Week 9

Welcome back readers. This we had to execute periods 3 through 7 in the simulation. This was the focus of our week and I assure you, it was not easy.  In the first few periods we tried to adjust to reverse course for any negative trend while staying in our strategy. This did not work very well. We also had planned to release a new allergy product that the simulation did not allow us to release. We chose instead to release a new product at all until later when we could introduce an allergy product. A part of our strategy was to consistently increase our price based on inflation and competitor pricing. A couple times we forgot to do this however so we left potential profit on the table. As we released our new product and we saw the overall market begin to shrink we saw our cash flows significantly decrease. To offset this, we had to reallocate resources while staying true to our strategy. Our allergy product did very well but as we reallocated our budget from Allround to our allergy product we saw a decrease in sales for Allround which cut into our revenue.

We feel confident about where we are currently but it was a struggle. We can see the potential for where we can go and the future looks positive for our company. As we have stopped looking so deeply into the statistics and trying to focus more on our strategy implementation we have seen promise. Hopefully all the potential we see will soon be realized.

Week 8

Hello readers. This week’s post will be fairly short. My team and I have been working diligently on our marketing strategy for the simulation we are working with. Right now we are entering into period 3 and will be going to period 7 of the total 10 periods.

We are looking to launch a new product this next period. In addition to our currently cold medication we will offer an allergy medication. After looking at the market we felt it was a growing market with few competitors that we would likely be able to beat. We will look to maintain our market sure in the cold market and in the long term we will look to turn this medication into our cash cow to fund the newer projects we develop.

Toward the end of this section of the simulation we will look to reformulate our cold medication. We may not end up changing it but this would be when we would make those changes if we make any changes. Also near the end at this time we will look at another product to launch. We are thinking of offering a nasal decongestant at this time.

This is the broad view we have for our company without getting into too many specifics. It took us some time to come to these conclusions. Some people in the team, myself included, wanted to reformulate now but after discussing it we all came to the decision to wait. There were talks of offering the nasal decongestant first and the allergy medication second. These and many other discussions took place over Skype. Some team members were traveling so it became necessary to meet virtually. I think the process would have been more efficient if we had met in person. Hopefully in future meetings we will be able to meet in person.

Week 7

Welcome back to all the readers. I am posting much earlier than usual this week because The next few days I will be working to finish my situation analysis for the simulation. For the same reason, this will be a shorter post than usual.

I would like to say that I enjoyed the quick reference to Vince Lombardi reference. I find it ironic that I had actually included a picture of Coach Lombardi in my post last week. Maybe a I have a little more of the talent Drucker had to accurately predict future events.

For this post I would like to focus on the metrics that I feel would be best for evaluating performance in the simulation and a short explanation as to why I think each of these would be best. These are going to be presented in no particular order. I do not think any one of these is any more important than another.

 

Units sold we be a good figure to look at. This will give us a good idea of how we are doing compared to our competition. If we are doing great in this area but our profits are lagging we may need to increase our prices but have high units sold will tell us that our product is selling.

Market share would be a good metric to keep track of. This will show us similar information as units sold. We will be able to see who is in control of the market or at least who is attracting the majority of customers.

I would like us to look at brand awareness. By looking at brand awareness we will be able to tell if customers know our brand. If we have low brand awareness we need to increase our advertising and/or our promotions and educate the customers who we are and why they should buy our product or products.

Customer satisfaction will be important to note as well. This metric will tell us if customers are happy with their purchase. If it is low we may have an issue with buyer dissonance. We need to make sure this does not take place. Satisfied customers are more likely to become repeat customers and customer loyalty will ultimately determine our success in the long run.

Along the same lines as customer satisfaction, brand effectiveness perception will give us valuable information. This may be an objective statistic but ultimately the customer’s perceptions dictate our reality. If folks suffering from symptoms feel our product will best treat their symptoms then they will buy it. If they don’t think it will help they will choose a competitor. We want our product to be effective and to be perceived as effective.

 

Also, I think stock price would not be a very good metric. While this number is important to many people and should not be discarded entirely it can lead us down the wrong path. We are not solely in business to increase our profits. There are other ways we can tell if we are making money without focusing on this figure.

Week 6

I would like to start by saying hello and thank you to all the readers. A couple classmates had mentioned that their blogs were being viewed by people other than just those in class. To add to this fact, some individuals are in different countries across the globe. I was surprised to see this is the case for my blog as well. Hello and thank you for reading my blog.

This week we began our live simulation. We made decisions for the first two rounds. Each round we faced a special decision to make. The first round we were asked if we would like to enter our company into the world of social media. Our company would create a presence on sites such as facebook or twitter. We decided this would be a good idea. At the same time we reduced our advertising budget. Our social media did well but this did not make up the difference in our reduced spending on advertising. We lost a little ground in the marketplace. The next period we were informed that distributors would not accept product within 12 months of expiration. We had a batch within 6 months of expiration. Our choices were to send the batch out and hope they would not notice but if they did we would have to pay for return shipping and producing a new batch. We could sell it to a “jobber” who would not mind the expiration date and we would pay an additional $50,000 to get our product on the shelves without any issues. Our final option was to pay $100,000 to ditch the batch and produce a new batch and avoid any issues. We chose to ditch the entire batch. We figured that if we tried to get it out without being noticed but it was that it was a gamble that may cost more money in the end and we also did not want bad press that would make customers question our brands quality and company’s ethics. We didn’t see any impact positive or negative but I guess this was the intent in making the decision we made.

Overall, the first rounds were good to get some experience under our belts but we did not make decisions that led to gains by our company. We are hopeful that after doing our situation analysis we will have more information to create and implement a successful strategy.

Also this week I got some interesting bits of information. Once again we were given examples of Drucker’s skill in predicting future events. I’m not saying he was a fortune teller. He said that to him it wasn’t difficult. He just took into account what has taken place in the past and took assessment of what was currently taking place to determine what would come. It sound simple but the true skill is to see how certain events impacted each other. This also showed me how valuable experience is. It is important to understand what is happening so you can sort of see around the next corner in business. This will allow you to take advantage of advances or new markets before your competition. Some people may have great instincts and a this will help them but experience is incredibly important.

Another bit that I got out of the readings this week had to do with leadership. Cohen made that point that good leaders don’t quit. They lead by example. If they come into the office early and leave late it shows that they feel what they are doing is important. If they don’t at least act like it is important why would their subordinates feel the business is important? I think of a coach in sports.

 

The good ones are the first in the building. Regardless of it being for a game, a practice, or coming back from the offseason they are the first there and the last one to leave. Their players see their dedication and for most of them they realize how important their preparation is in order to win or achieve their goals.

We also read about abandoning a product. In the life cycle of a product it may be necessary to abandon a product that was successful. There are different reasons you may need to abandon the product. I tried to think of a product that I had seen take place but I couldn’t. I did a little research of products this had happened to and found some examples but none that I was familiar with. Can any of my readers think of an example?

Week 5

This week we discussed customer analysis. This is a very important portion of the marketing process. In order to effectively market your company you must first understand who your customers are and what they are looking for.

One issue that came up was the topic of emotional and psychological benefits of products to customers. In this discussion we talked about brand loyalty. There are some people who are very committed to a particular brand’s product or maybe even their entire product line. I hate to continuously bring up Apple in all of my blog posts but they are once again a great example of what I am talking about. Some customers own an iPhone, iPod, iPad, and a Mac Book. This same tie can be formed with pharmaceutical products. Customer may prefer to buy a name brand over the generic alternative. The two may very well have the same chemical makeup but just have different names on the packaging. Buying Nyquil instead of the generic brand may give a consumer a higher sense of security knowing that they bought a quality product. But just because the name on the package is a trusted name, does this mean the product inside deserves the same trust? Could Advil be more effective than a generic for some people because they think it is? It makes me wonder if these emotional and psychological benefits we discussed create more of a placebo effect and are not based fully on benefits delivered by the product.

 

The answer to this question would likely take more time and resources to fully answer than it is worth. Advil and Nyquil can charge more for their product because they are Nyquil and Advil. They have put the time and money into marketing and product development to get to this point. Some people will choose the less expensive alternative and they have their reason, while others will stick with the name brand and they also have their reason. These factors make a difference in the marketplace and they are difficult to measure but they matter and cannot be overlooked.

Another aspect that we read about is the difference between buyers and users of products. Some products are bought and used by the same individual while other are not. A great example of this would be toys. Toys are bought by adults but used by children. This is important for a company to understand.

 

This will help the company create an appropriate marketing plan to achieve their goals. If you do not have this understanding then you will be promoting your products to the wrong market and will not create buyers.

During the week we discussed the different types of sales companies make. There are business to customer sales, customer to customer sales, and business to business sales. This was nice to talk about because it had to do with my role in my company. I help with business to business sales predominantly. In this I assist with modified rebuys. Essentially, an existing customer will want to rebuy a product but they will want to make a few changes. Maybe they will want to change to formula slightly to better suit their needs or they may want a different quantity, just to name a few changes that can be made. I enjoy reading about concepts that directly relate to my current role. It helps me see where I fit in the larger scheme of the company. Sometimes we can get bogged down by the mundane aspect of our jobs but when you see how you contribute to your organizations execution of its goals it help you to keep perspective of why you do what you do.

A big topic of discussion this week was customer dissonance. This is the post-purchase displeasure a customer has with their decision. We discussed how customers can avoid this by taking measures including researching properly before making a purchase. I questioned whether the majority of the burden to avoid customer dissonance should be placed on the company. I think that by pricing products properly, providing great customer service, and accurately describing products along with other actions customers will not have to worry about this as much. Customers should take their time and make well informed decisions either way but companies should be conducting their business honestly and ethically regardless.