Buckley’s Cough Syrup’s Export to Saudi Market

Market overview

In order to accomplish the business of exporting Buckley’s cough syrup from Canada to Saudi Arabia, it is necessary to examine the market for the product in the export country. From the statistics provided it is inferred that Saudi Arabia accounts for 65% percent of the market for pharmaceutical products in Middle East with an annual turnover of about $2.0bn. The pharmaceutical expenditure is projected to rise by $1.5bn by the year 2015. The high prices of pharmaceutical products indicate that the Saudi Arabia market is still not satisfied. Drugs for simple respiratory ailments are the most requested. The prevailing weather conditions in Saudi Arabia make the population more vulnerable to respiratory ailments. In Saudi Arabia, “pharmaceutical drugs are distributed through the following channels; emergency care centers, retail pharmacies, health inclined organizations, Government programs, long term care centers and hospitals.” (“Saudi Arabia: Saudi Food and drug authorority.” Regulations+ guidelines. htm) Prescription for respiratory ailments, especially for young children is offered in all the above distribution channels. Syrup medication is mostly indicated for pneumonia, common colds and other respiratory ailments. The supply of cough syrups to Saudi Arabia has been minimal compared to the demand; this has only acted to push the prices high. It has also created a vibrant market for substandard drugs which are shipped in from the back door. The authorities are in constant battle with fake or substandard syrups which are finding their way to the market and compromising the health of citizens. The Buckley’s cough syrup is expected to fill a demand vacuum that currently exists in the Saudi Arabian cough syrup market. The product is of high quality, effective and certified by all the international quality certification bodies. It is projected to impact the Saudi Arabian health sector by satisfying the demand for cough syrups. The syrup is important, especially to toddlers and young children who are more vulnerable to adverse weather conditions prevalent in the country. In analyzing the market we look at the following market factors.

Competitive advantage

Buckley’s cough syrup is very effective for treatment of coughs and is expected to have a competitive edge in the cough syrup industry in Saudi Arabia. Apart from the guaranteed quality, other mechanisms have been formulated to ascertain its competitiveness in the Saudi Arabian market. Combination of quality and reasonable “pricing will be the most effective strategy after the project launch.” (Turnbull 155)The cost of a cough syrup in Saudi Arabia is relatively high; the company is planning to offer slightly lower prices. This is intended to enable a large proportion of the population to access the syrup, which will in turn ensure competitive advantage. Profitability will be based on the volume of supply and after gaining the competitive advantage, the prices may be revised in stages. The company will also consider taking advantage of the fall out between the Saudi Government and its major pharmaceutical provider. In view of this, the company intends to negotiate with the Ministry of health of the Saudi Arabian government to include the Buckley cough syrup to the list of products purchased and supplied by the Government. This will go along way to shield the product from unfavorable market behavior.

Pharmaceutical framework

The pharmaceutical framework in Saudi Arabia creates a favorable business atmosphere. The regulations provided are far much better and easier to cope with as compared to other countries. “Provision of quality pharmaceutical product is the bench mark of all the regulatory programs.” (“Saudi Arabia: Saudi Food and drug authorority.” Regulations+ guidelines. Htm) The Buckley’s syrup is listed among the pharmaceutical products that are eligible for the Saudi Arabian pharmaceutical market. The inclusion of the product is based on the quality and certification by international pharmaceutical standards monitoring organizations. Therefore, the Buckley cough syrup will not be affected by legal constraints and subsequent negative publicity. The distribution channels existing in Saudi Arabia include: “emergency care centers, retail pharmacies, health inclined organizations, Government programs, long term care centers and hospitals.” (“Saudi Arabia: Saudi Food and drug authorority.” Regulations+ guidelines. Htm)To ensure that the Buckley cough syrup is available to the majority, we intend to make use of all the channels, with emphasis being placed on retail pharmacies, private hospitals and government sponsored programs. These three channels are the best for a business model and will ensure maximum profitability.

Market trend

The demand for pharmaceutical products, especially for treatment is not affected by on and off season market behavior. Health is a basic human need is given priority and therefore less affected by financial trends, unless in extreme cases. However, the circumstances are not so for the cough syrup, there are times when more people are affected by respiratory ailments. This is often due to the changing weather patterns. In such periods of high incidences of respiratory infections, there will be a higher demand for cough syrups. In studying the weather patterns in Saudi Arabia, it is certain that the product will be always in demand as the weather conditions in that country account for higher rates of respiratory infections. This information is meant to assist in the crafting of a supply formula for the Buckley’s cough syrup to the Saudi Arabian market. Sales may be affected by flooding the market with cough syrups, there is need to shield our product from cough syrups from other suppliers. We intend to achieve this by “gaining a competitive advantage” initially by quality and low price, later quality alone after adjusting the price for profitability. (Sidney 34)The demand for the Buckley’s cough syrup may be low in the period following the introduction into the market. But aggressive programs aimed at familiarizing the product to the people of Saudi Arabia will ensure growth. The initial marketing activities will consist of advertising, personal promotion, discounts, commissions and customer training programs.

Projected market growth

The product’s initial entry point will be the private hospitals and the Retail pharmacies. The quantity of supply during this period will be specifically made to satisfy these to channels. The supply will be increased as the product becomes familiar with the general public, other supply channels may be considered depending on the endorsement of deals, either with the Saudi Arabian Government or non governmental health organizations. The initial year will be the hardest for the business and all efforts during this year will be geared towards gaining a sizable chunk in the Saudi Arabian cough syrup market. It is during the same period that we intend to lower the prices in order to attract more buyers as well as offering other incentives. This period will also be marked with advertisements through print and electronic media and other activities aimed at familiarizing the product with the general public. Following the gain of a sizable chunk of the market, the focus will shift, to expansion. Expansion will mainly be done by utilizing more supply channels that are available to us. This will in effect, increase the public’s access to the Buckley’s cough syrup. After the initial year of the project, it is estimated that with adequate dissemination of information to the public on Buckley’s cough syrup, the annual growth will be at an estimated level of 10%. In five years time the Buckley’s cough syrup is expected to have acquired a competitive market share in the Saudi Arabian cough syrup market. After attaining this status, future increase in supply may be considered based on the factors such as; increase in population and increase in demand due to health factors.

The consumers of the product (Buckley’s cough) will be the patient suffering from respiratory complications which result in coughing as one of the symptoms. The above market review is first and foremost intended to ascertain the “sustainability of such a program.”(Turnbull 45) Secondly, it is meant to enable the supply of Buckley’s cough syrup work in a business model to generate profit for the supplier. Therefore, the aim of all the above market activities will be to increase provision of medication of respiratory ailments by providing a quality product to the people of Saudi Arabia. The government of Saudi Arabia has favorable policies regarding the supply and distribution of quality health products. This is aimed at reducing constraints in accessing health services by the people of Saudi Arabia.

Market entry strategy

The project aims at exporting the Buckley’s cough syrup from Canada to the Saudi Arabian Market. This is will be a company that buys and delivers the cough syrup to Saudi Arabia for resale. The Buckley’s cough syrup will be a new product in the Saudi Arabian pharmaceutical market. A market entry strategy has been designed to ensure that the product is introduced into the market, familiarized, and supplied well for best customer and distributor satisfaction. The entry strategy is designed to address all the areas of concern, specifically, transportation, handing and distribution of pharmaceutical products. Being a new and definitely superior product in the market, “technical innovation strategy has been designed to deal with familiarization.” (Turnbull 133)Saudi Arabia and Canada are thousands o miles apart and therefore the safety of the syrup while in transit is an important factor. A strategy has been designed to ensure the security of the product while in transit. Market entry strategy will be implemented through process such as:

Transportation

Syrups are normally bottled; the transportation mode needs to be safe due to the delicate nature of the syrup packaging. In addition the transportation needs to be fast as drugs and other potent materials degenerate quickly when under unfavorable conditions. In consideration of the above factors the well placed transportation mode will be through air. This will ensure that the drugs are delivered fast and with no disruptions to the form. The drugs will be transported on usual cargo airlines that play the Canada Saudi Arabia route.

The exportation process is designed to create a smooth, safe transportation of the Buckley’s syrup from Canada to the distributors in Saudi Arabia. The process includes: order information, order processing, order preparation and certification, insurance, freight forwarding, customer care and guarantees. This will be in liaison with an office to be setup in Riyadh, Saudi Arabia. The office will coordinate the processing and distribution of consignments in Saudi Arabia.

1. Order information: the information requesting the order to supply the syrup will be relayed to the company’s office which will be set up in Saudi Arabian (Riyadh), among other functions; the office will receive the quotations for orders from the customers and relay the same to the main office in Canada. The information will be processed as per the customer’s demands.
2. Ordering process: on behalf of the customer, the company will order the specified quantity of cough syrup from the Buckley cough syrup manufacturer. It has been confirmed that the firm will be processing the orders faster to enable delivery within the specified period.
3. Order preparation and certification: ones the specified Quotation have been obtained from the manufacturer, preparation and documentation will be done to ascertain that the amount being sent is actually what the customer requested for. After all the paper work has been done the consignment will be forwarded for exportation.
4. Freight forwarding: the consignment will be cleared for export, and will be delivered to the airport for transportation to Saudi Arabia. Appropriate information will be send to the agent in Saudi Arabia, informing him or her about the consignment and the specifications. When the order arrives in Saudi Arabia, the agent will pick it and deliver it to the owner.
5. Customer care: There will be a resident customer care unit in Saudi Arabia. Its functions will be to ensure customer information and satisfaction. The unit will have an open telephone line that customers can get through any time during the working hours. The customer care will also function to provide information on the Buckley’s cough syrup to all the potential customers. The unit will be linked to the main office in Canada and any verification regarding order status will be offered.
6. Guarantees: On obtaining the order information, the information will be studied to decide how best the demands made by the customer can be satisfied. This will take into consideration the time it takes to order for the consignment and transport it. After all the factors have been considered and the customer will be given a guarantee regarding the delivery of his or her consignment. Should the orders be late, or get lost in transit, the customer will be refunded or another order processed for him/her.
7. Insurance: the orders will be delivered via an ensured airline. The wellbeing of the consignment while transit will be our responsibility. In the goods are lost while in transit, the agency will solve the issue on behalf of the customer. Compensation to the customer will be done by the agency.
8. Government regulations: All the orders will be processed in line with the laid down regulatory framework by the Government of Saudi Arabia. Payment of duties and other taxes will be conducted by the distributor in Saudi Arabia and this will be factored in the customer’s charge sheet.
9. Transportation within Saudi Arabia: The transportation of ordered consignments will be at the customer’s discretion. If a customer wishes to receive the consignment at his or her premise, he or she will pay a transportation fee.

The above model will only work in the initial period during market assessment. After market penetration the processing of orders will be done in Saudi Arabia. This is because, once we establish a customer base there will be no need to import a consignment for each order. The agency will establish a storage facility in the “capital Riyadh to serve the market demands.” (Kalton 76)The storage facility will be replenished on regular basis. The capacity will be increased with increase in the customer numbers. In case the agency gets a major tender to supply the cough syrup and our storage capacity is overstretched then we will revert back to the later model.

Strategy for market penetration

The Buckley’s cough syrup has never been used in Saudi Arabia. It will be a completely new product there and so a strategy has been developed to familiarize the people of Saudi Arabia with the product enhance its competitiveness in the market. The strategy includes: Advertising, personal promotion, competitive pricing, commissions and training of customers.

1. Advertising: the product advertisement will be done through all media outlets, both print and electronic. The advertisements will aim on capturing the attention of as many people as possible. The specific adverts will be through local papers, television, radio and posters. The adverts will inform the public on the product specifications, quality and where it can be found.
2. Personal promotion: The agency will train a number of local support staff, whose function will mainly consist of education. Where by they will be going out to the retail outlets and offer information on the Buckley’s cough syrup to potential customers. The potential customers in this case will be. Hospital directors, retail pharmacy owners, directors of non governmental organizations and care center officer.
3. Competitive pricing: The initial price per unit Buckley’s cough syrup will be set competitively to attract more buyers especially the retail pharmacies and private hospitals. Since the quality of the product is assured a substantial market penetration is estimated to have been realized 1-2 years after product launch. “Competitive pricing strategy” will include discounts on certain amount of products purchased. (Sidney 86)
4. Commissions: commissions will be offered to customers who are willing to buy the products and distribute them to other customers. Giving of commissions is expected to enhance the demand for the Buckley’s cough syrup.
5. Training of customers: The Buckley cough syrup is a prescription drug. For optimal and safe use, the agency will provided additional training to complement the indications labeled on the containers. This will go a long way in establishing a mutual relationship with our customers.

The strategy developed above is expected to enable the penetration of the Saudi Arabia cough syrup market with ease. For successful project completion the market entry strategy will have to be implemented to the latter. Though the agency will spend a lot of money on the strategy, it will be justified at the end by ensuring acquisition of a sizable market share. The strategy will be modified to take into account bureaucracy and additional requirements, incase the agency is prompted to supply the cough syrup to Government hospitals.

Regulatory and logistical issues

Regulatory and logistical issues are matters which affect the delivery of a product from the producer to the consumer. Logistics involves the whole process from producer to consumer. Regulatory issues are bottle necks mostly involved in the regulation mechanisms put in place by a government of a country to monitor the products being supplied to its people.

1. “Regulatory framework for importation” of goods into Saudi Arabia: the framework entails that the goods arrive at the agreed place, in this case, the airport. The person importing the goods should produce documents indicating the type of goods imported and the quantity. (Kalton 145) The goods are then examined by the custom authorities. This is followed by the payment of custom duty and other taxes. The importer is then allowed to take the goods.
2. The export regulations in Canada: the export regulations demand that; a person seeking to export goods should have a declaration form. The declaration form should contain the product to be exported, the quantity and the destination. In addition to this form we should also have an export license for particular goods.
3. Regulatory framework for pharmaceutical products in Saudi Arabia: the regulatory framework specifies the conditions for all processing and handling of pharmaceutical products. First, the law is very clear on the quality standards of the pharmaceutical products that may be allowed into Saudi Arabia. Policies have been formulated to specify the quality requirements, basically the law states the drugs “should safe for therapeutic application,” the drugs should have be effective in the treatment of the disease indicated and the supply should be reliable. (“Saudi Arabia: Saudi Food and drug authorority.” Regulations+ guidelines. Htm) This law guides the drug approval process which is a requisite before any drug is allowed into the Saudi Arabian market. The Buckley’s cough syrup has been subjected to all the quality tests and it is certain that the product will be allowed into the Saudi Arabian pharmaceutical market. Secondly, there is a regulatory framework for importation and clearance of pharmaceutical drugs. This law stipulates the dosage forms that can be imported into the country, the shelf life at the time of importation and the maximum quantity that can be brought in at any given time. The third law is on approval of importation on necessity; the law requires that there should be a need for pharmaceutical drugs before they are imported. The demand for cough syrups is high in Saudi Arabia; therefore the importation of Buckley’s cough syrup will not be affected by the above law. The fourth law is on post marketing inspection, this law demands that the there should be a market surveillance after a specified period to determine the need of the pharmaceutical product. The Buckley’s cough syrup introduction into the Saudi Arabian market is well researched, and the market entry strategy is well done to ensure a good reception in the Saudi Arabian pharmaceutical market. Therefore, the requirement for market surveillance is part of the business and the agency will not wait to be pushed by the government to do it. The fifth law, “institution approval framework” scrutinizes institutions that may deal in pharmaceutical products. The law demands that the pharmacy or any other institution dealing with pharmaceutical drugs should be; well designed in accordance with the international specifications, should have proper storage facilities for the said drugs, should have qualified and certified staff and it should be licensed to deal in the said pharmaceutical product(s). (“Saudi Arabia: Saudi Food and drug authorority.” Regulations+ guidelines. Htm)

The laws on pharmaceutical products are meant to be beneficial to both to the patient and the producer. This is termed cost effective testing. Focus is drawn on efficiency of the drugs not the efficacy. It is required that treatment must be worth the cost to benefit everyone in the society. The criterion is aimed at maximizing the advantage to the patient at the same time leaving a reasonable profit for the pharmaceutical industry.

Logistical issues

In the pharmaceutical industry, logistics are meant to enable the delivery of drugs to the required patient, at the required place, in the required form, required amount and at required time. The Buckley cough syrup will be exported from Canada to Saudi Arabia, this is a vast distance and “logistical issues are quite complex.” (Kalton 187)However, a plan has been drafted on how to overcome the issue. A strategy has been formulated to ensure efficiency in supply of the Buckley cough syrup (which was also mentioned in the market entry strategy) Arabia. The strategy describes the whole process of sourcing for the Buckley cough syrup from Canada to final delivery to the customer in Saudi Arabia. The strategy involves:

1. Ordering: the information regarding the order to supply the syrup will be relayed to an office which is to be set up in Saudi Arabia, among other functions; the office will receive the order for supply of syrup from the customers and relay the same to the main office in Canada. The information will be processed and the ordering process initiated. The company will order the specified quantity of cough syrup from the Buckley cough syrup manufacturer.
2. Order preparation and certification for delivery: ones the specified consignment has been obtained from the manufacturer, preparation and documentation will be done to ascertain that the amount being sent is actually what the customer requested for. After all the paper work has been done the consignment will be forwarded for exportation.
3. Freight forwarding: the consignment will be cleared for export, and will be delivered to the airport for transportation to Saudi Arabia. Appropriate information will be send to the agent in Saudi Arabia, informing him or her about the consignment and the specifications. When the order arrives in Saudi Arabia, the agent will pick it and deliver it to the owner.
4. Customer care: There will be a resident customer care unit in Saudi Arabia. Its functions will be to ensure customer information and satisfaction. The unit will have an open telephone line that customers can get through any time during the working hours. The customer care will also function to provide information on the Buckley’s cough syrup to all the potential customers. The unit will be linked to the main office in Canada and any verification regarding order status will be offered.
5. Guarantees: On obtaining the order information, the information will be studied to decide how best the demands made by the customer can be satisfied. This will take into consideration the time it takes to order for the consignment and transport it. After all the factors have been considered, the customer will be given a guarantee on the delivery of his or her consignment. Should the orders be late, or get lost in transit, the customer will be refunded or another order processed for him/her.
6. Insurance: the orders will be delivered via an ensured airline. The wellbeing of the consignment while transit will be the responsibility of the agency. In the goods are lost while in transit, the agency will solve the issue on behalf of the customer. Compensation to the customer will be done by the agency and this will not wait for the tedious claiming for compensation from the insurer.
7. Government regulations: All the orders will be processed in line with the laid down regulatory framework by the Government of Saudi Arabia. Payment of duties and other taxes will be conducted by the distributor in Saudi Arabia and this will be factored in the customer’s charge sheet. This will ensure that the activities regarding the sell and use of Buckley’s syrup are within the legal framework.
8. Transportation within Saudi Arabia: The transportation of ordered consignments will be at the customer’s discretion. If a customer wishes to receive the consignment at his or her premise, he or she will pay transportation fee. Eligibility for the transportation service will depend no the volume of consignment and in future the company may consider providing free transportation services for large consignments.

Business progresses and growth is witnessed, most of the operations will shift to Riyadh, the Saudi Arabian Capital. The issue of logistics will be much simpler and will be approached differently, although most of the above processes will be maintained only that the services will be closer to the people. When the company shifts, and sets base in Saudi Arabia. All the orders will be processed within the country. The company will set up a store with enough supply of the Buckley’s cough syrup to satisfy the market need. This plan will effectively deal with the logistical and regulatory issues for the success of the project.

Works cited

Kalton, Joseph. The middle east and Asian Markets. Mumbai : Wishwa prakashan publishers, 1999.Print

“Kingdom of Saudi Arabia: Saudi Food and drug authorority.” Regulations+ guidelines. htm. 2010.Web.

Sidney, James. Reengineering management: expansion to New Markets.

London: Harper Collins Pulishers, 1996. Print Turnbull.

David. Strategies for international Industrial Marketing . Cunningham: Croom helm publishers, 1986. Print