Pharma SIM Final Presentation By Kiss Group Wei
Pharma. SIM Final Presentation By “Kiss“ Group Wei Wang, Yung-Pei Lee, Xiaoying Ma Zhuobin Chen, Jiajia Cai, Zhen Yang
Agenda • Part 1 ü ü Marketing Plan Highlights Performance objectives and actual performance Key success factors Future Positioning • Part 2 ü ü Marketing Plan Key success factors to future 4 Ps New management team organization
Marketing Highlights • Overall levels of advertising spending • Overall levels of promotional spending • Market sales
Marketing Highlights Significant changes of advertising spending resulted in our stable media budget • We maintain the advertising budget at $18. 0 Million • Keep hiring the Ad Agency Sully and Rogers (10%) • However, we changed the proportion of the ad messages according to different strategic plans.
Marketing Highlights With the launch of Allround+ and strong Allround’s brand awareness and product equity, we decided to reduce the promotion allowance for gaining more profits • We reduce the promotion allowance from 18% to 12% • Add more promotion allowance to Allround+ • But still maintain the high proportion of point of purchase(#2) purchase
Marketing Highlights Because the merchandising and detailing are important for successful new product introductions: Allround+ • Increase the Indirect sales force: force Merchandisers and detailers • Specially detailers: detailers from 16 to 42
Performance objectives Allround aims at maintaining its market leadership and exploring new opportunities in the OTC industry Market leader New Opportunity
Performance objectives
Actual Performance Allround has experienced an increase in terms of manufacturing sales, net income and stock price
Actual Performance Brand Awareness and brand Satisfaction of Allround have been increased slightly over periods Note: The top performance of Brand satisfaction and brand awareness is always lead by Allround during these 6 periods.
Actual Performance Allround’s market share has been decreased because of direct competition with the new product--Coughcure in the cold products category, yet it stills maintains it’s leadership.
Actual Performance Two new products, 4 -hour cough liquid and 4 -hour multisymptom liquid for children have been added, which contributed to the increasing sales and enlarging product lines. 25. 5 million 5. 3 million 11. 4 million Allround+: 4 -hour cough liquid Allright: 4 -hour multi-symptom children liquid
Key Success Factors Why our net income increases in period 4 -5?
Key Success Factors • Channel: We focus on the wholesaler and +2500 volumes (the grocery store) which would bring us the most profit and increasing discount range for them • Promotion allowance: 20% promotion allowance to the new brand: Allround+, which gives the incentives to the retailers and wholesalers Reduce the promotion allowance from 18% to 12%, which increase our net income • Price: increase the MSRP of Allround from $5. 78 to $6. 02, which increases the total sales
Key Success Factors Why our brand awareness increases?
Key Success Factors In period 4 – 5, we keep the same co-op advertising, point of purchase, trial size and coupon budget The increase usage of the coupon budget can help with our brand awareness.
Key Success Factors In period 5, we keep the high advertising budget and use the medium ad agency to promote our brand. We convey the advertising message focusing on the “comparison” with other brands and “reminder” to bring the customers back.
Key Success Factors Why channel sales increases?
Key Success Factors Market Share Based on Retail Sales Allround accounts for the big market share. The total is 18. 2%. It is the highest one in all categories.
Key Success Factors Period 4 Period 5 In period 4 – 5, we increase our direct and indirect sales force, especially the indirect sales force for wholesalers, merchandisers and detailers, which can increase the customer retention.
Future Positioning _ Product life cycle Stages Star Question Cash Caw Dog Brand in this stage All Right All Round+ All Round - Competitive rivals - Promotions, Change formula - Low Limited Market Environmen competivenes competitors s t Marketing Plan Create brand awareness Demonstrate strength, Trail usage
Future Positioning The red circle means the blank market which indicates less competitiveness Company can position its products base on own expectations and market environment by changing the price and symptom
Important take-aways • Reading carefully through the case is essential which gives a broader view of the whole situation; • Analyzing and segmenting consumer will result in better understanding to our target; • Besides sales increase, net income is more essential to influence the profit making by the company.
Key Success Factors: A user-driven strategy • Find the most valuable segment and channel • Analysis on customer’s demand: -Shopping habits, decision making criteria -Differentiate our product from the competitors • Never ignore the potential customers • Support from distributors: -Communication, relationship • Cost saving: -Minimize the expenses on discount, allowance while keeping a satisfactory margin level to distributors • Explore the opportunities in growing industry • Impact from the macro-environment
Changes on Marketing Plan The main change on marketing plan: withdraw from heavily investing on promotion, instead, we cut down the expense in allowance, and adjust the discount with little influence on distributors’ margin
4 P: PRODUCT What are we looking for on new product introduction • • • Initial market share comparable to competitor’s High effectiveness in Capital utilization Increasing Awareness aided by our existing brand WOM High satisfaction which motivates consumer’s acceptance Good turnover to support the next round Customer’s decisions of brand switching
4 Ps- Pricing Promotional Allowance: 12% Retail margin (volume < 250) 28% 37. 13% 36. 64% Retail margin (250<volume<2500) 32% 33. 85% 40. 16% Retail margin (volume>2500) 36% 30. 57% 43. 68% Wholesale margin 39% 28. 11% 46. 32% Discounts are set based on margins of manufacturers and most importantly distributors MSRP Manufac Distribut turer or Margin Price to End users Margin to Distributors Price to Distributors Margin to Manufacturer Promotional Allowance Cost of Goods Sold Promotional Expenditure Advertising Expenditure Sales Force Administration Fixed Costs of Goods from manufacturers
4 Ps- Pricing Therefore, our pricing strategies are psychological pricing and discrimination pricing
4 Ps- Promotional Allowance Rate, Actual Allowance earned by Sales and Coop Advertising Amount are core vectors in measuring the self space to Distributors
4 Ps- Place The messages we want to convey in different promotional vehicles are determined by consumers insights
Advices on new management team Ø Set up a inspiring objective for the whole group Ø Assign different roles to the team members according to their personalities and experience Ø Build common rules to solve conflicts within team Ø Optimize everyone’s advantage by identifying their roles like advisor, explorer, controller, etc.
Thanks very much for your listening! Any questions?
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