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MKTG 824: STRATEGIC BRAND MANAGEMENT S. Sinem Atakan

Class time: July 4-5-6, July 11 Email: sinem.atakan@ozyegin.edu.tr Office: Room 217 Office Hours: by appointment Course website: Log in at https://lms.ozyegin.edu.tr/ and go to link MKTG 824

Course Objective This course will provide a hands-on experience on Brand Management. Via use of a game simulation that requires student teams to make product management decisions, the course will require the participants to make long-term strategic decisions for a portfolio of brands as well as manage the 4 Ps and make tactical/day-to-day decisions for individual brands.

Specifically, the objectives of this course are to:

Provide a foundation in basic brand management so that you start understanding how to build, manage, and guard strong brands,

Learn how tactical decisions regarding a product line affect the brand equity, and Place you in a dynamic business environment that requires you to make effective decisions

under time constraint.

Course Content/Teaching Style In the course, we will use the PharmaSim Simulation. The simulation is designed to introduce you to the principles of product management. You will work in a group (3 people) during the simulation. Peer evaluations will be done at the end of the semester and will significantly determine your course grade. You will have the opportunity to decide your own group members. If you have not submitted your group member names by the specified date (check out the Tentative Schedule), I will randomly assign you to a group.

I would highly recommend that you take CONSUMER BEHAVIOR before you take the Brand Management course.

Course Materials You are required to have access to the PharmaSim Simulation (including the Case and Manual). The password for the simulation will be distributed during the 1st class.

Communicating with me outside class My goal is to make sure you learn the material, whatever it takes. If you do not understand a concept, you need to get in touch with me! Make me explain it to you! The best way to get a quick answer is via e-mail. I will do my best to respond within a day, but e-mail I receive on the weekend will usually be answered on Monday. If you would like to meet in person, please e-mail me and we will find a time that is mutually agreeable.

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Grading While my first objective is that you learn something from this class, I do need to assign grades to each of you. I will do my best to make sure that the grading system is fair and that you understand how I arrive at the grades.

Simulation Performance & Presentation 80% Class Participation 20%

PharmaSim Simulation (80%) Most of the work in this class will involve your group project. You will work on the simulation in teams of 3. You have the option to form your own teams. E-mail me your group members by the date announced on TENTATIVE SCHEDULE. If I have not heard from you by the deadline, I will randomly assign you to teams and announce all the groups before the first class. Your groups grade for the project will be determined by how well the group did during the simulation as well as the final presentation. I will ask you to rate your fellow teammates and will base your individual grade on both the overall quality of the group project and how your fellow teammates rated you. Peer evaluations are confidential (see Appendix 1 for the peer evaluation form). I will be the only person who has access to these evaluations. Plan and Presentation Your group will present the final marketing project to the entire class during the last week of the semester. You will have 15-20 minutes to make your presentation and to answer questions from your classmates. See Appendix 2 for the presentation guidelines and Appendix 3 for the details on PharmaSim.

Late policy. It is very important that you turn in your period decisions as well as the presentation for the PharmaSim simulation on time. If you do not meet the deadlines, your grade for the simulation will be reduced by one full letter grade (e.g. A- becomes B-) FOR EACH LATE DECISION and FOR EACH LATE DAY (24 hours).

Group work policies 1. PharmaSim Student groups are considered static throughout the semester, which means that once you have formed your group, you will remain in the same group throughout the term. However, I strongly discourage free-riding. Therefore, a group has the right to fire group members who choose not to provide quality work and the required amount of time for the successful completion of the simulation. Prior to the final decision of firing a group member: a. A written warning must be emailed to the offending member with a copy sent to all other group members and myself. The group members should allow the offending member a reasonable amount of time to act on these warnings and make sufficient contribution to the project work.

b. If the member continues to behave inappropriately, all of the group members (except for the person being fired) must reach consensus to fire the offending member and communicate their decision personally and by email to the fired person with a copy sent to me. 2. If your membership within the group is terminated, you forfeit all team benefits associated with completing the simulation as a group. Bad teammates usually show their tendencies early, so let a problematic group member know that her/his behavior is not acceptable early. Fired group members MAY NOT join another group.

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Finally, remember that you have a chance to control the composition of your group. If you end up not enjoying your experience with this group, I would appreciate if you do not blame me for it at the end of the semester. I have absolutely no control over the outcome.

Class Participation (20%)

Attendance Attendance is optional. I do not believe that you can be forced to learn something. If you would like to benefit from this class as much as you can and get a good grade, you should be at the class both PHYSICALLY and MENTALLY.

If you have decided to come to the class, please ARRIVE ON TIME! Arriving late to class disrupts the activities and is never appreciated by myself or your class mates. Please let me know beforehand if you have an urgent situation and will be arriving late or leaving early. Class Participation Class participation is your overall positive contribution to classroom learning. It is based on the quality of your responses to my general and cold-call questions, not on how much you talk. To contribute well, you must read the simulation case, work on the specific periods, ask questions about concepts you dont understand, and make comments that help your fellow classmates understand the material better. During the class discussion, give examples from your own experience that demonstrate the concepts in the simulation.

During the class time, please limit your cell phone usage. If possible turn off your cell phone and leave in purse, backpack, or outside of the classroom (not on the desk).

Disabilities If you think you need accommodation for disability, please let me know. As soon as you make me aware of your needs, we can work together to determine appropriate accommodations. I will treat information you provide to me about disabilities as private and confidential.

Honor Policy BE HONEST AND PROFESSIONAL!

Learning is enhanced through cooperation and as such you are encouraged to work in groups, ask for and give help freely in all appropriate settings. At the same time, as a matter of personal integrity, you should only represent your own work as yours. Any work that is submitted for evaluation should be an original piece of writing, presenting your ideas in your own words. Everything you borrow from books, articles, or web sites (including those in the syllabus) should be properly cited. Using ideas, text and other intellectual property developed by someone else while claiming it is your original work is plagiarism. Copying from others or providing answers or information, written or oral, to others is cheating. Unauthorized help from another person or having someone else write ones paper or assignment is collusion. Cheating, plagiarism and collusion are serious offenses that could result in an F grade and disciplinary action. Please pay utmost attention to avoid such accusations.

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Tentative Schedule

E-mail your PharmaSim group member names by 9:00am, July 1st, Tuesday

July 4th (Friday) PharmaSim Intro Mini-Quiz (Before the class, thoroughly read the case. You will have a short, open-book quiz from the case) PharmaSim Individual Practice Rounds (3 practice periods, no re-play)

July 5th (Saturday) PharmaSim Decision Periods 1-5 9:00am - Simulation restarts for team play; no replays

Period 1: Submit decisions by 10:30am (Brand Assistant) Period 2: Submit decisions by 12:00pm (Brand Assistant)

Period 3: Submit decisions by 2:00pm (Assistant Brand Manager) Period 4: Submit decisions by 3:00pm (Assistant Brand Manager)

Period 5: Submit decisions by 4:15pm (Assistant Brand Manager)

July 6th (Sunday) PharmaSim Decision Periods 6-10 Period 6: Submit decisions by 10:30am (Brand Manager) Period 7: Submit decisions by 12:00pm (Brand Manager)

Period 8: Submit decisions by 2:00pm (Brand Manager) Period 9: Submit decisions by 3:00pm (Brand Manager) Period 10: Submit decisions by 4:15pm (Brand Manager)

July 11th (Friday, 9:00am) Submit your presentation via LMS July 11th (Friday) PharmaSim PRESENTATIONS & Discussion

Submit your peer evaluations by 9:00am, July 13th, Sunday

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APPENDIX 1 Confidential Peer Evaluation Form

(An online version of this form will be provided.)

Please fill out the peer evaluation form online by the date specified on the tentative schedule. You should give careful consideration to how you assess each group member's performance and contributions. If an individual receives consistently high or low scores from his/her peers, then that individuals grade may be affected accordingly. Before completing the form, please read the descriptions of the evaluation criteria listed below. Keep in mind that this peer evaluation is completely confidential. You can be assured that no one other than me will be allowed access to the ratings and comments you provide.

Descriptions of Evaluative Criteria

Cooperation Was the person a good colleague? Was the person dependable in accomplishing tasks and attending group meetings? Did the person accept tasks/responsibilities requested by the group? Did the person readily offer to help other group members and offer constructive criticism of other group members ideas and work? A score of '1' indicates a very low level of cooperation and a score of '10' indicates a very high level of cooperation throughout the semester. Extent of Contribution Was the person active in group meetings, activities, and efforts? Did the person offer ideas and make an effort above and beyond what would normally be expected? A score of '1' indicates a very low extent of contribution and a score of '10' indicates a very high extent of contribution.

Quality of Contribution Did the person offer suggestions and ideas which were well thought-out and worth listening to? Did the person add value to the group's overall performance? A score of '1' indicates a very low quality of contribution and a score of '10' indicates a very high quality of contribution. Overall Evaluation Evaluate each person's overall performance. A score of '1' indicates a very low overall evaluation and unacceptably low performance.

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Peer Evaluation Form

Please evaluate each group member (including yourself) according to the following criteria. Provide a rating between '1' (Very Low) and '10' (Very High) for each criteria. Refer to the description of each criteria provided above. If a low rating must be given, please provide an explanation in the space provided. Remember that only SIGNIFICANT reported problems will affect the grade (i.e. if you really think someone didnt contribute, by a significant amount, use numbers much lower than 10). Please be as honest as you can while you evaluate your own and others performance.

Name of the Group Member

Cooperation

Extent of

Contribution

Quality of

Contribution

Overall

Evaluation

Additional Comments:

Your Name ______________________________________

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APPENDIX 2

FINAL PRESENTATION The final presentation is an opportunity for you to reflect on the PharmaSim experience and compare your plans and outcomes with others in the class. Because we have limited time, you`ll need to present only the most important aspects of your experience. Presentations should be prepared in PowerPoint and will be presented to the entire class. Please keep the presentation to 15-20 minutes, but cover at least these points:

1.Highlights of your marketing plan

2.Your firm`s performance objectives and actual performance

3.Key success factors in PharmaSim

4.How you left the company positioned for the future

5.Important take-aways from the simulation experience what would you do differently?

Detailed guidelines for the presentation:

For each of the decisions you have made (including the ones about price) indicate your reasons based on your analysis of the current strengths and weaknesses of Allstar and its brand Allaround, the case, and your overall strategy. Describe your decisions over each period of time and how they changed over that period. Please do not simply list all the decisions. The important point is to explain your reasoning, the specific factors (& market research reports) you took into consideration. While it is not necessary to describe every change you made in each period, you should give an adequate description of what you tried to accomplish, why you did what you did, what results you found, and how you then reacted, etc. What happened that confirmed what you thought? What surprised you? What worked and what did not? What variables did you monitor that proved useful; what was not useful? Be sure to describe what information you used and how it helped, along with the details of any analyses you did. Discuss what you learned from the PharmaSim exercise. Aside from your decisions and strategy for your brands for this company and why you did what you did (above), what would you do differently if you could replay the simulation? More important, what conclusions have you learned about marketing from all of this? Thus, some of these lessons may focus on this simulation, and others focus on generalizations about marketing and marketing decision making in general. The best presentations will offer an analysis of what happened and why based on specific principles (4Ps: Price, Place, Promotion, Product; 5Cs: Company, Collaborators, Competitor, Customers, Climate/Context).

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APPENDIX 3 What is PHARMASIM, and why are we using it?

Tell me and Ill forget. Show me, and I may remember. Involve me, and Ill understand. (Native American saying)

PharmaSim is a computer-assisted exercise (a simulation game) that offers an interesting and different format to learn about product/brand management. Simulations allow students to learn from their own experience, to experiment with different strategies, and to live with their decisions over the long run. In effect, they are flight simulators for managers. The purpose of this exercise is to learn about product/brand management and decision-making in a dynamic environment in which you will actually make decisions for your brand, over a multi-year period, and learn from your decision-making process and the results that ensue. The PharmaSim case presents on overview of the over-the-counter cold medicine market from the perspective of the management team at Allstar Brands. The case is where much of the qualitative information about the industry is located. You are in charge of making decisions for the ALLROUND and related brands. You will have a 3 person group for this PharmaSim game and a team leader will be assigned for administrative (decision entry) purposes. Before your group makes any decisions, it is important that you (individually and collectively) carefully consider the available information and analyze the PharmaSim case just as you would any other Marketing case. You may download the case, as well as the PharmaSim manual, from the PharmaSim website. BEFORE OUR FIRST CLASS, you will need to study the case. You must then study all the market research information that has been pre-ordered for your first period decision, and come up with an initial strategy for the first period, and your rationale for those decisions. These decisions are described in the case/manual and include: a manufacturer's suggested retail price and the level of any volume discounts as well as the discounts you give to wholesalers; an advertising budget, selected advertising agency, and the relative emphasis on four types of ad messages; a promotions budget with allocations to cooperative advertising and three types of consumer promotions; and the three types of consumer promotions; and the sales force, including how many sales people allocated to five different types of retail stores as well as to wholesale and indirect support functions. As in subsequent periods, your total budget across advertising, promotions, and sales will be constrained by a total available budget. Then, you will learn the results of your decisions, and make decisions for subsequent periods. You will benefit from good decisions over time and, conversely, suffer the consequences of bad decisions. Your decisions and results are independent of those of any other team. Your goal is to (1) try to be as successful as possible at achieving your marketing goals (e.g., market share, net income, shelf space), while (2) learning about product management decision-making and the need to make decisions that make optimal use of available information and that are integrated within some logical strategy. Note the many good suggestions in Chapter 3 of the manual READ THIS CHAPTER THOROUGHLY BEFORE YOU MAKE ANY DECISIONS! The PharmaSim manual/textbook has four sections. Section 1 describes the case. Section 2 describes how to play the simulation, and describes all of the available information that can be accessed either free or for some fee. For your first period decisions, all the available market

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research has been pre-ordered, but you will need to make decisions on what to order and pay for, for subsequent decisions. You will start out as Assistant Brand Managers for the first period. Later on, you will be promoted to Brand Manager. Note that everyone starts off with the same position in the marketplace, in charge of the Allround brand, as you proceed through several years of decisions. List of Questions to Consider for PharmaSim:

Who are our current and potential customers? What do they want? Given our competitive strengths and weaknesses, what elements of the marketing mix will be most effective to motivate them to buy our brand(s)? How is the market changing? Are there identifiable segments that differ in their needs and/or responsiveness to particular marketing efforts? Where does growth seem to be occuring? What existing and emerging needs are not being met well by current products? What is happening in the market channel(s)? Which distribution outlets are most important to our success, given volumes/shares, segment shopping behavior, and trends? How can we motivate the channels to do a better job for us without giving too much away what do they want from us, and how well are we meeting their needs? Who are Allround's competitors? What advantages over competition does Allround offer? What is competition trying to do? How do their actions differ from ours (benchmarking)? How successful are they? What are the reasons for their success (or lack of success)? How is their strategy likely to change in the future based on what our brand(s) are doing? How should we react to what they are doing? How is the environment changing? What is the best way for us to allocate our limited resources across different products, markets, marketing tactics, and distribution outlets? What seems to work best when we change things? Why? What available information will be useful? How can we analyze available data to make it informative? How can we best use this information? When and how often should we buy proprietary information? What are key measures of success? How do we best influence these measures? What marketing theories, hypotheses, and/or rules of thumb will best help us to develop a rational plan for dealing with these many decisions and the complex and dynamic situation confronting our company?

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List of Miscellaneous Things to Consider When Working on the PharmaSim Simulation When you start the simulation, you will be in PERIOD 0 and making decisions for

PERIOD 1. Remember that each period is an entire year. Thus, many things can and will happen during that year (e.g., inflation, consumer attitudes, changes in competitors actions and success, distribution results).

Do not buy any research reports in Period 0. This would be a waste of money since the information is the same as in the examples in the case description.

I recommend that you do buy a lot of research information, potentially beginning in period 1. Assess each piece of information for how helpful it is (or could be), how to use this information, and how often you should buy the information. If you buy the survey, remember that you can segment the data in many ways each time you buy the survey information. However, you will only be making segmented decisions as a Brand Manager. My recommendation is to err on buying too much too often. However, it does cost money that is deducted from your budget and it is helpful if you use it in a rational manner.

Make a plan about what information to use and how to make various decisions. These theories, hypotheses, and rules of thumb can help you to structure a very complex task. Chapter 3 of the PharmaSim text is helpful in this regard. Be flexible in your plan and adapt it as you advance through the periods.

For each period, keep track of not only what you did but also your rationale and what

you concluded from the results. Adopt specific goals and monitor them to construct and flesh out a theory of what works and why. This will help you when you finish and have to re-construct all this for your presentation. Make sure to include your insights (what you learned, your reasoning) in the presentation.

If sales increase beyond production capacity, you will automatically add some fixed amount

of capacity that will more than cover sales. You are allowed to run over capacity up to 110%. If you exceed 110%, an additional 20 million units of capacity will be built the following period. This will impact your fixed costs for the periods after the capacity has been increased. You can see what the estimated increase in fixed costs will be on the what-if screen. (Capacity is a behind-the-scenes issue for you, as you do not make decisions on this directly. Basically, once you produce more units than the 110% capacity, it will increase automatically).

Many of us have trouble remembering what type of product and what benefits are offered by

each of Allstar's brands and which competitor brands do what and compete with each of Allstar's brands. I recommend that you write this out and keep it on a card or piece of paper so that you do not have to keep checking up on this as you ponder decisions.

Beware of inflation. It is high in the PharmaSim world and will impact your costs (and

should affect your price). There is no specific report that shows sales force utilization or efficiency. Review the

Company Sales Report as well as the Market Sales Force Report to get more information on this (for your specific team using the Company information, and the competitive information under Market). Also check the competitors as well as the importance of the channel to decide on the sales force size.

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When you change the formulation of a product, the reformulations are immediate. So, if you

choose to reformulate in Period 1, you will see the new product being sold in Period 2. WHILE MAKING DECISIONS, CONSIDER:

The ATAR model (Awareness, Trial, Availability, Repeat) is based on concept of Diffusion of Innovation. In order for a person to be a regular purchaser of the new product they must first become Aware that it exists. Once they have become aware of it they must make the decision to Try it out. In order to be able to try it out, it must be Available for them to purchase. If they are happy with the trial, then they may decide to adopt the product, that is, Repeat the purchase again. Awareness will depend on the extent to which the new product is advertised in the marketplace. For example, it might cost $1.0 million to make 10% of the market aware of the product. Trial implies that the customer actually decides to purchase the new product and try it out. Receiving a free sample in the mail does not necessarily mean that they actually tried the product. Availability relates to the ease with which the purchaser can find the product to purchase. This is directly related to the number of channels (retail stores, internet, etc) that are available to the purchaser. Repeat means that the trial was successful. In the case of convenience items, the purchaser has decided to make repeat purchases. For one-time shopping goods, or specialty goods purchases, repeat may mean recommending the product to a friend.

MORE TO CONSIDER!

Awareness: primary driver is advertising. Promotions (POP, coupons) also impact it. Impacted by message, particular type of promotion chosen, share of voice.

Intention to Buy: builds on awareness, but also adds product characteristics and MSRP. Does the product meet the needs (cold, cough, allergy symptoms) of the customer? Is the price about what the customer expects? Thus, the primary decisions that impact intention to buy are the product choice (reformulation or not and new product introduction) and setting the MSRP. In-Store Attractiveness: focuses on the in-store influences such as the location on the shelf, the amount of space allocated to the brand (shelf space in PharmaSim), point of purchase displays, and finally, the actual retail price (taking into consideration volume discounts and promotional allowances that may or may not be passed on to the customer). This factor is primarily driven by sales force and promotion decisions.

Purchase is the actual purchase decision that results from the above factors relative to the competitive offerings. Many purchases may be satisfied customers repurchasing the brand if they were satisfied with the experience and do not find a surprise when they go to purchase again (such as a huge price increase).

Usage / Satisfaction captures the experience the customer had with the product. Did the product actually meet their needs? How well?

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Repurchase. For a low-end product such as OTC cold medicine, repurchase behavior is important as many customers will just repurchase a brand rather than using extended problem-solving behavior. The percent of customers who repurchase is driven primarily by satisfaction rates.

Terminology

Share of voice: a brand's or group of brands' advertising weight expressed as a % of a defined total market or market segment in a given time period. The weight is usually defined in terms of expenditure, ratings, pages, poster sites etc.

In the online advertising industry, share of voice is used to "represent the relative portion of ad inventory available to a single advertiser within a defined market over a specified time period." Share of Voice in Online Advertising concerns weight or percentage among other advertisers, within the context of the advertising medium

Awareness: the % of respondents who recognized the brand prior to purchase. Conversion Ratio = Trials / Awareness, or of those aware of a brand, what percentage have tried it. Retention Ratio = Most Freq Purchased / Trials, or of those who have tried a brand, the percentage that purchase it most frequently. Promotional allowance: the ave. allowance for the five retail outlets and wholesalers for each brand. This allowance is given as a percentage of the price to the retail channel and typically is used for the cost of stocking, price discounts, and brand promotion in the outlet. In many ways, this can be viewed as an additional discount to the channel. Trade Rating: A summarized result from a survey of retailers and wholesalers on trade support and practices offered by your company. The trade rating value is scaled from 1 to 10, where 10 is the highest value. This value is on a product basis and may be graphed.

Co-op advertising: the amount used for joint advertising between the manufacturer and retailer. The estimate is from retail channel sources.

Point-of-purchase (POP) expenditures: the amount spent on creating, producing, distributing, and maintaining point-of-purchase displays in retail outlets.