Situational Analysis of Dixons Retail Plc - Case Study Example

? of the of the Number Communication Plan Introduction A couple of extra pounds is not always considered as a cause of concern for the individuals, but when that extra pounds become more than two, then it becomes a serious cause of anxiety. From the societal perspective, overweight is often regarded as the issue related to one’s appearance, but in reality it is major medical concern. Overweight and obesity has been a global concern and is responsible for the death of a significant percentage of the population throughout the world. Reports have suggested that in the US, obesity rates have doubled since the last few decades. Approximately 65% of the overall adult population of the country falls into the category of overweight population. However, the situation is worsening day by day and has now reached an alarming stage. Several techniques have been tried and tested and hardly any of them has impacted or provided the desired results (Haberer 14). Considering this situation, marketers have also tried to utilize the opportunities of the US market. A number of companies involved in manufacturing and marketing of anti obesity drugs have emerged in the market and hence, the industry is becoming quite competitive (McDaniel 14). This report seeks to investigate the external business environment of the US and frame in marketing and communication strategies for the company, Cambridge Sciences Pharmaceuticals (CSP). The company has recently launched weight reducing drug names as Metabical. According to the pilot study carried out by the company, the drug is providing effective results. However, industry experts and eminent scholars around the world believes that a good product does not serve the purpose or fulfills the objectives of a firm, rather to get success a good product needs to have the support of good marketing and promotional campaign. The research paper will begin with a context analysis and the frameworks to be put into practice are PESTEL analysis and SWOT analysis. Context Analysis The context in which a business operates is crucial for a number of factors. The context not only influences the business decision of a company, but also plays a vital role in the operations of a firm. Hence, before devising the marketing plan, the study will carry out an in-depth analysis of the context in which the company operates. Apart from that the study will also enumerate SWOT analysis of the company. PESTEL Analysis Pestle is a strategic management tool by which a company analyses the external business environment (Mills 14 -16). It stands for political, legal, environmental, economical, social and technological factors. The analysis is carried out below: - Factor Analysis Verdict Political The political factors of a country include the stability of the government, regulations of the environment, taxation policies, and Competition regulation and consumer protectionism among others. Almost each of these factors impacts the pharmaceutical industry. In the context of US, the government is stable enough and has always supportive to a new business and investments. However, the country is strict when it comes to the compliance of environmental condition. The recent health reforms have however led to an increased pressure on the prices of the products. It is obvious that compliance with the rules and regulation of a country is mandatory for a business, but along the same time it is also necessary that the company encompasses a strong internal policy to guide the operations of the firm. It has been found that most of the factors pertaining to the political situation of the country are favorable for doing pharmaceutical business in the country. The only cause of cause of concern is the strict regulation of government towards the maintaining the standard of the drugs and to ensure there are no side effects for consuming it. Therefore considering theses facts it is strongly recommended to the firm that they should ensure that the product maintains the standards and the promotional campaign should showcase the good effects of the drug and at the same time make the customers aware of its ill impacts and procedures to avoid it. Economical The economical factors of a country include the economic growth, government spending, unemployment policy, exchange rates, inflation rates and consumer confidence among others. The growth of the pharmaceutical market is directly related with the GDP of the country. The GDP of USA is $15.94 trillion and is 2nd largest in the world. The country has a growth rate of 2.2% and the GDP per capita is $50,700. These factors clearly signify that the country is economically stable. Metabical will be priced something between $3- $5 per day. Hence, it is evident that the price is not too much high or costly and is affordable to almost every individual. Yet the economic scenario of a country always has an impact on the business. Therefore from an overall point of view with the given stable economic figures of the country it is evident that the country will offer a favorable economic condition to Cambridge Sciences Pharmaceuticals (CSP) for doing business. Social The social factors have a profound impact on the business operation of a company. The impact is more when the business is involved in a pharmaceutical company. For example, the demographic profile, population growth, distribution of income, changes in the lifestyle, living conditions and market trends. Since, Cambridge Sciences Pharmaceuticals (CSP) is a company involved in the business of manufacturing and marketing of anti obesity drugs, the significance to consider the body mass index (BMI) of the overall US population is a mandatory task. The study has suggested that around 64% of the adult candidates are overweight in USA. The overall population of the country is 316,668,567 (“North America: United States”). However, the particular product i.e. Metabical can be only applied to the candidates with BMI 25-30. In this range 34% of the US adult population resides. Hence, it is evident that the target market for the product is quite large. The analysis has clearly shown that from the perspective of the society the company has a number of advantages. One of the most evident one is the population of the country. With greater population of the target market, the company will have the opportunity to cater to a large customer base. In addition, due to the campaigns of government and other NGOs, the level of awareness among the consumers about the overweight has increased significantly and as a result of that people has become more cautious and they do not hesitate to try weight reduction pills. Hence, from this analysis it is obvious that demand for CSP’s Metabical pill will be high. Technological Nowadays, technology plays an indispensible role for the success of a business. Without proper technological infrastructure, the success of a firm is a matter of concern. The significance of the technological infrastructure is few times more when the company is involved in the business of pharmaceuticals. It encompasses factors such as spending of government in research and development, development and new inventions, rate of technology transfer. In addition, some of the other factors that signify the technological infrastructure of a country are internet usage, energy use and cost. USA is considered as one of the technologically advanced countries of the world. The facts and figures also signify the same. For example, the country has 146 million fixed lines, 290.3 million mobile subscribers. Furthermore, with a staggering 245 million internet user, it is obvious that the country is stable enough. In the context of infrastructure, the country has 13,513 airports, 224,792 km railway line, 6,506,204 km roadways, 41,009 km of water ways which indicates that if infrastructure is considered the country will offer favorable business situation for pharmaceutical business (“North America: United States”). Since, a drug is a physical product it needs the aforementioned infrastructures so as to distribute the products to the end consumers. Furthermore, the pharmaceutical industry is greatly impacted by the research and development infrastructure of a country. In this context USA offers great infrastructural support and even government aid is also provided for different research and developmental works. Hence, from the infrastructural and developmental point of view USA will offer tremendous amount of support to the company. Legal The legal factors of a country encompass the legal lawsuits and other factors related to the legal proceedings. Furthermore, increased litigation and global inconsistencies are also vital factors. From the promotional aspect, changes in the advertising laws or prohibition on any kind of advertisements may adversely impact an industry. Other factors in this context include health and safety law, employment law as well as consumer law. The pharmaceutical industry of the US is subjected to regulatory compliance and hence, legal departments examine all the required data for the purpose of supporting efficacy, stability and support. The industry is however self regulated and representatives are appointed to carry out quality evaluation and examination. The analysis has made it evident that the USA has well established legal frameworks for the pharmaceutical industry and this framework helps in maintain high quality standard of the product. The analysis has also shown that the industry is self regulated but if the government intervenes into it, the consumer confidence is obvious to rise. Environmental The environmental factors are also vital factors for the success of a business. However, the significance of the environmental factors depends upon the industry or the type of business in which a company belongs. Since, medicine is a perishable product the significance of the environmental factors is much more compared to other types of product. In order to overcome the environmental impact it is strongly recommended to the company that they should make use of technology. SWOT SWOT is another strategic management tool used for the purpose of identifying the existing strengths and opportunities for the firm and at the same time identifying the probable opportunities and threats for the firm. Strengths Well established brand in the US market. Strong Financial situation. Support Program to boost sales. Weakness Metabical is subjected to strong regulatory compliance. The drug is effective to people with BMI of 25-30. Opportunities The company can come out with other variants to target people with greater than 30 BMI. Expansion to neighboring countries. Threats Threat of safety. Intense rivalry within the industry. Promotional Objectives Any activity undertaken by a firm should have a back up objectives to justify the activities undertaken (Croft 14). Setting proper objectives allows a firm to frame in better strategies and also increases the chances of success for a firm. The promotional objectives for the firm are as follows: - The prime objective of the promotional campaign is to create awareness of the new drug among the target group. The product is aimed at people who are of BMI 25-30. Another objective is to ensure the overall promotional budget of the 1st year remains within $1.3 million. The most vital objective is to make use of diversified promotional techniques so as to reach out to every customer group. The last marketing objective of the firm is to increase the overall sales by generating awareness among the consumer group. Marketing Communications Strategies The company through its promotional technique would like to create awareness among both the end user as well as the health care providers who are responsible for prescribing medication for the patients. The company is also aiming to target the professional medical community through different types of advertising modes. Targeting the online physicians is another promotional objective of the firm (Nash 13-20). Some of the other common promotional objectives for the firm is to increase the demands of the product, presenting comprehensive information about the product so that no confusion arises in the minds of the consumer, highlighting the benefits of the product and along with that making the customers aware of the probable negative consequences if it is not consumed following the proper guideline (Monczka 1-3). In addition, the objective is also to promote the product in such a manner that the products are easily differentiated from the competitors. Therefore from the above discussion as well as considering the promotional objectives it is apparent that one particular form of advertisement will not serve the purpose and hence different techniques need to be put into practice (Beri 1-5). In addition, the company also needs to analyse the feasibility of the chosen communication strategy. For example, evaluation of the promotional and advertising campaigns to know their impact will greatly help. In the next section, the study will highlight a promotional mix for the company. Promotional Mix The promotional mix encompasses five main aspects which are advertising, personal selling, public relations, direct marketing and sales promotion (Richter and Pahl 2). Apart from that there are other two aspects which are used on the basis of requirements namely sponsorship and corporate image (Boone and David 14). In the context of Cambridge Sciences Pharmaceuticals, Metabical the company will use the following: - Advertising: - The Company will mainly follow Direct-to-consumer (DTC) advertising strategy. The medium which will be used for pursuing this strategy are radio, television, online platforms, and print media. The aim of advertisements was meant for portraying consumers that losing weight is a tough task, this drug will make them look best and how obesity can be a cause of concern. Direct Selling: - The Company will also make use of the direct sales force to boost up the sales of Metabical. Each salesperson will be assigned a territory to look after the business of the product. Around 32 sales representatives will be used by the company to target approximately 3200 medical offices and stores. Public Relations: - The public relations efforts of the company will encompass press releases before and after a product launch. In addition, the company will host various events to create awareness among the physicians and the end consumers. The public relation budget for the company is estimated to be somewhat near $4.3 million. Resources The resources play an indispensable role in implementing a particular strategy. Since, this activity is related to the implementation of a promotional tool, the resources required are mainly financial resources (Pride, Hughes and Kapoor 16-20). In addition, the other resources required by the company are human resources, equipments and outsourcing resources. The exact numbers or volume of these resources will be identified on the basis of the magnitude of the promotional campaign. Schedule & Implementation Scheduling and implementation are probably two most important tasks of a promotion and communication plan. The scheduling of the events is mentioned below: - Task/Time Wk1 Wk2 Wk3 Wk4 Wk5 Planning the Campaign Accumulating the resources Pre public relations activities Designing the necessary materials for the campaign Launching the campaign The implementation will be done through the following ways: - Step1: - The first step is to identify the implementation considerations. Identification of these factors before rolling out the campaign will surely save money and time. It will also minimize the chances of errors. Step 2: - The second step is to develop an implementation plan. This step will encompass several tasks such as the formation of a committee, and deciding upon the plan of action. In addition, a selection of the most appropriate media forms and strategies are vital tasks of this step. Step 3: The committee formed in the last phase will be assigned the task of executing the plans and communicating the stakeholders about the proposed plan. Evaluation & Control Once a strategy is formulated and is ready to implement, it is also necessary to consider the evaluation and control techniques. The market and communication plan formed will be evaluated and controlled through the following manners: - The evaluation of the promotional campaign will be done by using the following methods: - 1. The analysis of the sales figures to know the impact of the communication on the consumers. 2. The analysis of the ratio between the sales and expenditure for the marketing activities. 3. Measurement of the customer’s satisfaction level. The controlling measures for profitability, efficiency and strategy will be also undertaken so as to ensure the company remains profitable and also mitigates the risks. The strategic control will be developed to check whether the objectives of the company fit to the marketing environment. In the similar way, efficiency control will help in increasing productivity and overall customer satisfaction. Works Cited Beri, G. C. Marketing Research. New Delhi: Tata McGraw-Hill Education, 2007. Print. Boone, Louis. E. and David L. Kurtz. Contemporary Business. New Jersey: John Wiley & Sons, 2011. Print. Croft, Michael. J. Market Segmentation: A Step-By-Step Guide to Profitable New Business. London: Routledge, 1994. Print. Haberer, Jenny. Disneyland International Marketing Mix: International Marketing Mix of Disneyland Hong Kong. Munich: GRIN Verlag, 2010. Print. Mills, Gordon. Retail Pricing Strategies & Market Power. 2000. Melbourne: Melbourne Univ. Publishing. Monczka, Robert. M. New Product Development: Strategies for Supplier Integration. Wisconsin: ASQ Quality Press, 2000. Print. Nash, Edward. Direct Marketing: Strategy, Planning, Execution. New York: McGraw-Hill Professional, 2000. Print “North America: United States.” CIA. CIA World Fact-book. Web. 08 November 2013. Pride, William. M., Robert James Hughes. and Jack R. Kapoor. Business. Connecticut: Cengage Learning, 2010. Print. Richter, Anne. And Nadine Pahl. SWOT Analysis- Idea, Methodology and a Practical Approach. Munich: GRIN Verlag, 2009. Print. Read More