It is important for organizations and all companies engaged in the production of commercial goods to have a marketing plan. This will ensure the streamlining of the company such that it is well focused and integrated into marketing activities. All departments in the organization (especially the marketing department) ought to know what activities will happen and at what juncture. The marketing plan will ensure the organization meets this objective (Lamb, 2008).
Opportunities existing in the market will also be well exploited if marketing plans are incorporated. This way, the organization can remain in good financial health; such that, it’s able to recover its costs and still run at a profit by preparing for possible, unforeseen market eventualities. The organization will therefore be in a better position to counter these eventualities by identifying the proper marketing mix for adaptation to a rapidly changing market environment (Berkowitz, 2006).
Past business analyses have attested to the fact that a good marketing plan is key to a successful business. The marketing plan will lay down the path of growth the business or organization is expected to take so that it may realize revenue earnings. Not only do marketing plans ensure the success of the business, but they also enable the organization to have extra financing in terms of loans or partnerships (Lamb, 2008). To organizations and management, a marketing plan will facilitate the depiction of thoughts into paper and ensure proper allocation of resources to strategic areas for positioning the organization on a pathway of success. In summary, this marketing plan is a virtual document describing the elements of the work plan for market success. This study will therefore analyze the marketing plan for pharmaceutical products which Veto, a healthcare business could use to increase its market share in America.
Essentials of the Marketing plan
Goals and Objectives
Through the incorporation of new strategies, the goal of the marketing strategy is to position the company as a major pharmaceutical entity that provides the best products in the market. This is the long-term goal for adopting the strategy. The secondary objective will involve improving the company’s brand name and its product characteristics in comparison to existing competition in the market. This will be the short-run objective to achieving the long-term vision (Berkowitz, 2006).
The primary quantitative goal for the marketing plan would be to increase the market share of Veto as the long-term goal. This marketing strategy would also be aimed at increasing the profitability level of the company and effecting effective marketing strategies as short-term goals (Berkowitz, 2006).
In the analysis of marketing pharmaceutical products in the United States, it is important to note that the plan would be affected by marketing activities of pharmaceutical products in neighboring states such as Canada and Mexico. In Canada alone, $2 billion was spent in marketing pharmaceutical products, in 2008. The US government on the other hand spent more than $20 billion annually in marketing pharmaceutical products to physicians across the periods of 2004-2008 (Lamb, 2008). Higher projections have been noted with the highest amount spent by the state being $57 billion (Brody, 2008). The year 2005 also saw the US government spending $29.9 billion. The break down of these figures boils down to 56% of the revenues being dedicated to free sample, 25% to orienting physicians to the product, 12.5% directly attributed to consumer advertising, 2% attributed to orienting hospitals to the Pharmaceutical products, and 2% used on advertising in health journals (Brody, 2008).
Pharmaceutical companies have therefore been noted to spend much more on advertising but more revenue could be saved if generic drugs were used instead of brand names that were equivalent. The savings could average $20 billion (Lamb, 2008). From this analysis, there is definitely much revenue allocated to advertising pharmaceutical products. Health care businesses would therefore gain from advertising generic drugs as a substitute to brand-name drugs.
The Market- Qualitative
The US pharmaceutical market has been bogged down by low adoption rates of pharmaceutical products in the market (Lamb, 2008). This is primarily caused by high investment apprehension among competing firms, coupled with a lack of pharmaceutical companies identifying a proper business case to market their products. However, stakeholders in the industry are slowly adopting measures to tackle the slow adoption (Lamb, 2008). Business companies seeking to command a higher stake in the market, therefore, need to prepare pilot kits and products for professional customers and hospitals to try out their products first before purchase. This will also go a long way for Veto’s customers to develop confidence in the company’s products (Mullner, 2005).
These products and kits should however be developed to the highest standards to ensure potential customers are contented with the product. The company should also ensure that customers understand the technology costs and benefits. Products and kits should therefore have a higher utility value than their cost (Lamb, 2008). The company would therefore be in line to take advantage of opportunities posed by the projected increased uptake from retailing agents like Wal-Mart (Lamb, 2008). This is true because these retail agents have the mandate from pharmaceutical authorities such as the California Board of Pharmacies to ensure measures such as e-pedigree are effectively implemented in the supply chain.
The US currently hosts among the six biggest pharmaceutical companies in the world (Lamb, 2008). The demand for pharmaceutical products is however tremendous in the world today with better drugs being sought, over old pharmaceutical drugs. However, with the liberation of the economy, more entrants have been observed to grace the US pharmaceutical market (Mullner, 2005). The veto should therefore take advantage of the American market having the biggest pharmaceutical companies in the world and seek partnership.
Trends in the US Pharmaceutical Industry
Mergers had been very common in the mid-1990s among pharmaceutical industries in the US (Lamb, 2008). These mergers were usually characterized by partnerships between large and medium pharmaceutical industries. A mutual relationship was realized where medium companies enjoyed the huge infrastructure development of large organizations. Large companies also enjoyed increased market presence from smaller companies (Lamb, 2008). The venture of pharmaceutical industries into the stock market has characterized recent efforts of businesses trying to raise funds through the sale of equity. Biotech companies have been the major entities at the forefront of this initiative. Many offshore companies have also entered the US pharmaceutical industry because of its liberal nature (Mullner, 2005). This means that Veto will experience more market competition from external firms.
To counter the competition, Veto needs to amalgamate with other pharmaceutical entities to create a more formidable force to counter the market competition. This will ensure the pooling of risks and increased financial power to carry out aggressive market’s campaigns. The market share will also be increased. Such mergers have been evidenced to be quite beneficial for example, the Glaxo Smithkline merger (Lamb, 2008).
The US pharmaceutical industry has recently been characterized by competitive advertisements campaigns (Lamb, 2008). This has primarily been caused by a surge in Pharmaceutical industries that came about as a result of the liberalization of the market. Liberalization on the other hand has helped in opening up new global markets. The emergence of foreign markets has only compounded the competition for market share, coupled with the marketing of generic and branded pharmaceutical products (Lamb, 2008). Competition has therefore escalated in the recent past decade. The veto would therefore need to come up with proper marketing strategies to counter this competition.
Amalgamating with stronger and more established pharmaceutical industries would pit the company as a stronger business entity in light of competition; though this move will not be enough. Veto needs to adopt more modern marketing techniques, online to increase the efficiency of its marketing initiatives and expand its markets.
More website activities should be encouraged and interaction with customers simplified online. To improve product development, the company should have a feedback mechanism where customers can share their views and make recommendations about the company’s products. To increase its revenue base, the company should establish a small subscription fee when customers want to access product information. The fee should however be small; such that, the general public wouldn’t be scared away by high costs. This means that the company ought to have a segment in its websites where general information about pharmaceutical products is availed (Lamb, 2008). The company would therefore gain at profiting from the curiosity of its customers on issues such as the pros and cons of generic and branded drugs. This extra revenue should be used to finance marketing campaigns across the market (Mullner, 2005).
Problems and Opportunities
The expiry of patents for pharmaceutical industries has been a big problem in the US pharmaceutical market (Lamb, 2008). This increases the vulnerability of a company to competition from generic brands in the market. Veto can however counter such moves by merging with a potential partner firm to increase its patent life. There is evidence in the market attesting that sales can decrease by up to 75 percent upon expiration of patents (Lamb, 2008). Veto would therefore avert these detrimental effects if it sought partnership (Swarbrick, 2007).
However, one of the major internal problems Veto has is the lack of professional personnel to undertake the new marketing strategies. The firm’s human resource should therefore undertake a training program to improve the skills of its personnel. This should be undertaken through seminars and internal programs aimed at training employees (Lamb, 2008). To attest to the success of merger strategies, there have been observed trends of mergers increasing revenue growth according to a 2009 survey cited in Mullner (2005).
Veto should also seek to market pharmaceutical products centered on biological drugs because such drugs have been projected to increase in demand in the coming years (Mullner, 2005). Cardiovascular drugs and cancer drugs have also been rated to increase in demand in the coming years (Lamb, 2008). Veto should therefore increase its market campaigns to be in line with this opportunity. The biggest opportunity to be utilized in 2010 would be to own brand companies that are set to be acquired (Lamb, 2008). There are big names in the pharmaceutical industry that strike as the best entities in the market and Veto would be in a strategic position by associating with such brands. They include: Biogen Idec, Amylin Pharmacies, Elan Corp among other big firms in the United States (Lamb, 2008). The veto would increase its market standing if it associated with these brands (Swarbrick, 2007).
For the company to obtain proper funding for its strategies, it needs to sell its equity at the stock exchange market. This will ensure there is adequate financing for its marketing activities. Measures described earlier entailing providing subscription provision in the company website and merging with a stronger company would increase the capital base of the company. Marketing generic drugs as a cheaper option would also save up some money that would be diverted to marketing campaigns (Mullner, 2005).
The public relations officer should embark on diplomatic initiatives to position the company as a viable partner to any of the reputable pharmaceutical organizations currently existing in the market. This should be done by identifying strategic areas the partner company would benefit from the merger and how Veto would gain as well. Through this mutual relationship of “give and take”, the company should be able to merge comfortably with a partner company (Mullner, 2005).
Market share would be increased through information and technology tools. The internet would be the primary focus in facilitating the increase of market share through redesigning the company website to allow a feedback mechanism. This should increase the level of interaction between the company and its customers (Mullner, 2005).
The management team for the realization of the strategy’s objectives would constitute the Managing director, Marketing Manager, Human resource manager, Public relations officer, and Finance manager. Management needs to be at the forefront in ensuring this strategy is effectively implemented. Management will also ensure the synchrony of departments that will ensure the realization of the objectives pertaining to the strategy. These departments will include Human resources, Public relations, the Finance department, and the Marketing department. All these departments need to function together to ensure the strategy is well-coordinated (Berkowitz, 2006).
Apart from ensuring synchrony of involved departments, management should ensure there is enough funding for the projects to kick off. Management should ensure the financing initiatives are effectively undertaken for adequate funding to be availed. It is also the responsibility of management to ensure that training of employees is undertaken to equip every person in the organization with the skills to effectively undertake the strategy. Management should also ensure all employees are oriented toward strategic goals. The team’s commitment should also be unwavering for the strategy to sail through (Berkowitz, 2006).
The formulation of a marketing plan has to start with the organization formulating a marketing vision. The marketing plan to be adopted needs to have an analysis of the marketing environment in line with a SWOT analysis. The competition will be a key analysis of the marketing strategy to position the company to better deal with the challenges of the health care market.
- Berkowitz, E. N. (2006). Essentials of Health Care Marketing (2 ed). Sudbury, MA: Jones and Bartlett. Publishers Inc.
- Brody, H. (2008). Hooked: Ethics, the Medical Profession, and the Pharmaceutical Industry. London: Rowman & Littlefield.
- Lamb, C. W. (2008). Essentials of Marketing. London: Cengage Learning.
- Mullner, R. (2005). Pharmaceutical Marketing. New York: Emerald Group Publishing.
- Swarbrick, J. (2007). Encyclopedia of Pharmaceutical Technology. Philadelphia: Informa Health Care.