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Mission Statement:
Allstar Pharmaceuticals is dedicated to promoting healthy lifestyles for our customers through quality products. We are equally focused on creating a positive work environment and maximizing shareholder value.
S.W.O.T. Analysis
A. Strengths 1.Customer Satisfaction
If the customer is not satisfied with our products, then we are unsatisfied as well.
Customer satisfaction stems primarily from the quality and effectiveness of our products.
Our Customer Satisfaction has risen steadily over the last 10 periods.
2. R&D Department Focuses on developing new products related to consumer
needs and demands. Introduces quality products with low side effects.
S.W.O.T Analysis
A. Strengths3. Brand Awareness
Allstar has the highest brand awareness in the Pharmaceuticals market .
Allows us to confidently introduce a new product into the market.
4. Quality products The quality of our products is a strong factor in
our customer satisfaction. We strive in making high quality products with
limited side effects.
S.W.O.T Analysis
A. Strengths5. Ever-Present Market
People will always be in need of a cold medicine, especially in the winter months.
This is a strong potential for growth if products are marketed and targeted accordingly.
S.W.O.T Analysis
B. Weaknesses1. Low Marketing Budget
We find ourselves with a limited budget.We should not sacrifice funds to areas which we
know need specific amounts of capital.2. High Cost of Goods Sold
Our Low marketing budget is partly linked to the high costs of goods sold.
We invest greatly in advertising in order to raise our consumer brand awareness.
S.W.O.T Analysis
B. Weaknesses3. Allowances are too high
Another reason for high costs is that our distributor’s allowances are high.
Very beneficial to have our products at the consumer’s eyelevel in order for them to be exposed to our products.
S.W.O.T Analysis
C. Opportunity 1. Expansion of product line
Ever-growing market gives us the opportunity to expand our product line.
Introduction of two new products AllRound + and Allstar in the last five periods.
2. Acquisition of Baby Boomer MarketWith the aging of this large generation, the
demand for Pharmaceuticals will increase greatly.
S.W.O.T Analysis
C. Opportunity3. Advances in biomedical research and
technology It is very beneficial to utilize this technology in order to
produce a product that may potentially revolutionize the market.
4. Getting products covered by MedicareLarge number of Americans who cannot afford
medication.The consumer and the company would greatly benefit
from the Government’s investment.
S.W.O.T Analysis
D. Threats1. Crowded Markets
Many firms that distribute similar products.Competition is very intense.
2. Faulty-product lawsuits Very difficult and costly to run long-term tests
before introducing the product to the market.Difficult to predict the future side effects of a
new product.
S.W.O.T Analysis
D. Threats3. Government regulations
F.D.A regulations in the United States are quite strict.
Even though these regulations are for the well-being of the consumer, product introduction takes ample time.
Marketing Objectives
Increase Brand Increase Brand AwarenessAwareness
Marketing Activities
Focused on increasing advertising expenditures
Continuously maintained high awareness of Allround
Launched new products to reach more of the more market (Allround+ and Allright)
Marketing Activities
Once Allround reached maturity, we shifted our advertising budget to promote the newer products
Allocated money to the four elements of our ad message: primary, benefits, comparison, and reminder
Marketing Objectives
Focus on Newer Products
Marketing Activities
Concentrated on advertising and distribution
Designated a significant portion of our budget towards advertising
Geared attention towards grocery stores and drug stores, since they generated the most sales
Constantly stayed aware of our position and that of competitors within the market
Marketing Objectives
Maintain Competitive
Shelf Space
Marketing Activities
Maintained competitive incentives for direct resellers
Ensured that our products were conveniently accessible to our customers
Provided a constant level of promotional incentives
Increasing Profit MarginsALLROUND:
•Currently selling 40% fewer units/year than 10 years ago•Profit up 20% over same period•Profit/unit (before SG&A) up more than 105% over last 10 years
Increasing Profit MarginsWhat We Can Do
•Increase Prices•Lower Promotional/Volume Discounts•Focus on Selling Direct to Retailers, not Wholesalers
0
10
20
30
40
50
60
70
Allround Allround+ Allright
Retail
Wholesale
Increasing Marketing Department Budget
•Currently spending less on advertising than all competitors
•Budget has decreased or remained flat each of last four years
•This has resulted in extreme difficulty effectively promoting each product
How the Marketing Budget Relates to Stock Value
Advertising Budget and Stock Price
0
10
20
30
40
50
60
70
0 1 2 3 4 5 6 7 8 9 10
Periods
AdvertisingExpenditure
Stock Price
•Our stock price today represents an increase of 65% over thelast 10 years•Last year’s advertising budget was 63.5% higher than 10 yearsago
Increasing Marketing Department Budget
Demonstrate to Management That Our Marketing Activities Have Directly Resulted in : Increased profits Increased profit marginsSuccessful new-product launches
What We Can Do
Lessons Learned
Lessons Learned
Profit margins from retailers are greater than those of wholesalers.
Allround MSRP: $7.09
Sold to Retailers for: $5.67-$6.38
Wholesale Price: $5.32
Lessons Learned
Discount Rates:
Direct Retailers: 10-20%
Wholesalers: 25%+
Percentage of Sales:
0
10
20
30
40
50
60
70
Allround Allround+ Allright
Retail
Wholesale
Lessons Learned
Constantly monitor how the marketing budget is being allocated, and make changes as needed.
0
10
20
30
40
50
60
Promotion Advertising Sales Force Research
% of Budget
Lessons Learned
Advertising Expenditure for Allround
Lessons Learned
It is essential to be customer-oriented.
We kept the price of Allround below inflation for every period.
$4
$5
$6
$7
$8
$9
1 2 3 4 5 6 7 8 9 10
Allround
Inflation
Lessons Learned
It is important to segment the market and focus products on under-utilized market segments.
Product Market
Allround Cold Remedies
Allround+ Cough Remedies
Allright Children’s Cold Remedies
Lessons Learned
Existing Competitors When Product Was Introduced:
Allround:
Allround+:
Allright:
Besthelp, Dripstop, Dryup, Effective, Extra
Coughcure, End
Coldcure, End+
Questions?