Viagra. As Pfizer had spent a heavy R&D on Viagra and to make sure the success of it preceding its competitors, it had to think of ways to outperform them and always maintaining itself in the leading position and profitability.
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Introduction
1.0 CASE SUMMARY Pfizer is currently the world's largest drug company with revenues of $32.4 billion and an R&D budget of 7.1 billion as in year 2003. It became the world's largest pharmaceutical company, after its merger with Warner-Lambert in July 2000. It is also considered as the industry's best marketer. The company has three business segments, they are, health care, animal health and consumer health. Pfizer's products are found in over 150 countries. Pfizer is the first company which highlighted erectile dysfunction (ED) as a curable sickness and came out with their famous blue pill, Viagra. It had spent close to $2.5 billion for this pill in R&D and another $185 million annually to promote it. The marketing channel used is via medical sales representatives who promote Viagra to medical practitioners (doctors) and pharmacies. Viagra was considered a success in the first five years when it was introduced into the market in the 1990's. However, later on, competitors such as Bayer/Glaxo SmithKline Beecham and Eli Lilly had also introduced their version of pills for ED. This had threatened Pfizer's previously monopoly market. The case study had a detailed description on Viagra, Pfizer as well as its competitors. Challenges were also highlighted in the case and Pfizer would have to reconsider a change or modification of its marketing strategies in order to maintain as the leading company in providing solution for ED, and to recap the heavy R&D investment it had done previously. 2.0 PROBLEM STATEMENT As Pfizer had spent a heavy R&D on Viagra and to make sure the success of it preceding its competitors, it had to think of ways to outperform them and always maintaining itself in the leading position and profitability. ...read more.
Middle
4.3 Enhance Marketing This is done by heavily investing in advertisement, highlighting the product and outperforms rivals by making other products insignificant by building strong brand equity. 4.4 Dropping price This is one of the competitive strategies where Pfizer would drop Viagra price in order to remain relevant in the market. Pfizer has made huge profit since its launching of Viagra, but its competitors are still trying to breakeven. Dropping price would make its competitors suffer. 5.0 EVALUATION OF ALTERNATIVE STRATEGIES 5.1 Medical Sales Team Advantages: * Effective and efficient Currently Pfizer has spent a lot of capital to train its sales team to approach and service medical practitioners and pharmacies in order for them to provide information and Viagra to the end user. This strategy has been proven successful. * Professional endorsement As medical practitioners and pharmacies has the knowledge power to influence patients or end users to subscribe Viagra for their needs, the endorsement from these professional expertise are viewed to be an invaluable source and channel to market Viagra. Disadvantages: * High Cost Cost to maintain medical sales team as well as payment of commission to medical practitioners are high. Consequently, it resulted in high price of Viagra to end users. * Could not apply mass market penetration Consequent to maintaining medical sales team, mass marketing could not be applied as an implied agreement has been agreed upon the sales team and these professional practitioners. 5.2 Pre-empt rivals Advantages: * Block rivals on distribution channel Once the exclusive agreement has been signed by medical practitioners and pharmacies, they are not allowed to sale drugs of the similar function for certain period of time. Therefore, competitors would not be able to penetrate this market within the time frame. ...read more.
Conclusion
* Dropping price in stages Test market can be done on responses on demand versus price at each level. Pricing can be finally fixed at a level where profit and quantity are justified. * Restructure production & distribution strategy This is needed in order to match strategy 3 and 4 as production is expected to increase to meet rising demand. * On-line purchasing and distribution by website Viagra is a suitable product to be purchased and distributed on-line by looking at the light weight and size. This would also allow Viagra to reach global market much more quickly and cost effective. Long-term * Sponsoring global events Sponsor global events such as AIDS prevention, sports and health awareness programme. Sports events such as Formula 1 racing, football, basketball and other popular events normally draw a lot of audience and these events serve as good location to promote Viagra. Sports events also go through television channels and viewed internationally. Pfizer can expect a fast growth in sales with this move. * Enhance R&D on Viagra Currently, Viagra has many side effects and the features are similar to competitors. This move is seen to be vital to outperform competitors' products. However, drugs are tightly controlled internationally due to its impact on health. The improved version of Viagra could take years to reach the market. * R&D on Viagra for external usage / application This alternative should be given attention as some patients or end users are allergic to taking drugs or pills. External used application is said to be less risk inversed, and should function more quickly and more convenience. * R&D on Viagra for women As women might also face their own kind of problem as faced by men, huge potential market is seen in this area as female consists of almost equal percentage of population compared to male. ?? ?? ?? ?? 1 ...read more.
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