Allstar Company

The Management Team:Lucian HerciuJim BrenneckSharona GonenGreg AcquavivaJon Briones

Mission StatementMission Statement

The Allstar Company is an international

organization catering to customers seeking

symptomatic relief in the cold and allergy

over-the-counter market. Our goal is to understand

and fulfill the needs of our customers by providing

them with an effective product that allows them to

get better. Allstar wants to assure our customers

that our products are safe, reliable and convenient.

Marketing Objective 1

Increase retail sales by 15% in the next two years by increasing promotional expenditures on coupons by 10%.

To achieve this objective research indicates the following

activities: increase distribution of coupons by including

them within the packages to encourage product

repurchases. The team also suggests adding coupons to

college campus advertisements during the cold and flu

season. The management team believes that in two years

these actions will lead to a 15% increase of retail sales.

Marketing Objective 2Lower cost of goods sold by 10% through increased research and development using 10% of retained earnings to finance it in 2006.

To achieve this, research indicates that Allstar’s research

and development should focus on upgrading production

lines, and streamlining the new product development

research process to make it quicker and more productive.

The results of these upgrades should be geared toward

maintaining product quality while decreasing costs through

better procedures. This should be financed by using a

maximum of 10% of Allstar’s retained earnings per year.

Marketing Objective 3

Increase market share by 25% in the next three years by increasing Allstar’s advertising budget by 10%.

To achieve this objective research indicates the following activities: expand the advertising campaign budget by 10% to include internet advertising, with websites such as Google, Yahoo, and Msn. Allstar’s research also suggests sponsorship of winter activities and events such as skiing and snowboarding events (X-Games) to take advantage of the adventurous youth market that is exposed to the elements. The management team believes that this will increase the market share in the next year by 25%.

Marketing Objective 4

Expand current distribution networks and create new ones by increasing promotional allowances to distributors from 13% to 15% over the course of two years.

To achieve this research indicates the following activities : increasing the discount allowances from 13% to 15% in the course of two years will give potential outlets greater incentives to purchase Allstar products. This will attract more distribution networks and eventually lead to greater profits.

Marketing Objective 5

Managing sales force and budget to keep Allstar’s utilization within the 85% to 95% range for the year 2006.

To achieve this objective research indicates the following

activities : closely monitor Allstar’s utilization by analyzing

past and present data to prevent the over and under

utilization experienced during the first five years. Further

studies of past utilization show that maintaining an 85% to

95% capacity has had a positive effect on stock price and

profits.

Marketing Objective 6

Designate $500,000 dollars each year for the next two

years toward redesigning Allround’s product packaging and

logos to refresh its image.

To achieve this research indicates updating the company

image, logo, and product packaging colors within the next

two years. Allstar will use $500,000 each year to conduct

research surveys to identify what color schemes

customers will associate with Allstar’s message of security,

reliability, and convenience.

Marketing Objective 7

To achieve this research indicates implementing a pricing strategy that keeps Allstar’s products priced above its competitors while maintaining tradeoffs between symptom relief and price. Allstar will portray Allround products through commercial advertisement as high quality items that are worth paying for.

Raise brand awareness by 20% over the next two years.

Marketing Objective 8

To achieve this research indicates hiring a market analyst to assess the economic inflation rate will be necessary to keep product prices at 1% above the inflation rate.

Increase Allstar’s product prices by 1% over the economy’s inflation rate in the next year.

Marketing Objective 9

Research indicates investing 15% of Allstar’s advertising budget should be sufficient for establishing a task force to decrease customer cognitive dissonance. The task force should achieve this through reminder advertisements that will assure customers their decisions were sound. These advertisements should consist of commercials emphasizing doctor recommendations as well as billboards emphasizing symptom relief.

Create a task force to examine and decrease cognitive dissonance in the next two years, by developing methods to counteract it, using 15% of Allstar’s advertising budget to reinforce customer post purchase satisfaction.

S.W.O.T Analysis

•Strengths•Weaknesses

•Opportunities•Threats

StrengthsImage:*Perception of high quality of product as a share leader in the OTC marketMarketing Skills:*Team successful at creating high brand awareness for Allstar product line.Technology:*Reformulation - elimination of alcohol decreases production costs.*Streamlined distribution methods and overall efficiency and improvement of production.Finance:*High profit margins lead to allocating resources to other areas within organization. This stimulates growth, higher profits and investor potential.

WeaknessesImage: *Tainted due to inability to adapt to changing environment. May steer consumers away.Financial:*Extensive labor costs due to size. Financial resources spent on promotion requires a high sales force. Results in profit decrease.Technology:*Technological improvements in production grant better access to Allround brand but increase overhead costs.

OpportunitiesDemographics:*Growing elderly population and annual birth rate (1% ) presents a profit opportunity, since those market segments are more dependent on OTC medication.Economical:*Decrease in inflation > decrease in price >Increase in sales volume = Higher RevenueTechnological:*Technological advances = More efficient and effective production methods.Competitive Advantage:* High volume discounts for buyers = high volume purchases= high turnover rates = Increased Sales

ThreatsSocial:*Poor quality of product as a negative consumer attitude, due to a decrease in product price. May decrease perceive value, leading to a decrease in revenue.Economical:*Rising inflation rates decrease disposable income. Decrease in consumer purchasing power leads to a decrease in revenue.Technology and competition:*Competing firms’ superior applied research advancements hinder teams accelerated production pace.Demographics:* Reduced occurrences of illness in warmer climate areas. May cause a decrease in sales and revenue.

Lessons LearnedLessons Learned

Heavily relied on surveysHeavily relied on surveys– Operating StatisticsOperating Statistics– Share of Channel SalesShare of Channel Sales– Performance SummaryPerformance Summary– TradeoffsTradeoffs

Marketing decisions were made based Marketing decisions were made based upon the information from surveysupon the information from surveys..

Marketing MixMarketing Mix

Implemented the 4 P’sImplemented the 4 P’s– PromotionPromotion– PricePrice– Place (Distribution)Place (Distribution)– ProductProduct

PromotionPromotion

AdvertisingAdvertising– Allocation of budgetAllocation of budget– Advertising messageAdvertising message

PrimaryPrimary

BenefitsBenefits

ComparisonComparison

ReminderReminder

– Improve product imageImprove product image– Increase salesIncrease sales

Income GraphIncome Graph

Income Statement

67.2

79.4

69.6

80

67.3

79.8

63.6

94.387.3

99.5

130

0

20

40

60

80

100

120

140

0 1 2 3 4 5 6 7 8 9 10

Period (years)

Do

llars

(m

illio

ns)

Income

Retail SalesRetail Sales

Retail Sales

468.1

524 532.1551.4

584.2

647626.2

647.8 656.9685.3

752.9

0

100

200

300

400

500

600

700

800

0 1 2 3 4 5 6 7 8 9 10

Period (years)

Do

llars

(m

illio

ns)

Retail Sales

Stock PriceStock Price

Stock Price

38.35

45.19

41.58

45.7343.91

48.39

41.12

47.72

43.69 44.98

52.46

0

10

20

30

40

50

60

0 1 2 3 4 5 6 7 8 9 10

Period (years)

Pri

ce Stock Price

PricingPricing

PROBLEMSPROBLEMS

Tradeoffs SurveyTradeoffs Survey

Overlooked Inflation RateOverlooked Inflation Rate

ACHIEVEMENTSACHIEVEMENTS

Discount PriceDiscount Price

TradeoffsTradeoffs

PlacementPlacement

Distribution channelsDistribution channels– Groceries & Mass Merchandisers were Groceries & Mass Merchandisers were

company’s main focus (strongest growth)company’s main focus (strongest growth)– Raised sales force within these channelsRaised sales force within these channels– Gave high volume discounts to influence Gave high volume discounts to influence

particular channel salesparticular channel sales

Positioned product in prominent locationsPositioned product in prominent locations– Shelf space & point-of-purchaseShelf space & point-of-purchase

ProductProduct

Allround brand reformulationAllround brand reformulation– Dropped alcoholDropped alcohol– Reduced production costsReduced production costs– Led to an increase in retail salesLed to an increase in retail sales

Introduction of Allround PlusIntroduction of Allround Plus– Gain higher market shareGain higher market share– Brand’s symptom relief highly sought after by Brand’s symptom relief highly sought after by

consumersconsumers

ConclusionConclusion

Pay attention to key detailsPay attention to key details– InflationInflation– Industry trendsIndustry trends– Budget allocationBudget allocation

Q & AQ & A

Any questions?Any questions?