Market Attractiveness Zappa 361 Maximum - Case Study Example

Market Attractiveness Executive Summary The chief objective of any firm is to make profit through provision of products that offer value to their clients, but value is a subjective connotation. What customers’ value now might not be valuable in the next coming years or what different social groups’ values are different. This can only be dealt with by being adaptive to change and trends. However, before a firm establish a product it has to evaluate the market attractiveness level. Establishing market attractiveness is not an easy task. This can be achieved through market and marketing research and the ability of the firm to adapt or take the lead in shaping that market. This report examines market attractiveness for Zappa 361 maximum a painkiller drug developed by Apotex Inc. The report is divided into 8 sections, the first section looks at the product, its description and use. The second section looks at why the product was launched. This is supported by numerous needs to tap market segments by superior product. The third section examines how the firm would segment its intended market so that they are effectively catered for. However, this drug is to be used by all irrespective of age, gender, social and economic status. The different segment adopted is the approach to marketing where the firm will employ business to business approach and this will form the immediate market. However, the final market is the consumers who need pain relievers and this answers the fourth section. The fifth section employs the use of political, economic, social, cultural, technological and legal analysis (PESTEL) to examine the attractiveness of the market for this product. The sixth section examines other three overseas countries that might be resourceful to the firm in terms of global presence and expansion. In addition it justifies why the firm has chosen a given overseas market in relation to numerous factors that influence a market. The seventh section outlines the challenges likely to be faced in attempt to launch this product. The last section examines the strategy that will be implemented so as to gain footage in the market. 1.0 Introduction Efficient and effective marketing addresses the question of what do customers want, where the market is, who will buy and why they will buy the product. This is achieved through the process of planning, executing the conception, pricing, promotion and distribution of ideas, goods and services to satisfy the customer needs which are dynamic while ensuring increased income and successful market leadership (Chartered Institute of Marketing, 7). On the other hand, a product developed should aid in value creation for the end customer while giving the manufacturer an avenue to gaining market leadership (Ehmke, Fulton & Lusk, 2 & 3). This outlines a marketing attractiveness report for Zappa 361 maximum relief which is a new product line produced by Apotex Inc a pharmaceutical firm. 2.0 The Product Zappa 361 maximum relief is categorised in the class of medication known as nonsteroidal anti-inflamatory drugs (NSAIDS) that is used to treat fever and moderate pain caused by inflammation (C. Health). The 200mg, 400mg and 600mg tablets are yellow, round, biconvex, film-coated and identified as IBU over 200. They also contain several non-medicinal ingredients like microcrystalline and cellulose. Zappa 361 maximum relief liquid filled capsules are clear, colourless to pale yellow solution in a clear, green oblong gelatine shell. The same applies to the extra strength filled version with the capsules. The Pamprin Zappa 361 maximum relief and Zappa 361 maximum relief menstrual pain relief is both reddish-brown, capsule shaped and biconvex (Medbroadcast). 3.0 Rationale for Launching the Product Apotex Inc. aims at being a one stop solution to pharmaceutical products. This would help in achieving market dominance while offering value to clients. The product to be launched is one that has gone under rigorous research process for the last 10 years. The drug is appropriate for faster relief of pain yet with minimal side effects as compared to the existing ones. According to earlier market research by the firm, there is wide market for this product. Apart from the above, there is the added value to the customer in terms of the proven capability of the drug. The manufacturer has proved that the drug will be considerably helpful in relief of pain or inflammation associated with one or more of the following: menstrual cramps, dental pain, arthritis, sprains, cold and flu, sore throat, muscular aches, migraines, headaches, backaches and strains among others. 4.0 Basis for Market Segmentation To offer value to the clients, call for proper research about marketing dynamics such as consumer behaviour, target market population, decision making process and distribution channels among others. This kind of information will help the firm develop a product or service that captures the trends noted in the market information. In order to conduct a proper marketing there is need for an information system that can only be developed after conducting thorough marketing research. Marketing research allows marketing managers to formulate rational policies that are in tandem with market demands. One are area in marketing research is market segmentation (Aaker, Kumar and Day, 2, 3 and 4). Segmentation is the division of market according to attributes like demographic attributes, geographic attributes, psychographic and behavioural attributes. In business to business marketing, the attributes used include the capacity of the recipient firm, its distribution networks and marketing strategy and market share. The first basis for segmentation is on the volumes to be purchased. Apart from just focusing on bulk dealers, the company realizes that the final consumer matters a lot and even if the product were to be purchased in bulk but not sold at the required rate it would be useless. Thus, there is need for segmentation based on the customer data. This will guide the firm on areas where to supply more and where to supply less. The worth noting point that this drug is formulated to be used by all gender and people in different age brackets according to the doctors/pharmacist prescription. 5.0 Key Target Markets The firm will focus on business to business marketing strategy. Apotex’s target market is independent pharmacies and retailer pharmacies. There exist several of these outlets in Canada so that the market would be viewed as perfect and pretty wide. For example, we have, ‘Shopper’s Drug Mart’, also known as Pharmaprix. Since it is the largest full service pharmacy chain, Shoppers Drug Mart has many locations all around Canada. Other targeted bulk buyers are Value Drug Mart, PharmaChoice, Alentex pharmacy, Dell pharmacy, Lawtons, Safeway Pharmacy and Rexall among other drugstores. The reason for choosing these suppliers is because people have come to trust drug prescriptions from hospitals and medical institutions. The reason for this is that it will allow the firm to sell in bulk by taking advantage of existing distribution network for the product as it also build other new ones. 6.0 Issues That Would Make a Market Attractive for This Product Politics major role is in the formulation of policies, regulations and legal requirements. The positive is that it levels the playing ground and ensures standards are met since this sector deals with human life. This is a plus for the firm like ours which invest in research while developing human drugs while following laid down guidelines. Economically, Canada was not affected with much financial crisis. This means that there is low inflation and stable foreign exchange and thus the company is guaranteed of higher profitability. Moreover, this is liberal economy. Apart from these, life is critical and deals with no experiment. This means there is a demand which can be tapped with right products like Zappa 361 maximum. The socio-cultural factor that will work in favour of the firm is the improved awareness by the consumers about drugs that are effective and those with huge side effects. Our product being effective after thorough review and minimal effects it is expected to get warm reception. Moreover in Canada people trust prescription from qualified personnel and not over the counter purchase with out prescription. This will augur well with the firm since it targets organised pharmaceutical institutions. Adopted from: McDonnell, 2011. 7.0 Three Overseas Countries as Potential Destination for the Product France is ranked the fifth largest economy in the world with an annual GDP of $2.58 trillion in 2010. The real GDP increased by 1.5 % in 2010 after a decline of 2.5 % in 2009 after economic crisis of 2008. The government projects that by the end of 2012 financial year the GDP would have grown with 2.25 % (U.S. Department of State). Bryson (5) observes that Italy woes are based on two concerns. The first is the debt-to-GDP ratio, while the second is the growth rate. It has been noted that one of the Italy’s problem is stagnated growth. Italy has been able to record 3 percent growth per annum. Secondly, the debt-to-GDP ratio of Italy is the second in Europe and next to Greece. It noted that the debt-to-GDP ratio of Italy currently averages at 130 percent. Currently, Germany is the leading one in Europe and accounts for a fifth of European Union GDP (Ahearn and Belkin, 2). While both the three countries present a formidable market, Germany is preferable due to its economic strength and geo political positioning. Thus it can be used as launch pad in accessing other European markets. 8.0 Challenges to be faced in Introducing the Product The first challenge is stiff competition at local and international level. All pharmaceutical manufacturers are gigantic corporations. There are 22 such in Canada. Moreover due to globalisation, there are those producing generic drugs from China and India at lower costs. The second challenge is looking for prospective customers and supply chain management during the earlier stages. Looking for new and potential customers is not an easy process. Prospecting is often viewed as a step by step process of finding potential customers and every selling situation needs a unique prospecting system suited for it. The last is on expansion of distribution network. Since the firm will focus on business to business distribution, the third challenge will be establishing new supply network outside the dominant players. These small sized non dominant distributors are in need of a supplier who can advance credit and deliver to all most or most of their chains. However, detecting financial stability for these smaller drugstores or general stores is usually much more complicated. 9.0 Strategy for Market Penetration The firm’s strength that it will utilize to ensure market penetration is the long standing history. The firm was founded in 1974, in Canada, and has grown to be the largest player in the production of generic drugs hitting record high sales of one billion Canadian dollars (Bloomberg). The company does its marketing through its distributors in various countries, exporting directly to over 100 countries worldwide. It also markets through worldwide healthcare facilities and pharmacies where its products are sold. Thus, the main approach would be formation of strategic alliance with companies located in geographical locations desired by the firm. Addition, the incentive that the company will use to attract these distributors and lock out competitors is through marketing mix (Ehmke, Fulton & Lusk, 2 & 3). One approach to marketing mix is pricing. The pricing strategy is reasonable and comes with cash and quantity discounts. The purchasing company pays the transportation cost for minimal quantities, but for bulk purchases, the company meets the transportation and shipping costs. The credit period for partnering organization is 90 days while, for other companies, it is two months. This only applies to bulk purchases. As a last strategy, Apotex Corporation will be willing to recall and refund on all the expired drugs within the first two years and after that we will expect that distributors shall have determined their demand levels so that approximately all the drugs that they order will end up being sold. 10.0 Conclusion Any individual product or service must be developed in line with the firms overall mission and objectives. Marketing plays a chief role of connecting the firm and the product/service to customer. It is the proper marketing that allows any firm to gain market leadership through higher sales return and customer satisfaction (Onkvisit & Shaw, 7). The strength of establishing market attractiveness is through marketing research. Works cited Aaker, D. A., Kumar, V. and Day, G. Marketing research. New York: John Wiley and Sons, 2001. Ahearn, R. J. and Paul, B. The German economy and US-German economic relations. Congressional Research Service 7-5700, 2010. Retrieved on 16th April 2012 from: http://www.fas.org/sgp/crs/row/R40961.pdf Bloombergy Businessweek. Apotex Inc. Retrieved on 16th April 2012 from: http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=4211892. Bryson, J. H. European debt crisis: what next? Well Fargo securities LLC economic group, 2011. Retrieved on 16th April 2012 from: http://mediaserver.fxstreet.com/Reports/f94cca42-c3fa-47e4-88dd- b4c17a0cdced/309eba94-ec77-40ec-be13-eeaf76864503.pdf C. Health. Drug factsheets. Retrieved on 16th April 2012 from: http://chealth.canoe.ca/drug_info_details.asp?brand_name_id=271&rot=4 2012. Chartered Institute of Marketing. Marketing and the 7ps: A brief summary of marketing and how it works. 2009. Retrieved on 16th April 2012 from: www.cim.co.uk/filestore/resources/10minguides/7ps.pdf Drug factsheet. Apo-Ibuprofen. Retrieved on 16th April 2012 from: http://www.medbroadcast.com/drug_info_details.asp?brand_name_id=271#.T0Z1b_Kvy00 Ehmke, C., Fulton, J. and Lusk, J. Marketing’s Four P’s: First Steps for New Entrepreneur. Purdue Extension EC-73, May 2005. McDonnell, A. Strategic Management. Lecture Notes, 2011. Onkvisit, S. and Shaw, J. J. International marketing: strategy and theory, New York: Routledge, 2008. U.S. Department of State. Background note: France, 2011. Retrieved on 16th April 2012 from: http://www.state.gov/r/pa/ei/bgn/3842.htm Read More