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The PharmaSim Case Period Review Prepared by: Nik Rentas Turgut Tezir August 10, 2006.

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Presentation on theme: "The PharmaSim Case Period Review Prepared by: Nik Rentas Turgut Tezir August 10, 2006."— Presentation transcript:

1 The PharmaSim Case Period Review Prepared by: Nik Rentas Turgut Tezir August 10, 2006

2 OUTLINE General Period Review General Period Review Period Performance Period Performance Period 4 Period 4 Period 5 Period 5 Period 6 Period 6 Period 7 Period 7 Conclusions I & II Conclusions I & II

3 General Period Review PERIOD Introduce New Products DryupColdcureBesthelp + Allround+ Curall Children Ethick End+ AllStar Allright Advertising Spending 3.3Mil.+17.7Mil.+7.3Mil+17.2Mil+14.4Mil+12.3Mil+21.3Mil+2.7Mil+7.3Mil Promotional Spending +1Mil+17Mil+3.5Mil+7.8Mil+3.7Mil+10.1Mil+3Mil+4.1Mil+1.5Mil SALE Mass Merchandiser +9%+13.7%+13.6%+19% Retail82.1Mi l 4.3% 380.7Mil 19.1% +57.4Mil 2.4% Mil 4.4% Mi l 6.6% Mil 12.8% Mi l 7.3% Mi l 5% +316Mi l 9.2% Convenience+36.4%-21.8%+29.1 % Grocery9.9%+7.5%

4 General Period Review Period Net Income (millions$) Compare Groups in Class* Stock Price ($) Compare Groups in Class* Return on Expenditures (%) Compare Groups in Class* Return on Sales (%) Compare Groups in Class* Share of Manufacturer Sales (%) Compare Groups in Class* Cumulative Net Income (millions$) Compare Groups in Class*

5 General Period Review

6 Period Performance Period 1 was below average compared to groups in the class. Period 1 was below average compared to groups in the class. Period 8 was above average Period 8 was above average We were in the top 3 best company based on We were in the top 3 best company based on net income, net income, return on expenditures and return on expenditures and return on sale. return on sale. We were in the top 4 best company based on We were in the top 4 best company based on stock price. stock price. We were in the top 5 best company based on We were in the top 5 best company based on share of manufacturer sales, share of manufacturer sales, cumulative net income cumulative net income

7 Period 4  Allround + 12hr Multi Capsule  Capsule & Stronger  Net Income and Stock Price climb  Advertising & promotional spending high  Grocery and retail store sale grew  Curall has also requested permission to sell children cough medicine

8 Period 5 Advertising & promotional spending high  Product awareness high but declining  New competitor products introduced with better marketing strategies, more focused segmentation.  Ethik introduced End+  Net Income increased almost double size  Stock prices increased  Retail sales grew by 12.8%

9 Period 6 Allright children medicine introduced Allright children medicine introduced Total advertising and promotional spending increased Total advertising and promotional spending increased Sales force increases caused major improvements Sales force increases caused major improvements Net Income and Stock prices grew Net Income and Stock prices grew Retail sales grew by 7.3% Retail sales grew by 7.3% Convenience store sales decreased 21.8 % Convenience store sales decreased 21.8 %

10 Period 7 Advertising and promotional spending increased Advertising and promotional spending increased We continue to increase sales force We continue to increase sales force Grocery stores showed the strongest growth in this period with an increase of 7.5%. Grocery stores showed the strongest growth in this period with an increase of 7.5%. Retail sales grew by $164.1 million. Retail sales grew by $164.1 million.

11 Conclusions I An average advertisement and promotional allowance help us to increase product awareness although didn’t help retention. An 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. 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. 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.

12 Conclusions II Through cost cutting in advertising we increased our sales force from period 6 on to attempt to match that of B&B. Through 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 7 AllstarB & B Retail Sales Manufacturer Sales Promotional Allowance Cost of Goods Sold Gross Margin Cons. & Trade Promo Advertising Sales Force Administration Contrib. after Mkting Fixed Costs Net Income Stock Price Capacity Utilization Period 8 AllstarB & B Retail Sales Manufacturer Sales Promotional Allowance Cost of Goods Sold Gross Margin Cons. & Trade Promo Advertising Sales Force Administration Contrib. after Mkting Fixed Costs Net Income Stock Price Capacity Utilization


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