The Role Of Market Segmentation In Guiding
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 1551 words||✅ Published: 18th Apr 2017|
The Pharmaceutical industry is a mature market and is currently undergoing a critical phase where there has been a decline in new inventions and there are now emergences of more diseases which cannot be treated with a single pill. The industry has always been subjected to various regulations pertaining the patenting, marketing, advertising and cost reduction making it very volatile and competitive industry to sustain in.
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Pfizer is one of the world’s leading pharmaceutical companies and their 38,000 person global sales force is a major contributor for it to attain this position. Pfizer’s formula to success is mass marketing and this strategy worked very well for Pfizer when they had a steady stream of blockbuster products in the pipeline which contributed to fifty two and half billion dollar sales in 2004.
Pfizer operational segment currently adopts an undifferentiated marketing strategy whereby their products are advertised aggressively on popular magazines and broadcast media with an annual advertisement budget of three billion dollars a year. Since all their drugs are prescription product, they advertise in media widely to create awareness and needs among consumers who in turn puts pressure on doctors for Pfizer products.
Their massive sales force are given lavish expense accounts and other perks for them to go all out to convince the medical professionals in making Pfizer’s range of drugs the treatment of choice at their respective hospitals and clinics. Pfizer’s sales force is also currently dominated by representatives who pitch a diverse range of drugs to a wide group of medical practitioners. This dynamic and competitive mass marketing approach is now being replicated by other competitors within the pharmaceutical industry.
With the convergence of Pfizer’s sales representative and other competitor representatives, it is proving difficult to get contact time with the doctors. The sales teams are tripping over one another and doctors are put off at the fact that they sometimes have meetings with three Pfizer representatives in one day. This has resulted in many practitioners putting stern policy on when the representative could arrange for an appointment to meet them.
Describe Pfizer’s targeting and positioning strategies. Are there any indications that changes may be needed concerning the strategies?
“The market targeting decision identifies the people or organization in a product – market towards which an organization directs its positioning strategy initiatives” (Cravens, D.W. Piercy, N.F. (2009), pg.: 185)
Pfizer’s current targeting strategy is based on an undifferentiated marketing strategy which is also known as a mass marketing strategy. The company culture is always to think big and spend lavishly on marketing their products to their target market (Medical Practitioners)
In order to create a demand among the doctors, they advertise aggressively in magazines and media and create the product awareness among the consumer who in turn puts pressure to obtain the prescription drugs.
Pfizer also has a very strong 38,000 sales force globally who are given all the necessary support to convince the doctors to make Pfizer’s product their treatment of choice at their respective hospitals.
However this mass marketing strategy only worked very well when Pfizer had a steady stream of blockbuster products. At this point, the industry at a whole is facing a slowdown with new inventions and issues with patenting which only gives each product a levy for 10 years before it is replicated by cheaper generic products.
Therefore a company with such a diverse portfolio like Pfizer should adopt a Differentiated Marketing Strategy instead whereby they should concentrate on different unique segments within their target market where their product would reach. This marketing strategy allows the company to appeal to their target segments based on their specialization for example: cardiovascular, muscular and neurology and many other particular diseases.
This strategy will allow Pfizer to create a good reputation, maintain a relationship and build loyalty with the customers instead of just making a sale. This relationship building will in turn help Pfizer to determine the wants of the segments and work on satisfying the needs based on their requirements for the future. This will give Pfizer a competitive edge among its competitors.
This targeting strategy would allow Pfizer to restructure the operations within the company as well. They can look at decentralization concept, creating a more concentrated set of business approach which will help them come up with more targeted sales strategies.
“The positioning strategy is the combination of marketing program (mix) strategies used to portray the positioning desired by management to the targeted buyers” (Cravens, D.W. Piercy, N.F. (2009), pg.: 194)
Pfizer’s tagline “Working for a healthier world” aims to make their product the treatment of choice by medical practitioners and attain world drug domination. Their positioning strategy is basically marketing each of their product characteristics and useful benefits to create a need among the consumers.
Pfizer was recently embroiled in a legal turmoil when their drug Celebrex and Bextra , one of the most widely advertised drugs was accused of not displaying important safety data and had high heart risk. Therefore, in order to position a product in the minds of the consumer, it is very important for Pfizer to have clarity in their product and on the advertisement for them to convey the right message. The clarity is very essential so that credibility of the product as well as the organization is not at stake.
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Decline in new inventions rings and alarm bell within the company where it is becoming more difficult to treat new diseases with one pill. The other major issue is the patenting issue faced by Pfizer. Most of the blockbuster products can only enjoy the patent protection for 10 years before cheap generic replicas from competitors prowl the market. Pfizer should not rely on the” Cash Cow” products alone since they have a very limited life cycle before they are replicated. They should find out what are the future needs of the consumers by the targeted sales approach and satisfy them. Pfizer needs to pump in more resources into their research and development for them to have a consistent array of drugs to appeal to their segments this will give the company a competitive edge among the competitors.
Does Pfizer need to change the structure of its organization? If so, what changes are needed and how should they be implemented?
Pfizer’s current mass marketing approach has helped them achieve the position to be one of the world’s leading pharmaceutical companies. The aggressive sales and marketing strategy created many opportunities for them to dominate and become leaders in the industry.
However, this strategy only worked well when Pfizer was in the development stage with many blockbuster products in their pipeline and before their sales strategy was replicated by other competitors.
In my opinion, Pfizer should change its structure to a more targeted and focused approach(Differentiated Marketing) instead of mass marketing just to make a sale. Pfizer should streamline their mega sales force to smaller more focal groups targeting to different unique segments based on specialization of diseases. This action will be more coordinated and will help reduce repetitive pitches by various sales representatives. This approach will also be highly professional and will create a good relationship between the doctors and representatives and this consumer relationship can help build a long term brand loyalty and repeat purchase.
Decentralization across all the departments within the organisation will give Pfizer a better understanding of the segments that they want to cater to and plan on advertising and marketing strategies to appeal to particular unique segments.
Pfizer should also reduce their cost in administrative and advertising and pump in more resources into the research and development department so that they will be able to come up with new and improved drugs. Due to the decline in blockbuster sales and new inventions within the pipeline, it would be wise to move into more personalized treatment such as cancer. Pfizer should not only rely on the “Cash Cow “products because the industry is a now facing a shift and the one size fits all approach is not valid anymore.
Pfizer should consider acquiring smaller drug companies to strengthen its portfolio since their labs are not churning out enough blockbuster products. Acquisition of new companies will also give Pfizer better distribution channels to reach out within the market.
Finally, with a more focused and targeted approach, it will open more scope for Pfizer to analyse the industry and the target market segments to overcome the shortcomings and work on the opportunities that they can venture into .
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