How To The GlaxoSmithKline Is More Concerned With Development?
Distribution strategies refer to the measures that the company has in place to ensure that products reach the intended recipient. There are several means through which a company can do this. The particular measure or measures taken are dependent on the nature of business the organization is in, its size, and the overall strategy. In some instances, the company may follow a direct distribution strategy, whereby its products are sold to the end consumer directly. In other instances, the company chooses to use an agent, who then sells to the end consumer. Other strategies have longer chains, with several players. There may be a wholesaler, agent, retailer, among others, all determined to find the easiest way that the product can be marketed.
Pharmaceuticals are ultimately responsible for whichever distribution channel they use. However, the payers influence the exact nature of these channels. The company, such as GSK must consider distributors, controllers, payers, regulators and dispensers in its decision makers.
GSK uses several means to ensure that its products reach the market. The first among these is the strategy which involves selling directly to hospitals. The distribution mechanism ensures that the medicines can then be distributed as prescription drugs to patients through the respective hospital’s pharmacy. The importance of this channel is that it has a wider coverage, on top of being an excellent way of accessing a large size of the market (McCain, 2012).
The second distribution model involves using super agents. These agents stock GSK products on their premises. They are responsible for selling the drugs on behalf of the company, using whichever strategy they use. However, any agreement requires the super agent to be responsible and ethical in supply, so that the drugs are not used for the wrong purpose. The super agent is so called because they do not supply to the end consumer. Instead, they in turn supply to hospitals and agents who distribute to the end consumer. This type of distribution has its advantages and challenges. While the company is able to sell more drugs due to the ability of the super agent to reach more customers (GSK, 2012; Weitz & Jap, 1995).
Another facet of the distribution strategy that the organization has adopted involves sales agents. The sales agents are involved in contracting the different buyers, including agents, super agents, hospitals, clinics and drug stores. They sell the wares to these parties, for onwards distribution to the end consumer or other distributors in the chain. The difference between the super agent and the sales person is that while the sales person is employed by the company, the super agent is a different entity. It is cheaper to sell the drugs through a salesperson than through the agent, but the sales volumes are considerably less (Gupta, Mandhav & Ojha, 2015).
The company also distributes drugs through drug stores. In a conventional sense, the drug store is an agent who does not sell the drug to other sellers, but instead dispenses them to the end consumer. The end consumer may be accompanied with a prescription note by a physician where necessary. In other cases, the drugs do not require a prescription note. The company sells most of its - over the counter medicine in using this channel (Gupta, Mandhav & Ojha, 2015). The different facets of this distribution strategy are illustrated in the flowchart below.
To support the distribution channels described above, the company has created a positive relationship with several institutions in the country. This factor enables them to get firsthand information about the preferences of different parties and the changing trends. Furthermore, it allows them to access past records to determine the common challenges connected to their products. Therefore, the organization uses its distribution channels not only to distribute products, but also to obtain valuable market intelligence (Black et al, 2002).
Not included in this model is the export segment of the GSK Australian market. GSK’s business has a significant export component. The company exports drugs to several countries in Asia and beyond. The company may either be shipped to GSK branches in these countries, or directly to agents or other intermediaries. Apart from this, the channel followed is similar to what has been discussed above under other distribution models (Gupta, Mandhav & Ojha, 2015; GSK, 2017).
The Australian market that GSK controls is large. It is among the major players in the country, controlling up to 5% of the Australian market (DIIS, 2017). The country is also large geographically. This means that it is not practical to have only one distribution model, since it will face serious limitations. The company is therefore justified in seeking to sell its products through several channels as it does (Black et al, 2002).
It may sometimes be impractical to sell the product directly to customers. GSK deals in drugs which are extremely harmful if not consumed through the right directions, which means a physician’s prescription. This means that the drugs that the company sells must be sold in a controlled way, which the different channels of distribution provide. More importantly, the company does not deal directly with the end user. The middlemen therefore in this case perform an essential role of ensuring ethical practice (Tse & Yim, 2008).
The size of the company is also an important consideration in determining the distribution channels it will use. For smaller companies, many distribution models are likely to result in operational inefficiencies, which will result in the organization losing money. GSK is a large company present in more than 150 countries, however. This means that it is well placed to employ these distribution models since it has the financial ability and operational capacity to support them. In short, it has both the products needed, and the people to sell the products to (Tse & Yim, 2008).
The results of this approach have been that GSK’s Australian business has grown well over the last few years, mirroring the overall growth in the Australian pharmaceutical industry. GSK’s growth has been a product of expanding markets, as well as improved operational and distribution efficiencies. Ultimately, the most important element of its success is how well it is able to get its product to the end user. It is also dependent on the decisions of important players such as physicians and governments, and how well GSK is able to influence thme. This refers to how well the company is able to collect market intelligence form its distribution channels.
The distribution channels that a company chooses are dependent on several factors. This includes size of market, size of company, size of its market in terms of geography, and the nature of the product. For this reason, GSK has found a hybrid model of distribution, which has worked well for them.
Black, N, eat al. (). Modeling consumer choice of distribution channels: an illustration from financial services. Journal of Bank Marketing, 20(4), 161-173.
Department of Industry, Innovation and Science. (2014). Australian Pharmaceuticals Industry Data Card 2014. retrieved 06 04 2017, from https://industry.gov.au/industry/IndustrySectors/PharmaceuticalsandHealthTechnologies/Pharmaceuticals/Pages/PharmaceuticalsIndustryDataCard.aspx
GSK. (2017). About Us. Retrieved 06 04 2017, from https://au.gsk.com/en-au/about-us/.
Gupta, S., Mandhav, S., Ojha, A. (2015). Review on Pharma Marketing. European Journal of Pharmaceutical and Medical Research, 2(4), 174-184.
McCAIN, J. (2012). Part 1: Distribution models for biologics and other specialty pharmaceutical products. Biotechnology Healthcare, 9(2), 8–13.
Tse, A., Yim, F. (2008). Factors Affecting the Choice of Channels. Journal of International Consumer Marketing, 14 (2-3), 137-152.
Weitz, B., Jap, S. (1995). relationship marketing and distribution channels. Journal of the Academy of Marketing Science, 23(4), 305-320.
MyAssignmenthelp.com has become one of the leading assignment help provider in New York City and Boston. We provide top class auditing assignment help. Not only auditing, but we also cover more than 100 subjects and our writers deal with all types of assignments with utmost expertise. To make writing process faster and accurate, we have segmented our assignment experts' teams as per their expertise on writing different types of assignments. We guaranteed that students who buy our assignment online get solutions worth their investment.
Question: Discuss about the Enhancing Logistical Process of E-Commerce. Answer: Introduction: I am studying a course on Engineering Management which a practice that combines the technical skills of engineering with the business and management skills so as to prepare us on solving business problems that are complex in nature. A practical understanding of the business situation is needed to be a good engineering manager ...Read More
Question: Discuss about the Compare and Contrast Report. Answer: Introduction The two companies Bramble and Blackmores have a significant Australian presence. Bramble is a supply-chain logistics company operating in more than 60 countries, primarily through the CHEP and IFCO brands. Blackmores on the other hand is Australia’s manufacturer and distributor of vitamins, minerals, and nutritional supplements. They operate ...Read More
Question: Discuss about the Analysis Of Circular Economy. Answer: Introduction Circular economy is a major alternative to the traditional linear type of economy in which the resources are kept in use for the longest time. The organizations which implement the concept of circular economy aim at extracting maximum value from the various resources that are available for them. The resources are used for the purpose of regenerati...Read More
Question: Discuss about the Corporate Mission and Vision Statements. Answer: Introduction: In the present competitive business environment, organizations look to develop different strategies for creating desired impact on the market. For the effective development of strategies, organizations need to develop proper mission and vision statement. Many studies have highlighted the fact that clear development of mission and visio...Read More
Question: Discuss about The Current Risks And Issues In Supply Chain Management In The Oil And Gas Industry. Answer: Introduction Background of the study Supply chain management (SCM) is defined as the coordination, configuration and the continuous improvement in the systematically organized set of operations. The main goal of the SCM is seen in providing of the maximum customer satisfaction at the minimum cost. A customer is k...Read More
Just share Requriment and get customize Solution.
Our writers make sure that all orders are submitted, prior to the deadline.
Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.
Feel free to contact our assignment writing services any time via phone, email or live chat.
Our writers can provide you professional writing assistance on any subject at any level.
Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.
Complete guid on proofreading and editing.
Get all your documents checked for plagiarism or duplicacy with us.
Get different kinds of essays typed in minutes with clicks.
Calculate your semester grades and cumulative GPa with our GPA Calculator.
Balance any chemical equation in minutes just by entering the formula.
Calculate the number of words and number of pages of all your academic documents.
Our Mission Client Satisfaction
This was my 1st time using this site. I must say they exceeded all of my expectations!! Great customer service & stellar work!! Thank you for helping me out of a bind!!
I am not happy with this assignment. I asked change colored numbers on the assignment. I received the assignment with number on the cover page. I haven't any corrections as I requested. Last time I was happy as I got the true answered and reply to my queries but with this assignment I am truly disappointed
you people are dumbasses. When you guys have to get money you people call 1000 times and when you deliver wrong paper then I asked you to call and then I got in response call back service is not available. I asked for two different papers instead I got same papers just copy pasted. Even though I told million of times that make sure two different p...
Thank you for your efforts and all work have been done. Appreciate the efforts from the team support who were helpful