While I certainly am in no such position to be doing this at MY organization, I must admit that it was semi thrilling to be the one calling the shots on Pharmasim. I haven't had much time to play around with the simulation but I did get the chance to complete one period. However, I'm now starting to think I may have made too many decisions in one period. I was having a tough time trying to start off. As one of my classmates mentioned in class, there's so many decisions you can make... where do you begin? Well, I began by looking at the market update tab and I think that this was tremendously helpful. It gives you all of the news that is coming out about the market to help you aim your decisions where the trends are going. For example, I saw in the market update that a competitor came out with a new cold medicine that was similar to Allround's current cold medicine. So I adapted my advertising to be much higher in benefits and reminder messages and changed the brand of comparison messages to compare it to Dryup. The market update also said that mass merchandisers were increasing exceptionally. I increased the sales force all across the board but especially mass merchandiser since they were the category with the most growth. I also dropped the price by $0.10 in hopes that since it was cheaper than other products customers would be more willing to buy them. I also increased my coupon offerings from $0.50 off to $1.00 off. This was also in the hopes that having a whole dollar off would get more people to try and purchase Allround medicine.
The net result was pretty good when I advanced the simulation. The stock price increased by about $10 and there was a 16.2% increase in revenue with a 21.9% increase in net income. I was pretty pleased with this... especially for my first period!
One catch... I nearly spent my entire budget on sales force. Now luckily for me, I didn't know that you necessarily got more in the budget when you advanced the simulation. So I was worried that I had 0.1 million left in the budget with no promise of more, and more decisions to make in future periods. I am happy to say that when I want to make decisions in the second period I now have $3.2 million to spend.
So what did I learn from all of this? Tons! I'll admit that when I was first looking at the simulation I began making my decisions off of nothing more than what I wanted to do. I wanted to drop the price so I did... I wanted to offer a bigger coupon discount so I did... There was no reasoning behind my decisions. However as I mentioned above, when I found the market update tab all of my decisions started to be carefully thought out and planned; they began to have a meaning. I didn't just increase mass merchandiser sales force because I felt like doing so, but rather because the market research showed that this particular segment was growing and I wanted to prepare the business for this growth by providing them more sales support. The same can go for why I chose to advertise and compare against Dryup... because they were the biggest competition! The pieces started coming together.
So in period #1, the total cost of the surveys cost $458,920. That's a ton of money! The budget for that period is $3.2 million. So I suppose in the grand scheme of things, it really isn't too expensive to purchase SOME of these reports. Professor Spotts recommended that we purchase some research in order to be best prepared to make decisions when we start our group play. But it is pretty clear that buying ALL of them would take a huge chunk out of the budget and some reports may not give very useful information (compared to how much they are costing you!). I hope to make some more decisions and advance the simulation further to see the results of my decision making and whether or not they were the right decisions to make based upon the market research available to me and the analysis I conducted.
Neil's blog this week was helpful for me to read. He discusses his problems about reaching/exceeding capacity. Since I have only completed one period, I'm not quite sure what problem he is dealing with. However, I was glad to have read his section about capacity because it now gives me insights into a problem that may occur and how to avoid it! He also mentions offering a brand new product and all of the costs added to this process. This too is something that I have not yet reached in the simulation but I will be sure to really think about starting a new product before I make that decision!
Another classmates blog that I found interesting and helpful was Greg's. Although he posted it today, I will certainly be using his blog as a guide for my next Pharmasim decisions. He posted an excellent photo of his own simulation statistics where he shows the budget allocation into each area: promotion, advertising, sales force, and research. This screen shows the budget allocation in both monetary amounts as well as percent of the overall budget. I honestly don't think I would have found this screen and I can't thank Greg enough for posting that photo! Thank you, thank you, thank you! I will definitely be referencing that tool in my future decisions!
Finally, we were asked to identify a classmate's question that we found interesting this week. I think that of all the questions, Adam Wopschall's question was the most intriguing:
"When we look at SLEPT, do some influences carry more weight than others or is this dependent on the organization and industry marketers work in?"
By SLEPT he is referring to the social, legal, economical, political, and technical factors that influence a company's decision making. We discussed this at large in the online class meeting/discussion. It seemed as though each classmate's organization differed in the weights that played the biggest role. For some, economic factors played the largest role and for others it was legal factors. So to answer Adam's question, I would say that yes, it depends on the organization and industry of the marketers!
Cheers to the weekend! And to more Pharmasim decisions on the way!
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