Introduction
The AllStar Pharmaceutical is an over-the-counter retail medicine division of Allstar Brands, a leading company that manufacturers various packaged goods. It is the manufacturer of Allround, a cold and allergy medication that is a leading over-the-counter drug. Allround is a 4-hour multi-symptom over-the-counter liquid that offers consumers relief for five basic symptoms. These symptoms are aches, fever, cold, congestion as well as cough. This drug has been a significant product line for the pharmaceutical division due to its profitability and rather high sales volumes. Increased competition in the cold and allergy market has resulted in negative performance of Allround. While the introduction of new medications into the market coupled with increasing advertising and promotional expenditures has affected the performance of Allround.
S.W.O.T Analysis
SWOT analysis entails a strategically planned method of evaluating the strengths, weaknesses, opportunities and threats that a project or business venture faces. It entails identifying the objectives or purposes of the business as well as the external and internal aspects that could promote or hinder the achievement of these objectives. Strengths and weaknesses comprise the internal aspects of the business venture while opportunities and threats comprise the external aspects of the business venture. SWOT analysis is a very important tool for any business venture or organization as it helps in the decision-making process, resulting in the appropriate use of the available resources for profitable growth and goal achievement. Below is a SWOT analysis of AllStar’s Allround in comparison to other products its major competitors B&B, Ethnik, Discrol, and Curall.
Strengths
• Established brand name
• High Customer Satisfaction
• High brand loyalty
• Effective distribution channels
• Large capital resource pool
• High quality advertising Weaknesses
• Single product in the OTC Cold Medicine market
• Highly competitive market
• Unwanted alcohol content
• High suggested retail prices
Opportunities
• The pharmaceutical market has a high growth rate
• High demand for multi-symptom products during cold months
• Possibility for expanding the Allround product line
• Possibility of reformulating Allround Threats
• High inflation rates
• Competition from many established products
• Highly regulated market
• Technologically obsolete
Strengths
• Established brand name
Allround enjoys a well-established brand name that has enabled it to become the leading over-the-counter drug for the cold and allergy market. Allround has been in the market longer than other drugs and has greatly benefited from the great amount of brand awareness that the company has developed over the years. Brand awareness refers to the amount of brand recognition that a brand has among current and potential consumers. With brand awareness of 74.1%, Allround is the most recognized brand in the cold and allergy medicine market.
• High Customer Satisfaction
Allround continues to enjoy high customer satisfaction due to its rather high effectiveness rates. Allround is a multi-symptom medication that contains an antihistamine, an analgesic, a cough suppressant, a decongestant, and alcohol. An analgesic offers remedy for aches and fevers while a decongestant offers remedy for nasal congestion. An antihistamine offers remedy for runny nose while a cough suppressant offers remedy for constant coughing. Alcohol is used to enable the patient be able to rest. As such, Allround cures five symptoms with one medication as opposed to the other nine drugs in the market that are formulated to cure only one or two of the symptoms.
• High brand loyalty
Allround enjoys a high brand loyalty among its consumers as compared to its competitors. The drug is considered the most efficient in curing cold symptoms as compared to its competitors in the cold and allergy medicine market. The brand enjoys a brand trial level of 47.1%, a brand awareness level of 74.1%, a customer retention rate of 46.3%, a conversion rate of 63.6%, and product repurchase level of 21.8%. Though its competitors have higher levels on customer retention rate and conversion rate, it leads in the brand trial level, brand awareness level, and product repurchase level, hence making it the brand with the highest brand loyalty level. This is very important since it helps to increase the amount of customer satisfaction that consumers get from this product and offer it a competitive advantage over its competitors. The product enjoys high brand loyalty as it is among the highly priced drug in this market. Consequently, it remains the drug of choice due to its multi-symptom action of curing five symptoms associated with coughs and allergies.
• Effective distribution channels
The company has effective distribution channels for its Allround medication that have enabled the product to be made available to its consumers. It has both direct and indirect distribution channels that result in the product being provided close to the consumers, enabling them to have easy access to the drug. The direct channels that it has established are mainly targeted at the large urban areas, with the most targeted outlets being chain drugstores, convenience stores, independent drugstores, mass merchandisers, and grocery stores. The indirect channels used include wholesalers, detailers, and merchandisers who are able to access rural areas.
• Large capital resource pool
The pharmaceutical division at Allstar has provided a large capital resource pool that has been used to develop and effectively market the Allround product. This has greatly helped in making Allround a dominant brand in the cold and allergy medicine market as well as enjoys great market leadership within this market. For instance, $1.4 million was allocated for promotional allowances, $20 million was used in Allround’s advertising campaign, $4.2 million was used for coupon support, and $1.4 million was used for point-of-purchase special displays during the previous period. It also has adequate resources to employ a sales force of 127 people. It as well carries out extensive training on these people to enable them achieve their goals. In addition, a large amount of money is used to carry out market research activities that show the performance of the brand in the cold and allergy medicine market and research and development activities for new formulations.
• High quality advertising
Allround enjoys high quality advertising that has led to very high brand awareness levels as compared to its competitors in the market. All advertising efforts are geared towards having messages that address the primary demand of the product, increase it unaided awareness, and emphasize the benefits of using the drug. The advertising messages are also used to make clear comparisons between Allround and its competitors and serve as a reminder to customers in order to increase brand awareness, repurchase levels, and customer retention. For instance, $20 million was used in Allround’s advertising campaign that was used mainly for television commercials. In addition, its advertising messages and campaign are designed and run by one of the best advertising agency that has been recognized for delivering high quality work.
Ability to adapt to change through line extensions and product reformulations
Weaknesses
• Single product in the OTC Cold Medicine market
Allround is the single product that Allstar has in the OTC cold medicine market. The other four companies in this market namely B&B, Ethnik, Discrol, and Curall have two or three products that target to cure various symptoms associated with colds and allergies. Allround is a multi-symptom drug that cures five of the symptoms associated with colds and allergies. However, it does not fare as well when compared to some of its competitors in several of the symptoms.
• Highly competitive market
The OTC cold medicine market has a very competitive aspect due to the large number of products that are aimed at curing similar symptoms. B&B, Ethnik, Discrol, and Curall have introduced key drugs that have been able to compete with Allround especially due to their effective ability to cure the particular symptoms they are made to cure. Though Allround is a multi-symptom drug that cures five of the symptoms associated with colds and allergies, its competitors enjoy better effective rates and market leadership in some of the symptom types.
• Unwanted alcohol content
Allround contains alcohol that has been regarded negatively by some of its users as well as some doctors. Alcohol is used to enable patients using Allround to get rest, but some of the patients view its effect in a negative manner as they do not like the drowsy feeling that is produced by alcohol. This major brand formulation problem is facing Allround, with a new formulation being tested that would see the alcohol removed.
• High suggested retail prices
The retail prices suggested for Allround are significantly high compared to those of other similar products within the market. This is in the sense that the suggested retail price for Allround is $5.29 while other products retail at below $5. This limits prospective buyers from purchasing Allround as the huge retail prices discourage them while the relatively cheap retail prices of other products attract them.
Opportunities
• The pharmaceutical market has a high growth rate
The pharmaceutical market for over-the-counter medicine is experiencing a high growth rate influenced by the increased need for over-the-counter medicine. The significant rise in lifestyle related ailments increases the need for over-the-counter prescriptions thus presenting Allround with a significant opportunity by increasing its consumption. Consequently, Allround offers relief for about five symptoms thus offering it a significant opportunity in regards to sales as it is multi-purpose.
• High demand for multi-symptom products during cold months
There is a huge demand for pharmaceutical products that offer relief for cold related ailments especially during the cold seasons of spring and winter. During these seasons, the rate of sickness among children and adults significantly increases owing to cold weather thus creating an opportunity for Allround. In essence, Allround has a significant opportunity during cold seasons influenced by the fact that it offers relief for a majority of cold related symptoms.
• Possibility for expanding the Allround product line
Allround faces an opportunity of expanding its product line by addressing other symptoms that it does not address. This offers the product a significant opportunity as it has a significantly huge customer loyalty. Increasing its product line offers it the opportunity to increase its sales and consumption.
• Possibility of reformulating Allround
Allround faces a significantly huge opportunity presented by the possibility of reformulating the product. This entails reducing the huge capacity of unwanted alcohol within the product, which is a crucial weakness identified in relation to the product. By reformulating the product, Allround faces a significant opportunity for capturing a significant market portion that fails to consume the product due to the unwanted alcohol levels. In essence, the possibility of reformulating Allround offers the opportunity for increased sales as well as consumption.
Threats
• High inflation rates
The general economy faces high inflation rates characterized by the recent global economic recession. This posses a significant threat for Allround as it limits the purchasing power the products target market. Consequently, the threat of high inflation rates is compounded by the fact that Allround has relatively high retail prices thus limiting the ability of consumers to purchase the product.
• Competition from many established products
The over-the-counter cold medicine market has a large quantity of established products already in the market. The likelihood of new products being introduced into the market is as well significantly huge. In this regard, Allround faces a significant threat posed by competition from the many established pharmaceutical products within the market that offer the same relief as compared to Allround. The fact that most of these products are established limits the market penetration for Allround thus offering it a significant threat.
• Highly regulated market
The medical drug industry is highly regulated in order to ensure only the best products are released to the market for consumption. The Food and Drug Administration regulates the OTC cold medicine market to ensure that medical products in the market meet healthy standard. This high sense of regulation offers a threat for Allround as it has to invest significantly in ensuring it products meet the high standards set by the regulating authorities.
• Technologically obsolete
Allround as well faces a significant threat influenced by the fact that it uses technology that is outdated in the marketing of its products. This limits its market penetration capability thus reducing its sales.
Conclusion
Allround is a leading product in the over-the-counter cold medicine market with significant strengths in customer satisfaction, brand loyalty, distribution channels as well as a large capital pool. However, Allround has significant weaknesses in the sense that it has a high content of unwanted alcohol as well as high retail prices. In regards to opportunities, Allround faces a significant growth in the OTC cold medicine market while its demand increases significantly in cold seasons. However, Allround faces significant threats influenced by high inflation rates, the use of obsolete technology in marketing as well as the high regulation of the market.
