Product life cycle is the stages that Allround goes through during its time in the market. This incorporates the different phases ranging from initial introduction to product growth, leading into product maturity, and concluding with the product decline or market exit (Mankiw, 2012). Through these phases, one can effectively evaluate and determine the product’s current state in the market. During the third period of the simulation, Allstar Brands had to make a decision on a line extension or brand reformulation. The threat analysis highlighted a potential weakness was Allstar Brands’ heavily reliance on the Allround product which was mature. The decision was made not to become reactionary and launch a new product which could cannibalize or diminish the strength of Allround. A reformulation of removing alcohol, a primary concern for consumers extended the product life cycle of the Allround product and strengthens the brand. Advertising and promotion resources were deployed to not only attract new customers but also to position the brand as being attentive to consumer demands and become more child-friendly.
As reformulation provided an opportunity for the Allround product line, the risk remained Allstar Brands was heavily reliant on a single product. In period five the decision was made to enter into the allergy space with the Allright product. The symptoms report market research indicated the Allstar Brands did not have a product or reformulation which in 18% of the reported symptoms which related to allergy.
Pricing, advertising, promotions, segmentation and sales force allocation were interrelated components that needed to be integrated and viewed holistically for the marketing strategy to be effective. The long-term success of the strategy which guided the decisions period over a period can be measured by financial performance, market share and in the stock price. The guiding principles of a customer-centric approach supported by financial stewardship and a commitment to executing on the strategy would enable consistent solid financial results and shareholder value. The initial plan outlined a goal of achieving 10% top line growth and 5% bottom line growth period over period. The net income goal growth period over period dramatically was exceeded as depicted in the chart below. Net income grew from $67M in period 1 to $124M in period 8. Allstar Brands experienced a $57M increase in net income for the entire simulation.
The steady cash flow and consistent growth in sales disciplined spend management, and net income was consequently rewarded and reflected in the Allstar Brands stock price which increased by $48.38 or 127% over the eight periods.