PharmaSim Promotion Tips

We just recently did the PharmaSim project in my class and I thought I'd share one aspect of our success (we got the highest in our class--just I guess that doesn't necessarily translate into the highest in other classes...) ;)

So here are a few tips for you, free of charge even!

New Product Introductions

One of the first things that we learned from previous rounds was how to not introduce a new product. In previous rounds, we got so excited for new products that we decided to dump lots of cash into it to establish a quick, huge presence in just one period. Bad idea—one that we were careful not to implement in this final round. Moving from period 5 to period 6, we pulled off a feat we hadn’t quite yet done; we actually increased our net income and introduced our new product line, Allright. We did that by simply being a little more conservative in our promotion efforts of the new product and not throwing as much money as we could at it. We put half a million on Co-op, Point of Purchase and Trial Size, all the while keeping our allowances as low as we could.

Coupons and Trial Size Samples

Couponing and Trial Sizes were another thing that we managed a lot more closely then we ever had before. We especially were careful to watch the conversion rates for these numbers, because for the markets we were targeting, some of them particularly liked the coupons. In that case, we continued to raise the amount of money spent on coupons until we noticed the conversion rates leveling off. Once we noticed the conversion numbers starting to decline, we responded by lowering the amount of money spent on it.

Couponing proved to be a great source of our promotional success and strength. It established our brand among our target markets and directly impacted our bottom line and our continual growth.

Allowances

The final thing that we were careful to manage was the allowance percentages per retail channel. We learned that some channels responded better to salespersons, and some responded better to allowances. We allocated our resources around these facts and gave higher allowances to our grocery stores, mass merchandisers and chain drugstores.

ON A SIDE NOTE, If you understand the glossary, you will do really really really well.