Allstar: Round 3 & 6Done by:

Anoud Almutlak

Arwa Alnahdi

Baraa Alafif

Khlood Soma

Mashael Alotaibi

Round 3 Period #2

Company Overview

Revenue (M$) 406.2-5.2%

Gross Margin (M$) 196.5 -5%

Net Income (M$) 81.3 -15.8%

Stock Price $41.64

CGS (M$): 140.7

Capacity Utilization: 92.2%

Market Situation

Prices increased an average of 2.0% compared to an inflation rate of 3.2%

Total advertising spending is up $7.9 million while promotional spending increased $3.3 million...

Mass merchandiser sales showed the strongest growth this period with an increase of 14.1%...

Retail sales grew by $67.6 million, or 2.8%...

Competitors Situation

Special Incident: Cannibalization

OPTIONS REASONSa- 12-hour multi capsule * Decrease sales for our original 4-

hour multi liquid.* Not attracting new customers ( only adults).* Different in time of using.

B- cough formula * Decrease sales for our original 4-hour multi liquid.* Not attracting new customers. ( only adults).

C- children’s liquid cold medicine

* New target customers. ( Children)* Not affecting the sale of the original brand. ( Different users)

Special: Reformulation

During this round, we had the choice to either Drop Alcohol (1.20) switching from cough suppressant to

expectorant(1.31) Leave the brand as it is (1.31)

Reason: Lowest cost, and we wanted to cut down our costs.

Special: Reformulation

Decision: Pricing

Before MSRP: 5.58

Prices increased avg 2%

Inflation 3.2%

After Increase price by 2%

New price: 5.69

Report Used: Pricing

• Allround has the fourth highest MSRP therefore we felt okay to increase the price(due to inflation) because we would still be in the industry range.

Decision: Advertising

Before Budget: $20 million

Ad Agency: BMW (15%)

Primary: 5%

Benefits: 45%

Comparison: 45%

Reminder: 5%

After Budget: $16.0 Million Ad Agency: Sully and Rogers

(10%) 

Primary10%  Benefits45%  Comparison35%  Reminder10%

Report Used: Advertising

• Highest among competitors, therefore we needed to decrease it relative to the industry.

• Reason: to decrease costs.

Decision: Sales Force

Before Mass merchandiser sales

showed the strongest growth this period with an increase of 14.1%

Mass Merchandise: 20

Total Sales Force: 189

After Increase SF by increasing

Mass Merchandise

Opportunity: MM sales growth

Also, we had the lowest SF in the industry.

New MM: 40

New Total SF: 209

Report Used: Sales Force

Results

Revenue (M$) 412.81.6%

Gross Margin (M$) 209.4 6.6%

Net Income (M$) 95.2 17.1%

Stock Price $44.45

CoGS (M$): 133.2

Capacity Utilization: 91.8%

CoGs

Customer Satisfaction increased from 57.6% to 63.7%

Growth of sales according to symptoms increased except for Cough. This increase might be due to the reason of dropping the alcohol in the formulation.

Round 6Period #5

Company Overview

Revenue (M$) 511.38.7%

Gross Margin (M$) 259.4 12.6%

Net Income (M$) 115.3 32%

Stock Price $63.12

CGS (M$): 179.7

Capacity Utilization: 118.6%

Company Overview

CGS (M$): 179.7Capacity Utilization: 118.6%

Market Situation

Ethik announced the introduction of End+ this period... Prices increased an average of 3.2% compared to an

inflation rate of 3.6% Total advertising spending is up $13.4 million

while promotional spending increased $7.1 million... Mass merchandiser sales showed the strongest growth

this period with an increase of 14.6%... Retail sales grew by $255.1 million, or 9.4%...

Competitors Situation

Special: Creative Marketing Fund street artists in major cities to act out a

"commercial” ($500,000) Place your product in a movie expected to be popular

with young adults ($100,000) Sponsor a racecar driver ($2 million) Advertise in a crossword puzzle ($50,000) Run an ad contest ($1 million)

ReasonsOption 1 * Not related to our product.

* Not helpful.Option 2 * Focusing on a specific group of

people.Option 3 * To costly. Option 4 * Not being used or played

anymore* People may don’t have time

Option 5 * Seems the most reasonable. *Attract customers to participate which will create a relationship between buyers and the firm. * Activate the website. * Knowing what customers like and prefer.

Decision: Promotion

Before Lack of consumer

promotion for all round (market update)

Consumer promotion: $ 1.65 m

After Consumer promotions:

$ 2.5 m

Decision: Pricing

Before Price of Allround : $ 5.53

Price of Allround+: $ 5

After Price of Allround: $ 5

Price of Allround+: $ 5.7

Reason: Decreasing Allround: To encourage salesIncreasing Allround+: Already beimg advertised and tried.

Decision: Sales Force Reallocate our sales force based on benchmarking ( curall company):

Direct (#SF) Indirect (#SF)

  Indep Drugstores 30 Wholesaler Support 36

   Chain Drugstores 66 Merchandisers 24

   Grocery Stores 93 Detailers 24

   Convenience Stores 6

  Mass Merch 30 Total sales force 309

Report used: Sales Force

The sales force report showed that we Ranked the 4th ( insufficient allocation ).

Decision: Advertising

Before: Advertising budget: $ 8 m

Advertising options percentages:

-Reminder: 10%-Comparison: 35%

After: Advertising budget: $ 5 m

Advertising options percentages:

-Reminder: 15%-Comparison: 30%

Reason: * Not a new product any more, Already being advertised a lot. * Increase: To remind and attract. * Decrease: Not a new product to be compared to others.

Results