Hello!
This week was fast paced and serious as it was the last week to get in good practice with Pharmasim before the team assignments started. I tried my hand at Pharmasim and failed miserably the first couple of runs. I was making too many drastic changes at once. I was doing too much. I learned a lot about how sensitive the effects of marketing could be from period to period.
Some of the lessons I learned were that quality of advertising counts. The money saved from moving down to a less qualified advertising agency does not truly add anything to the bottom line.
I did some tweaking in the early periods of the first simulation this week with the percentage of marketing directed towards Independent Drug stores. I thought that since the grocery stores were not that big for us, that our company should focus on the places where people go strictly for medicine. The scenario tells us that we do not have a problem bringing in customers, we have a problem keeping them. My share price plummeted $3/sh by increasing this from 6% to 16%. I obviously over did it.
I wised up and realized that since we commanded so much of the market, consumers want our product. So why were they leaving. I spent less on advertising and then I wondered if our price was a little too high so I lowered it by 25 cents. Worked like charm. The next period our share price rose by $2 back to a healthy $33.03/ share.
After this, I made a series of bad move that I learned from. Most notably was my horrible decision to add a new line of product called All round +. This tanked the mkt share price and placed me well over budget at the same time. In the next period I tried to salvage the company by discontinuing the new line but it was too late.
In class this week, we focused on the consumer. Market analysis is where marketing managers earn their bucks and figuring out the customer is a lot more important than learning about the competition. One of the concepts discussed in class was the difference between product features and product benefits. We also hit on this in our book.
In chapter five, Lehman and Winer talk about product features and product benefits. Features need to provide a useful function for the customer, otherwise it is not a benefit. In the book, the benefit simply seems like a description of what he feature can do (or the feature’s ability). If this is the case, why don’t marketing managers promote the benefits first, and then back them up with the label of the feature once the customer asks how it’s possible? Why doesn’t Lehman teach us to do this? For example, instead of leading with ‘The car has a North star engine.’ The marketing manager could have the company lead with “The car will not need a tune-up for the first 100,000 miles. That sounds a lot better to me.
In the discussion post, one of our classmates made a comment that I felt that I should comment on. Randall posted "The buying decisions video discussed the decision making continuum. After watching the video it seemed that keeping the customer in the normal range to ensure repeat purchases. Doesn’t this suggest that quality to ensure customer retention is more important that mass marketing campaigns?" Yes Yes Yes Randal. Mass advertising can only get you so far. True marketing will focus on the consumer. The consumer wants benefits and the consumer wants those benefits to be of the highest quality. I think that is why we're going through so much in pharmasim simulation. Our product is well known (I think our advertising department is doing very well... so well, that I tend to take money from them), but something must be wrong with our product (or it could be price) that is causing consumers to leave.
This brings me to the 'Try This' for this week.
I spoke to a family member about what type of Cold medicine they use. I asked them a series of questions about cognitive dissonance, but did not tell them what Cognitive dissonance was nor did I use that term in the
Cognative Dissonance is the uncomfortable tensions or feelings that occur when we make decisions that conflict with our beliefs. Basically, I told them have they ever bought cold medicine and then wished that they had bought a different type / brand. So, I basically told the about post purchase dissonance because I believe that when someone is sick or hurting, they are making a high involvement decision.
My Mom informed me that she just uses the store brand (whatever store
she happens to go to) Nyquil. This means that she does not buy Nyquil,
she buys the generic drug that is produced by the drug store she goes
to (most likely Walgreens). She told me that she never feels any guilt
about the purchase. She is satisfied with it. Most of the time, she
takes it at night, she goes to sleep, she wakes up and her cold is gone.
I explained to her that the most likely reason that she never feels any post purchase dissonance is because this is not a high involvement decision for her. This is because of her associations that she has created between her and the drug over the span of 50 years.
1. My Mom believes in Nyquil to cure all of her cold symptoms (even if it’s not specifically made for that). I’m sure that because she sleeps an entire night after taking it, her body does most of the healing on its own.
2. My mom has financial limitations, so she picks a cheaper brand (store brand) and this reduces the amount of dissonance that she feels. If she had purchased the actual Nyquil brand, she might feel bad because she is not in a great financial situation.
3. My mom thinks that the store brand is just as good as the ‘name brand’ because in order for the medicine to be of the same type, it has to have the same ingredients. She’s mostly accurate. Her knowledge also lowers the amount of dissonance she feels.
I told her that the combination of those three associations is why she can purchase her Nyquil knock off and feel good about it.
Advertising and Marketing by Nyquil actually hurt the brand in this case b/c it made her want Nyquil, but not pay that price… so ‘she had no choice’ but to go with a cheaper option.
In conclusion this week was blur. I was able to advise my Mom purely by watching the Week 5 videos on Cognitive dissonance. It was very helpful and I explained most of the concepts in the above paragraph. Being that this is the last opportunity to practice Pharmasim, I'm going to stay up late to work on it. It has become very addictive.
This week was fast paced and serious as it was the last week to get in good practice with Pharmasim before the team assignments started. I tried my hand at Pharmasim and failed miserably the first couple of runs. I was making too many drastic changes at once. I was doing too much. I learned a lot about how sensitive the effects of marketing could be from period to period.
Some of the lessons I learned were that quality of advertising counts. The money saved from moving down to a less qualified advertising agency does not truly add anything to the bottom line.
I did some tweaking in the early periods of the first simulation this week with the percentage of marketing directed towards Independent Drug stores. I thought that since the grocery stores were not that big for us, that our company should focus on the places where people go strictly for medicine. The scenario tells us that we do not have a problem bringing in customers, we have a problem keeping them. My share price plummeted $3/sh by increasing this from 6% to 16%. I obviously over did it.
I wised up and realized that since we commanded so much of the market, consumers want our product. So why were they leaving. I spent less on advertising and then I wondered if our price was a little too high so I lowered it by 25 cents. Worked like charm. The next period our share price rose by $2 back to a healthy $33.03/ share.
After this, I made a series of bad move that I learned from. Most notably was my horrible decision to add a new line of product called All round +. This tanked the mkt share price and placed me well over budget at the same time. In the next period I tried to salvage the company by discontinuing the new line but it was too late.
In class this week, we focused on the consumer. Market analysis is where marketing managers earn their bucks and figuring out the customer is a lot more important than learning about the competition. One of the concepts discussed in class was the difference between product features and product benefits. We also hit on this in our book.
In chapter five, Lehman and Winer talk about product features and product benefits. Features need to provide a useful function for the customer, otherwise it is not a benefit. In the book, the benefit simply seems like a description of what he feature can do (or the feature’s ability). If this is the case, why don’t marketing managers promote the benefits first, and then back them up with the label of the feature once the customer asks how it’s possible? Why doesn’t Lehman teach us to do this? For example, instead of leading with ‘The car has a North star engine.’ The marketing manager could have the company lead with “The car will not need a tune-up for the first 100,000 miles. That sounds a lot better to me.
In the discussion post, one of our classmates made a comment that I felt that I should comment on. Randall posted "The buying decisions video discussed the decision making continuum. After watching the video it seemed that keeping the customer in the normal range to ensure repeat purchases. Doesn’t this suggest that quality to ensure customer retention is more important that mass marketing campaigns?" Yes Yes Yes Randal. Mass advertising can only get you so far. True marketing will focus on the consumer. The consumer wants benefits and the consumer wants those benefits to be of the highest quality. I think that is why we're going through so much in pharmasim simulation. Our product is well known (I think our advertising department is doing very well... so well, that I tend to take money from them), but something must be wrong with our product (or it could be price) that is causing consumers to leave.
This brings me to the 'Try This' for this week.
I spoke to a family member about what type of Cold medicine they use. I asked them a series of questions about cognitive dissonance, but did not tell them what Cognitive dissonance was nor did I use that term in the
Cognative Dissonance is the uncomfortable tensions or feelings that occur when we make decisions that conflict with our beliefs. Basically, I told them have they ever bought cold medicine and then wished that they had bought a different type / brand. So, I basically told the about post purchase dissonance because I believe that when someone is sick or hurting, they are making a high involvement decision.
My Mom informed me that she just uses the store brand (whatever store
she happens to go to) Nyquil. This means that she does not buy Nyquil,
she buys the generic drug that is produced by the drug store she goes
to (most likely Walgreens). She told me that she never feels any guilt
about the purchase. She is satisfied with it. Most of the time, she
takes it at night, she goes to sleep, she wakes up and her cold is gone.I explained to her that the most likely reason that she never feels any post purchase dissonance is because this is not a high involvement decision for her. This is because of her associations that she has created between her and the drug over the span of 50 years.
1. My Mom believes in Nyquil to cure all of her cold symptoms (even if it’s not specifically made for that). I’m sure that because she sleeps an entire night after taking it, her body does most of the healing on its own.
2. My mom has financial limitations, so she picks a cheaper brand (store brand) and this reduces the amount of dissonance that she feels. If she had purchased the actual Nyquil brand, she might feel bad because she is not in a great financial situation.
3. My mom thinks that the store brand is just as good as the ‘name brand’ because in order for the medicine to be of the same type, it has to have the same ingredients. She’s mostly accurate. Her knowledge also lowers the amount of dissonance she feels.
I told her that the combination of those three associations is why she can purchase her Nyquil knock off and feel good about it.
Advertising and Marketing by Nyquil actually hurt the brand in this case b/c it made her want Nyquil, but not pay that price… so ‘she had no choice’ but to go with a cheaper option.
In conclusion this week was blur. I was able to advise my Mom purely by watching the Week 5 videos on Cognitive dissonance. It was very helpful and I explained most of the concepts in the above paragraph. Being that this is the last opportunity to practice Pharmasim, I'm going to stay up late to work on it. It has become very addictive.
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