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A business faces serious challenges due to multiple opportunities faced by globalization. To sustain the competitive business environment pharmaceutical companies are changing their marketing strategies (Singh & Mishra, 2016). Changes related to product marketing are the highly complex phenomenon. Marketing is an exchange process for meeting the needs and wants (Turnbull & Valla, 2013). A pharmaceutical company must properly understand the market environment before developing and implementing the marketing strategies (Srivastava & Bhatnagar, 2012). The processes in a huge company are complex and are the primary reason for marketing challenges. According to Wedel & Kamakura, (2012) “Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer”. However, marketing goods in the foreign market give rise to several hurdles, therefore; a proper scrutiny of a cultural, legal and political environment is required to assess the results of international marketing strategies (Kanthe, 2012). The communication system has changed a lot with the development of internet and digital media marketing. It increases awareness related to market segment and helps in adding extra revenues to the business (Kalotra, 2014).
Ranbaxy Lab. Ltd. is a multinational pharmaceutical company established in India in 1961 and it entered in Australia in 2005 (Damodaran, 2008). It manufactures pharmaceutical products such as antacid, anti-asthma, anti-cholesterol, anti-anxiety, anti-diabetic, anti-migraine, anti-cholesterol, anti-hypertensive, anti-thrombotic, anti-dementia, anti-viral and other products related to osteoporosis (Chowdhry, 2015).
This report deals with marketing campaign design of "Revital capsule" a product manufactured by Ranbaxy in the target market Australia. The aim of this report is to develop a marketing strategy and comprehensive marketing campaign for launching Revival in Australia.
The objective is to design a marketing strategy and marketing campaign for launching “Revital capsule” a product manufactured by Ranbaxy in the target market Australia. This objective is the result of CEO’s demand to expand Ranbaxy’s marketing and diversification strategy.
The aim of this report is to understand the principles of marketing and the forces that affect marketing. It intends to understand the international marketing environment (political, legal, ecological and cultural disparities). The learning outcome of this report includes concept about international market research, market segmentation, a positioning of product and services and international supply chain management.
Product innovation is the primary source for growth of business (Belleflamme & Peitz, 2015). Revital, which is a combination of minerals, ginseng, vitamins (A - E) and other trace elements, is a food energy supplement. It intends to provide the users with “physical & mental lifestyle” (De Mooij, 2013). This product can be consumed by both female and male those who are above the age of 15 years (Dehejia, 2014). This product is sugar-free, and hence, it is well suited for diabetics.
The concept of this adult health supplement is “positive health” (Kalotra, 2014). As the daily diet of an individual lacks all the essential nutrients for being healthy, active and fit, Ranbaxy claims that Revital fills this nutrition gap. The consumers are initially not aware of the significance of this product. Therefore, it is necessary to draw the attention towards the key benefits of this adult health supplement (Has et al., 2011).
Marketing strategies are greatly influenced by external and internal factors. These are economic, political; legal and social factors. Knowing these factors will better help develop the marketing strategy.
Australia has product liability regulation by its statutory framework that regulates the safety of the product. It has standards to prevent the marketing of harmful products (Monczka et al., 2015). Product enforcement includes the role of “state and territory government fair trading offices” to assist the consumers.
Australia has privacy laws, which regulates when and how business communicates and collects personal information (Moir & Palombi, 2013). Specific requirements are to be fulfilled for collection and management of medical records. Australia has strict consumer laws, which regulates product safety laws, unsolicited agreements with the consumer, guarantees consumer rights, monitors unfair contract terms and penalize if any. The marketing strategy will be planned keeping in mind the above policies of the target country.
Public attitude towards their health and hygiene is an important parameter in the product launch. People who are highly health conscious are more likely to be influenced by the advertisements. Additionally, human resource is the other major factor. If the work force is well trained and motivated than it can better deliver the “market leading customer services and productivity” hence creating competitive marketing advantage. Additionally, Australia has “marketing oriented culture” which enables to find various methods to satisfy consumer needs (Has et al., 2011).
Australia is highest among the OECD countries in terms of per capita income and spending levels, which is a positive factor for product launch (Rice & Atkin, 2012). Marketing strategies are impacted by business dynamics of the target nation. Cash flow, profitability and liquidity greatly affect the scope of marketing activities. However, Australia being globally free nation helps in ease of doing business. The positively influencing factor is its healthy banking system. However, it has “high wage rate system” that damages the competitiveness. On the other hand, the economic growth is on boost due to fall of lending rates. Moreover, Australia is increasing its investment on public infrastructure and is also a global leader in IT business (LPO, 2012). Keeping the above key points in mind the marketing strategy will change accordingly.
Market research prior to launching a product requires analysis of target market in details and that of competitors to get a direction for the business (Turnbull & Valla, 2013). Analysis of market includes proper organization of information in various formats and from different sources after defining the research objective. Extensive research will include understanding of key demographics of Australia. It includes understanding the physicians and doctors in both urban and rural areas. It will help to augment insights and foray customer needs. It will help to know the economic stability of the selected region (Singh & Mishra, 2016). SWOT analysis is essential to perform to evaluate our own strength and weakness in relation to the competitors. Competitor’s analysis include knowing their profile, weakness and strength. Market research is essential for consumer segmentation, and for feature prioritization (Rice & Atkin, 2012).
Market research will include both “qualitative and quantitative analysis”. In qualitative analysis, less number of respondents will be included for in-depth interviews and is more investigative than quantitative analysis. Quantitative information on the other hand helps in reaching conclusion as large number of participants is used. Quantitative analysis includes surveys and questionnaires with close-ended questions. Data collection method may be by mailed questionnaires, telephone polling, survey conducted online or by personal interviews (Potter, 2012). The research findings will be interpreted by grouping the data and organizing efficiently into tables, charts, mind-maps and spreadsheets. These data will be reviewed thoroughly to make sure there are no gaps. It will better help in identifying the major trends and uncover other aspects. Finally, a decision related to marketing mix will be taken that will align with the primary research aim.
Revital, which is a combination of minerals, ginseng, vitamins (A - E) and other trace elements, is a food energy supplement. It intends to provide the users with “physical & mental lifestyle” (De Mooij, 2013). This product meets the daily nutrient requirement of an individual and one capsule per day is sufficient dosage. One can extend its consumption for 2-3 months at the stretch. The presence of ginseng and vitamins in Revital, help increase the oxygen utilization in the body to a standard level. It helps feel active all day and is recognized to increase the strength of the body. It is beneficial as it increases the physical work capacity. It helps to overcome stress and fatigue by improving endurance, compatibility, concentration and tolerance.
The target segments are mainly professionals having long working hours. The listed segments are:
The demographics for the market segmentation will include the individual of age range 20-35 years, with young family life cycle and are working professionals with income more than $ 500 per month. The geographic factor in the market segmentation is Urban. The behavioral aspects include health benefits. Market segmentation is also based on Psychographic factors in which social class includes “middle class”, striver lifestyle and an ambitious personality. The charts below show the profile of new segment.
Country – Australia
City- Sydney, Melbourne, Brisbane, Perth, Darwin, Gold Coast, Newcastle
Climate- Southern and Northern
The lifestyle of users- Survivors, strivers, and achievers.
Personality traits- ambitious, compulsive
Social class- middle and lower class, working class
Rate of use- Medium, late and heavy user
Product attitude- positive and enthusiastic
Population- both male and female
Family size- 1-2, 2-3 or more
Family cycle- single, married, married with and without child and young, adults
Women- above 14 years age
Educational qualification- graduates or in grade school
Race- Indigenous and non-indigenous
The selected segments are mainly working professionals:
The target segment for this product includes "sports person". According to the advertisement strategy in India, the Revital endorsed by sports person M. S. Dhoni and actor Salman Khan has generated huge impact and increased the consumer demand. The message given by working professionals is that it is healthy if consumed daily especially for those working for longer duration and it add refreshment. As sports person have a tough and hard working life having Revital is a good energy source (Kanthe, 2012).
The diabetic patient segment is analyzed before entry into the market, and the result shows that the year 2010 has 4-5 million of diabetics reported in Australia and is estimated to increase to 8 million by the year 2025. Every day around 270 Australians is found to develop Diabetes (Mowla et al., 2014). The growth of the diabetic patient segment is as follows: In the main cities- the diabetes growth per year is 13.7%, in indigenous population the growth rate is 12.5% whereas in non-indigenous population it is 3.4%. In inner regional areas, it is 4.5% (Has et al., 2011). The diabetic segment is chosen because product such as Revital is not already present for energy purpose (Taneja, 2013). Revital is proven safe for the diabetics and can be consumed along with their regular medicines. Being a new emerging market and since the diabetic population is increasing per day, it is justified to consider this segment.
In women segment, the age above 15 years is considered safe for use (Kanthe, 2012). Moreover, they are health conscious and are fewer competitors in this segment. In the men segment, for those having tough and hard working life Revital as an energy supplement is safe and taking one or two tablets per day is enough to increase the sales volume (Kapferer, 2012).
The first and the foremost thing in launching the product is to position the product in manner that will stimulate the “early adopters” in the market. This process should be strategically planned for successful launch of product in new market. According to Potter, (2012) process should start with describing the benefits and usefulness of the product to the customers for at least 1 year. It needs to be explained as to how it differs from the competitor’s products in the market. Simultaneously, taking customer feedback and expectation vigilantly is essential.
The next step is brand development- creating an appeal for the product is the primary objective of any marketing strategy. Rapid programs to enhance the brand name by line slogan or messages that attract consumers like "Do more achieve more", "live life to the fullest”, "stay young in mind and body" would be used in an advertisement of these products.
The next phase of product launch is “strategic online marketing”- This process is easy with the help of Twitter and Facebook pages. Additionally, “Guerrilla marketing and viral videos” and “link spreading and search engine optimization” more popular these days will be used to increase the product awareness. Marketing can be improved by influential keywords that can be easily searched online to improve the content (Chowdhry, 2015). The third phase of marketing strategies includes “execution of online marketing for future”. The aim is to have different and unique activities of digital PR for “Ranbaxy and Revital” to attract more people. Advertising will be increased after the launch of product for more enhancement and presence of the product. It will include the Yahoo, Bing ads, Google AdWords and other products.
The positioning of a product will be mainly on sports and men segments, diabetic segment and women segment. All these segments are highly exposed to media. In general women and other sportsperson do love to watch TV and advertisements appear in any commercial event may be sport or any other. Therefore, in these advertisements if a product is endorsed by the actor or favorite sports stars it is eye-catching for all the viewers. This process intends to stimulate the “early adopters” in the market. Moreover sportsperson are always inspiring to others hence incorporating them will give an added advantage. Being a new emerging market and since the diabetic population is increasing per day, it is justified to consider this segment.
Use of blogs in internet will improve the strategic positioning of Ranbaxy in Australia while promoting Revital and related services categorically and defining the benefits, credentials and leadership qualities in the current competitive marketplace. The “partnering program and digital PR” will support the online presence. It will further encourage the communications, traffic and networking as well to build a strong online reputation of Ranbaxy. Use of viral videos in B2C and B2B marketing product is an important technique to increase the awareness of product. On the other hand, the use of SEO will dynamically increase the effect of social media, blog and digital media marketing activities (González-Benito et al., 2012).
The three core elements of product strategy are distribution, promotion and customer support. Distribution is reaching the important influencers and making the product available making sure that they have sizable online presence. It targets people who are interested and eager about the offerings of Ranbaxy. Promotion includes use of social media and online marketing, campaigns etc. Ranbaxy has planned to create the mass appeal of Revital capsule by catchy advertisement and promotional campaigns done by famous personality in Australia. This will ensure more visibility and awareness of the new product in the market of Australia. Customer support is getting the partners involved by spreading the news about the release or launch of the product by crowd based campaigns. Such campaigns will include contests and events to maintain public interests by briefing and speaking with media analysts and also increase the relevance and presence of product in market for long term (De Mooij, 2013).
Ranbaxy has done careful planning for developing Revital capsule as a top brand name in Australia. The core marketing strategy is to create an appeal for the product in the target market and make the product a success for Ranbaxy in term of high sales in Australia. They are doing an extensive market research in Australia to understand the insight of consumers and physicians and evaluate the acceptance level of the product. They propose to execute a switch strategy in which they will analyze how the drug gives a solution to consumers problem, how doctors give authority for the brand by including it in their prescription list. They also plan to evaluate the accessibility of the product in sample population and taking feedbacks regarding its prediction for purchase rate (Kapferer, 2012).
Successful promotional activity is the key to the successful launch of Revital in the target markets. This strategy is built to increase the number of new users, which will automatically boost the sale of Revital capsules (Belleflamme & Peitz, 2015). Once the consumer is convinced that the product will give them mental and physical vitality, it will develop positive health concept for the product in the market. They have plans for expanding the distribution of goods by involving both pharmacist and other distributors for better availability of the product in chemist outlets (Kauppinenâ€Räisänen, 2014).
Regarding packaging, a major focus will be on attractive labeling of the product, great detail in packaging leaflet to help partially sighted patient and better presentation of products. They plan to give a distinct catchy logo and packing design to Ranbaxy capsule. They intend to look into all aspects of packaging. This includes packaging material that will protect the product from environmental factors. They want to ensure the physical and chemical stability of the product despite the climate of the country for market and protect it from damage during distribution and storage of products.
In term of labeling strategy there plan is to provide all necessary information of Revital capsule regarding the strength of the product, instructions for safe use, detail on safe preparation and storage of medicine and ways of disposal of the product (Baertschi et al., 2013). The aim is to specify accurate dose of the product according to age. To counter cross-border illegal trading of Revital capsule, they want to maintain supply chain integrity by specific features like holograms, microdot patterns, and Radiofrequency identification (RFID) technology. The logo of the product should be such that it has a minimum chance of being copied or counterfeited. They have a specific plan for color and design for the logo. The logo should be such that it stands out and easily recognized in the market space (Oghazi, 2014).
To test the new product in the new market, it is necessary to analyze the cost and risk of Revital capsule failure against the profit and chance of success. To test the product, the plan is to implement preemptive launch in Australia. The first step is getting the approval of product from FDA (Food and Drug Administration) in Australia. FDA ensures that drugs marketed in the country are safe and effective. Then they may go for testing of the new product to a local clinic and convince local doctors to prescribe the medicine to patients. In the initial phase of clinical trial, they will distribute the product in a limited area and take feedbacks related to the benefits of taking the medicine. The clinical trial study takes times, and this report is again reviewed by FDA. In these experiments, drugs are used in human subjects to check the effectiveness and side effects of medicine (Dehejia, 2014). The major aspect is to convince physicians and pharmacist of the value of the product. Once final approval is given, the purpose of test marketing is served. Then the product can directly launch in Australia. Before going for test marketing, one must ensure that their product has all the features that consumers want, and the consumer will pay the price for the product. The market testing could be done by organizing event at the local clinic or local places in Australia (O’Connor et al., 2016).
The issue faced in test marketing is that many are reluctant to try the new product initially. So Ranbaxy must have the effective strategy to convince each person and organization so that they get ready for initial product testing. The second problem is that many consumers take the product but they do not give honest feedback, or they do not give feedback at all. For this purpose, it is necessary that Ranbaxy explain the purpose of testing via visual presentation or motivation speech (Kalotra, 2014). Once they realize the importance of the testing program, effective feedback can be garnered. There might be criticism coming in for the product. In this case, it is necessary to take the criticism constructively and accordingly measure which feedback is useful. Based on that analysis, one can take ideas to change or improve their product (Mascia et al., 2013).
Ranbaxy could use a wide variety of strategy to the launch Revital capsule in Australia. One can analyze a cost-plus method for determining pricing rates. It involves calculating production cost and other promotional costs of products and then adding a percentage to their unit cost to get desired profit (Kapferer, 2012). Some Companies want a return on investment in mind. But before setting a price for the new product, it is necessary to study the market and competition of product from other brands or drugs. One pricing policy that can be used for the new product is penetration pricing. This involves setting lower price initially to attract new customers. In this case, the Company assumes that consumers will switch to the new brand because of the low price. Ranbaxy could also go for price skimming in which they will charge high price from customers initially, but the price will be lowered once the customer is satisfied with the product. The decision to choose either of the two strategies will depend on different factors (Danzon et al., 2015).
Penetration pricing gives the company advantage of faster diffusion of product in the target market. It creates a good impression on initial users and discourages entry of other competitors due to the low price (Rice & Atkin, 2012). Skimming strategy will work for Ranbaxy only when they can ensure that their product is of a rare variety and not commonly available. To allow high price they could go for legal protection of Revital capsule so that any duplicate product is not available. For effective pricing in Australia, Ranbaxy will also have to file an application to Pharmaceutical Benefits Advisory Committee (PBAC) so that they can get their medicine subsidies under Pharmaceutical Benefits Scheme (PBS). PBAC may recommend lower pricing after evaluation and negotiation (Paris & Belloni, 2013).
The different environmental factors that will affect pricing decisions include currency fluctuation, pricing in the inflationary environment, Government subsidies, competitive behavior and price and quality relationship. Price fluctuation will depend on a currency of Australia. Ranbaxy could analyze the appreciation or depreciation value of currency in Australia to make pricing decisions. The final price of a product will depend on internal and external factors. Regarding internal factors, pricing decisions will depend on how quickly the product is manufactured by the Company. If the productivity is increased, it will reduce the cost per product, and this can give Ranbaxy the chance of lowering the price of the capsule. But increasing productivity is also a major challenge because it will require a lot of investment and significant changes ate manufacturing facility. Therefore, it will not translate into a lower price for some time (Paris & Belloni, 2013)
External factors are those factors, which cannot be controlled, but it will affect pricing decisions. To understand the influences of external factor, Ranbaxy will have to research the drugs market in Australia and analyze what is happening in the market. Return on investment, cash flow, and market share will have an effect on pricing decisions (Hair et al., 2015). To capture Australian market, Ranbaxy will have to keep the price low initially and increase the price after the acceptance of Revital Capsule in Australia. It will also help Ranbaxy to retain their market share in Australia. The Company might be influenced by competition from other similar products in terms of quality, durability, and service.
Ranbaxy’s pricing decision will depend on market and demand, cost and offering from other competitors. Any company has to be very clear about price and demand relationship before setting a price for their product. They will also have to check the change in the price of other competitors and take steps accordingly. Ranbaxy will also have to consider the economic position, rules and regulation of Australia before making pricing decisions (Bowie & Buttle, 2013).
Ranbaxy will have to rely on agent and distributors of Australia to represent its product Revital capsule in the Australian market. They will have to keep track of materials and information as the product moves from supplier to manufacturer to wholesaler to retailer to consumer (Singh & Mishra, 2016). So Ranbaxy will have to confirm specific role and responsibilities of agents in Australia. Agent will act as a representative of their product. The distributors will supply the goods to local end users. They will be responsible for the marketing of Ranbaxy's Revital capsule, carrying inventory, extending credit to customers. Distributors are paid higher fees so Ranbaxy will have to absorb the distributor’s margin in their product pricing so that overall price is not too high for consumers (Ross, 2013).
Business will be easier if there is a high level of trust and good working relationship with the distributors (Srivastava & Bhatnagar, 2012). Selecting a potential range of distributors in the pharmaceutical industry will be crucial for Ranbaxy's business. They may assist them in getting trade reference in Australia's clinics and chemist store. Good communication is also necessary for distributing products. Confirmation of discussion by emails and meeting directly or by telephonic or Skype interaction will reduce misunderstanding in the supply chain. Since Ranbaxy will be relying on knowledge and contacts of agent and distributors in Australia maintain a healthy relationship with them is very much important (Monczka et al., 2015). A good representative will assist in creating a marketing plan for Ranbaxy's product in Australia. Ranbaxy will have to do write legal agreement with agents and must seek advice from Australian legal authority with contract experience to before signing any agreement. The agreement discussion may be related to the product range, the supply of samples, the area covered, term of payment and ownership of trademarks (Wisner et al., 2015).
The different promotional strategies are as follows-
Advertising: Ranbaxy may go for direct to consumer advertisement after segmentation study and defining communication target. The purpose of advertising is that Ranbaxy wants to change patient’s and doctor’s attitude towards the product after advertising campaigns. Ranbaxy may try hard to persuade doctors to prescribe their brands over other generics (Turnbull & Valla, 2013).
Public relation: Ranbaxy's plan is to create the positive relationship with health organization, chemist, media, and public. The purpose of this is to obtain favourable publicity of product within media and people (Wisner & Leong, 2015).
Sales promotion: Sales promotion could be done by giving special offers and coupons with the product. Companies get involved in sales promotion to increase their sales in a short period (Wang & Anirban, 2016).
Personal selling and direct mail: It involves selling product directly to a firm and sending positive product related information to a particular person in the organization (Singh & Mishra, 2016). This approach is helpful for companies as it gives them a chance to manage their resources effectively within a target segment. This kind of personal advertising gets improved response and sales rate (Sashi, 2012).
The above campaign design is chosen as it has the potential to deliver the message about product's uniqueness and appeal very quickly. Advertising is the quickest media to market the product in a large mass. All the above marketing campaigns will utilize new technology and social media platform to advertise a product of Ranbaxy. This campaign design has more chance of creating a mass appeal and reaching the large target group (Potter, 2012).
These promotional campaigns will help Ranbaxy get a competitive advantage. A competitive advantage could be maintained by cost leadership, differentiation and focus. Cost leadership will be attained when Ranbaxy can give a better price than its competitors. Differentiation strategy can be utilized by Ranbaxy in which they will give the perception to customers that their product is unique in the industry. Focus means creating a niche for the product in a target market. The competitive advantage is achieved when Ranbaxy can understand the dynamic of customer needs in the target market (Rice & Atkin, 2012).
Creating appeal for the product will help in achieving selling proposition (Kanthe, 2012). To achieve this Ranbaxy can ensure that its product Revital capsule has the capability to cater to needs of customers. If Ranbaxy offers unique trait in its product, then will be a standout in the crowded marketplace with competitors (Wang & Anirban, 2016).
Ranbaxy will have to take effective media decisions. They should be sure about what message they will put across target audience, how it will be delivered, use of branding, deciding about catchy logos or slogans in advertising and areas where they will be promoted. Culture and values of Australia will also have to consider for marketing decisions. If Company has a grasp of locality, marketing process will become easier. Ranbaxy could use symbols of the culture of Australia such as Opera House in their advertising (Atkin & Freimuth, 2013).
The promotional campaign should exhibit principles of corporate social responsibility. Ranbaxy focus is on enhancing transparency, customer's empowerment, and purpose. A company can show corporate social responsibility by two objective-obtaining profits for the business as well as society. The purpose is to promote active and good health by their product ‘Revital'. They want it to be accessible to the local community and society of Australia. The key is to take creative solutions for social and business challenges. CSR activities promote business and a cause for the community too. CSR initiative plan for Ranbaxy includes better staffing, minimisation of waste and resource, focus on health and safety issues (Duckett, & Breadon, 2013). It helps also help Ranbaxy to increase their brand awareness and build the reputation. They should understand customers and match those findings with CSR activity for successful marketing strategy (Vitell, 2015).
Once the plan is prepared, it is necessary to estimate the success of marketing campaign. This can be measured by analyzing if the product becomes available to the customer in a direct manner or by other parties. But since Ranbaxy plan promotional campaign is based on a role of agents and advertisement, they can evaluate their way of convincing each channel. One can measure the marketing metrics to see if the purpose of a marketing campaign is achieved or not. Ranbaxy plan is to measure this by collecting feedback from those people who first came into contact with the product and all the way to actual customers. It can help in tracking which customers were lost and for what reason. This evaluation will assist in heightened brand visibility and increased market share in the future (Solomon, 2014).
OTC products can be successful once they meet the demands, efficacy wants, and needs of the customer. The product moves smoothly once a clear marketing strategy is applied and implementing proper communication method that is large scale advertising and other promotional strategies to establish the strong retail relationship, to create the brand among customers and widespread distribution of products. The important factor is that the communication system should be able to create a long-term impression. The other factor is the correct time of market entry in addition to the provision of the efficient, safe and user-friendly product that the consumer wants, gaining competitive advantage and markets, making brand name recognizable, Proper communication of benefits of the products and sustaining purchase of the OTC products.
The assignment has helped in gaining adequate knowledge and concepts related to international marketing and related major ideas, concepts and principles. Working in a team, has improved the problem-solving techniques, collaborative and communication skills. It has developed the critical thinking and analytical rigor. This assignment has given the opportunity to engage in self-directed learning and an opportunity to improve the research methods and apply theoretical knowledge in practical situations.
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