On Market Compatibility - Report Example

Centrum Vitamins: Report on Market Compatibility Executive Summary The determination of market compatibility of a product in selected areas requiresextensive investigation and objective analysis. Centrum Vitamins, as a widely distributed international product, has an international reputation for being well-received due to affordable costs. Potential countries for Centrum expansion include Nigeria, Sweden and Brazil. Based on demographic and socioeconomic dimensions, Brazil has labor workforce which is young, but old enough to be driven for economic excellence--with better socioeconomic situation with the general public. Although Sweden has higher living standards, workforce is declining, while population density is insufficient to ensure adequate market demand for Centrum products. Worse still, Nigeria may have adequate number of labor and consumer demand, but citizens are too young to competently hurdle economic crises, exacerbated by continued political unrest. On sociocultural and legal matters, Sweden and Brazil maintain positive attitude towards integrating supplements for sustenance of well-being while improving local manufacturing and import of pharmaceutical goods. In spite of higher taxation, turnover support on economy remains good; hence, industrial investment will be favorable for both government and business sectors. Contrarily, Nigeria may have recovered from political unrest, but its persistent negligence on reasonable taxation and import regulations makes it unfit for international trade. Introduction Prior to actual business investment market expansion, comprehensive feasibility data set must be collected to generate suitable for business ventures. In review, Centrum products are multivitamin agents, purportedly containing complete nutritional health support. These are exclusively manufactured by Pfizer, a top biopharmaceutical company in health related products (“Pfizer in Canada,” 2010). These are distributed internationally, with higher turnovers due to cheaper prices. In retrospect, full expansion of Centrum vitamins in other nations, including Nigeria, Sweden, and Brazil, may depend on several factors. Forecast on market correspondence with the product, sociocultural acceptance, as well as economic policies and restrictions are necessary to better determine how Centrum vitamins may be received in the markets of these countries. In this report, how Centrum vitamins might fare, in terms of consumer demand, is better addressed through critical review on the status of each country from political to economic and legal aspects. Bulk of Possible Market Upon latest survey, Nigeria is a country with adequate territorial holdings, possessing 356, 700 square miles of total land area (please see Figure 1 in Appendix A) (“Sub-Saharan Africa,” 2010). Population has amounted to over 152 million, yet, median age in all categories is only at about 19.1 years--similar in both males and females. Moreover, distribution of living spaces sides with urbanization is profound; almost majority of the citizens (48%) prefer to reside in urban areas (“Nigeria Demographics,” 2010). Primarily dependent on oil reserves exports, the country could have the economic independence that most oil-rich countries enjoy, yet, Nigerian government is surprisingly burdened in fighting problems of extreme public impoverishment (“Sub-Saharan Africa,”2010). The living conditions, then, are so poor that there is a great gap between upper and lower class in society. This illustrates negative socioeconomic status, as report shows that the bulk of population is struggling at levels “below poverty line” (Eze, 2007, p. 445). Based on such scenarios, the market potentials in Nigeria may be barred by general economic conditions and government involvement, possibly reducing consumer compliance. Jumping on to European climate, as a country of high economic profile, Sweden belongs to the European country. As illustrated in Figure 2 (please see Appendix B), its land area reaches to almost 175, 500 square miles, but population is only at 9,196,227 (“Europe: Sweden,” 2010). Compared with Nigeria’s young median age, Sweden dominates the opposite, with most citizens in early forties: “40.6 years for males while the females are at 42.9 years old.” In these ages, most of the citizens are experts in their occupational field, hence, the eventual prosperity in the country. Urbanization in the country is higher, with 85% statistics, and is still increasing at a rate of 0.5% (“Sweden Demographics,” 2010). In terms of socioeconomic standing, Sweden is at the top of market game with steadfast hold in exports--resulting to low unemployment status. Despite high taxes, citizens are living at higher lifestyle standards, as government supports them through lavishing employment benefits; and uplifts the socioeconomic status of both high and lower societal class (“Europe: Sweden,” 2010). Should corporations, such as Pfizer, decide to invest, the country is one of the most stable markets in the international scenes. Encompassing a large territory of almost 8,547,403 square meters, (please see Figure 3 in Appendix C), Brazil equally contains an enormous population of 198.9 million Brazilian citizens (“South America,” 2010). Compared to the two countries above, Brazil tops in both areas: land area and population size. Closer to ideal age range, Brazil has sufficient working forces, as median age is at 28-29 years of age. Most of them reside in urban areas, with 86% of Brazilian population prefer urban living (“Brazil Demographics,” 2010). With significant improvements in political management, outcomes portrayed “falling unemployment, low inflation, and firm currency” in the country (Ball, 2009). Low unemployment rate shows that majority of citizens are reaping rewards of economic elevation. In Figure 4 (in Appendix D), there is increment in general employee wages, as higher compensation means better lifestyle conditions. This evidently manifests better socioeconomic status in the country. Sociocultural Influence in the Market On the subject of product demand, the extent of sociocultural influence may differ in various countries, as well as the reception and eventual acceptance of Centrum products. In Nigeria, due to economic restraint and political conflicts, matters like health improvements and maintenance are not overly important (“Country Profile: Nigeria,” 2008, p. 9). The belief that meeting up the physiologic aspects of living bears more importance than higher needs is applicable in the country. With great hunger pangs clawing at Nigerian citizens, adaption of supplemental products, such as Centrum vitamins requires long-term campaign; consumer demands, such as lifestyle priorities, are to be modified to include Centrum vitamins in daily coverage. On the other side, Sweden seems more receptive consumers of Centrum vitamins. To promote better pharmaceutical exposure towards the mass public, legal maneuver allows for distribution of over-the-counter drugs in pharmacies and convenient stores. This way, such medications are made available in wider scope of consumers. With the rising percentage in the ageing population, focus on health is more on well-being promotion and infirmary prevention; hence, consumption of Centrum supplements may subsequently increase to maintain better health conditions in the country (“The Pharmaceutical Market,” 2010). With the combination of older residents and easy accessibility, sociocultural adaptation in the public is important for market acceptance, but not necessarily so. Lastly, sociocultural adaptation of Centrum vitamins in Brazil continues to be arduous, despite enhancing economic trends. With the prevailing market on generic drugs, equity in agent distribution has been overlooked. By far, “most drugs are...restricted to high-class population” (Arzeno, Diaz, & Gonzalez, 2004, p. 4). The statement implies that middle and lower class citizens are not afforded the right to obtain such drug agents. With expensive medicine agents, more people suffer with lack of treatment options. The import of inequity in drug allocation carries profound implications on market supply and demand. This time, supply restrictions influence acceptance of Centrum vitamins, and not the other way around. Related Legitimate Transactions In most parts, Nigerian restriction of goods is centered on the export scene, neglecting import regulations. There is no clear delineation of specific import restrictions in the country, hence, organization of expenditures and revenues are not as clear-cut (“Nigeria Country Profile,” 2010). In further analysis, legal activities on local manufacture and its taxation seem obscured, despite low value added tax (VAT) of 5%. In Nigeria, “VAT expenses are (treated) as input costs...while the government injects the VAT revenue...as consumption expenditure” (Ajakaiye, 2000). As a result, final product prices hike up with no real avenue for expenditure and revenue placement. In the end, increased taxes do not solve economic problems, it aggravates them in Nigeria. In contrast, Sweden’s legal systems and taxation experiences lighten burdens. As subjected to European Standards on imported products, the general regulations of the said procedures are followed, including proper documentation, risk testing validation, labeling and marking of designated goods, with VAT at 25 % in most of the goods (“Sweden Country Profile,” 2010). Specific lawful actions are strictly followed in the country. More importantly, legal system reaches out in pharmaceutical sections to improve drug availability, consequently eliminating pharmaceutical monopoly as part of deregulation policy in Sweden. With more (in macro and micro) manufacturing companies in local scenes, this means significant drug price reduction in the market, (“The Pharmaceutical Market,” 2010). Nevertheless, an open market creates economic stability, while consumers benefit with alternative drugs at cheaper costs. Consistently, Brazil’s legal niche hinges on effective government guidelines. In illustration, Brazilian policy governing the possession of a drug patent enforces several international companies to initiate the drug manufacturing “within three years of obtaining the patent.” If unable to do so, Brazil can rightfully create generic products of same classification (Arzeno, Diaz, & Gonzalez, 2004, p. 11). The legal move lures companies while obtaining opportunities to create own drug agent lines. In terms of taxation, reforms are instigated to enhance quality of economic services. Tax schemes shifts from “production-based to consumption-based...collection from wages to employers’ value-added revenues” (Baer & Amann, 2005, p. 26). With the welfare of the public in mind, such ruses purportedly improve economic situations in Brazil--favorable for sizable investment in Centrum vitamins for taking advantage of stable politics and economic growth. Recommendations In respite, several suggestions are constructed for better assessment of market compatibility and analysis of data at hand. For one, there is a need to explore other avenues for which the reasons behind poor conditions in Nigeria and what make it a poor choice for the launch of Centrum vitamins. Secondly, the strong link between sociopolitical strength and subsequent investment opportunities needs to be addressed in order to establish the particular area that must be treated in order to select the best locations for successful product dispersal. Lastly, the product content Centrum vitamins must be closely investigated to ascertain whether the demand really is due to cheap prices or the efficacy of the product really does render it a success in consumer market. All of these must be reviewed to distinguish other elements involved in the potential market identification for Centrum vitamins. References Ajakaiye, D.O. (2000). Macroeconomic effects of VAT in Nigeria: A computable general equilibrium analysis. Retrieved from http://unpan1.un.org/intradoc/groups/public/documents/idep/unpan003897.pdf Arzeno, A., Diaz, R., & Gonzalez, S. (2004). Brazil’s generic drug manufacturing success and policies that permitted it. Retrieved from http://ocw.mit.edu/courses/electrical-engineering-and-computer-science/6-901-inventions-and-patents-fall-2005/projects/brazil_gen_drug.pdf Baer, W., & Amann, E. (2005). Economic orthodoxy versus social development? The dilemmas facing Brazil’s labor government. Retrieved from http://www.business.illinois.edu/Working_Papers/papers/05-0108.pdf Ball, J. (2009). Investing in Brazil. Retrieved from http://www.investmentinternational.com/magazine/alternative-investments/investing-in-brazil-3057.html Brazil demographics profile 2010. (2010). Retrieved from http://www.indexmundi.com/brazil/demographics_profile.html Country Profile: Nigeria. (2008). Retrieved from http://memory.loc.gov/frd/cs/profiles/Nigeria.pdf Eze, C.M. (2007). The privatized state and mass poverty in Nigeria: The factor of economic development programmes since 1980s. African Journal of Political Science and International Relations, 3 (10), 443-450. Europe: Sweden. (2010). Retrieved from http://www.fco.gov.uk/en/travel-and-living-abroad/travel-advice-by-country/country-profile/europe/sweden/?profile=all Nigeria country profile. (2010). Retrieved from http://fedex.com/us/international/irc/profiles/irc_ng_profile.html?gtmcc=us#C05a Nigeria demographics profile 2010. (2010). Retrieved from http://www.indexmundi.com/nigeria/demographics_profile.html Pfizer in Canada. (2010). Retrieved from http://www.pfizer.ca/en/about_pfizer/corporate_background/ South America and South Atlantic Islands: Brazil. (2010). Retrieved from http://www.fco.gov.uk/en/travel-and-living-abroad/travel-advice-by-country/country-profile/south-america/brazil/?profile=all Sub-Saharan Africa: Nigeria. (2010). Retrieved from http://www.fco.gov.uk/en/travel-and-living-abroad/travel-advice-by-country/country-profile/sub-saharan-africa/nigeria?profile=all Sweden country profile. (2010). Retrieved from http://fedex.com/us/international/irc/profiles/irc_se_profile.html?gtmcc=us#C03 Sweden demographics profile. (2010). Retrieved from http://www.indexmundi.com/sweden/demographics_profile.html The Pharmaceutical market: Sweden-Review. (2010). Retrieved from http://www.researchandmarkets.com/reportinfo.asp?report_id=45441&tracker=related Appendix A Figure 1: Illustration of Nigeria’s Land Area (“Sub-Saharan Africa,” 2010) Appendix B Figure 2: Illustration of Sweden’s Land Area (“Europe: Sweden,” 2010) Appendix C Figure 3: Illustration of Brazil’s Land Area (“South America,” 2010) Appendix D Figure 4: Salary Compensation in National Levels (Baer & Amann, 2005, p. 17) Read More