Presentation on theme: "The PharmaSim Case Period Review"— Presentation transcript:
1The PharmaSim Case Period Review Prepared by:Nik RentasTurgut TezirAugust 10, 2006
2OUTLINE General Period Review Period Performance Period 4 Period 5 Conclusions I & II
3General Period Review Period 4 introducr PERIOD 1 2 3 4 5 6 7 8 12345678Introduce New ProductsDryupColdcureBesthelp+Allround+ Curall ChildrenEthick End+AllStar AllrightAdvertising Spending3.3Mil.+17.7Mil.+7.3Mil+17.2Mil+14.4Mil+12.3Mil+21.3Mil+2.7MilPromotional Spending+1Mil+17Mil+3.5Mil+7.8Mil+3.7Mil+10.1Mil+3Mil+4.1Mil+1.5MilSALEMass Merchandiser+9%+13.7%+13.6%+19%Retail82.1Mil 4.3%380.7Mil 19.1%+57.4Mil 2.4%+106.2Mil 4.4%+168.4Mil 6.6%+345.6Mil 12.8%+223.8Mil 7.3%+164.1Mil 5%+316Mil 9.2%Convenience+36.4%-21.8%+29.1%Grocery9.9%+7.5%Period 4 introducr
4General Period Review Period 1 2 3 4 5 6 7 8 Net Income (millions$) 67 12345678Net Income (millions$)6791695211220698141Compare Groups in Class*1014Stock Price ($)38.3550.7139.1437.535.4252.9857.761.7580.689Return on Expenditures (%)203.6257.3182.7200.890.1217.6139.4132.8192.7131112Return on Sales (%)18.921.316.911.724.618.416.019.9Share of Manufacturer Sales (%)23.823.421.920.821.422.022.822.4Cumulative Net Income (millions$)158227296349460567665806
6Period PerformancePeriod 1 was below average compared to groups in the class.Period 8 was above averageWe were in the top 3 best company based onnet income,return on expenditures andreturn on sale.We were in the top 4 best company based onstock price.We were in the top 5 best company based onshare of manufacturer sales,cumulative net income
7Period 4 Allround + 12hr Multi Capsule Capsule & StrongerNet Income and Stock Price climbAdvertising & promotional spending highGrocery and retail store sale grewCurall has also requested permission to sell children cough medicine
8Period 5 Advertising & promotional spending high Product awareness high but decliningNew competitor products introduced with better marketing strategies, more focused segmentation.Ethik introduced End+Net Income increased almost double sizeStock prices increasedRetail sales grew by 12.8%We were marketing our products to too wide of a market. In period 6 we received the performance sheet which questioned some of our decisions. After making changes in accordance with the recommendations we saw all aspects of the business improve.
9Period 6 Allright children medicine introduced Total advertising and promotional spending increasedSales force increases caused major improvementsNet Income and Stock prices grewRetail sales grew by 7.3%Convenience store sales decreased 21.8 %
10Period 7 Advertising and promotional spending increased We continue to increase sales forceGrocery stores showed the strongest growth in this period with an increase of 7.5%.Retail sales grew by $164.1 million.
11Conclusions IAn average advertisement and promotional allowance help us to increase product awareness although didn’t help retention.The best advertising company had a marginal effect. We switched over cheaper advertisement company to reduce advertising cost.Through cost cutting in advertising we increased our sales force to attempt to match that of B&B.Doing so made retail sales skyrocket and brought us within 10 million dollars of B&B.
12Conclusions IIThrough cost cutting in advertising we increased our sales force from period 6 on to attempt to match that of B&B.Doing so made retail sales skyrocket in period 8 bringing Allstar within 103 million dollars of B&B in retail sales.Period 7AllstarB & BRetail Sales805.9943.9Manufacturer Sales615729Promotional Allowance116.5111.9Cost of Goods Sold219.8192.7Gross Margin278.6424.4Cons. & Trade Promo.16.521.7Advertising4350.6Sales Force14.621.1Administration16.919.5Contrib. after Mkting187.7311.5Fixed Costs89.3109.5Net Income98.4202Stock Price61.75129.95Capacity Utilization108.996.7Period 8AllstarB & BRetail Sales925.31028.3Manufacturer Sales706.1794.5Promotional Allowance134122Cost of Goods Sold240219.1Gross Margin332.1453.4Cons. & Trade Promo.1523.8Advertising4455.7Sales Force1422.9Administration18.821.2Contrib. after Mkting240.3329.8Fixed Costs99.7113.5Net Income140.6216.3Stock Price80.68144.47Capacity Utilization100.2104.6