Australian Pharmaceuticals Industries Company's Market Strategies - Case Study Example

Australian pharmaceuticals Industries Company Analysis Name: Course: Tutor: Institution: Date: Table of Contents Table of Contents 2 1.0 Introduction and Background 3 2.0 Overview 4 3.0 Marketing Mix 4 3.1 Pricing Strategy 5 3.2 Promotion Strategy 5 3.3 Distribution Strategy 6 4.0 Industry Comparison 7 4.1 Pricing Strategies 7 4.2 Promotion Strategies 8 4.3 Distribution Strategy 9 5.0 Recommendations 9 6.0 Conclusion 10 References 12 1.0 Introduction and Background Global changes in healthcare services and lifestyle needs have necessitated the need for an increased market supply of health organizational products and services. In this regard, the healthcare industry across the globe has in the recent past encountered drastic changes. This is partially hedged on increased culture change that increases process acceptance as well as an increased need for healthcare services. This has been the case in Australia. Statistics demonstrate that the Australian market has in the recent years improved leading to increased gains and profits by the private healthcare facilities. However, this has resulted to increased competition. As the industry increasingly grows profitable, competition has increased both from the emerging and existing competitors. A porter’s five forces analysis on the industry reveals that the market faces increased competition from both the existing and new market entrants (Clinton, 2004, p.23). Such competitors to Australian pharmaceuticals Industries (API) include North Coast Area Health Service and Royal Prince Alfred Hospital, NSW. In addition the analysis reveals that the industry is dominated by an increased buyers influence. This is because, as the analysis establishes, the switching costs are relatively low due to shared medical standards and quality among partners. Moreover, the analysis reveals that organizations lack control over the market and purely hedge their success on marketing and quality services delivery. In this industry, API is positioned as a high quality and reliable healthcare provider based on a firm quality and professional services delivery commitment. This report reviews the organizational products and its marketing mix application. Moreover, in order to enhance increased positive growth, the organizational strategies are compared and contrasted with those of the competitors to enhance logical recommendations development towards the report conclusion. 2.0 Overview The healthcare industry is an industry that is charged with the provision of increased products as well as services. On one hand, the industry provides goods as drugs and medicines to allow for increased efficiency. This makes the industry a good provision industry. On the other hand, the industry provides service such as diagnosis, administration and other medical related consultation services. In particular, this report seeks to evaluate products offered by API Company both goods and services. The organization offers medical consultancy services. In this regard, medical practitioners, trained and qualified for the practice are used to offer professional services. On the other hand, the organization provides pharmaceuticals onto the Australian market as well as offering beauty products into the market (Brock and Hastings, 2013, p.83). 3.0 Marketing Mix For every organization to retain market competitiveness and sustainability, marketing is a requirement. Therefore, it is imperative for the organizations to adopt appropriate marketing strategy and tools. With the realization that it is imperative to market in order to enhance increased competitiveness. In this regard, Bowman and Gatignon (2010, p.13) argued that such competitiveness is only achieved through the development of a unique selling point for individual organizations in the market. To this effect, this report section offers a review of the API marketing strategy. In a marketing strategy review, it is imperative to assess the marketing mix inclusive of the price, promotion and distribution channels. 3.1 Pricing Strategy The pricing strategy under the marketing mix incorporates the approaches and strategies through which the market ventures into the new markets. In this regard, the pricing strategy is either based on low cost pricing or the high costs pricing. In this case, organizations determine their approach into the market either through the adoption of a cost leadership approach or price leadership approach. On one hand, Seshadri (2005, p.130) stated that cost leadership approaches result to low product prices, while price leadership approach hedges its concept of quality and the argument that quality is expensive. API organization uses the low costs market approach. In this regard, despite the organizational increased services and products quality, it has retained relatively low consultation fees as well as low products such as beauty products and services costs. As such, this has enhanced increased organizational influence in the local Australian market. As such, the organization remains competitive and influential in the market, especially for the large population with average earnings. 3.2 Promotion Strategy Under the organizational promotion approach, organizations result to increased advertising and market familiarity creation strategies to increase their presence and influence in such markets. As such, corporations adopt diverse marketing strategies to acquire the desired market influence. On one hand, some organization adopts a market targeting approach (Gelder and Woodcock, 2003, p.44). In this case, the organizations target on a specific market and establish its influence in it. On the other hand, the organization increases their influence in the diverse market through diversification strategies. On its part, API adopts the market diversification approach. In this case, the organization serves diverse market segments in the economy. Consequently, the organization has increasingly used the branding approach. It has developed diverse brands to propagate influence in the diverse organizational markets. For instance, the organization markets brands such as Priceline Pharmacy, Soul Pattinson and Pharmacist Advice. In this case, each brand targets a uniquely specific market. Through brand promotion strategy, the organization achieves an increased market presence in the Australian healthcare industry through targeting the diverse consumer segments in the market. 3.3 Distribution Strategy Dent (2011, p.33) states that distribution strategies are an imperative and crucial marketing concept. The distribution marketing concept outlines the process and approach through which the marketing function achieves its ultimate organizational performance objective of availing the marketed goods to the final consumers. While as organizations would establish ideal pricing and promotional strategies, a strategy failure on the distribution approach would negate any merits on the adopted strategies. Therefore, it is important for organizations to develop appropriate structure and approaches through which to distribute their products. This includes both the physical distribution and the channels of distribution. On one hand, the channels of distribution include the alliances with other stakeholders in the industry and the supply chain to allow for efficiency and cost effectiveness in products delivery. In this case, API partners with other stakeholders in its distribution channels to allow for on time deliveries. On the other hand, physical distribution systems are the actual outlets and premises through which consumers can acquire the organizational products. On its part, API organization has over the years conducted increased mergers and takeovers with retail outlets. Consequently, the organization has established increased outlets where customers can acquire its products. These retail outlets are run and operated directly under the organizations management. 4.0 Industry Comparison As already discussed in the report, the Australian healthcare industry is highly competitive. As such, competition has resulted to the adoption of diverse marketing strategies. This section seeks to benchmark API marketing strategies as discussed above, with those of its industry competitors. In this case, the review seeks to critically examine the relevance and competitive levels of the discussed strategies. Consequently, the review seeks to establish the strategies strengths as well as weaknesses in order to develop appropriate remedies. 4.1 Pricing Strategies As the report establishes, API or animation uses the low cost approach into the Australian healthcare industry. As such, the strategy offers the organization an increased market appeal and a consequent increased customer base. However market competitors adopt different pricing strategies. For instance Royal Prince Alfred Hospital, NSW, a major industry competitor, uses the price discrimination approach. In this case, the organization charges different prices in the different market segment. Through this approach, the organization achieves increased profit margins as well as increased market influence. Smith (2012, p.106) argued that the price discrimination approach is a new pricing approach. In this case, the strategy operation is based on the concepts of increased market operations as well as disparity in market culture and earnings. The approach recognizes that diverse economic standards across the industry required differentiated marketing approaches. Consequently, the failure to adopt this marketing approach, denies the API organization the much desired profit margins through charging higher prices for market segments willing to pay up increased costs for the acquired products and services. Therefore, this failure denies the organization a competitive advantage as compared to its industry competitors. 4.2 Promotion Strategies As the report discusses, the promotion strategies enhance increased organizational presence in the market. As such, through appropriate marketing and promotional strategies, organizations achieve increased marketing competitiveness. As discussed in the report, API adopts the diversity branding promotional approach, through which it serves different market segments under different brands. This reduces the implications of negative feedback and reviews on a given brand. In such an occurrence, the negative implications on a brand are limited to the specific brand and not on the overall organizational functioning in other consumer segments. Consequently, this offers the organization increased market competitiveness. This strategy is among the most ideal and market fitting strategies in the healthcare industry. This is because, unlike other industries, different segments in the healthcare industry demand different medical and professional skills and expertise. Therefore, such segments tend to have unique needs form those of the general population. This has resulted to the increased use of the strategy as can be evidenced in the case of Royal Prince Alfred Hospital, NSW and North Coast Area Health Service organizations serving in the Australian healthcare industry. Thus, a competitor’s strategy analysis with respect to the promotional strategy reveals that the organization remains highly competitive in the market (Hoskisson and Hoskisson, 2008, p.37). 4.3 Distribution Strategy The distribution marketing strategy is discussed in two aspects in the report. On one hand, the report establishes that distribution strategies are based on the concepts of managing the distribution channels. In this regard, the report reveals that API manages its distribution channels through establishment of alliances with the stakeholders in the chain. However, market competitors such as North Coast Area Health Service adopt direct distribution channels. In this case, the channel allows for increased market relationships establishment. However, the channels require increased organizational commitment and funds investment. Thus, this takes up the organizational time and directs its ability form its core business. Consequently, it is not an ideal distribution strategy to adopt. Therefore, this implies that API organization has increased market competitiveness with regard to the adoption of an indirect distribution channel and the adoption of alliances as a form of its marketing approach. On one hand, Tielmann (2010, p.43) states that the channel requires minimal funds commitment. Moreover, the channel allows for increased market commitment as well as increased efficiency in the organizational core activities. Therefore, through this distribution strategy, the organization remains increasingly competitive than its industry competitors. 5.0 Recommendations An analysis on the organizational performance as well as that of its competitors adopted strategies reveals that the organization has a deficiency in its adoption of the low cost pricing market approach. In this case, the approach denies the organization increased profit margins. Therefore, this report recommends a change in the pricing strategy. Instead, the report advocates for the adoption of the discrimination pricing technique approach. Through this approach, the organization will charge different prices in the different market segments. As it is, the organization serves its diverse market bases with the differentiated brands. In this case, this report recommends that in the execution of the proposed recommendation the organization should base its price discrimination on the segment basis. Instead of grouping and segregating the market based on the common demographics such as the economic levels and geographical location, the organization should establish a discriminatory approach based on its brand customer bases (Michelmann, 2001, p.157). Consequently, each brand should have its unique pricing approach and price levels in the market. This report argues that through the adoption of this recommendation, the market will achieve increased market success through increased profitability margins. 6.0 Conclusion In summary, this report reviews the marketing environment in the Australian healthcare industry. In this case, the review seeks to establish the marketing approaches adopted by diverse organizations in the market. In order to offer a practical approach to the concept, the report adopts the API organization as a case study. An analysis on the organizational marketing mix reveals that the organization uses the low cost pricing approach in the market. Moreover, the analysis reveals that the organization uses a combination of both the direct and indirect channels of distribution through alliances formation. Finally, its analysis reveals that the organization employs a diversification marketing approach through the use of branding techniques in the market. A comparison of the organizational mix with those of industry competitors reveals its weaknesses in the pricing approach, while demonstrating conformance with competitors in the diversification approach. In addition, it reveals competitiveness in API adoption of the indirect distribution channels. Consequently, the report recommends the adoption of a price discrimination approach based on the diverse brand segments discrimination. Conclusively, this report argues that with retention of existing competitiveness and the incorporation of the offered recommendations, API will increase its market competitiveness in the future. References Bowman, D., & Gatignon, H 2010, Market response and marketing mix models: Trends and research opportunities, now Publishers, Boston. Brock, W. J., & Hastings, K. L. 2013, Nonclinical safety assessment: A guide to international pharmaceutical regulations, Wiley Publishers, Chichester, West Sussex. Clinton, M. 2004, Management in the Australian health care industry. Prentice Hall Health, Frenchs Forest, N.S.W. Dent, J. 2011, Distribution channels: Understanding and managing channels to market, Kogan Page, London. Gelder, D., & Woodcock, P 2003, Marketing and promotional strategy, Thornes, Cheltenham: Nelson. Hoskisson, R. E., & Hoskisson, R. E. 2008, Competing for advantage, Thomson/South-Western. Mason, OH: Michelmann, H. J. 2001, Globalization and agricultural trade policy. Boulder, Lynne Rienner. Seshadri, S. 2005, sourcing strategy: Principles, policy, and designs, Springer, New York. Smith, T. J. 2012, Pricing strategy: Setting price levels, managing price discounts, & establishing price structures, Cengage Learning, Mason, Oh: South-Western. Tielmann, V. 2010, Market Entry Strategies: International Marketing Management, GRIN Verlag GmbH, Munchen. Read More