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250 words or more each response and 1-2 references
One: Group B
Group B did an excellent job throughout the simulation. They have proven to be experts in Marketing, which can be seen by the huge numbers they delivered. Great job!One strategy used in their report that would have been beneficial for your strategy that your team did not do.When it comes to sales force, it appears that group B realized, early in the simulation, that increasing the number of points of sale was a key driver to the success of the brand. Their market decisions were based on the fluctuation of the market and how the shopping habits could influence the marketplace. For example, when sales declined in a certain market, they quick adjusted the points of sales, increasing them where the market was more favorable. Although we applied similar rational, our group (Group A) did not react as quickly to market changes, potential loosing sales.As it shows in our report, our investment in sales force remained relatively low until our group (Group A) noticed in period 7 that Besthelp had matched Allround cold medication in shelf space by investing more in sales force and promotional allowance. As a result, with a limited budget, we increased the sales force from 378 to 404. At the end of the simulation, the trade rating for Allround was 6.9, AllroundPlus cough medicine was 6.8, and Allright nasal spray was 6.7, all in the top five. However, Besthelp and Believe had higher trade ratings of 7.0 and 7.8, respectively, which could be the result of our slow decision-making process regarding sales force.One strategy that your team did that was better than their team.In the â€œvolume discount & promotional allowancesâ€ arena, I believe our group (group A) did a better job than group B did. By leveraging the market research and insights, group A was able not just to retain sales, but also increase market share. Some of the trade allowances provided by both groups are listed below:Allstar discount and allowances offering by product:
Group B Group A Allround 18% Allround 14% Allright 18.5% Allright 14%
The fact that group B realized that their trade allowances were suppressing their ability to achieve greatest capital, is a clear indication that they may have missed an opportunity to leverage the resources available in the simulation to better support their decision-making process. Group Aâ€™s decision to leverage all the resources available through the simulation was based on the available reports. This helped ensure that all changes in the trade allowances were based in facts, mitigating the risk of losing control over the budget allocated to discounts and allowances, which helped deliver strong manufactures sales, especially after period 5.In summary, both teams displayed strong marketing skills, which has led the teams to successfully delivery strong results, allowing Allright to stay on top of the competition.
One strategy used in their report that would have been beneficial for your strategy that your team did not do.
Consideration of promotional allowance adjustments. Group A made no changes to the promotional allowance of 14% since we thought it was one of the most significant expense items on Allstarâ€™s income statement. We offset the lack of change in the allowance by focusing more on investments in sales force and co-op advertising, to ensure favorable shelf space and a good trade rating. Whereas, Group C made a concerted effort to adjust the promotional allowance taking into consideration the promotions report, channel sales, and the allowance of the competition.
Group A incorporated a dual push and pull promotion strategy. A push promotion strategy refers to getting channels to carry and sell Allstar’s products, and a pull promotion strategy refers to motivating customers to ask for Allstar brands by name (Winer & Dhar, 2016). By intentionally ignoring the promotional allowance, we missed an opportunity to focus on one of the key elements of a push promotion strategy. Marketing managers must use an assortment of promotional devices to persuade channels to stock a product and encourage them to sell it (Winer & Dhar, 2016).
Therefore, Group A had more pressure to compensate with an expensive sales force, which led to an imbalance of promotions designed to increase shelf space and trade ratings. For example, we expanded our sales force from 274 to 375 in period 2, but our promotional allowance remained fix at 14%. A more effective balance may have had a greater impact on our results. It was not until the final period that we considered adjusting the allowance, but we decided not to do so since we were so near to achieving our objectives. If anything, we should have followed Group C’s path and made adjustments early on to see the actual evolution of the impact.
One strategy that your team did that was better than their team.
Consideration of volume discount adjustments. In period 5, Group A reduced the volume discounts for purchases <250 from 25% to 22.5% and <2,500 from 30% to 27.5%, to offset reduced sales. A 0.5% reduction for the same categories was also applied in periods 6 and 7, and we ensured Allroundâ€™s discounts were higher than those given by Besthelp, its top competitor. As well, we wanted to motivate our retailers to seek higher discounts in the 2,500+ and wholesale categories. This change was also applied to AllroundPlus cough medication and Allright nasal spray. Group A observed that Allstarâ€™s manufacturer sales, after volume discounts, were amplified starting in period 5.
Whereas Group C noted that â€œthroughout each of the eight decisions, no changes were made to any of the AllStar productsâ€™ volume discounts as we did not want to affect our steady incline in sales.â€ I must admit that initially, this was our mindset as well until we realized that reducing our volume discounts could amplify our profits. The key for us was not to cut it bellow the discounts of our top competitors. Two primary reasons to offer volume discounts is to compete with rivals who provide them and to lock in channels to commit, to the detriment of opponents, especially if a new competitor is entering the market (Mohammed, 2013). Therefore this would involve comparing the volume discounts of Allstar’s products to their competitors. Starting from period 5, we noticed that our net profit stood out more than usual, owing to the reduced discounts. However, we were mindful of the impact lowering volume discounts could have on the consumer price of Allstar’s products. I know that one of the arguments is that repeated, deep discounting may function to shrink the reference price of a product in a consumerâ€™s mind and may mitigate attempts to sell goods at full price in the future (Ogden-Barnes & Minahan, 2015). Ultimately, I believe that Group C missed this low-hanging fruit and left profits on the table.
Therefore the takeaway is that both Group A and Group C could have benefited from each otherâ€™s strategy in managing volume discounts and promotional allowance, respectively.
Mohammed, R. (2013). When it’s wise to offer volume discounts. Retrieved from
Ogden-Barnes, S. & Minahan, S. (2015). Sales promotion decision making : Concepts, principles, and practice. New York, NY: Best Experts Press. Retrieved from https://ebookcentral.proquest.com/lib/saintleo/detail.action?docID=1919444.
Winer, R. S. & Dhar, R. (2016). Marketing management (4th ed.). Boston, MA: Pearson Learning Solutions.