Facebook @Dethivaonganhang www facebook com/dethivaonganhang www ThiNganHang com S Á C H – T À I L I Ệ U T H I T U Y Ể N Trang 1 GRADUATION THESIS Major International Business Administration MARKETING[.]
Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang GRADUATION THESIS Major: International Business Administration MARKETING ACTIVITIES IN AN CHAU PHARMACEUTICAL JOINT STOCK COMPANY www.ThiNganHang.com S Á C H – T À I L I Ệ U T H I T U Y Ể N Trang Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang ACKNOWLEDGEMENT This graduation thesis is the result of thirteen weeks of research and writing during the last semester of my final academic year at Hanoi Foreign Trade University It has been an interesting and learning experience In fulfilling this thesis, I would like to give my special thanks to many people for their significant help, contribution and recommendation during my writing process First and foremost, I am heartily thankful to my supervisor, MBA Nguyen Duc Nhan, whose encouragement, guidance and support from the initial to the final level enabled me to develop an understanding of the subject Secondly, special and grate thanks must go to all the managers, staffs and customers of An Chau Pharmaceutical Joint Stock Company, Ha Noi Capital for their cooperation that helped me in this study Futhermore, I offer my regards and blessing to my family and friends who support respect during the completion of the thesis Lastly, gratefulness is to the readers whose feedback will help much in improving the thesis Hanoi, April 2015 Tran Thi Thanh Tam i Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang ABSTRACT The graduation thesis represents the results of research on marketing activities of An Chau Pharmaceutical Joint Stock Company The purposes of this study are to identify the marketing activities of An Chau Pharmaceutical Joint Stock Company and measure factors affecting to the marketing activities Then, base on that, some recommendations are put forward to help An Chau PJSC improve the quality of medicines and enhance the effective of marketing activities Currently, An Chau PJSC has launched drugs in all 63 provinces and cities in Vietnam However, due to some reasons both objectively and subjectively, it is impossible to conduct the research on marketing activities in all provinces and cities in Vietnam Therefore, an area should be selected to be the representative for the whole country In this thesis, Some province like Ha Noi, Nghe An, Ha Tinh, Da Nang, Hai Phong is chosen to study because it is the most convenient area for the researcher In addition, this branchs has a huge number of customers of An Chau PJSC Therefore, it may be given more accurate information and able to take the right actions Questionnaires were sent out to 210 customers of An Chau PJSC in some province above but only 150 collected responses were usable ii Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang TABLE OF CONTENTS TABLE OF CONTENTS LIST OF ACRONYMS .vi LIST OF TABLES AND FIGURES vii INTRODUCTION 1.1 Background and cause of this paper: 1.2 Objective 1.3 Research questions 1.4 Research scope 1.5 Structure of the thesis LITERATURE REVIEW 2.1 Overview about Marketing 2.1.1 History of Marketing 2.1.2 Definition of Marketing 2.1.3 The Role of Marketing 2.1.4 Marketing in pharmaceutical 10 2.2 Basic content of Marketing Mix 11 2.2.1 Product 11 2.2.2 Price 18 2.2.3 Place 22 2.2.4 Promotion 24 RESEARCH METHOD 29 3.1 Pharmacy marketing research 29 3.2 Research process for thesis 29 3.2.1 Recogniance survey 29 3.2.2 Questionnaire design 29 iii Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang 3.2.3 Data collection 31 3.2.4 Conducting the results 31 DISCUSSION AND FINDING 32 4.1 Company background 32 4.1.1 General information 32 4.1.2 Establishment and development process 32 4.1.3 Vision, mission, values 33 4.1.4 Organization chart 35 4.1.5 Human resources 36 4.1.6 Production 37 4.1.7 Monthly financial result 38 4.2 Analyzing marketing activities of An Chau PJSC 39 4.2.1 Factors affecting the marketing activities in An Chau PJSC 39 4.2.2 An Chau PJSC market 47 4.2.3 Distribution strategy 47 4.2.4 Price 50 4.2.5 Product 53 4.2.6 Promotion and business assistance policy 59 4.3 Pros and cons of An Chau Pharmaceutical Joint Stock Company‘ marketing environment 63 4.3.1 Strengths 63 4.3.2 Weaknesses 63 SOME SUGGESTIONS FOR THE MARKETING ACTIVITIES OF AN CHAU PJSC 66 5.1 Objectives and development orientations of the company 66 5.2 Oriented strategies from the SWOT matrix Marketing 67 5.3 Customer feedback about the marketing activities at An Chau PJSC 69 iv Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang 5.4 Some supporting solutions for Marketing activities 70 5.4.1 Improving and developing the market research activities 70 5.4.2 Improving product activities 71 5.4.2 Improving pricing activities 72 5.4.3 Improving distribution activities 74 5.4.4 Improving promotion activities 75 5.5 Limitations of the study and suggestions for future work 77 5.6 Contributions of the study 78 REFERENCE a v Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang LIST OF ACRONYMS R&D Research and Development PJSC Pharmaceutical Joint Stock Company SMBs Small and medium enterprises ETC Ethical Drugs OTC Over the counter BOD Board of Directors ROE Return On Equity vi Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang LIST OF TABLES AND FIGURES Figure 2.1 The Marketing Mix Model 16 Figure 2.2 Product levels 18 Figure 2.3 Stages on the Product Life Cycle Marketing 19 Figure 2.4 Channels of distribution 28 Figure 4.1 Logo of An Chau Pharmaceutical JSC 37 Figure 4.2 Organizational structure of the company 40 FIGURE Figure 4.3 Growth of the total amount used drugs Vietnam TABLE 46 Figure 4.4 Distribution channel of An Chau PJSC 53 Figure 4.5 Product Structure of An Chau 2014 60 Figure 4.6 The dosage form, levels, packing of paracetamol 62 Figure 4.7 Form of advertising signboards drugstores 65 Table 4.1: Revenue, profit and retained earnings from 2012 – 2014 44 Table 4.2 Revenue on customer group 53 Table 4.3 The Sale Promotion Program of An Chau PJSC in 2015 57 Table 4.4 The discount policy for clinics and hospitals 58 Table 4.5 The product development portfolio in width in 2014 59 Table 4.6 The revenue of Children product group 61 Table 4.7 Portfolio of ingredient liver medicine in 2014 61 Table 4.8 The development of products which have Ginkgo Biloba 64 vii Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang INTRODUCTION 1.1 Background and cause of this paper: Economic crisis has led to the decline of areas of the economy while Medicine Industry is still considered to grow with the average speed growth of 18.8 % per year in a 5-year period from 2009 to 2013 (ViettinbankSc Report, 2014) The primary factor that impacts on this trend is that medicine can not be replaced by any other products and the awareness of Vietnamese about medical and health care has also improved Vietnamese pharmaceutical market has the highest growth level in South-east Asia, about 16% every year (ViettinbankSc Report, 2014) The total consumption value of tobacco was $3.3 billions in 2013 and it is predicted to increase by $10 billions in 2020 (FPTS Report,2014) All the sectors of the economy are accepted and can participate in Vietnamese medicine market for advancing medicine supply By the end of 2013, there has been 4560 enterprises participating in supplying and contributing medicine, there are 1336 domestic medicine enterprises among them and 425 foreign ones that are licensed for business activities in Vietnam (FPTS Report,2014) The participation of private companies with their simple organizational structures,flexible business strategies and high adaptation to market fluctuation has contributed to change Vietnamese medicine market Medicine market is getting overheating with average speed of growth 17% (FPTS Report,2014) However, most of medicine private businesses have small scales, limited economic potential, small nomenclature and severe competition between companies as well When it comes to this situation, if the medicine enterprises want to develop stably, they have to not only attach special importance to both technology and human resources‘ investment but also specially attend to handle marketing strategies creatively in order that they can get market opportunities and their own competitive advantages Marketing strategy not always decide an enterprise‘s success or failure; nevertheless, it is indispensable Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang An Chau Pharmaceutical joint-stock company, a private company which majors at producing and dealing in domestic medicine It is trading in an overheating market filled with opportunities but threats as well If it want to exist and develop, it is essential that this company should have a certain marketing strategy and proper solutions to compete with its rivals (currently, the company just provides general solution and has not had an official marketing department) Therefore, I suggest that implementing a project to analyze the marketing activities at An Chau Pharmaceutical Joint Stock company is a necessary step to meet the customers‘ demand and evaluate the effective of marketing activities With this actual condition and my internship period at An Chau PJSC, I hope that my topic which is about ― Marketing activities of An Chau Pharmaceutical joint – stock company ‖ will assist the company in having a general look at its current Marketing activities and solutions given will support the company to improve their medicine business operation, which is expected to contribute to advance their revenue and profits as well 1.2 Objective An Chau PJSC is a local company, with years of construction and development medicines The company has been strides and achieved relatively good results But the economic situation of open competitive today, the company faced many difficulties The current marketing strategy of the company purely generic, while Marketing has a very important role The research topics of significance in terms of practicality Topical help companies with the overall look of marketing activities in recent years and propose some solutions to improve business performance of the company Pharmaceuticals Besides, the subject can be used as materials for the project, other research on the role and performance of Marketing, the performance of pharmaceutical companies in the next phase Besides, the application of knowledge Marketing_Mix, through analysis of the actual economy, from customers as well as the current situation of the company to Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang find out the causes of the present marketing activities of companies are not really effective, which proposed a number of measures the company may consider applying to improve business performance in the future The purpose of this thesis is to investigate the current marketing practices of pharmaceutical companies through a literature search, case studies and interviews The literature search focussed on the regulations and guidelines that control the promotion of pharmaceutical products in Vietnam markets The case studies focussed on how the companies promoted and influenced patients to buy their products through television commercials and websites in order to keep their market share and maybe entice new customers to buy it 1.3 Research questions The key question of this study is: ―How marketing activities of An Chau Pharmaceutical Joint Stock Company influencing the customer satisfaction throught 4P, especially product, price and promotion?‖ To answer this question, it is necessary to answer the following these sub-questions: How did An Chau pharmaceutical PRODUCTS perform? (Overall quality, First use experience, Usage experience, ) How is the An Chau‘s promotion program? (discounts, PR ) Overall, how satisfied were you with price of medicines of An Chau Pharmaceutical JSC? Interviews were done with a series of 10 questions with An Chau 's customer to find out their opinions on current marketing practices of the companies, the influence of gifts from pharmaceutical representatives on prescribing or selling particular drugs and opinions on Direct-to-Consumer (DTC), internet advertising, and how this effects and controls their decisions on prescribing or selling particular brands of drugs Interviews were also preformed with some pharmaceutical representatives (doctor) to find out their opinions on their own positions within the pharmaceutical industry, their backgrounds, and their individual approaches in selling their particular products Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang 1.4 Research scope This study focuses on measuring the level of satisfaction about marketing activities of An Chau PJSC of customers in Nghe An Province (50 clients), Ha Noi Capital (50 clients), Ha Tinh province (20 clients),Hai Phong (10 clients), Hai Duong (10 clients), Da Nang (10 clients) where there have major big customer of An Chau PJSC since the beginning of March 2015 210 customers of An Chau PJSC who is owner of drugstore, pharmacy, clinic in these place that is mentioned above have been invited to survey with the hypothesis that they will fit with the whole population of An Chau PJSC customers in Vietnam 1.5 Structure of the thesis At the beginning of the thesis there is a short description and defination of Marketing, Marketing activities in Pharmacy company The author carries on to theories that are implicated in the different parts of the actual marketing plan The results of the research will be applied in the marketing plan that will be the next and central part of the thesis The marketing plan will consist of five parts: An introduction about background, purpose and research method Literature review about Marketing, Marketing activites and factors in the Pharmacy company Research method Dicussion and Finding Orientation toward marketing activities and suggestions for An Chau Pharmaceutical Joint Stock Company Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang LITERATURE REVIEW 2.1 Overview about Marketing 2.1.1 History of Marketing Marketing terminology used for the first time in 1902 in the lecture hall at the University of Michigan, US, until 1910, all the general university in the US began teaching this course During almost half a century, marketing was taught only within the English-speaking countries Until after World War II, in the 50s and 60s of the twentieth century, it spread to new Western Europe and Japan Internationalization process of marketing has grown very fast Led by marketing scholars from several major universities in the world, the development of marketing was motivated by the need to analyze relationships and behaviors that existed between sellers and buyers In particular, the research of marketing led sellers to recognize that adopting certain strategies and tactics could notably benefit the seller/buyer relationship Before the 1950s, Marketing often meant identifying strategies and tactics for simply selling more products and services with little link for what customers really wanted Often this meant companies embraced a ―sell-as-much-as-we-can‖ philosophy with little interest in building relationships for the long term But starting in the 1950s, companies began to recognize that old ways of selling were not really effective As competition grew stiffer across most industries, organizations looked to the buyer side of the transaction for ways to improve What they found was an emerging philosophy suggesting that the key factor in successful marketing is understanding the needs of customers Today enterprises want business achieve higher economic efficiency needs to have an understanding and application of modern marketing Besides that, the concept of marketing that we now see has more to with developments during the industrial revolution of the 18th and 19th centuries This was a period of rapid social change driven by technological and scientific innovation One Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang result was that for the first time the production of goods was separated from their consumption Mass production, developing transport infrastructure and growing mass media meant that producers needed to, and could develop more sophisticated ways of managing the distribution of goods For much of the industrial revolution goods were generally scarce and producers could sell pretty much all that they could produce, as long as people could afford to buy them For much of the industrial revolution goods were generally scarce and producers could sell pretty much all that they could produce, as long as people could afford to buy them Their focus was on production and distribution at the lowest possible cost and what marketing management (for example, reducing distribution costs, opening new markets) From the start of the twentieth century to the period following the Second World War (although the development was interrupted by the wars) competition grew and the focus of marketing turned to selling Communications, advertising and branding started to become more important as companies needed to sell the increasing outputs of production in an increasingly crowded market Marketing was therefore still a 'slave' to production, but focussed on distribution, communication and persuading customers that one manufacturers goods were better than another Marketing terms appear in the early years of the twentieth century, the first time ever in the US But after the world economic crisis (1929 - 1932) and especially after World War II (1941 - 1945), Marketing reached the leap, strong growth in both quantity and quality to really become a popular field of science today From the 1960s onwards most markets have become saturated (the size of the market remains the same) This means that there is now intense competition for customers The sophistication of marketing management has therefore developed into what we now see in a modern marketing department Marketers are involved at a strategic level within the organisation and therefore inform an organisation about what should be produced, where it should be sold, how much should be charged for it and Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang how it should be communicated to consumers Modern marketers research markets and consumers They attempt to understand consumer needs (and potential needs) and allocate organisational resources appropriately to meet these needs Modern marketers are particularly interested in brands They are also increasingly interested in ensuring that employees understand marketing, i.e that everyone within the organisation involves themselves with marketing activities First department of European Marketing was established in 1968 in the city Grai of Austria The process of internationalization of Marketing rapid development, today almost all universities in the world are teaching of Marketing and Marketing applications are also a very effective way in the field of business everywhere 2.1.2 Definition of Marketing Along with the development over time, the Marketing has many different concepts The concepts depends on the actual circumstances and different perceptions that people have different ways of defining Marketing The difference is not only in the level of detail, but also reflected in the content its contains But in short, the advent of Marketing effectively to support business operations, sales and marketing of products According to the American Marketing Association (AMA) Board of Directors, Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large Overall this is a quite perfect concept with many advantages Firstly, this concept indicate that the product being exchanged is not limited to tangible goods but also ideas and services and Marketing is not only apply to the business activities aimed at profit Secondly, it define clearly the functions of marketing not only the sale or distribution This concept access Marketing functional perspective, when it talk about 4P in Marketing, this is also the approach of some curricula in Marketing in Vietnam because this concept carries the advantage of being simple and high applicability The approach is matching the marketing management process that Philip Korler offering Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang In other hand, Julie Barile – Vice President of ecommerce, Fairway Market said that marketing was traditionally the means there by an organization communicates to, links with, and engages its target audience to convey the value of and ultimately sell its products and services This concept is influenced by traditional marketing ideas, emphasizing the distribution chain, cargo traffic That is an attempt to sell what was produced However, since the emergence of digital media, in particular social media and technology innovations, it has increasingly become more about companies building deeper, more meaningful and lasting relationships with the people that they want to buy their products and services The ever-increasingly fragmented world of media complicates marketers‘ ability connect and, at the same, time presents incredible opportunity to forge new territory But, Dr Philip Kotler defines marketing as the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit Marketing identifies unfulfilled needs and desires It defines the measures and quantifies the size of the target market and the profit potential It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services Futhermore, the term Marketing is defined as a social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others Synthesis of the reviews above, I believe that Marketing is an understanding, a sense of customer needs and market requirements This insight is not only in meeting the current needs of customers, that are led and shared with customers This concept involves a lot of processes Marketing activities processes such as market research to find out the real needs of customers (insight), product research, price research, distribution including the promotion (advertising, PR, promotions, direct marketing, personal selling) Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang 2.1.3 The Role of Marketing As we‘ve seen the key objective of an organization‘s marketing efforts is to develop satisfying relationships with customers that benefit both the customer and the organization These efforts lead marketing to serve an important role within most organizations and within society At the organizational level, marketing is a vital business function that is necessary in nearly all industries whether the organization operates as a for-profit or as a not-forprofit For the for-profit organization, marketing is responsible for most tasks that bring revenue and, hopefully, profits to an organization For the not-for-profit organization, marketing is responsible for attracting customers needed to support the not-for-profit‘s mission, such as raising donations or supporting a cause For both types of organizations, it is unlikely they can survive without a strong marketing effort Marketing is also the organizational business area that interacts most frequently with the public and, consequently, what the public knows about an organization is determined by their interactions with marketers For example, customers may believe a company is dynamic and creative based on its advertising message At a broader level marketing offers significant benefits to society These benefits include: Developing products that satisfy needs, including products that enhance society‘s quality of life Creating a competitive environment that helps lower product prices Developing product distribution systems that offer access to products to a large number of customers and many geographic regions Building demand for products that require organizations to expand their labor force As lodestar guiding, directing and linking business activities of enterprises Through the marketing activities that the decision in the business of manufacturing enterprises have more scientific basis, more solid Thereby Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang business conditions and sufficient information to facilitate more than satisfying customer needs Marketing must determine what to produce, how much quantity, product features, what materials to use Offering techniques that have the ability to convey messages that change societal behavior in a positive way (e.g., anti-smoking advertising) 2.1.4 Marketing in pharmaceutical Marketing activities are a form of human activity (including organizations) in order to satisfy the needs and wants through exchange Usually it is assumed that the marketing activities of the seller, but fully understood, both buyers and sellers are required to Marketing On the market side more active in seeking exchanges with the other party, that party as marketing collateral Pharmaceutical marketing is actually integrated policies, strategic marketing of the drug in order to satisfy the needs of patients, in order to serve the health care community In addition to the objectives, functions like marketing generally, because of industry-specific, active marketing in the pharmaceutical company is also responsible for: drugs being sold right drug, right price, the right quantity, right time and the right place Right drug: Right pharmaceutical ingredients, content, guarantee the quality and GPS Right quantity: Number of drug production, packing fit Right place: pharmacist prescription drugs, medication dispensing doctors maintaining relationships elements distribution channels Right Price: Pricing for customers to be acceptable Right time: Ready to meet demand, while introducing time 10 Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang 2.2 Basic content of Marketing Mix The marketing mix is one of the most famous marketing terms The marketing mix is the tactical or operational part of a marketing plan The marketing mix is also called the 4Ps or the 7Ps The 4Ps are price, place, product and promotion The services marketing mix is also called the 7Ps and includes the addition of process, people and physical evidence According to Kotler and Armstrong (2010), the marketing mix is the set of controllable tactical marketing tools – product, price, place, and promotion – that the firm blends to produce the response it wants in the target market Figure 2.1 The Marketing Mix Model Source: kbmanage.com, Marketing Mix 2.2.1 Product a Definition Acording to Kotler and Armstrong (2010), product means the goods-and-services combination the company offers to the target market A product is seen as an item that satisfies what a consumer demands It is a tangible good or an intangible service.Tangible products are those that have an 11 Facebook:@Dethivaonganhang www.facebook.com/dethivaonganhang independent physical existence Typical examples of mass-produced, tangible objects are the motor car and the disposable razor A less obvious but ubiquitous massproduced service is a computer operating system Every product is subject to a life-cycle including a growth phase followed by a maturity phase and finally an eventual period of decline as sales fall Marketers must careful research on how long the life cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product moves The marketer must also consider the product mix Marketers can expand the current product mix by increasing a certain product line's depth or by increasing the number of product lines Marketers should consider how to position the product, how to exploit the brand, how to exploit the company's resources and how to configure the product mix so that each product complements the other The marketer must also consider product development strategies b The structure of the product Acording to Philip Kotler, there are product levels: - Potential product It is the final product that is available on the market and that the consumers can buy This includes all the additional values and augmentations that the company finally included in the product to differentiate it from the competitors‘ products - Augmented product: Those attributes of the product that can differentiate it from the competitors‘ products and might provide a slight advantage over them for the consumers These may include the brand name, the design, the packaging, the overall quality, the additional functions (apart from the basic features), the installation, the after-sale service, the warranty, the home delivery and the possibility to accept credit from the consumers - Expected product 12