Key Strategies

In order for Allround to continue to keep a majority of the market share and outgrow the competition the following key strategies were put into place:

1) Reorganize sales force and promotional allowances to match retailer's priorities.

2) Maximize profits by strategically increasing MSRP.

3) In first period maximize advertisements and promotions.

Retailers have different priorities in regards to shelf space allocation. We identified that that grocery stores, mass merchandisers, and chain drugstores prioritized turnover and promotional allowances, while independent drugstores valued sales force support. Our strategy was to maintain the same sales workforce but reallocate more salesmen from the grocery stores (-2), mass merchandisers (-2), and chain drugstores (-2) to the independent drugstores (+6). We then increased promotion allowance for the grocery stores (+2%), mass merchandisers (+2%), and chain drugstores (+2%) and reduced it for the independent drugstores (-6%). The result of this strategy after round 1 was overall increased sales as seen in Exhibit 1.

For the first round we were focused on increasing are market share so we kept MSRP the same. We succeeded in this goal, however in order to increase profits we had to raise MSRP for round 2. We decided to increase MSRP the same as inflation rate (3.1%) in order to test our results. As a result we saw slower retail sales growth, however we did become more profitable. For the final round we increased our MSRP 0.5% and at the same time increased our promotions and we saw slow financial growth.

The third strategy that we implemented was to run advertisements and promotions early in order to help gain market share. Once we increase our market share we would purchase fewer advertisements and reduce our promotions. We wanted to focus early so we can quickly overtake our competition.