Pfizer Is a Global Pharmaceutical Giant - Essay Example

Introduction Pharmaceutical industry has expanded beyond boundaries and has turned more competitive and fragmented. The industry is characterized by innovations, patent expiries and relaxations, rapid expansions and stringent regulatory environment that have resulted in a handful of players dominating the pharmaceutical global market. The present case on Pfizer- a global pharmaceutical giant, is an attempt to analyze the turbulences that had led the senior management and the policy makers at Pfizer to rethink their marketing strategies and the business model. Even the organizational structure is anticipated to change to accommodate the changing dimensions of customer perceptions and value expectations from medicines and healthy living (Barrett 2005, 72-82). The case commences with the market segmentation practices and its role in guiding the sales force efforts at Pfizer. Next are the targeting and positioning strategies in place and an understanding whether they need any changes. Adding on to the analysis, whether the company needs a complete revamping of its structure is also discussed along with the ‘what’ and ‘how’ of the change. Market segmentation and its significance in guiding the sales force efforts To its accolades, Pfizer boasts of a 38,000 person global sales force that is competent enough to turn the demand function upside down. However, the traditional sales force efforts seem to be rusting with the changes in perceptions and expectations of physicians, patients and the total customer base. Earlier till date, the onus of marketing and spreading awareness of newly discovered medicines and drugs had been on sales team with frequent visits to clinics and appointments with physicians and doctors as the major activity of Marketing Charter. However, with the knowledge of new and categorical diseases with specialized physicians, mass marketing seems to take a back seat. Now Pfizer aims to focus on specialized diseases with less of talking and persuading the physicians with sales force efforts. Pfizer has learned a lesson from its Viagra sales experience. In its spree to extract maximum benefits from its Viagra proposition for ED (Erectile Dysfunction), it distributed a large number of samples and free medicine to clinics and physicians, resulting into a faulty determination of the exact demand. There were more of curious customers than actually afflicted ones, which led to an instant upsurge in demand at the time of the launch of the Viagra. This was all because the sales team was too aggressive in its efforts. Learning from this experience, the market segmentation now calls for niche marketing to specialized drug categories and sales personnel visiting physicians that are found to be more productive, rather than following herd-mentality. Even pruning of non-essential and non-productive sales professionals is also on marketing agenda to be able to do quality work with less people. Moreover, when generic drugs are being devised with capabilities of customization from person to person genetic structure, market segmentation will enable and streamline the efforts of the sales team in determining the intensity of diseases in different places and on different people and also, how the effects of the drugs and medicines alleviate or reduce the probabilities of cure from person to person (Quirks 2005). Targeting and positioning strategies of Pfizer Pharmaceutical industry suffers greatly from imitation behavior from competitors and expiry of patents nightmare. As soon as a patent expires, companies go crazy to develop a substitute or an improved version of the expired drug. For Pfizer, blockbuster model has been the legacy behind its targeting and positioning strategies. It always go for a block buster drug that can propel the revenues significantly and make up for the sales losses for any of the about-to-expire drugs. It comes up with a novel introductory drug in a completely unknown disease category where Pfizer is known to be exemplary in spending mammoth amounts on clinical trials and research and development efforts. Once it touches the market, the global sales team of Pfizer starts its juggernaut to visit and convince the B2B and B2C customers to gain value from the product. However, instances of legal clutches on clinical side effects of many of its drugs have provided clear indication as to changes in its targeting and positioning strategies. Now instead of letting its fleet of scientists burn the midnight oil and promoting the drug to almost all physicians, it is recommended to first undertake a thorough research on the prospects of developing a drug, keeping in mind the views and opinions of specialized physicians, existing or anticipated market for the drug and possibilities of side effects of the drugs on patients with different afflictions, and then promoting it to the outside world (Swedenbio n.d). On advertising front also, it is essential to let the patients know that no drug is a sure shot cure for any disease and as such, it cannot be assured that any drug is free from side effects. Even clinical trials can defy the results that might come to the knowledge of drug makers after the population starts using the drug. Change in organizational structure? Pfizer already anticipates changes in the mode of working of its sales team in the light of increased competition and customer placing more value on reliability, quality and pricing of drugs. When externalities confront major changes, internal environment does not remain aloof of the influence. As reflected from the case, Pfizer has been observing an authoritarian and top-down approach of management till date. However, when innovation and productivity are all set to replace the foundations of the business model, decentralized decision making and a bottom-to-top approach is inevitable. In research intensive businesses, it is very essential that opinions of all levels of management is gathered and knowledge base is enhanced by seeking guidance and advice from the field managers who are actually in touch with the ultimate customers. In pharma companies too, it is the sales team and lower level employees who know where the impulse of the market is, which disease categories urge for the development of drugs and what is the probable customer base. They are also equipped with the generalist as well as specific customer responses. Thus, if the company needs to catch the nerve of the market, it needs to get real time data from its employees and not from reports. Information from actual process owners could make the decision making much more reliable, error free and responsive (Pfizer 2008). This could be deemed to be a big change for a company that is heading for a complete refurbishment of its organizational culture and structure. Initially, it could be indigestive to the senior management to seek advice on their decision making authority and also for the employees who are accustomed of obeying the commands. Yet, the change has to be implemented for better. To start with, there should be frequent discussions of the management with the sales team on issues regarding latest information on market happenings and moves of the competitors. There should be more of participative management inclusive of all employees and workers. The R&D team should direct its efforts after getting the details and data from the marketing and sales persons. This could reduce the dependence of Pfizer on its blockbuster drug model and come up with a solution that is always rewarding. Conclusion Pfizer has diversified along numerous business lines, yet declining profits signal shortcomings in the basic strategic structure which can be amended by organizational and cultural modifications and putting responsibilities on each and every single employee. Works Cited Barrett, Amy. “Pfizer’s Funk” Business Week. 28 Feb. 2005. 18 Aug. 2010 “Creating new drugs and treatments” Swedenbio. 18 Aug. 2010. “Data use: Forecasting new market product potential in the pharmaceutical industry” Quirks. 2005. 18 Aug. 2010. “Pfizer presents new opportunities for global growth” Pfizer. 2008. 18 Aug. 2010. < http://media.pfizer.com/files/investors/presentations/analyst_march030508.pdf > Read More