Transcript Marketing Objectives

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. Strengths

3. Brand Awareness
Allstar has the highest brand awareness in the
Pharmaceuticals market .
 Allows us to confidently introduce a new
product into the market.

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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. Strengths

5. 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. Weaknesses

1. 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.
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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. Weaknesses

3. 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.
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2. Acquisition of Baby Boomer Market

With the aging of this large generation, the
demand for Pharmaceuticals will increase
greatly.
S.W.O.T Analysis
C. Opportunity

3. Advances in biomedical research and
technology
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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 Medicare
Large 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. Threats

1. Crowded Markets
Many firms that distribute similar products.
 Competition is very intense.
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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. Threats

3. Government regulations
F.D.A regulations in the United States are quite
strict.
 Even though these regulations are for the wellbeing of the consumer, product introduction
takes ample time.

Marketing Objectives
Increase Brand
Awareness
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
Margins
ALLROUND:
•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
Margins
What We Can Do
•Increase Prices
•Lower Promotional/Volume Discounts
•Focus on Selling Direct to Retailers, not Wholesalers
70
60
50
40
Retail
30
Wholesale
20
10
0
Allround Allround+
Allright
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
•Our stock price today represents an increase of 65% over the
last 10 years
•Last year’s advertising budget was 63.5% higher than 10 years
ago
Advertising Budget and Stock Price
70
60
50
40
Advertising
Expenditure
30
Stock Price
20
10
0
0 1 2 3 4 5 6 7 8 9 10
Periods
Increasing Marketing
Department Budget
What We Can Do
Demonstrate to Management That Our
Marketing Activities Have Directly
Resulted in :
Increased profits
 Increased profit margins
 Successful new-product launches

Lessons Learned
Lessons Learned
Profit margins from retailers are greater
than those of wholesalers.
Allround MSRP:
Sold to Retailers for:
Wholesale Price:
$7.09
$5.67-$6.38
$5.32
Lessons Learned
Discount Rates:

Direct Retailers:
10-20%

Wholesalers:
25%+
70
Percentage of Sales:
60
50
40
Retail
Wholesale
30
20
10
0
Allround Allround+ Allright
Lessons Learned
Constantly monitor how the
marketing budget is being
allocated, and make changes as
needed.
60
50
40
% of Budget
30
20
10
0
Promotion
Advertising Sales Force
Research
Lessons Learned
Advertising Expenditure for Allround
Lessons Learned
It is essential to be customer-oriented.
$9
We kept the price
of Allround below
inflation for every
period.
$8
$7
Allround
Inflation
$6
$5
$4
1 2 3 4 5 6 7 8 9 10
Lessons Learned
It is important to segment the market and
focus products on under-utilized market
segments.
Product
Allround
Allround+
Allright
Remedies
Market
Cold Remedies
Cough Remedies
Children’s Cold
Lessons Learned
Existing Competitors When Product Was Introduced:
Allround:
Besthelp, Dripstop, Dryup,
Effective, Extra
Allround+:
Coughcure, End
Allright:
Coldcure, End+
Questions?