Post 1)TM
Group D
Group D's strategy was to focus on strategies that maintained their current customer base while expanding their market share to untapped segments. They chose to focus on brand awareness, differentiation, pricing, and promotional strategies. Group D increased the price of their products based on the inflation rate. They chose to be conservative with price increases they discovered that conservative price increases did not affect the demand for their products. Their strategy for volume discounts and promotional allowances was to keep their allowances the same from their initial strategy. They also chose to stay with the same advertising agency for the entire simulation period. They stuck with their initial plan to allocate a larger portion of their budget to advertising. They ran into some issues maintaining the advertising budget during the simulation. Group D allocated $20 million for their advertising budget. Group D focused their sales promotion to their biggest retailers the grocery stores. They discovered during the simulation that there were too many stores pushing the product but not enough sales to cover the low demand of the product. In period 5 Group D decided to continue to promote their current product lines rather that create a new product formulation. They chose this strategy to maximize sales and retain their customer base. Group D's net income increased 25% per period. They ended with $895 million of cumulative income by period 8. Their stock price reached $83.49 by period 8.
Group A
Group A's strategy was to focus on gaining market share in the cough segment by adjusting their advertising, segmentation, demographics and competing with the competitor Coughcure. Group A discovered during the simulation that this strategy was not working. Group A then changed their strategy to improve Allround's market share and sales by penetrating the existing market base. Group A focused on additional marketing and sales. The team was conservative in their approach of budgeting. They did not spend much on resources, research or analysis. This caused their stock price to lag and net income declined. The team decided to then invest in reports to improve their performance. Group A learned from their mistakes and put a long term marketing strategy in place with Allright. When Allright was launched Group A experienced an increase in their stock price and revenue. Group A saw net income increase to $115 million and the final stock price of $87.37
Group B
Group B's strategy was to determine the best strategy to maintain long- term profitability and market share in a competitive environment. Group B's pricing strategy was to use the reports provided and base their prices on the prior year's inflation rate. Group B used discounts and promotions to reward their customers. This strategy failed and resulted in a loss of profit and stock price. Group B's advertising budget started at $16 million dollars and fluctuated throughout the simulation. The promotional allowances also fluctuated throughout the simulation. Group B decided to use a different advertising agency during period three to save money. This decision resulted in a loss the new agency was not able to produce the results as the original agency they used. Group B originally decided to focus on cold and cough symptoms ad not try to enter the allergy market. They later decided to target all symptoms including allergy symptoms. Group B was able to recover from some decisions that impacted their stock price and profitability at the end of the simulation. Their final stock price was $40.42 and cumulative net income $733 million.
Group C
I was a member of Group C. Our pricing strategy helped us to remain competitive. We started with a lower price for Allround and gradually increased our price throughout the simulation. Our overall strategy was closest to Group A. We also decided to reformulate Allround to remove the alcohol. The reformulation of Allround was very pleasing to our customers. We also used reports and made adjustments based on our social media feedback. We also maintained the same advertising agency throughout the simulation; we wanted to make sure that our product remained a premium product. Our strategy proved to be strong resulting in drastic increases in our stock price and net income. Our net income grew from $67 million in period 1 to $124 million in period 8.
Post 2)ST
There are many similarities in the experience we had in group D to your described experiences in Group A. We also tried to focus on the competition side to see where our competitors stood and attempted to react to that as well as use the initial strategy report and the market updates as a guide. We failed to realize the importance of the purchased reports until later in the simulation. We also began to see changes as soon as we began to invest more in our salesforce. We put so much energy and focus in advertising and promotions that we didn't realize we were so low on the sales people needed to actually push our product at the different locations. As group A also mentioned, sufficient staffing was vital to the success of the Allround products.
As mentioned in group B, we also thought about changing our advertising agency to save cost. We were extremely hesitant for the reasons mentioned by group B, cheaper does not mean better. We decided against it and glad we did seeing the results experienced by group B. Brewster, Maxwell, & Wheeler proved to be the best choice for advertising agency in this simulation. The cost was great compared to the others, but their quality had also shown to be better. In the beginning, we were placing a lot of our budget in advertising and promotions instead of in other areas as I mentioned previously. In the end, we decided that since our advertising agency was so good, we could come down on the amount we were spending there and direct that money to salesforce. This decision proved to be correct because after making those adjustments, our stock price and net income began to rise each period.
Group C handled changes in their manufacture suggested retail price by adjusting according to inflation rate which was very smart. We did not adjust prices in the beginning because of the fear of raising the price too high since the product was already perceived as high by consumers. This was not the best decision. We realized this after the profit margin and net income suffered. We quickly adjusted this as group C did also, to increase with inflation. There were many similarities between all of the groups. There were opportunities for so many different outcomes. The learning curve was definitely experienced by all groups while attempting to regain the success of the Allround brand.