2. Market
Market Types, Size, Volumes
Indian Pharmaceutical Market
Product Life Cycle
Relaunching Strategies
Expansion of Product Life Cycle
SWOT Analysis
Boston Consulting Group (BCG) Matrix
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3. A Marketer is someone seeking a response
(attention, purchase, vote, donation) from
another party called the prospect
Marketers are responsible for stimulating
demand for a company’s product
Marketing managers seek to influence the
level, timing, and composition of the demand
to meet the organisation objectives. Eight
demand states are possible
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4. These are:
i. Negative Demand- consumers dislike a
product and may even pay a price to avoid it
ii. Non-existent Demand- consumers may be
unaware or uninterested about the product
iii. Latent Demand- Consumers may share a
strong need that cannot be satisfied by an
existing product. Marketers try to capture
this demand and come out with newer and
better products
iv. Declining Demand- Consumers begin to buy
the product less frequently or not at all
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5. v. Irregular Demand- consumers purchase vary
on seasonal, monthly, daily or even an
hourly basis
vi. Full Demand- consumers are adequately
buying all products put into the market place
vii. Overfull Demand- too many consumers
would like to buy the product that can be
satisfied
viii.Unwholesome Demand- consumers may be
attracted to products that have undesirable
social consequences
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6. Economist describe market as a collection of buyers
and sellers who transact over a particular product
or particular class
Marketers use the term “Market” to cover various
group of customers. The five basic markets are:
a) Resource Market
b) Government Market
c) Manufacture Market
d) Intermediary Market
e) Consumer Market
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7. Resources Resources
Money Resource Money
Market
Service
Money
Manufacture Consumer
Government
Market Market Market
Taxes
Goods
Money Money
Goods and Services Intermediary Goods and Services
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Market 7
8. Seller and buyer are connected by flows:
a) Seller sends goods, service and
communication to the market.
b) In return they receive money and
information
c) There is an exchange of money for goods and
service
d) There is an exchange of information
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9. A. Consumer Market- consumer good and services such as
soft drinks and cosmetics spend a great deal of time trying
to establish a superior brand
B. Business Market- companies selling business goods often
face well-trained and well-informed professional buyers
who are skilled in evaluating competitive edge
C. Global Markets- Companies face challenges and decisions
regarding which country to enter, how to enter the
country, how to adapt to their product/ services to the
country, and how to price their product
D. Nonprofit and Governmental Markets- Companies selling
to these markets have to price their product carefully
because these organisation have limited purchasing
power like churches, universities, charitable organisation
and government agencies
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10. Product is the end result of a manufacturing
process, to be offered to the marketplace to satisfy a
need or want.
Anything that is offered to the market that customers
can acquire, use, interact with, experience, or
consume, to satisfy a want or need
Service is any act or performance that one party can
offer to another that is essentially intangible and does
not result in the ownership of anything. Its production
may or maynot be tied to a physical thing.
Manufacture, Retailer, Distributor can provide value
added service to differentiate themselves
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11. Products that are marketed include:
• Physical goods
• Service
• Experiences
• Events
• Persons
• Places
• Properties
• Organizations
• Information
• Ideas
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19. Product life cycle, as the name suggests is the
life cycle of a product which begins from the
introduction phase, then there is the growth
phase, then a steady phase and finally the
decline phase.
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20. A company’s positioning and differentiation
strategy must change as the product, market
and competitors change over the product life
cycle (PLC). To say that a product has a life cycle
is to assert four things:
a) Products have limited life
b) Product sales pass through distinct
stage, each posing different
challenges, opportunities, and problems to
the seller
21. c) Profits rise and fall at different stages of the
product life cycle
d) Products require different
marketing, financial, manufacturing, purchasi
ng, and human resource strategies in each
life-cycle stage.
22. Most of the PLC curves are portrayed as bell
shaped. The curve is divides basically into four
stages:
a) Introduction
b) Growth
c) Maturity
d) Decline
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24. A period of slow sales growth as the product is
introduced in the market. Profits are
nonexistent because of heavy expense of
product introduction
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25. A product’s sales revenue are small and exhibit a
slow growth
The manufacturer is trying to gain product
acceptance from the prescriber or patients
The overall marketing strategy is to attract the
therapeutic area opinion leaders, who are
essential in communicating the product’s benefit
to their colleagues through the pyramid of
influence cascade
The marketers need market data that help them
define the product’s optimal
targeting, positioning and profiling.
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26. In order to increase consumer awareness and willingness to
buy the product, the following activities can be implemented:
i. Offer clinical trial experience
ii. Include physicians and patients in long term treatment
iii. Develop opinion leaders
iv. Develop media spokesperson (such as successful patient
testimonial)
v. Risk reduction
vi. Adapt promotional mix
vii. Sampling or couponing
viii. Broaden product offering
ix. Modify marketing channels
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27. Furthermore the ability to prescribe or buy can
be increased by the following activities:
i. Penetration pricing
ii. Adequate distribution
iii. Liberal payment terms
iv. Wholesaler consignment stocks
v. Compatibility with existing medical supplies
and equipment's
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28. Product Development- when a new product is
introduced in the current therapeutic
segment, the company is said to be active in
product development, as opposed to entering a
new therapeutic segment with an existing
product- a strategy called new market extension.
Diversification- When a new product is
introduced into a new therapeutic segment the
company is pursuing a diversification approach
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30. Product’s sales revenue are moderate but rapidly
growing and its profitability is increasing
Early adopters like the product, and additional
consumers start buying the product
Marketers main objective is to expand the
distribution and product line by offering new
product benefit and forms
Increasing competition drives down the product
price
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31. Sales force is expanding, shifting it’s priority
from the few medical specialist to a large
number of family physicians or GP’s
nationwide
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32. During the growth stage, the marketers use several strategies
to sustain rapid market growth:
i. Improve product quality and add new product features
and styling
ii. Add new models and flanker products
iii. Enters new market segment
iv. Shifts from product awareness advertising to product
preference advertising
v. Lowers the price to attract the next layer of price
sensitive buyers
vi. Increases distribution coverage and enters new
distribution channel
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34. This phase is characterized by a stabilized sale
performance with low cost and high profits
At this stage:
Marketer is occupied with maintaining the
products advantage
Fighting new competitive new product launches
with new features and benefits
A full product line is now available offering a wide
spectrum of product dosages, ROA and formulation
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35. The Maturity phase is divided into three stages:
a) Growth
sales growth rate starts to decline
No new distribution channel to fill
New competitive forces emerge
b) Stable
Sales flatten on per capita basis because of market
saturation
potential consumers have tried the products and the
future sales govern by population growth and
replacement demand
c) Decaying maturity
Absolute level of sales starts to decline, customers
begin to switching over to other products
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37. Sales decline for a number of reason
Technological advancement
Shifting consumer taste
Increase domestic and foreign competition
Increase price cutting
Now the pharmaceutical marketers are faced with
the dilemma of harvesting the product or
terminating the product or introducing a
replacement
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41. Very often successful product life cycle needs to
be prolonged, either because the product can
continue to be a significant revenue making
engine for the organisation or because the
existing product pipeline does not guarantee a
promising blockbuster in the near future
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42. Aspirin market is about a centaury old.
Early it was used as antipyretic-analgesic but lost
its market to paracetamol due to effective
repositioning of paracetamol and due to certain
side effects of aspirin
It was repositioned in the market with safer
dosage forms such as Enteric Coated
tablets, Buffered coated, Dispersible tablets.
Brands like Dispirin (Reckit Coleman), Microfine
Aspro (Nicolas) succeeded while lesser known
brands vanished from the market
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43. Flagyl of May & Baker was used in t/t of
“Giardiasis” . They later found out its use in t/t of
“amoebiasis” which was more prevalent in India.
The company launched aggressive promotion of
“FLAGYL” in t/t of amoebiasis and replaced
conventional treatment with emetine and
dihydroemetine inj..
Many other companies joined the bandwagon
and FLAGYL is among the top selling brands of
May & Baker
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44. Betenesol injection had always been imp. Brand
of Glaxo. It was lagging behind Decadron
injection (Dexamethasone) (of Merind).
Glaxo by promoting its one new indication, i.e., a
ten ampoule course in Myocardial Infraction, had
changed the position dramatically
The product image as a life saving drug had got a
big boost and product became a brand leader
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45. Find out the new usage of the product
Enter new markets by covering new geographical
market or expand the existing new market coverage
Modify existing product, Introduce different
size, Introduce larger pack size of tonics and enzymes
Introduce new flavours, New dosage Forms, Introduce
flanker products
Keep track of competition and develop your products
constantly
Be alert to spot the new opportunity and introduce the
new products early enough in your existing markets
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47. The overall evaluation of a company’s
Strength, Weakness, Opportunities and Threats
is called SWOT analysis. It is a way of monitoring
the external and internal marketing
environmental
Internal Enviorment include Strength and
Weakness
External Enviorment include Opportunities
and Threats
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48. OPPORTUNITY- A marketing opportunity is an
area of buyer need and interest that a company
has high probability of profitably satisfying.
There are three main source of market
opportunity:
a) To supply something that is short in market
b) To supply an existing product or service in a
new or superior way
c) To develop totally new product or service
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49. A company may be able to offer a product at a
much lower price. Pharmaceutical firms have
created generic versions of brand-name drugs.
A company may be able to deliver a product or a
service faster. Fed Ex discovered a way to deliver
mail and packages much more quickly than the
U.S Postal Service
A company can meet the need for more
information and advice. Guru.com facilitates
finding professional experts in a wide range of
fields
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50. An environmental threat is a challenge posed by
an unfavorable trend or development that
would lead, in the absence of a defensive
marketing action, to lower sales or profit.
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51. The internal factors are those which are
governed by the company themselves.
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52. Strengths
Cost effective technology
Strong and well-developed manufacturing base
Clinical research and trials
Knowledge based, low- cost manpower in science & technology
Proficiency in path-breaking research
High-quality formulations and drugs
High standards of purity
Non-infringing processes of Active Pharmaceutical Ingredients (APIs)
Future growth driver
World-class process development labs
Excellent clinical trial centres
Chemical and process development competencies
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53. Weaknesses
Low Indian share in world pharmaceutical market
(about 2%)
Lack of strategic planning
Fragmented capacities
Low R&D investments
Absence of association between institutes and
industry
Low healthcare expenditure
Production of duplicate drugs
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54. Opportunities
Incredible export potential
Increasing health consciousness
New innovative therapeutic products
Globalization
Drug delivery system management
Increased incomes
Production of generic drugs
Contract manufacturing
Clinical trials & research
Drug molecules
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55. Threats
Small number of discoveries
Competition from MNCs
Transformation of process patent to product
patent (TRIPS)
Out-dated Sales and marketing methods
Non-tariff barriers imposed by developed
countries
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57. This technique is particularly useful for multi-
divisional or multi-product companies. The
divisions or products compromise the
organisations “business portfolio”. The
composition of the portfolio can be critical to
the growth and success of the company.
The BCG matrix considers two variables, namely:
a) MARKET GROWTH RATE
b) RELATIVE MARKET SHARE
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59. The market growth rate is shown on the vertical (y) axis and is
expressed as a %. The range is set somewhat arbitrarily. The
overhead shows a range of 0 to 20% with division between low
and high growth at 10%. Inflation and/or Gross National Product have
some impact on the range and thus the vertical axis can be modified to
represent an index where the dividing line between low and high
growth is at 1.0. Industries expanding faster than inflation or GNP
would show above the line and those growing at less than inflation
or GNP would be classed as low growth and show below the line.
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60. The horizontal (x) axis shows relative market
share. The share is calculated by reference to
the largest competitor in the market.
Again the range and division between high and
low shares is arbitrary. The original work used a
scale of 0.1, i.e. market leadership occurs when
the relative market share exceeds 1.0.
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61. The BCG growth/share matrix is divided into four cells or
quadrants, each of which represent a particular type of business.
These are:
a) QUESTION MARK
b) STAR
c) CASH COWS
d) DOGS
Divisions or products are represented by circles. The size of the circle
reflects the relative significance of the division/product to group sales.
A development of the matrix is to reflect the relative profit
contribution of each division and this is shown as a pie-segment within
the circle.
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63. These are products or businesses, that compete in high growth
markets but where the market share is relatively low. A new
product launched into a high growth market and with an existing
market leader would normally be considered as a question mark.
Because of the high growth environment, they can be a “cash
sink”.
Strategic options for question marks include..
Market penetration
Market development
Product development
Which are all intensive strategies or divestment.
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64. Successful question marks become stars. i.e. market leaders in
high growth industries. However, investment is normally still
required to maintain growth and to defend the leadership position.
Stars are frequently only marginally profitable but as they reach a
more mature status in their life cycle and growth slows, returns
become more attractive. The stars provide the basis for long term
growth and profitability.
Strategic options for stars include..
Integration – forward, backward and horizontal
Market penetration
Market development
Product development
Joint ventures
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65. These are characterised by high relative market share in low
growth industries. As the market matures the need for investment
reduces. Cash Cows are the most profitable products in the
portfolio. The situation is frequently boosted by economies of scale
that may be present with market leaders. Cash Cows may be used
to fund the businesses in the other three quadrants.
It is desirable to maintain the strong position as long as possible
and strategic options include..
Product development
Concentric diversification
If the position weakens as a result of loss of market share or
market contraction then options would include..
Retrenchment (or even divestment)
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66. These describe businesses that have low market shares in slow growth
markets. They may well have been Cash Cows. Often they enjoy misguided
loyalty from management although some Dogs
can be revitalised. Profitability is, at best, marginal.
Strategic options would include..
Retrenchment (if it is believed that it could be revitalised)
Liquidation
Divestment (if you can find someone to buy)
Successful products may well move from question mark though
star to Cash Cow and finally to Dog. Less successful products that
never gain market position will move straight from question mark to
Dog.
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69. The BCG is simple and useful technique for
strategic analysis. It is convenient for multi-
product or multi-divisional companies. It focuses
on cash flow and is useful for investment and
marketing decisions.
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70. Definition (qualitative and quantitative) of the market is sometimes
difficult.
It assumes that market share and profitability are directly related.
The use of high and low to form four categories is too simplistic.
Growth rate is only one aspect of industry attractiveness and
high growth markets are not always the most profitable.
It considers the product or business in relation to the largest player
only. It ignores the impact of small competitors whose
market share is rising fast.
Market share is only one aspect of overall competitive position.
It ignores interdependence and synergy.
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71. Companies will frequently search for a balanced
portfolio, since..
Too many stars may lead to a cash crisis
Too many Cash Cows puts future profitability
at risk
And too many question marks may affect
current profitability.
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