Free support for Round 1 and 2
Email: pharmasim2012@gmail.com
Blog: pharmasim2020.blogspot.com
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PharmaSim
The Marketing Management Simulation
If you are doing PharmaSim simulation for MBA students, this guide with help to win the game of ten rounds and save time (may be a few days of reading) and do the right things from start (and avoid doing the wrong things in early rounds) and get the understanding of all decisions you have to make during the simulation.
Enjoy your learning!
Good Health and Success!
It will require half an hour to read, then get ready.
If you complete reading, you win the game 60% already.
If you still need free support for rounds 1-2 after reading, email: pharmasim2012@gmail.com
You will manage a company: Allstar.
Your company, Allstar, competes with four other firms in the OTC cold and allergy market.
These five firms offer a total of 10 brands in five different product categories (cold liquid, cough liquid, allergy capsule, cold capsule, and nasal spray).
You will have to make about 30 decisions for each round. Then run the simulation to compete with other companies and brands to gain top sales, profit, and stock prices.
Note: There are five companies, with 10 brands, you are having the 2nd top sales with one brand, Allround - in the cold liquid segment. Other competitors are coming very close with strong brands.
Your company start with sales of $355 million, net income of $67 million and stock price $38.35
After ten years of the simulation (ten rounds), you can increase sales and profit, stock prices to top level, winning the four competing companies is one thing, gaining the top sales and profit, and top stock prices compares with the companies running by your class friend is more important to gain the top results of the course.
This is sample results after ten rounds, you can increase sales to $1.130 million, net income to $260 million, and stock prices higher than $230. This is top results in your simulation (compete with four computer control companies)
And, your results should also higher than your class friend in their simulation to get the top results for the course. So, this guide bring the wining tips to get the top sales and profit, and stock prices in both competitions.
Note: Your brand Allround is good product, can generate good sales and profit.
It is multi-purpose liquid, for cold, cough, allergy and also nasal.
The issue is that, other brands are more focus in one or two symptoms and are getting higher market share in that market segments.
It is your decision to make, to modify product and add new product to win the competition.
The good thing is your brand Allround is selling well in Cold segment, with 40% market share
The bad thing is it is not selling at all in other three segments, Cough, Allergy and Nasal.
Total market share is the 2nd top, 23.8%, just after Ethik with 3 brands, total market share of 26.5%
Again, it is your decision to update product to expand to other categories or segments and R&D new products for new market segments.
If you do not action fast, other competitors will dominate and control other segments.
And you can notice that, total sales of other three segments, cough, allergy and nasal is about 40% total market share, with also similar growth rate of Cold segment.
Your company advantage is having good brand, Allround, with high brand awareness and good frequent purchase, high conversion and retention ratio.
Tip: Keep focus on Allround, can modify to add more function, eg. Cough (higher sales than allergy and nasal) and consider R&D new products in nasal in later rounds.
One of the key to win competition is setting Price for each product.
Price and also discount level will affect sold units of each round.
Tip: Check the sales to decide which order size should have higher discount.
Do not make mistake here.
Support should be spent more for higher sales order (not lower sales, not trying to increase lower sales order. Again, this is important, support high sales order, in this case, the second and the fourth).
Also, spend good discount for the other two order sizes.
Sales Force decision is the key to win.
Total number of sales force.
How many to allocate into Direct and Indirect.
What are the basis for this allocation.
I often use sales of each channel to decide number of sales staff to allocate
The reason is simple, sales will decide how much to pay for that team of sales force.
Therefore, we need to check reports to identify sales of each channel, and then do some excel calculation to allocate sales staff for each channel. Note to increase total number by checking competitors' sales forces.
In this Pharmacy industry, R&D is also the key to win.
In rounds 1-2 will reform Allround
In rounds 3-4 will expand Allround to form a new product Allround PLUS (add new function, eg, Cough)
In rounds 5-6 will launch a new product Alright (for other segment, eg. Nasal)
In rounds 7-8 will reform Allround to add more functions or increase benefits (eg Allergy)
The key is to gain high sales and net income.
Keep balance between allowance and cost of goods sold.
Keep balance among promotion, advertising, digital marketing and sales force.
In rounds 1-2-3-4 keep Promotion + Sales force about 50% and Advertising/digital marketing about 50%
In rounds 5-10, can use 40%-45% for Advertising/Digital Marketing and 55%-60% for Promotion and Sales Force.
If you read to this part, you get 50% of winning the game.
If you spend time reading the key reports from the game, about 20 reports, you can get 10% more winning the game. (PART 2)
And the rest 40% is logging into the game, and input the decisions for each round, and click Submit to enjoy your winning. (PART 3)
GOOD HEALTH AND SUCCESS !
END OF PART 1
Continue reading PART 2 to find key reports
Continue reading PART 3 to find top 30 Tips and Step by Step Guide to make decisions for each round.
Pharmasim
The Marketing Management Simulation
FREE WINNING GUIDE AND TIPS
Free support for Round 1 and 2
Email: pharmasim2012@gmail.com
Blog: pharmasim2020.blogspot.com
------
PART 2 - KEY REPORTS TO READ FOR EACH ROUND
You can find that each round there are over 30 reports to read.
It is important to know what information is the key in each report, and what decisions you can make based on the report.
This part will show top key report you should look at to make decisions for each round.
Check Company Dash board to find out Inflation, then you can increase PRICES for the round based on inflation rate.
Check the Income statement, Gross Margin about 45-50% is OK
Contribution after marketing around 35% is OK
Net income around 20-25% is OK
Company Sales Report is important
Can use the details to calculate Sales Force numbers for next round.
Based on the sales of each channel to allocate sales force for each channel.
Market - Manufacturer Sales report is the key to check competition sales in each segment
To find out top competitors, in each segment.
Then can decide Ad to compare with top competitors
Then can check their prices, sales force to set better decisions
Market Sales Force is important to keep track of total number of sales force, and compare with competitors.
The key to win higher sales is higher sales force, and also promotion strategy.
This Market Channel report is the key to identify sales of each Brand in each channel
Then you can calculate sales force for each channel based on sales
If you have less time, please review above reports for each round. Then you can get quite enough information to make decisions for each round, and can win the competition.
If you have more time, read other reports to get more details and understanding of the game.
Pharmasim
The Marketing Management Simulation
FREE WINNING GUIDE AND TIPS
Free support for Round 1 and 2
Email: pharmasim2012@gmail.com
Blog: pharmasim2020.blogspot.com
PART 3 - TOP 30 TIPS AND STEP BY STEP GUIDE TO MAKE DECISION FOR EACH ROUND
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TOP 30 TIPS TO WIN PHARMASIM 2020
Tip 1. Check the Sales Report
Increase promotion for <2500 and Wholesales because they bring much higher
sales than <250 and 2500+
Support more for better sales sources
Tip 2. Check Operating statistics
Tip 3. Increase Sales Force
based on sales of last round
based on competitors sales force
THIS IS A KEY TO WIN
Tip 4. Increase Advertising budget each round.
Around USD 20 million ++
Increase 5-10% each round
Adjust based on total budget
Tip 5. Increase Promotion each round
17% - 18% - 19% to 20%
Tip 6. Check distribution channel
Check the sales report to allocate salesforce to each channel based on sales
THIS IS A KEY TO WIN
Tip 7. Setting Price
Increase prices based on Inflation rate
If you do not increase prices each round (to gain more sales for that round)
Then next round will be difficult - because inflation rate still increase
Then next round will have to increase too much to gain profit
Therefore, increase prices each round, at least as inflation, eg. 3% - 4%
Tip 8. Check Shopping habit
Check shopping habit of customers in order to focus more than effective sales
The reason is we will spend more in good channel because they bring good sales
and also increase spending for other channel
AGAIN, FOCUS ON GOOD CHANNELS (MORE)
THEN INVEST IN OTHER CHANNELS TO INCREASE SALES
TARGET HIGH GROWTH CHANNEL
Tip 9. Keep advertising agency
BMW
(Some can move to Sully and Rogers)
NOTE TO USE ALL AD BUDGET EACH ROUND
Tip 10. Select target segment
Allround and Allround Plus - target: Young and Mature families
Allright - target: Young singles, Empty nest, and Retirees,
Allround Plus: add cough suppressant
Alright: Focus on Cold Nasal spray
Tip 11. Use Reformula
Tip 12. Again, target high sales channels
Tip 13. Increase spending for Digital marketing
Tip 14. Again, increase prices each round at least = inflation
Tip 15. Increase Volume discount for 2.500 + in order to sell more
Increase sales for large orders
Tip 16. Drop Alcohol when possible (eg. Round 2)
Tip 17. Check phamacists/physicians recomment
Add allergy for Allround
Keep it top of all products
Tip 18. Keep Allround as Top for multi-symtoms
Even they are considered too much medication
Tip 19. Check cold market
Tip 20. Increase Sales force much higher than competitors
SALES FORCE IS THE KEY TO WIN
Tip 21. Increase Prices each round
If not increase prices, will lose more sales later round when increase price by
higher rate.
So, increase prices gradually each round, at least = inflation
Tip 22. Check all report carefully before making decision
Again, read all report before making decisions
Tip 23. Allround Plus need to beat Cough Cure
Because Cough segment is the 2nd top revenue
Tip 24. Check Symptoms report of last round
Tip 25. SALES AND MARKET SHARE
THIS IS KEY TO WIN
CHECK MANUFACTURER SALES REPORT
FOR EACH SYMPTOMS (COLD, COUGH, ALLERGY, NASAL)
Tip 26. Increase Allround prices each round
Tip 27. Apply Coupon
Tip 28. Increase Co-op budget
Tip 29. Again, Allround should be top in all symptom cures
Tip 30. Increase wholesales support
Tip 31. LAUNCH NEW
Allright to focus on NASAL SPRAY
Tip 32. Will face heavy competition COLD and ALLERGY markets
Tip 35. Focus on Cold and Cough
COLD - over 60% sales and increase 9%
COUGH - over 20% sales and increase 50%
Allergy and Nasal only accounts for total 20% sales
Tip 36. Again, sales force is the key to win
Tip 37. Again, pricing is the key to win
Tip 38. Promotion budget is the key to increase sales
PHARMASIM - FREE WINNING GUIDE AND TIPS
A List of Things to Consider When Working on the PharmaSim
1. Remember that each period is an entire year.
Thus, many things can and will happen during that year (e.g., inflation,
consumer attitudes, changes in competitors actions and success, distribution
results).
2. Print or Take notes of each period's decisions have been made and before you
advance the next period.
If you like to re-play or re-enter your decisions for a few initial periods, you can
re-construct exactly what you did by looking at these reports.
Again, keep report of all decisions for each round.
Then you can check and improve
YOU CAN ALWAYS SEE ALL DECISIONS OF EACH ROUND ONLINE
ALSO KEEP A NOTES OF ALL DECISION FOR EACH ROUND
3. This simulation is not meant to be an exercise in which you try a whole bunch
of different things and finally optimize in a final run.
Do not do this.
This is meant to be a one time activity in which you try to figure out strategy and
tactics ahead of time, make your decisions, learn from your results, and react to
them in the next period.
Do not restart the simulation without ANY REASONS.
HAVE A REASON FOR ANY DECISIONS
CHECK THE REPORT
THEN UNDERSTAND THE NUMBERS
FIND THE BASIS FOR ANY DECISIONS
ASK YOURSELF - WHY - BEFORE MAKING ANY DECISIONS
THEN YOU CAN WIN.
4. Do not buy any research reports in Period 0.
This would be a waste of money since the information is the same as in the
examples in the case description.
IN NEXT ROUNDS, PLS BUY THE REPORTS
IT COST A SMALL SUM OF SPENDING FOR EACH ROUND
BUT WILL BRING GOOD INFORMATION
5. AGAIN, I recommend that you do buy a lot of research information,
potentially beginning in period 1 (which is year 2).
Assess each piece of information for how helpful it is (or could be), how to use
this information, and how often you should buy the information.
If you buy the survey, remember that you can segment the data in many ways
each time you buy the survey information.
However, it does cost money which is deducted from your budget and it is
helpful if you use it in a rational manner.
6. Make a plan about what information to use and how to make various
decisions.
DO NOT TRY TO INTEGRATE THEORY FROM TEXT BOOK ALL THE
TIME
YOU NEED TO UNDERSTAND MARKETING STRATEGY, MARKETING
MIX
BUT, AGAIN, DO NOT TRY TO APPLY ALL THE TIME
THE KEY HERE, IS TO WIN GOOD SALES AND PROFIT, INCREASE
STOCK PRICE IN THE SIMUMATION
SO, AGAIN, FOCUS ON THE GAME, SET DECISIONS, GET GOOD SALES
AND PROFIT
(THEN COME BACK TO CHECK WITH THEORIES)
7. For each period, keep track of not only what you did but also your rationale
and what you concluded from the results.
Adopt specific goals and monitor them to construct and flesh out a theory of
what works and why.
Keep this anlyse in case you have to make a report of Marketing Plan.
8. Some students have not realized that, if sales increase beyond production
capacity, you will automatically add some fixed amount of capacity that will
more than cover sales.
THIS HAPPENS REALLY
WHEN YOU HAVE GOOD SALES AND PROFIT
DO NOT REDUCE THINGS TO AVOID THIS
DO NOT REDUCE AD BUDGET
DO NOT INCREASE PRICE TO MUCH
CHECK CAREFULLY HOW MUCH SALES IS OVER PRODUCTION
IN ANY CASE, IF YOU HAVE GOOD SALES AND PROFIT - THIS OVER
CAPACITY IS OK.
9. Many of us have trouble remembering what type of product and what benefits
are offered by each of Allstar's brands and which competitor brands do what and
compete with each of Allstar's brands.
I recommend that you write this out IN ONE A4 PAPAER
AGAIN, WRITE DOWN BRANDS AND PRODUCTS
Keep it on an A4 paper so that you do not have to keep checking up on this as
you ponder decisions.
OR you can copy screens, and print it out, to check in all rounds
10. It is easy to generate a lot of paper with this exercise. Be prepared if you are
working at home on your own computer and printer.
PRINT THE SCREENS YOU NEED TO LOOK AT
ABOUT 10-15 TABLES AND CHARTS YOU NEED TO KEEP TRACK ALL
ROUNDS
11. Beware of inflation.
It is high in the PharmaSim world and will impact your costs (and should affect
your price).
INCREASE PRICES EACH ROUND
AT LEAST = INFLATION
OR YOU WILL GET LESS PROFIT
BUT, DO NOT INCREASE TOO HIGHER THAN INFLATION, BECAUSE
CUSTOMER WILL FIND YOUR PRICES TOO HIGH, MUCH HIGHER
THAN COMPETITORS, THIS IS NOT SO GOOD FOR NEXT ROUNDS.
Pharmasim
The Marketing Management Simulation
FREE WINNING GUIDE AND TIPS
Free support for Round 1 and 2
Email: pharmasim2012@gmail.com
Blog: pharmasim2020.blogspot.com
ROUND BY ROUND DECISIONS GUIDE AND TIPS
ROUND 1
For Sales Force Distribution
Increase total number of sales force
Allocate into each channel based on sales of last round
For Brand Reformulation
- You can change formulation for Allround in round 1 (improve product by remove Alcolhol)
- Later, in round three can add Allround Plus (line extension), add more functions
- Later, in round five can add a new product Alright (for nasal)
- And in round seven can reformulate Allround again (get to max benefits or max functions)
Pricing
Increase price based on Inflation rate (or use 3%)
Set decisions for Volume discount
Higher support for higher sales volume order, to sell more
and also higher support for higher size order to encourage customers by with larger order size.
Setting decisions for advertising
Select targets for Allround - Cold
Select key benefits and all set ads messages
Set decisions for Promotion
Focus more in higher sales channels
ROUND 2
Set decisions for Ads for Round 2
Note to set targets, benefits and ad messages (adjust if needed)
Also can increase budget for ads, early rounds need more advertising budget.
For Brands, adjust formulation if needed
Can drop alcohol to meet customer demands better
For Pricing, increase prices to maintain profit, keep track of inflation (3%-4%)
Discount volume also need adjusted each round, increase more for higher sales order sizes.
Set decisions for Promotion, early rounds require high promotion and samples.
Coupon is also needed to increase sales.
Set decisions for Sales force.
This is key to increase sales
But also need control to balance cost and profit.
Increase sales force to higher than top competitors
Allocate sales force based on sales of each channel.
KEEP MOVING FORWARD TO WIN THE NEXT ROUNDS WITH TOP SALES, PROFIT AND STOCK PRICES.
GOOD HEALTH AND SUCCESS !
Pharmasim 2020
The Marketing Management Simulation
FREE WINNING GUIDE AND TIPS
Free support for Round 1 and 2
Email: pharmasim2012@gmail.com
Blog: pharmasim2020.blogspot.com
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Pharmasim
FREE WINNING GUIDE AND TIPS
Free support for Round 1 and 2
Email: pharmasim2012@gmail.com
Blog: pharmasim2020.blogspot.com
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