PHARMASIM

ALLSTAR BRANDS

GROUP 3: Abraham Ipe Josh Zimmerman Na a!ia G!"s#h"$ %&!e Bi#$!e&

TABL' O( )ONT'NTS

1. 2. 3. . !. #.

Mission Statement: Page 2 Marketing Objectives: Page 2 SWOT Analysis: Pages 2Target Market: Page -! Marketing Activities: Pages !-" $essons $earne%: Pages "-1! a& 'ear 1 b& 'ear 2 c& 'ear 3 %& 'ear e& 'ear ! (& 'ear # g& 'ear " )& 'ear * i& 'ear + j& 'ear 1,

". S-mmary: Pages 1#-1"

*+ MISSION STAT'M'NT:
To establis) Allstar .ran%s as a market lea%er o( Over-T)e-/o-nter m-ltisym0tom col%1allergy relie(2 3)ile maintaining t)e )ig)est level o( c-stomer satis(action t)ro-g) 0ro%-ct e((ectiveness2 4-ality an% a((or%ability.

,+ MAR%'TING OBJ')TI-'S:
To increase t)e stock 0rice by 3 0oints every 2 years To maintain a combine% %irect1in%irect sales (orce o( no less t)an 1 , To increase net income to 5 , million in t)e ne6t 2 years To increase bran% a3areness by !7 yearly (or all 0ro%-cts o( Allstar to3ar% a long-term goal o( *!72 t)erea(ter any increase is (o-n% s-((icient To maintain a%vertising b-%get e60en%it-re above 52# million2 minim-m 51, million to3ar% Allro-n%2 Allro-n%8 an% minim-m 5+ million to3ar% Allrig)t 9ntro%-ce one ne3 0ro%-ct 3it)in every 3-year 0erio% accor%ing to a00ro0riate market tren%s an% c)aracteristics o( %eman% To kee0 0romotional allo3ance at or above 1 7 (or all 0ro%-cts To increase c-stomer satis(action to #,7 (or all Allstar .ran% 0ro%-cts 3it)in t)e ne6t 2 years

3+ S.OT:
S ren/ hs: Allstar .ran%s )ave a com0etitive a%vantage 3)ic) is base% on t)e lo3est 0rice in t)e col%1allergy market

.ran% a3areness (or t)e 0ro%-cts o( Allstar .ran%s is one o( t)e )ig)est among t)e com0etitors

Pro%-ct mi6 targets variety o( ailments :Allro-n% ; m-lti-sym0tom2 Allro-n%8 col% an% allergy2 Allrig)t ; co-g) an% col%&

/-stomer satis(action (or Allstar 0ro%-cts ranges (rom ! 7 to #17 Allro-n% is t)e secon% )ig)est bran% 0-rc)ase% among t)e OT/ me%icine an% )as t)e secon% largest market s)are o( man-(act-ring sales

Allro-n% .ran% 0erce0tion o( co-g) an% ac)e me%icine is t)e )ig)est among t)e com0etitors

Stea%y rise o( 0ro%-ct contrib-tion (or Allrig)t an% Allro-n%8 Allstar o((ers relie( (or all o( t)e most (re4-ent sym0toms o( ailments: ac)es2 co-g)ing2 an% c)est congestion

Allrig)t attains largest market s)are base% on man-(act-ring sales o( 1 .+7 in t)e co-g) me%icine market

.ea$nesses: $o3 sales (orce Stee0 %ro0 o(( o( stock 0rice a(ter year (ive Allro-n% )as t)e lo3est net income among t)e com0etitors A%vertising b-%get (or every 0ro%-ct is not s-((icient (or lea%ing a 0ro0er a%vertising cam0aign to increase bran% a3areness A stronger com0etitor .est)el0 kee0s Allro-n% (rom being t)e lea%er o( bran%s 0-rc)ase% $o3 b-%get allocate% to 0romotional mi6 o( all 3 0ro%-cts

/-rrent c-stomer<s intentions to b-y Allro-n%2 Allro-n%8 an% Allrig)t are larger t)an Allstar can 0ro%-ce

Ann-al (all o( Allro-n%<s total sales an% 0ro%-ct contrib-tion since year ! /onstant (all o( tra%e ratings (or Allrig)t an% Allro-n%8 Allstar .ran%s takes t)ir% 0lace in retail sales Me%i-m 4-ality o( a%vertising %-e to a%vertising agency S=> )ire%

Oppor "ni ies: 9ntro%-ction o( ne3 0ro%-cts in t)e (-t-re 9nvestment in >esearc) an% ?evelo0ment to im0rove com0osition o( e6isting an% ne3 0ro%-cts .ecoming t)e )ig)est bran% 0-rc)ase% among OT/ me%icine an% reac)ing t)e )ig)est marketing s)are in man-(act-re sales /)anging bran% (orm-lation o( 0ro%-cts accor%ing to e6isting market nee%s Po0-lation gro3t) rate o( 1.#7 9n%-stry gro3t) rate !.+7 Penetrating international markets

Threa s: Strong com0etition in col%1allergy market $oss in stock 0rice an% net income o( Allstar bran%s @conomic instability An(avorable market (l-ct-ations

Poor c)oice o( a%vertising agency to lea% a%vertising cam0aigns (or t)e /om0any 0ro%-cts

9n(lation rate increase An(avorable Bovernmental reg-lations to3ar% OT/ 0ro%-cts /om0etitor a%vantage in >esearc) an% ?evelo0ment $ack o( a%e4-ate sales (orce

0+ TARG'T MAR%'T:
Provi%ing Over-T)e-/o-nter me%icine Allstar targets 0eo0le 3)o )ave common )ealt) 0roblems. T)e best 3ay to segment Allstar<s c-stomers 3o-l% be by t)e (ollo3ing t3o major categories: illness :col%2 co-g)2 allergy& an% %emogra0)ics :yo-ng singles2 yo-ng (amilies2 mat-re (amilies2 em0ty nesters2 retire%&. Allstar .ran%s invests in marketing researc) to learn abo-t t)e ever c)anging 0re(erences an% tren%s o( t)e market. T)e in(ormation t)e /om0any gat)ers (rom t)is researc) is t)en -se% to make accor%ing %ecisions to satis(y eac) 0artic-lar category o( c-stomer.

1+ MAR%'TING A)TI-ITI'S:
9n or%er to ac)ieve o-r (irst marketing objective2 3e recommen% t)e (ollo3ing activities: Cee0 0ro%-cing )ig) 4-ality2 0ositive image 0ro%-cts t)at satis(y c-stomer<s nee%s. Secon%ly2 t)e team m-st maintain %irect an% in%irect sales (orce o( no less t)an 1 , an% 0lan in a%vance in or%er to )ave t)e b-%get to %o so. We also recommen% o((ering em0loyee (ringe bene(its to enco-rage long term 0ositions in t)e com0any. Dor t)e ne6t objective2 3)ic) is to increase net income to 5 , million in t)e ne6t t3o years t)ey m-st c)oose an% maintain t)e s-itable marketing10romotional mi6. O((er %iversity o( 0ro%-cts to meet every c-stomer<s nee% an% kee0 0romotional allo3ance above 1 7 to #

enco-rage stores to carry o-r 0ro%-ct. Bive o-t trial siEes (or ne3 an% e6isting 0ro%-cts to increase bran% a3areness by !7 yearly 3)ic) is objective n-mber (o-r. Also t)e a%vertising agency s)o-l% be c)osen care(-lly to ens-re t)e )ig)est 4-ality o( a%vertising cam0aign an% strategy. T)e com0osition o( t)e a%vertising message m-st be create% accor%ing to t)e stage o( t)e 0ro%-ct<s li(e cycle. T)e key to ac)ieving all o( t)ese a%vertising goals is to make s-re t)e c-rrent an% (-t-re b-%get 3ill be great eno-g) to cover t)ese critical nee%s. T)e key to reac)ing t)e objective o( maintaining an a%vertising b-%get e60en%it-re at least or above52# million2 51, million an% 5* million (or Allro-n%2 Allro-n%8 an% Allrig)t res0ectively is to kee0 -0 closely to t)e %esigne% marketing 0lan. S0en%ing no less t)an t)e minimal o( 3)at t)e 0lan says. Boo% 4-ality (orecasting is a -se(-l tool to kee0 a3ay (rom s-%%en c)anges in t)e market 3)ic) co-l% 0-t t)e Allstar o-t o( b-siness. T)e com0any s)o-l% maintain a miscellaneo-s b-%get to %eal 3it) s-%%en s-r0rises t)at 3ill occ-r. To be able to intro%-ce a ne3 0ro%-ct 3it)in every 3 year 0erio%2 Allstar .ran%s )as to maintain e6isting 0ro(itable 0ro%-cts so t)at t)ere is an o00ort-nity to 0-t money into t)e %evelo0ment o( ne3 0ro%-cts. Ans-ccess(-l 0ro%-cts m-st be remove% (rom Allstar 0ro%-ction lists as 3ell to kee0 an ab-n%ance o( %is0osable income. Dor s-ccess(-l 0ro%-cts alrea%y e6isting2 a%vertising an% 0romotion b-%get s)o-l% not be c-t as 3ell as t)e sales (orce. 9n (act2 3)ile intro%-cing a ne3 0ro%-ct t)e sales (orce m-st be raise% in 0ro0ortion to t)e 0lanne% vol-me o( t)e ne3 0ro%-ct. 9t is essential to )ave a %ee0 kno3le%ge o( t)e market2 its c)aracteristics an% tren%s2 c-stomer nee%s an% 0re(erences2 as 3ell as economic an% legal iss-es t)at mig)t in(l-ence t)e 0ro%-ct<s s-ccess. T)-s a certain amo-nt o( money m-st be investe% into marketing researc) concerning in(ormation abo-t t)e marketing mi6 to be create%.

"

Drom o-r e60erience2 3e can say t)at t)e amo-nt o( 0romotional allo3ance matters greatly to t)e overall 0romotional stat-s as 3ell as to t)e overall s-ccess o( t)e 0ro%-ct. To enco-rage t)e stores to carry o-t t)e 0ro%-ct2 0romotional allo3ance m-st be maintaine% at 1 7 or above among all t)e 0ro%-cts. T)e /om0any b-%get s)o-l% be balance% in a 3ay to %e%icate t)e amo-nt o( money corres0on%ing to t)e allo3ance 0ercentage 3it)o-t %ist-rbing reg-lar b-%get %istrib-tion to 0ro%-cts an% activities o( Allstar .ran%s. Maintaining a (avorable cas) (lo3 is a key con%ition to reac) t)e i%enti(ie% objective. To increase c-stomer satis(action o( t)e Allstar .ran%s 0ro%-cts by #,72 (irstly2 t)e a00ro0riate in(ormation s)o-l% be collecte% on t)e 0ro%-ct (eat-re% an% bene(it e60ectations o( t)e c-rrent an% 0otential c-stomers. T)is in(ormation 3ill )el0 management make %ecisions (or %evelo0ing a ne3 0ro%-ct image2 (eat-res2 an% bene(its to meet t)e c-rrent %eman%. T)e last objective im0lemente% is a%vertising2 3)ic) s)o-l% be stresse% to attract an% in(orm t)e c-stomers abo-t t)e c)anges ma%e. Trial siEes s)o-l% 0lay a big role in t)e im0rovement 0rocess. .y receiving (ree trials2 t)e c-stomers 3ill be more likely to e60erience t)e innovate% 0ro%-ct an% see its a%vantages over ot)er bran%s.

2+ L'SSONS L'ARN'D

3ear *43

/oming into t)e (irst 0erio% o( o-r ne3 com0any t)ere 3ere many -ncertainties. We notice% t)at t)e 0rice (or Allro-n% be(ore 3e )a% ac4-ire% Allstar 3as set at 5!.2+. We %eci%e% to only raise t)e 0rice by one cent 0-tting it at 5!.3,2 o-r j-sti(ication (or %oing t)is 3as t)at 3e )a% seen )o3 goo% t)e com0any 3as %oing 0rior to o-r involvement so 3e le(t t)e 0rice close to 3)at it )a% been. We also ke0t o-r %istrib-tion relatively t)e same at +" (or ?irect Sales an% , (or 9n%irect sales com0are% to + 2 33 res0ectively. We c-t o-r Promotion allo3ance (rom 1"7 to 1!7. We came to t)is %ecision %-e to o-r 0ro%-ct being carrie% by many %istrib-tors (or several years. O-r 0ro%-ct 3as not ne3 an% %i% not nee% a Promotion Allo3ance t)at 3as )ig)er t)an 1!7. We ke0t o-r cons-mer 0romotion at !.# an% tra%e 0romotion at 1. an% raise% a%vertising (rom 2, to 2,.! million in )o0e to get o-r name o-t t)ere more2 since 3e 3ere going to intro%-ce a ne3 0ro%-ct relatively soon in t)e (-t-re. A(ter t)e (irst 0erio% 3e 3ere %oing great. We 3ere n-mber one in t)e class (or stock 0rice an% it looke% like 3e kne3 3)at 3e 3ere %oing. O-r income 3as +#.2 million an% o-r sales (orce 3as a mere #.!. We realiEe% t)at making a (e3 slig)t c)anges )a% ma%e a 0ositive in(l-ence on t)e com0any. /-tting o-r Promotion Allo3ance back 27 %i% not %ecrease sales at all an% t)e 5!,,2,,, increase in a%vertising b-%get m-st )ave -rge% cons-mers to b-y o-r 0ro%-ct. We le(t o-r a%vertising agency at 3)at it )a% been 0rior to o-r o3ners)i02 being t)e mi%%le 4-ality agency 3e (ig-re% it 3o-l% be %irecte%
Prediod 1 2 3 Retai 532.2 53!.0 53 .! Promo 7.0 #.5 !.0 Adv 20.5 21.1 21. SF .5 #.# #.! Incom !1.1 7!.! 71.# Util% ! .2 !7.# !3.# Stock "#.01 "3.77 3!.12 Shelf 1.30 1.37 1.52 Allow 15.0 15.0 15.0

to3ar% everyone an% 3o-l% also )el0 -s kee0 t)e MS>P lo3. Boing into ro-n% t3o 3e basically )a% to make t)e same %ecisions as ro-n% one. We still %i% not )ave m-c) (ree%om to make many c)oices2 so 3e (oc-se% on 3)at 3e co-l%. We notice% t)at convenience stores 3ere s)o3ing t)e strongest gro3t) an% (rom +

t)is 3e %eci%e% to increase o-r %irect sales (rom +" to 11* an% o-r in%irect sales (rom , to !!. We le(t Allro-n%<s 0ro%-ct 0rice at 5!.3,2 (oc-sing on making t)is year a sales gro3t) 0erio%. 9nstea% o( raising t)e 0rice2 3e (oc-se% on kee0ing o-r c-rrent loyal c-stomers an% )o0e(-lly gaining ot)ers t)ro-g) reasonable 0ricing. We le(t o-r Promotion Allo3ance at 1!7. We increase% o-r Tra%e Promotion (rom 1. to 2. We )a% also increase% o-r /ons-mer 0romotion (rom !.# to # an% o-r a%vertising -0 (rom 2,.! to 21.1 million. Once again all o( t)ese %ecisions 3ere base% on increasing o-r market s)are1sales gro3t) 3)ic) 3e )o0e% to obtain by increasing all 0romotional as0ects. A(ter 0-tting m-c) money into 0romotion an% 3aiting to see o-r income stea%ily rise 3e 3ere s)ocke% to see t)at it )a% (allen more t)an 1, million %ollars. O-r stock 0rice also %ro0e% (rom *.,1 to 3."". O-r sales (orce )a% also risen (rom #.! to *.*. T)e only c)ange 3e sa3 t)at co-l% be a((ecting o-r sales so greatly 3as t)e t)reats o( t)e economy in 3)ic) 0-rc)asing 0otential )a% %ro00e%. 9n(lation )a% risen an% c-stomer<s %is0osable income )a% %ro00e% since last year. Anot)er (actor t)at may )ave a((ecte% o-r %ecline in income 3as t)e increase in Sales Dorce an% t)e (ail-re to raise o-r MS>P. Moving into ro-n% 3 3e )a% t)e (ree%om to %irect e6actly )o3 m-c) Sales Dorce 3e 3ante% in eac) c)annel. T)is 0erio% (orecaste% a gro3t) in 9n%e0en%ent %r-gstores so 3e rasie% o-r ol% SD o( " in in%e0en%ent ?r-gstores to 12. We lo3ere% o-r c)ain %r-gstores (rom 3# to 3, beca-se 3e )a% risen in%e0en%ent %r-gstores so %rastically. Brocery stores seeme% to be giving -s t)e biggest ret-rn so 3e increase% o-r SD (rom !! to #,. O-r 3)olesale SD 3e sa3 as a great 0otential so 3e increase it (rom 2! to , in )o0es to regain o-r n-mber one s0ot in t)e class. T)is 0erio% 3e also raise% t)e 0rice o( Allro-n% (rom 5!.3, to 5!. , once again in )o0es t)at 3e co-l% bring in some more income so t)at 3e co-l% 0-t it to3ar% o-r (-t-re goal o( intro%-cing anot)er 0ro%-ct. We )ave le(t o-r sales 0romotion basically t)e same as 0erio% t3o 3)ic) s)o-l% be s-((icient2 consi%ering t)at it 3orke% t)e (irst 0erio%. T)is 0erio% 3e )a% control o( 3)at o-r

1,

a%vertising 3o-l% be (oc-se% on. We le(t o-r 0rimary a%vertising at 1,7 %-e to o-r 0ro%-ct )aving a stable market s)are alrea%y an% )aving been establis)e% several years 0rior. We raise% o-r bene(it (rom 1,7 to 1!7 so t)at 3e co-l% 3in over ne3 c-stomers by s)o3ing )o3 m-c) better Allro-n% 3as t)an o-r com0etitors. We lo3ere% o-r /om0arison (rom ,7 to 3,7 so t)at 3e co-l% raise o-r remin%er (rom ,7 to !7. .y raising o-r remin%er 3e )o0e% cons-mers 3o-l% realiEe 3e o-r still a strong com0etitor an% )ave been in t)is b-siness (or many years. @ven a(ter 3e increase% o-r a%vertising b-%get (rom 21.1 million to 21.# million 3e still are loosing money. O-r sales (orce )a% only risen (rom *.* to *.+. O-r income also %ro0e% (rom "+.+ to "1.* making -s loose anot)er nine million %ollars. T)at is not all t)e ba% ne3s. O-r stock 0rice %ro00e% (rom 3."" to an even lo3er 3+.1 . We (o-n% o-r main 0roblem to be o-r 0ro%-ct %isco-nt 3)ic) 3as not (orm-late% 0ro0erly. We )a% a 237 %isco-nt (or F2!,2 2*7 %isco-nt (or F2!,,2 33.!7 %isco-nt (or 2!,,8 an% 3*7 %isco-nt (or 3)olesale. We realiEe% t)at o-r 3)olesale %isco-nt s)o-l% )ave been some3)ere aro-n% 272 2!,,8 aro-n% 3+72 F2!,, aro-n% 3!7 an% F2!, aro-n% 3,7. T)is 3o-l% )ave given -s a com0etitive a%vantage over o-r com0etition (or o-r retailers to carry o-r 0ro%-ct.
50 "5 "0 35 30 25 20 15 10 5 0

S o#$ Pri#e

Allro&nd Allri'ht Allro&nd()

1$t %tr

3rd %tr

5th %tr

7th %tr

!th %tr

3ear 042
Period 4 Retai 584.6 Promo 13.4 Adv 6.! SF 8.5 Incom 6 .! Util% 1!3. Stock 41.!" Shelf .15 Allow 15.!

11

5 6

6!#.1 5#6."

11.5 15.#

3.1 31.5

#.! 1!.4

" .8 36.3

1!!.8 #".#

4 .!5 3!.5!

.!5 3.!1

1 .3 14.1

One o( t)e greatest lessons learne% %-ring 'ear (o-r 3as to realiEe t)e im0ortance o( every 0art o( t)e marketing mi6 3)ile intro%-cing a ne3 0ro%-ct. T)e 0ro%-ct can be s-ccess(-l 3)en its Ps a%%ress c-rrent market %eman%s an% 3)en t)e 0ossibilities are -se% to t)eir )ig)est e6tent. We intro%-ce% Allro-n%8 - 12)r M-lti /a0s-le 3)ic) containe%: 13,, mg analgesics2 * mg anti)istamines2 an% 1,, mg %econgestant. To increase bran% a3areness2 5+ 3as given to a%vertising b-%get2 5!.+million s0ent on 0romotion :trial siEes2 co-0ons2 co-o0 a%s2 0ro%-ct %is0lays&. To make s-re t)at t)e ne3 0ro%-ct 3o-l% make a 0ositive im0ression on t)e market2 t)e most e60ensive )ig) 4-ality 0er(ormance a%vertising agency G.re3ster2 Ma63ell an% W)eelerH 3as c)osen to lea% t)e a%vertising cam0aign. T)e com0osition o( o-r a%vertising message consiste% o(: Primary ,72 .ene(it ; 3,72 /om0arison 2,7 an% >emin%er ; 1,7. Allro-n%8 3as 0rice% c)ea0ly at 53 since it 3as a bran% ne3 0ro%-ct. T)e stock 0rice (or Allstar .ran%s in 'ear (o-r rose (rom 3+.12 to 1.,". T)is 3as strong evi%ence t)at o-r marketing mi6 3as com0ose% correctly2 lea%ing -s in t)e rig)t %irection. T)e sales (orce 3as agree% to be re%-ce% so t)at a great amo-nt o( money co-l% be investe% in a%vertising. T)-s n-mber o( em0loyees in /)ain ?r-g Stores2 Mass Merc)an%isers an% W)olesales 3as %ecrease% by !2 3)ic) bro-g)t %o3n o-r total ratio o( Sales Dorce (rom *.+ to *.!. We learne% later t)at t)e re%-ction o( o-r sales (orce )-rte% t)e com0any more t)an antici0ate%. T)e %ecisions m-st be ma%e in a 3ay to create t)e balance 3it)in t)e com0any2 bet3een %i((erent 0ro%-cts an% areas o( activities. 9( 3e %ecrease 0rice2 3e s)o-l% also %ecrease %isco-nts to receive t)e same or larger amo-nt o( sales %e0en%ing on elasticity o( %eman%. As t)e 0rice (or Allro-n% 3as re%-ce% (rom 5!. to 5!.2 an% average %isco-nts 3ere lo3ere% (rom 32.37 to 2*.172 man-(act-ring sales gre3 by 1, 0oints. 12

'ear ! may be c)aracteriEe% as one o( t)e most s-ccess(-l years in t)e li(e cycle o( t)e Allstar bran% in relation to net income earne% an% stock 0rice attaine%2 3)ic) acco-nte% (or 5"2.* million2 an% 2.,! 0oints res0ectively. >etail Sales rose (rom 5!* .# to 5#,+.1 million. T)ese 0ositive res-lts (ollo3e% a(ter t)e corrective %ecisions ma%e concerning t)e marketing mi6 o( t)e bot) 0ro%-cts. T)e major %ecisions o( t)is 0erio% 3ere to increase t)e 0rices (or bot) 0ro%-cts: Allro-n% :5!.2 to 5!.3& an% Allro-n%8 :53., to 5 .2!& along 3it) a slig)t %ecrease in %isco-nting. As t)e ne3 0ro%-ct 3as on its gro3t) stage an% nee%e% a lot o( in0-t2 3e %eci%e% to increase t)e sales (orce (rom *.! to +.,2 s0eci(ically increasing t)e n-mber o( em0loyees in in%e0en%ent %r-gstores2 mass merc)an%isers2 3)ile %ecreasing c)ain %r-g stores2 3)olesale2 an% %etailers. To 0romote Allro-n%82 a certain amo-nt o( money 3as taken a3ay (rom 0romotional an% a%vertising b-%get o( Allro-n% an% 0-t into Allro-n%8. T)at t-rne% o-t to be a 0oor %ecision. .y strengt)ening t)e ne3 0ro%-ct2 3e 3eakene% t)e establis)e% Allro-n%. T)e lesson is to not sacri(ice t)e 0ro%-ct t)at 0rovi%es t)e major cas) (lo3 in t)e com0any (or t)e sake o( t)e ne3ly intro%-ce% one. T)e largest event %-ring 'ear # 3as t)e intro%-ction o( anot)er ne3 0ro%-ct o( Allstar .ran%s ; Allrig)t. Allrig)t 3as intro%-ce% as t)e me%icine to c-re t)e common co-g). T)e %ecision 3as ma%e to set its 0rice at 5!. ! %-e to t)e 0ro%-ct being t)e most e60ensive to 0ro%-ce. Iaving anot)er 0ro%-ct re4-ire% )aving more 0ersonnel available to 3ork on itJ t)-s2 t)e sales (orce 3as increase% (rom + to 1,. . T)e %rastic (all o( net income (or t)is 0erio% (rom 5"2.* to 53#.3 million occ-rre% beca-se o( t)e intro%-ction o( t)e ne3 0ro%-ct. A large increase in a%vertising2 a %ecrease in 0romotional an% sales (orce e60en%it-res ca-se% t)is (inancial regress in t)e com0any.

13

T)e stock 0rice (ell (rom 2.,! to 3,.!,. T)e s)are o( retail sales (ell by ,."72 an% s)are o( man-(act-ring sales (ell by ,.!72 alt)o-g) s)are o( -nit sales staye% t)e same. At t)at 0oint Allrig)t 3as t)e 3eakest 0ro%-ct o( Allstar .ran%s2 its 0ro%-ct contrib-tion consiste% o( -".!2 3)ile Allro-n%8 )a% 13. 2 an% Allro-n% 1 3. . A lack o( (-n%ing ca-se% t)ere to be little room (or a%vertising an% 0romotional gro3t) making a s-ccess(-l %evelo0ment (or t)e t)ree 0ro%-cts im0ossible. T)e ne3 0ro%-ct o( Allrig)t s)o-l% not )ave been intro%-ce% so early a(ter Allro-n%8 3as intro%-ce%. T)e /om0any nee%e% some time to %eal 3it) c)anges2 an% to ac4-ire a stable (lo3 o( b-siness. 9nvesting into marketing researc) to learn abo-t t)e c-rrent market sit-ation 3o-l% )ave )el0e% t)e com0any stay a3ay (rom -n(avorable c)anges.

3'AR 5 6 7
Period 7 # Retai 573.2 573.5 Promo 10.5 7. Adv 25.0 22. SF 10.7 !.3 Incom 31.7 "1.! Util% !".2 !1.# Stock 2#.20 2#.!5 Shelf 3.1" 3.02 Allow 1".! 13.5

We (ell to t)e bottom2 no3 recovery is t)e only c)oice in t)e years o( seven an% eig)t. O-r goal 3as to 0-ll t)ro-g) o-r sl-m0ing stock 0rice an% 0er(ormance. As year " began t)ings 3ere getting 3orse. Drom year # to year * o-r retail 0rice 3ent (rom !+#." to !"3.! a %ro0 o( 227. We )a% c)ange% o-r 0romotions (rom 1!.+ to ".# 3)ic) ma%e o-r retail 0rice %ro0. We sa3 t)at t)e more 0romotion is %e%icate% to t)e 0ro%-ct2 t)e )ig)er t)e 0ro%-ct a3areness 3ill rise. ?-ring t)is year 3e )a% a small sales (orce at 1,. 7 %-e to t)e (act t)at o-r income 3as al3ays in t)e negative. Once 3e c-t o-r 0romotion an% a%vertising2 o-r stock 0rice %ro00e% (rom 3,.!, to 2*.+!. A(ter t)e "t) %ecision2 3e realiEe% t)at 3e 3ere not -tiliEing t)e (-ll 0otential o( o-r sales (orce. .y t)e en% o( year * o-r sales (orce got smaller. We learne% t)at o-r MS>P 3as lo3 in 0rice2 3e lacke% t)e n-mber o( em0loyees re4-ire% in %istrib-tion c)annels2 )a% internal (inancial 0roblems2 an% 0oor 0er(ormance ca-sing t)e loss o( market s)are. O-r market strategy 3as 0oor beca-se o( t)e inability to ca0italiEe on 0ro%-ct im0rovements an% retain or e60an% o-r c-stomer base. 9n year seven an% eig)t 3e 3ere c-tting more money t)an 3e 3ere investing into im0rovement o( o-r 0ro%-cts. We (oc-se% more on a%vertising t)an on sales (orce2 3)ic) 3e c-t every time 3)en 3e nee%e% money to 0-t to somet)ing else. .y year seven2 3e increase% o-r sales (orce by abo-t ,.37 an% 3ante% to increase it in year *2 b-t %-e to negative b-%gets2 3e 3ere (orce% to %ecrease it. 3'AR 8 6 *9
Period ! 10 Retai 55!. 5#7.# Promo .# .! Adv 20.2 17." SF 10.1 10." Incom 32.! 25.1 Util% #!.7 !7.# Stock 2".5! 2".5" Shelf 3.12 3.0" Allow 13. 1".0

We c)ange% %irections some3)at in t)e last t3o years in an attem0t to recover o-r sl-m0ing stock 0rice an% over-all 0er(ormance. We restr-ct-re% o-r 0ricing s-c) t)at t)ere 3as a greater incentive in 0-rc)asing in larger 4-antities. We also ma%e c)anges to t)e incremental increases in %isco-nts to a00ro0riately matc) t)e 4-antities 0-rc)ase%. 1!

Dor e6am0le2 in year seven (or Allro-n%8 3e 3ere giving 0-rc)asers o( 82!,,2 a 2*7 %isco-nt an% (or 3)olesalers an increase o( only 27 rising it to 3,7. We recogniEe% t)e 0otential loss in sales as a res-lt an% c)ange% it to 327 an% 3*7 res0ectively. %one t)is years earlier2 3e may )ave been able to signi(icantly increase sales. We also c)ange% o-r o-tlook to3ar%s t)e remin%er 0ortion o( o-r a%vertising. As t)e years 0rogresse% an% Allro-n% an% Allro-n%8 age%2 3e t)o-g)t t)at 0-tting a greater 0ercentage o( t)e b-%get into remin%er 3o-l% serve -s 3ell an% kee0 t)e 0ro%-ct (res) in t)e min%s o( t)e cons-mers. We no3 t)ink t)at 3e s)o-l% )ave allocate% more into bene(it an% com0arison earlier on. .ot) o( t)ese t3o (-nctions as t)eir names s-ggest b-t also are remin%ers in t)emselves. Dort-nately t)is 3as not an e6treme 0roblem (or Allro-n%8 an% Allrig)t beca-se t)ey 3ere im0lemente% later on. Wit)in t)e last t3o or t)ree years 3e 3ere (ace% 3it) t)e task o( cost c-tting %-e to lo3 reven-es. T)is recent activity acte% as a kin% o( %o3n3ar% s0iral. 9n e((orts to get o-rselves o-t o( t)e re%2 3e (elt (orce% to c-t back on 0romotional allo3ances an% even sales (orce. 9n t)is last year 3e %i%n<t )ave a single element o( 0romotions over one million %ollars an% o-r sales (orce 3as c-t to less t)an 1 , (rom almost 1#, in year seven. We believe2 )o3ever2 t)at t)ese t3o areas are cr-cial in ac)ieving strong sales gro3t). We )o0e% t)at i( 3e co-l% increase t)e -nit 0rice 3it)o-t greatly )-rting cons-mer sales t)at 3e co-l% make -0 a 0artial 0ortion o( o-r losses (rom t)e 0revio-sly mentione% (actors. Dort-nately (or t)e incoming management2 o-r mistakes can be t)eir gains. We strongly recommen% maintaining an a%e4-ate sales (orce an% 0aying close attention to t)e market tren%s an% ac4-iring t)e a00ro0riate researc). Ia% 3e

1#

S"mmar&
Make %ecisions care(-lly base% on entering a ne3 market beca-se t)ere may be an overab-n%ance o( ot)er com0etitors alrea%y in t)at 0ro%-ct branc). We )a% intro%-ce% t3o 0ro%-cts a(ter t)e 3ell establis)e% Allro-n% name. We intro%-ce% Allro-n%8 in yearKKKKK Anot)er major 0roblem t)at 3e (ace% 3as c)oosing t)e rig)t MS>P (or eac) 0ro%-ct. Ac4-ire com0etitor MS>P an% 0rice Allstar 0ro%-cts a00ro0riately. We 0rice% o-r 0ro%-cts at a minim-m )o0ing to grab %istrib-tors attention b-t 3e -n(ort-nately %i% not give eno-g) o( a %isco-nt to s-ccee%. We lacke% in t)is area 3)ere o-r com0etitors s-ccee%e%. We %i% 0rice o-r 0ro%-cts at a lo3er 0rice b-t %i% not %ivi%e t)e %isco-nts t)at t)e %istrib-tors 3o-l% get accor%ingly. We s)o-l% )ave increase% o-r MS>P to matc) o-r com0etitors or even a little less. T)e big concern is in t)e %isco-nt o((ere% 3)ic) is an incentive (or o-r %istrib-tors to carry o-r bran%. T)e %isco-nts s)o-l% range (rom 7 (or 3)olesales an% %o3n to 2!7

(or F2!, )aving t)e 0ercents s0lit evenly over t)e rest o( t)e %istrib-tion market so t)at t)e more t)ey b-y t)e c)ea0er it is (or t)em 0er 0ro%-ct. Also 0romotion allo3ance a((ects o-r retailers. Allo3ances are to )el0 yo- gain retail %istrib-tion2 s)el( (acing in retail o-tlets2 an% retail s-00ort (or bran% a%vertisements. 1"

Anot)er 3ay to get yo-r 0ro%-ct o-t to cons-mers is by concentrating on t)e sales 0romotion. T)ings s-c) as co-o0 a%s 3)ic) makes money available to retailers to 0ay (or a 0ortion o( t)e retailers a%vertising 3)en t)e relevant bran% is 0romote%. We s-ggest kee0ing t)is n-mber in t)e one an% a )al( to t3o millions range es0ecially i( t)e 0ro%-ct is being ne3ly intro%-ce%. Point o( 0-rc)ase %isco-nts are s0ecial %is0lays s-c) as retail sale racks. We also s-ggest to kee0 t)is in t)e one an% a )al( to t3o millions range. Point o( 0-rc)ase %isco-nts are (oc-se% at t)e c-stomer 3)ic) -s-ally gives t)e e6tra e%ge 3e nee% (or a ne3 c-stomer to try o-r 0ro%-ct. Trial siEe 0romotions are a key to get yo-r ne3 0ro%-ct o-t t)ere an% notice%. Trial siEes are smaller 0ackages o( o-r 0ro%-ct t)at are given o-t to cons-mers in )o0e t)at t)ey 3ill like t)e res-lt an% 0-rc)ase o-r bran% over t)e com0etitors. Trial siEes are not necessary -nless yo- are intro%-cing a ne3 0ro%-ct or yo- see a lag in bran% a3areness. We s-ggest 0-tting t3o million %ollars to3ar% trial siEes 3)en necessary. T)e (inal sale 0romotion is co-0ons. /o-0ons are s0ecial %isco-nts o(( o( t)e retail 0rice o( a 0ro%-ct 3)ic) is taken o(( at time o( 0-rc)ase. 'o- can (in% co-0ons in (lyers2 ne3s0a0ers an% magaEines. We s-ggest kee0ing t)is a major (oc-s on 3ell establis)e% 0ro%-cts as 3ell as ne3er 0ro%-cts. 'o- can 0lan on 0-tting aro-n% (ive million into t)is 0romotion. Overall2 many o( o-r %ecisions 3ere 3ell t)o-g)t o-t an% 3orke% to3ar%s t)e 0rogress t)e com0any %i% )ave. Io3ever2 t)e errors 3e ma%e o-t3eig)e%2 to some e6tent2 t)e 0ositive %ecisions. Io0e(-lly (rom o-r s-ccesses an% (ail-res Allstar can )ave a 0ro(itable (-t-re -n%er t)e ne3 incoming team.

1*