our brands future success. It is incredibly important to listen to customer’s feedback and adjust our product to better suit their needs. Our company saw immediate success after it introduced a 12 hour capsule (which are preferred over liquids) and a 4-hour allergy capsule, which customers had been requesting. One of our biggest faults was accurately pricing our products. We were always attaining high net income, but our stock price was not the industry leader. The original process was to look at our competitors’ prices and derive a fair price based on what they were charging. Our next thought was to fluctuate our prices at the same rate as inflation. These two methods were never a success. Our next step was to price the product based on the tradeoffs section of the survey. In this method we would base our prices on the amount of symptoms our drug would relieve. We aimed to keep Allright and Allround+ as close to the line as possible. As newer products, they would have to be reasonably priced until they build a large amount of brand awareness and loyalty. Allround had the benefit of being our veteran product. As the graph displays, Allround had high awareness throughout the 10 periods and, for the most part was growing at a steady rate above its competition. Therefore we were more lenient with Allround as we felt that customers believed it worked well and were willing to pay extra for satisfaction. We decided that we would only raise Allround’s price in conjunction with the inflation rate while making it relatively close to its nearest competitors. It is obvious how poorly we were pricing products. We were constantly below our competition even though our products were relieving the same amount of symptoms, if not more. By looking at the graph you can see that, as we began to use the tradeoff graph our prices rose above our competition, instead of right below.

Our methods of placement seemed to work very well. We would focus our sales force on areas that had a significant amount of growth in the previous period. This also had a negative effect at times when we would forget to focus sales force on smaller retailers, a mistake that we would later compensate for by giving them extra attention. We also began to study how each sales force was doing. If a sales force of 10 was producing 1.1% or total sales in one sector, while a sales force of 20 was producing 30% of total sales in another sector, then we would move some of the sales force from the lower producing sectors into one of the higher producing sectors. We often found that doing this made a very small change, if any, in the lower producing sectors, so a move like this can be described as, almost, entirely beneficial.