Implementing the Plan: Periods 3-7

Hello Readers!

This week was all about implementing out market plan into Pharmasim.  We stayed pretty close to our plan, but we realized that we had to be flexible.  We understood the value of sticking to our analysis and reasoning, but when unexpected results are occuring, sometimes you have to find an alternate route if a team wants to stay afloat!

First, we need to explain that the marketing budget and advertisement budget are two different things.  Our marketing plan called for us to ADJUST the marketing budget and decrease the advertising budget, which would allow us to spend the extra marketing dollars elsewhere.  We looked at advertising expense as a subset of the marketing budget. 

In period three we made substantial changes.

We

1.  answered a question that we would Children’s liquid option if we had to introduce a line extension… but not right now.

2. Eliminated Point of Purchase fund for Convenience stores

3. Reduced Trial size for Allround to $400K

4. Stopped focusing on Allergy (3.9 effectiveness rating) and Chest (2.8 effectiveness rating)

5. Re focused our advertising strategy. 

15% Primary

35% Benefits

15% Comparison

35% Reminder

6. Reduced overall advertising budget 16.5 to 15.5.. saving $1M

7. Reduced Sales force.  THIS REDUCTION WAS NOT BECAUSE OF OUR PLAN. OUR PLAN IS TO REALLOCATE THE SALES FORCE.  WE REDUCED SALES FORCE SIMPLY BECAUSE OF BUDGET CUTS.

      Grocery from 68 to 66

      Chain drugstores from 44 – 42

Stock Price before: $27.75

Stock Price after $36.71!!!

Stock price is not our metric that we're grading out marketing plan on, but when it increases, we're definitely going to promote it! 

During period 4:

We had to make a number of actions in the Special Report menu that could not be predicted by our plan. We chose to respond to positive and negative comments on our Social Media sites.  This resulted in positive feedback. We also chose not do a line extension at this time.  Our plan calls for us to implement this in Period 6.

Coupons: increased from 4.1 – 4.5  Increased by $400K

    This was to keep returning customers happy.

Sales Force Change:  This is in marketing plan.

            Ind. Drugstores from 12 – 14.

            Detailers from 18 – 19

Discounts:

Less than 250 qty: decreased from 20 -1

More than 2500: increased from 37 – 40

Increased price by 2.5% to stay with inflation.  $5.63

Our Marketing plan described how we would increase price, but we also added a caveat that we should stay close to the rate of inflation.  In the simulation, inflation seems to be slowing down, so we are increasing our prices at a lower amount as well.

 In Period 5:

1. Bought all Surveys

Satisfaction is still the highest among all competitors

Physician Recommendations dropped from 12.9 to 12.6 over 2 periods (did not buy reports last period)

2. Focused advertising on Singles

3. Increased price by 1.6% (inflation)  New price is $5.72

Perceived price is average

Effect perceived is high!

ACCOMPLISHED ABILITY TO REDUCE ADVERTISING and KEEP BRAND AWARENESS HIGH  .. even increased it.

This is really important to address because there was some skepticism if we could do both of these at the same time.  We stayed true to our plan and accomplished our goal!  This was very encouraging.

4. Added 3 detailers: 22

We have focused on detailers because they are the driving force 

5. Ind. Drug stores sales force from 14 – 15

Total sales force is 206 now.

6. Chain Drugstores sales force increase: 42 – 43

7. Special: option 2: $1M to provide training to detailers on negative effects of product.

Stock price went up from $32.97 - $34.15.

Period 6:

Marketing Incident: option 2 and 5 for special decisions. We chose to place product advertising in a movie to reach young singles and we also chose to run an ad contest.  The total cost of the options was $1.1M, but we feel that the benefits will be many times that amount.

We Introduced Allright product

- This decision was made in our marketing plan to be implemented in this period.  We felt that by the time period 6 rolled around, we would have to do something to reach new customers in new markets.  We realized that our product already had the highest brand awareness in the cold Market and reaching new customers was becoming more difficult.  We chose the Cough market because or product had a high perceived effectiveness for the cough market and because the cough market industry leader at the time had a low perceived effectiveness rating. 

Coughcure, our competitor, raised its price to $6.59, so we set our price to be competitive at $6.09.  This is a deter from our plan, which called for a much lower price originally.  Coughcure is perceived as being very high - priced.

            Differed from plan a little b/c inflation was not calculated during plan.

Value Discount for Allright

Did not change price of Allround because entire industry is on a down swing. Inflation was -0.5

During Periods 6 and 7: 

Our budget exploded!  We didn't have enough money for anything.  We thought that with the $14M budget increase we received when we introduced Allright, that we would be able to cover expenses, but we drastically underestimated the costs of operating two separate product lines. 

We cut so many expenses that it would take me another two pages to describe them all. 

Overall, we think our plan has been a success.  All of our surveys and metrics show that we are performing well.  We're battling with our budget issues, but we still have the option of maintaining these budget cuts or cutting the new product line.  This issue will have to be addressed in periods 8 - 10.