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

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

3. General Period Review Period 4 introducr PERIOD 1 2 3 4 5 6 7 81 2 3 4 5 6 7 8
Introduce New Products
Dryup
Coldcure
Besthelp+
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
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%
Retail
82.1Mil 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%
Grocery
9.9%
+7.5%
Period 4 introducr

4. General Period Review Period 1 2 3 4 5 6 7 8 Net Income (millions$) 671 2 3 4 5 6 7 8
Net Income (millions$) 67 91 69 52
112
206 98
141
Compare Groups in Class* 10 14
Stock Price ($)
38.35
50.71
39.14
37.5
35.42
52.98
57.7
61.75
80.68 9
Return on Expenditures (%)
203.6
257.3
182.7
200.8
90.1
217.6
139.4
132.8
192.7 13 11 12
Return on Sales (%)
18.9
21.3
16.9
11.7
24.6
18.4
16.0
19.9
Share of Manufacturer Sales (%)
23.8
23.4
21.9
20.8
21.4
22.0
22.8
22.4
Cumulative Net Income (millions$)
158
227
296
349
460
567
665
806

5. General Period Review

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

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

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

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.
Doing so made retail sales skyrocket in period 8 bringing Allstar within 103 million dollars of B&B in retail sales.
Period 7
Allstar
B & B
Retail Sales
805.9
943.9
Manufacturer Sales
615
729
Promotional Allowance
116.5
111.9
Cost of Goods Sold
219.8
192.7
Gross Margin
278.6
424.4
Cons. & Trade Promo.
16.5
21.7
Advertising 43
50.6
Sales Force
14.6
21.1
Administration
16.9
19.5
Contrib. after Mkting
187.7
311.5
Fixed Costs
89.3
109.5
Net Income
98.4
202
Stock Price
61.75
129.95
Capacity Utilization
108.9
96.7
Period 8
Allstar
B & B
Retail Sales
925.3
1028.3
Manufacturer Sales
706.1
794.5
Promotional Allowance
134
122
Cost of Goods Sold
240
219.1
Gross Margin
332.1
453.4
Cons. & Trade Promo. 15
23.8
Advertising 44
55.7
Sales Force 14
22.9
Administration
18.8
21.2
Contrib. after Mkting
240.3
329.8
Fixed Costs
99.7
113.5
Net Income
140.6
216.3
Stock Price
80.68
144.47
Capacity Utilization
100.2
104.6