Marketing Innovation in Roche Pharmaceuticals - Case Study Example

MARKETING INNOVATION IN ROCHE PHARMACEUTICALS By Location Introduction Marketing innovation is often dubbedfor platforms relative to the philosophy of doing business. The two subjects combined enable business entities to realize their full potential in their specific industries whenever implemented coherently. Roche Pharmaceuticals deciphers marketing innovation as of vital significance in achieving growth and competence in the healthcare market segment. Notably, marketing entails a customer centric culture and through such, an organization is able to identify new methods of reaching clients. The approach also engages businesses in the use of websites whose traffic seems profitable (Kohlbacher and Herstatt, 2011, p. 56). The method is essential for the implementation of innovative approaches, branding strategies, and synchronistic strategies. On the other hand, businesses engage on innovative approaches to evaluate market viability, dynamics of the clients, and the appropriate technology to implement in achieving successful outcomes (Ortún Rubio and García-Fontes, 2011, p. 33). The following is a critical discussion seeking to implement the process of marketing innovation in Roche Pharmaceuticals inclined to appropriate recommendations to decipher its success and probable opportunities in the market. The industry’s situation Roche Pharmaceuticals operates in the healthcare industry seeking to deliver astound resolutions in the pharmaceutical and diagnostics market segments. The healthcare industry is composite of many dynamics and business finding the idea of evaluation an inevitable course. Roche marketing innovation programs exist amidst an ever-changing environment for the industry is broadly affected by internal and external environmental forces. Arguably, the healthcare industry exposes the available business entities to uncertainties due to a process of continued degree of competition (Moffat, Bohmert, and Hulme, 2008, p. 107). This also serves to barricade new businesses from entering the market. Roche is a globally renowned producer of medical equipment, taking the divisions of pharmaceuticals and diagnostics respectively (Tinguely, 2013, p. 32). The former field is tasked with applied sciences, and Roche Molecular Diagnostics. Further, the field draws the company into professional and tissue diagnostics, and diabetes care. The latter is tasked to the Roche Pharma, Genentech, and Chugai that serves to enhance its relevance in the industry. However, these facts do not serve as potential solutions to the challenging market situations (Mohr, Sengupta, and Slater, 2010, p. 142). Ideally, it is evident that the global market situation presents imminent barriers to success in venturing into new market segments. The industry’s situation toughens to the extent that the company faces stiff competition from complementary producers of substitute commodities, for example, Novartis, Abbott, and Qlagen companies (Xu and Quaddus, 2013, p. 74). Researches indicate that the pharmaceutical and diagnostics continue to possess the better part of the healthcare industry. Analytical surveys indicate that Roche meets different types of exposures and trading cultures, hence being vulnerable to dynamic changes in the healthcare industry. Citing on the presence of different competitors and cultures, the company survives tremors of a rather volatile market (Rao and Klein, 2013, p. 77). The industry seems coherent in determining a company’s personal return on investment since the external factors of the health industry define the unit sales that a company can make. Researches indicate that the economic slumps witnessed in the global marketplace over the period have affected the per capita income of individuals from developed to less developed economies (West, Ford, and Ibrahim, 2010, p. 71). It is factual that Roche Pharmaceuticals faces the threat of changing foreign exchange rates while operating in the global marketplace. The global health industry’s situation is unpredictable since the society seems to be more critical in evaluating the merits and demerits of any product presented in the market (Persaud, Kumar, and Kumar, 2003, p. 90). This is an indication of the increasing market volatility in the health industry. Roche’s research and development teams identify that the industry’s situation has involved since the target clients’ needs are to be met despite the reduced income levels (Sloan, and Hsieh, 2007, p. 9). This resolution is coherent to the fact that the increased level of competition influences customers to have a wide variety of choices to make (Kasper, 2006, p. 81). Therefore, the situation is responsible for the increased clients’ bargaining power in the purchase of equipment and other services provided by the company. Lastly, the bargaining power of suppliers and the supply chain threaten to worsen the situation of the industry holding to the threat of increased cost of logistics as materials are availed to the company’s premises and off to the market segments (Obrien, Clifford, and Southern, 2011, p. 31). Identification of crucial factors influencing the situation The market situation in the healthcare provision remains challenging due to the emerging trends and new world trade policy. Companies like Abbott and Novartis are continually engaged in marketing innovation to present more competitive products for the healthcare industry. These activities seem to be a threat to the development and success of Roche Pharmaceuticals (Grant, 2010, p. 82). The marketing innovation approaches initiated by the research and development team in Roche Company identify the industry as a rather changing one. Therefore, the company is fixed to engage in a continued process of marketing innovation to cater for emerging consumer needs and to secure its market share from deterioration (Fortenberry and Fortenberry, 2010, p. 76). Arguably, the global market was hit by economic slumps in the recent past and these forced new shapes to the market segments. Notably, research indicates that the company grew by 4% in its sales prospects despite its production of competent commodities. Therefore, it is knowledgeable to assert that the economic slumps led to reduced incomes amongst the target consumers in all the global market situations. In turn, the situation forced a decrement in the power to purchase medical products and other related services. Another crucial factor that affects the industry’s situation is the eruption of new and complex diseases (Jakkrit Kuanpoth, 2010, p. 8). This aspect is also relative to diseases’ cellular mutation, whereby Roche may develop certain lab equipment that may be short lived in the marketplace. Research indicates that Roche Company and its competitors face the threat of uncertainties in yielding profitable returns on investments since the new trends pose financial challenges holding to the fact that the time and costs incurred in the development of the equipment may not be compensated in the long run (KüMmerer, 2008, p. 120). Reviews indicate that the current and the past market situations differ broadly. In emphasis, the healthcare industry was supported by numerous organizations in the past compared to the present day. These organizations funded for the development of solutions to ailments that seemed to threaten the life of the human race. They included social security systems and governmental bodies (Kohlbacher and Herstatt, 2011, p. 45). The impact of economic slump forced many countries in the global society to withdraw their medical aid in marketing innovation, and the development of products that would saliently serve to the eradication of diseases. Further, co-payment systems deteriorated to a certain extend. These trends serve as crucial indications to the changing marketing innovation practices. Essentially, Roche aims at controlling the situation of producing technologically advanced equipment at reduced costs since the presence of individualism is forcing every person to define his ways of accessing healthcare facilities depending on the ability. The fact that the economic slumps affected income levels is ideally a determinant that the Roche, marketing innovation approaches should present advanced but cheap priced equipment to the market (Shadlen, Guennif, and Chavez, 2011, p. 88). At this point, the market situation will seem profitable for the company since it shall have overcome the influential factors present in the healthcare industry. Analysis of Roche Pharmaceutical’s capabilities and competencies in fulfilment of marketing objectives, strategic implementation, and brand strategies Roche defines its global presence through strategic implementation of competitive products continuously. The company’s marketing innovation programs enable it to reign in the healthcare industry as the leading provider of diagnostic and pharmaceutical solutions. Research indicates that the company holds 46% of the global market share in the provision of diagnostic solutions. In order to off shelf the threat of competition and loss of market share, the company engages in the production of viable solutions based on the emerging healthcare needs. Roche has always bore the capabilities of engaging in timely research and development processes through its outside-in strategy, which enables the team to amass clients’ reviews and global data related to health care needs. With an employee population of 28,517 people, the business entity is able to secure dominance and prominence in the global marketplace since all its employees bear adequate knowledge of the target goals and objectives (Festel, 2005, p. 90). Research indicates that this strategic resolution on marketing and innovativeness is the actual definition of the concurrent market growth and innovation. It is indicated that the company grew by 4% with its total sales revenues standing at £10,267 million in its previous financial year. The company’s emphasis on marketing innovation is an abundant resolution to its advanced decision-making processes that enable the management to incorporate the strategy to research and development, financial plans, and production and distribution aspects (Farrell, 2007, p. 91). While based in Basel, Switzerland, Roche has always focused on external opportunities thus; it implemented various distribution bases, namely, the Asia-Pacific, EMEA- for Europe, Middle East and Africa, Japan, LATAM (Latin America), and North America (NAM). Through such bases, the company is able to define the actual needs and dynamics in the prospective market segments to develop customized solutions depending on the environmental forces presented therein. The company is renowned for its competitive advantages that declare insufficiency to other companies in the healthcare market segment (Shavinina, 2005, p. 31). These advantages include its breadth of technology in the development of DNA/RNA, protein, and cell-based equipment. Its brand is globally known for efficiency in delivering value to the healthcare segment thus; its presentation of a complete menu in inflammation, cardiology, and oncology serves to steer market prowess (Epstein and Jermakowicz, 2010, p. 96). Further, it defines new niches through its marketing innovative approaches that enable it to venture in developing solutions in women’s health, metabolic diseases, and hematology complications. Computerization serves a milestone towards global competence and success. Therefore, Roche defines a well developed and networked IT system that enables the management to monitor workflow and other internal trends. This aspect serves to ensure efficiency and effectiveness since the personnel engages in business oriented approaches throughout their course of work to acquire the set priorities. The brand is divided into diagnostics and pharmaceuticals, and this approach has strategically influenced the company’s market share growth to dominate a 32% with its challengers, Novartis, Abbott, and Qlagen dominating less than 10%. The attributive factor is that the company’s prowess in definition of leading brands is solely born to technological advancements. Arguably, Roche has been able to supply the market with solutions and storage equipment. It also provides the healthcare community with sophisticated software services (Gassmann, Reepmeyer, and Zedwitz, 2004, p. 9). Further, it engages in the development and provision of blood screening and storage equipment renowned for the detection of multiple viruses, including the West Nile and the parvovirus among others. Its brand effects seem unending as the company is competitive in the provision of tissue-based diagnostics of cancer (Drexl and Lee, 2013, p. 90). Enviably, its global dominance, competence, and success may increase rather than decrease as its brand continues to take the lead in the implementation of sophisticated biochemical solutions (Organisation for Economic Co-Operation and Development, 2006, p. 38). The marketing innovation approaches have enabled the company to define its market dominance towards success through the implementation of global operations that enable it to control its programs to a unified approach. Secondly, it defines the global quality and regulatory approach as a resolution to defining the use of the best technological approach in providing the market with abundant solutions. In the third phase, Roche identifies global platforms and support to offer instant outside-in and inside-out flow of information and solutions (Engelhardt and Garrett, 2008, p. 42). Lastly, the company is definitely in its quest towards growth in the provision of abundant healthcare resolutions through the implementation of global business development that ensures the identification of new opportunities and manipulation of the brand to fit in the newly identified market segments. Recommendations from the findings Throughout the research, it is crucial to note that the company’s approach to marketing innovation seems to be focused towards growth and success in the market segments. Notably, the company’s premium for innovation indicates that its generics have influenced its market presence for a lengthened period of time (Bhalla, 2011, p. 65). Thereafter, it is crucial to understand that Roche’s success in the industry is abundant due to its implementation of Medtech solutions that declare competitors insufficient in the provision of alternative commodities. Categorically, the marketing innovation approach has inclined the pharmaceutical brand to a continued upward ascend. It is factual that Roche improved from a 40% to 46% in global market share despite the threats posed by the prominent external market forces (Donaldson and Otoole, 2007, p. 90). It is vital to realize that the company’s growth at an annual rate of 4% is profitable since the implemented marketing innovation strategies reduce the risk of hitting the optimum point. The findings indicate that a continued focus on the solutions is directly influential to its success in the implementation of an incorporated brand; the Pharma-Dia. Research indicates that the company dominates 51% market share in diagnostics, 25% in diabetes, and 11% in molecular diagnostics. The attributive factors of marketing innovation success also emanate from the 7% influence in applied sciences, and a competitive 6% rate in tissue diagnostics (Kohlbacher and Herstatt, 2011, p. 22). In emphasis, it seems that the company concentrates much of its innovation and marketing program in developing its relevance in the diagnostics division. It is of critical value for the company to desist from indulgence on one division of the brand since such a resolution shall lead to the loss of market share in the other brand division. Therefore, Roche should adapt new strategies that will enable its marketing innovation programs to serve for the benefit of pharmaceuticals and diagnostics with equated urgency. Notably, Roche should be critical in the implementation of new strategies in marketing innovation holding that the implementation of any of the outlined strategies should conform to the financial capabilities. The approaches should be cohesive to production and distribution in order to heighten efficiency and penetration into the newly defined segments. Further, its technological advancements should not target to bar competition, but rather to serve the target clients with the actual healthcare products. In recommendation, it is crucial for Roche to engage in the production of targets to present value to the target groups of users (Coughlan, 2006, p. 55). Though its brand bears relevance in the market, it is of crucial importance for the company to engage in the presentation of its utilities to recognize websites as an approach to influencing market presence and brand loyalty. Proposal for the development of a renowned brand Essentially, the research and development team should help in the process of marketing innovation in order to identify the best alternatives of restructuring the brand. Critically, the company must adapt independent brands for its numerous products in the two divisions (Burns, 2012, p. 74). Since the company operates in a global marketplace with its presence evident in over 130 countries, it is crucial to desist from the use of two brands since the global clientele population may view the divisions as separate entities rather than brands (Held, 2009, 98). It seems that Roche’s growth rate is not as high as desired in the company’s market plan approaches. In response to the challenge of branding, Roche may define its products under two code names of diagnostics and pharmaceuticals. This process should also be articulated to stiff and comprehensive advertising and promotion. Lastly, the newly implemented brand should be incremental of customers’ needs as such will draw their loyalty. Conclusion The report on Roche Pharmaceuticals is coherent to the identification of opportunities that any brand can bear. Through the establishment of competitive marketing innovation criterion, it is evident that a company’s brand is able to grow profusely despite the presence of the dynamics and challenges (Ogrodnik, 2012, p. 34). The marketing innovation approaches enable businesses to overcome the threat of reduced dominance and presence in their specific segments. Therefore, the study is knowledgeable in presenting the essential; strategies in defining superior brands (Plunkett, 2008, p. 80). Lastly, the study evaluates alternative approaches that may serve on steering brand presence profitably. Bibliography Bhalla, Gb2011, Collaboration and Co-Creation New Platforms for Marketing and Innovation, New York, Springer Science+Business Media, Llc. Burns, LR 2012, the Business of Healthcare Innovation, Cambridge, Uk, Cambridge University Press. Coughlan, T 2006, So Why Do I Care?: Management, Marketing, And Innovation Insights For A Changing World, Lulu,Com. Donaldson, B, and Otoole, T 2007, Strategic Market Relationships: From Strategy to Implementation, Chichester, J, Wiley. Drexl, J, and Lee, N 2013, Pharmaceutical Innovation, Competition and Patent Law: A Trilateral Perspective. Engelhardt, H, T, and Garrett, JR 2008, Innovation and the Pharmaceutical Industry Critical Reflections on the Virtues of Profit, Salem, Ma, M and M Scrivener Press. Epstein, B, J, and Jermakowicz, EK 2010, Wiley Ifrs 2010: Interpretation And Application Of International Financial Reporting Standards, Hoboken, N.J Wiley. Farrell, R 2007, Internationalisation of Japanese Business, Cheltenham, Edward Elgar. Festel, G 2005, the Chemical and Pharmaceutical Industry in China Opportunities and Threats for Foreign Companies, Berlin, Springer. Fortenberry, J, L, and Fortenberry, JL 2010, Health Care Marketing: Tools And Techniques, Sudbury, Mass, Jones And Bartlett Publishers. Gassmann, O, Reepmeyer, G, and Zedwitz, MV 2004, Leading Pharmaceutical Innovation: Trends and Drivers for Growth in the Pharmaceutical Industry, Berlin, Springer. Grant, RM 2010, Contemporary Strategy Analysis And Cases: Text and Cases, Hoboken, N,J Wiley. Held, S2009, Impact Of Big Pharma Organizational Structure On R&D Productivity, Burgdorf, Herz. Jakkrit, K 2010, Patent Rights In Pharmaceuticals In Developing Countries Major Challenges For The Future, Cheltenham, Edward Elgar. Kasper, E 2006, Internal Research and Development Markets, Heidelberg, Physica-Verlag. Kohlbacher, F, and Herstatt, C 2011, The Silver Market Phenomenon Marketing innovation In The Aging Society, Heidelberg, Springer. KüMmerer, K 2008, Pharmaceuticals in the Environment: Sources, Fate, Effects, and Risks, Berlin, Springer. Moffat, M, Bohmert, J, A, and Hulme, JB 2008, Neuromuscular Essentials: Applying the Preferred Physical Therapist Practice Patterns, Thorofare, Nj, Slack. Mohr, J, J, Sengupta, S, and Slater, SF 2010, Marketing Of High-Technology Products And Innovations, Upper Saddle River, N.J, Prentice Hall. Obrien, E, Clifford, S, and Southern, M 2011, Knowledge Management For Process, Organizational And Marketing Innovation: Tools And Methods, Hershey, Pa, Information Science Reference. Ogrodnik, PJ 2012, Medical Device Design Innovation from Concept to Market, San Diego, Elsevier Science. Organisation for Economic Co-Operation and Development, 2006, Innovation In Pharmaceutical Biotechnology Comparing National Innovation Systems At The Sectoral Level, Paris, Oecd. Ortún Rubio, V, and García-Fontes, W 2011, Incentives for Research, Development, and Innovation in Pharmaceuticals, Madrid, Springer Healthcare. Persaud, A, Kumar, U, and Kumar, V 2003, Managing Synergistic Innovations In Global RandD, Westport, Conn, Praeger. Plunkett, JW 2008, Plunketts Health Care Industry Almanac, Houston, Tex, Plunkett Research, Quirke, V, and Slinn, J, 2009, Perspectives On Twentieth-Century Pharmaceuticals, Oxford, Peter Lang. Rao, P, M, and Klein, JA 2013, Strategies For High-Tech Firms: Marketing, Economic, And Legal Approaches, Armonk, N.Y, M,E, Sharpe. Shadlen, K, C, Guennif, S, and Chavez, AG 2011, Intellectual Property, Pharmaceuticals And Public Health Access To Drugs In Developing Countries, Cheltenham, Edward Elgar Pub. Shavinina, LV 2005, The International Handbook On Innovation, Amsterdam, Elsevier. Sloan, F, A, and Hsieh, CR 2007, Pharmaceutical Innovation: Incentives, Competition, and Cost-Benefit Analysis In International Perspective, New York, Cambridge University Press. Tinguely, X 2013, The New Geography Of Innovation Clusters, Competitiveness And Theory, Basingstoke, Palgrave Macmillan. Trias De Bes, F, and Kotler, P 2011, Winning At Innovation: The A-To-F Model, Basingstoke, Palgrave Macmillan. Turner, TN 2005, Vault Guide to the Top Pharmaceuticals and Biotech Employers, New York, Vault, Inc. West, D, C, Ford, J, B, and Ibrahim, E 2010, Strategic Marketing: Creating Competitive Advantage, Oxford, Oxford University Press. Wetfeet,Com Firm 2008, Careers In Pharmaceuticals, San Francisco, Ca, Wetfeet, Xu, J, and Quaddus, MA 2013, Managing Information Systems Ten Essential Topics, Amsterdam, Atlantis Press. Read More