LV Thạc sỹ_Analyzing current competitors of Astrazeneca Pharmaceutical in marketing gastro intestinal product

1 ABBREVIATIONS AZ AstraZeneca BMI Business Monitor International GERD Gastro-esophageal Reflux Disease GI Gastro Intestinal IMS International Monitor System PPI Proton Pump Inhibitor LIST OF TABLES Table 2.1: SWOT Model………………………………………………………… 19 Table 2.2: Some kinds of Product strategy……………………………………… 22 Table 2.3: Some kinds of price strategy………………………………………… 23 Table 2.4: Method, Channels and Some kinds of Distribution Strategy………… 24 Table 2.5: Purpose, Some kinds and tools of Promotion strategy……………… Table 3.1: Products leading the world in sales from 2009 to 2011……………… Table 3.2: Pharmaceutical growth of Asia Pacific countries…………………… 25 27 28 Table 3.3: Ranking of the top pharmaceutical companies in the world………… 32 Table 3.4: PPIs in the market…………………………………………………… 38 Table 3.5: Hospitals in charged by staffs……………………………………… 40 Table 3.6: Price of some PPI products in Hanoi market………………………… 45 LIST OF FIGURES Figure 1.1: Research process Figure 2.1: Principal actors in the company’s microenvironment 10 Figure 2.2: competitor analysis components 12 Figure 2.3: Main steps of Competitor Analysis 16 Figure 2.4: Marketing Mix 21 Figure 3.1: Drug sales in the world several years 26 Figure 3.2: Kinds of imported drugs 31 Figure 3.3: Ranking growth of foreign companies in VN in 2011 33 Figure 3.4: Ranking sales of foreign companies in Vietnam in 2011 34 Figure 3.5: Sales by groups in AZ in 2011 35 Figure 3.6: Gastrointestinal Diagram 36 Figure 3.7: Market share PPIs oral and IV by value in 2011 37 Figure 3.8: Price of some oral PPIs 46 Figure 3.9: Price of some IV PPIs 46 Figure 3.10: Distribution channels of some PPI products 47 Figure 3.11: Sales of some PPIs IV in Hanoi 2011 53 Figure 3.12: Sales of GI and Pariet in recent years 54 EXECUTIVE SUMMARY Nowadays, in the pharmaceutical industry, the gastrointestinal drug has relatively high proportion of total industry revenue, especially for the group of proton pump inhibitors Aware of the potential market, with the position of a salesman in charge of one PPI product of AstraZeneca pharmaceutical companies, I want to find out about the market as well as marketing activities for the same type products (other PPIs) in the market today to compare the effectiveness of the marketing mix then proposed the right direction for my product to enhance the effectiveness of working With the above objectives, the project has conducted the following studies: - Identify the competitors of the GI product - Analyzing marketing mix strategy for the main competitive products in the market - Find weaknesses, strengths in marketing strategy of each PPI products - Proposed solutions to improve the performance of Marketing Mix for GI Based on the theory of Marketing Mix and the theory of competition, with the primary data (100 customer surveys, interviews manager of AZ and manager from rival companies) and secondary data such as reports, articles, etc., the author has analyzed the marketing of PPI products (product, price, place, promotion) and then has found the following results: - GI products are appreciated for quality treatment on the market - High product prices can only access to the objects patients with economic condition - Wide distribution system but rather tight, yet flexible form of payment - Promotion: due to strong financial resource but limited by the rigor of the global pharmaceutical law, the marketing strategy for GI tend to rely on supplements to meet scientific information for medical physician based on conference activities, workshops, funding for scientific activities without commercial properties in marketing activities (such as discounts, gifts to doctors ) Thus the image of the product, the company's brand is highly appreciated in the customers mind Based on the above analysis, the results found in the research process, the author propose some following suggestions: - Strengthening the scientific activities of the branding strategy, make a deep impression in the customers mind about the brand and the image of the company's products - Enhance build relationships with customers in more flexible forms of marketing such as special occasion gifts, funding for scientific activities - Training and development of human resources, especially the sales team people in direct contact with customers, bringing the message to create product awareness among customers while reflecting the company's image The author hopes these suggestions will make AZ more successful in the result of marketing GI products in Vietnamese market CHAPTER 1: INTRODUCTION 1.1 RATIONALE: Vietnamese pharmaceutical market is increasingly attractive to Foreign as well as domestic Pharmaceutical companies According to the statistics of the Drug Administration, the total value of drugs used over $ 1.9 million in 2010 The growth rate of drugs value has an average growth of over 18% / year for years from 2006 to 2010, higher than the global pharmaceutical industry (6.2%) As BMI’s forecast, the drugs value will use nearly $ 3.4 million in 2015 with an average growth rate of 14.5% / year in 2011-2015 (excluding the impact of exchange rates), although more slowly than the 2006-2010 period but still higher than the global average growth forecast by IMS Health is 3-6% / year This is also reflected in the total number of 438 foreign pharmaceutical companies have been licensed business in Vietnam in 2010, an increase of 68 over 2007 companies (source: Drug Administration Department of Vietnam) Disease model in Vietnam are the mixture of developed and developing countries with current issues in cardiovascular disease, cancer and digestive diseases Environment with the living, eating and preventing diseases habits is not high, the pressures of the working environment is the cause of GERD (gastro-esophageal reflux disease), duodenal ulcer with Helicobacter pylori infection and gastrointestinal bleeding In recent years in Vietnam, the proportion of people suffering from digestive diseases is constantly increasing The rate of digestive patient is 20% of the total patients (Source: Drug Administration Department of Vietnam) Therefore gastrointestinal drug market (especially drugs to treat GERD, peptic ulcers and gastrointestinal bleeding) is a market that many companies is towards The drugs treating digestive disease are one of the top 10 classes of drugs with the largest sales in Vietnam and around the world With the large and potential market, the competition of the products in the same type of digestive group is very high In the position of a Sales employee, working at the pharmaceutical company AstraZeneca, with the desire to learn more about the competition and marketing strategy of the same use drugs in the market, I have chosen the thesis: “Analyzing current competitors of AstraZeneca Pharmaceutical Company in marketing GI product in Vietnamese market” Competitor Analysis is an important part of the strategic planning process • To help management understand their competitive advantages/disadvantages relative to competitors • To generate understanding of competitors’ past, present (and most importantly) future strategies • To provide an informed basis to develop strategies to achieve competitive advantage in the future • To help forecast the returns that may be made from future investments 1.2 RESEARCH OBJECTIVES AZ is the foreign pharmaceutical company in Vietnam It has strong capital source, good managerial system… but the company has made business in a strict code of Vietnam and Global This research is carried out to analyze the current competitors of AZVN with the GI product  Identify AZ’s current competitors of GI product  Analyze their marketing mix activities of competitors for GI product of AZ company  Propose solution to compete with the competitors in distributing GI product 1.3 RESEARCH METHODOLOGY 1.3.1 Research process Research process of the thesis is drawn by this following map: Identify current competitors of GI Secondary data Analyze Marketing Mix of Competitors and GI Primary data Propose solutions to compete with competitors Figure 1.1: Research process (Source: Author) 1.3.2 Secondary data collection • Public information: via Internet, newspaper, other people’s research relating to marketing activities of pharmaceutical firms in Vietnamese market and the information in the field, the author will have information about Vietnamese pharmaceutical industry on the whole and AZ in particular • AZ database: the author will collect the information from internal source that is really useful and serves for the analyzing the competitiveness such as: annual report, government regulation about Vietnamese pharmaceutical environment, the website of other firms The statistic figures in annual reports and other daily sources are collected, classified, analyzed to become useful for researching 1.3.3 Primary data collection • Survey: conducted through questionnaires with customers (doctors describing products in some hospitals) with the number of 100 persons.The questionnaires are designed to understand further about the customers’ awareness of products and their selecting products • Interview: The qualitative method used in this study is in-depth interview with managers in AZ and managers from other companies to obtain their confirmation about strengths, weaknesses, opportunities and threats of AZ in particular and other foreign companies in general 1.3.4 Data analysis With all the information collected from interviews, survey, Microsoft Excel software was used by author to analyze the information 1.4 RESEARCH SCOPE 10 Research object: Marketing mix of main current competitors of Gastro-Intestinal product to help AZ company distributing in the market Location: Hanoi Secondary data are within years (2008 - 2011) Primary data were collected from June to September, 2012 CHAPTER 2: THEORETICAL BACKGROUND 2.1 Contents of competitors 2.1.1 Concepts of competitors • Competitors are individuals or organizations who provide the same type of products or services Company Suppliers Marketing intermediaries Competitors Customers Publics Figure 2.1: Principal actors in the company’s microenvironment (Source: Philip Kotler, Principle of Marketing, second edition) 57 Which product you usually use to treat GERD disease? (GI, Pantoloc, Pariet, others) According to your understanding, which PPI can maintain pH > in a day for the longest time? Which PPI can control the GERD symptom fastest? Which PPI can maintain healed inflammation the most effectively? Q3 Q4 Q5 (Source: Survey) 3.5.1.2 Weaknesses: AZ is the leading company in Vietnamese Pharmaceutical market following in following strictly Global and National Pharma - code, have the staff compliance to code of conduct, so the marketing strategies much hard than competitors For example: 58  In the code of gifts, reception and non-intervention studies conducted in the hospital, AZ regulates: • Prohibit payments to relatives of the conference guests, not extend the stay longer than needed of a conference • Conference venue must be suitable for scientific purposes, not use location sounds magnificent, famous for entertainment purposes • Non-intervention studies (NIS) must have had medical or scientific purposes or solving related health needs We are not allowed to use NIS to introduce doctors and patients to participate in the benefits of our products because it is marketing purposes instead of medical, scientific purposes or the value of solving related health needs  Provide information about the product: Information we provided in order to support the safe using of our product, both via documents and promotional materials and answer any received question, must be backed by scientific evidence and approved through the approval and ratification procedures have been established by the company We only promote products that have been licensed and only those approved designations 3.5.2 Pariet and Pantoloc 3.5.2.1 Strengths: Eisai and DKSH are the foreign pharmaceutical companies in Vietnam They also have a strong financial resource to support the promotion activities However the company is not strictly according to Vietnam and International pharmaceutical code so marketing activities are also very flexible to meet the doctor's own interests needs For example: workshops in addition to providing scientific information are for entertainment, clinical 59 studies can be taken advantage to promote the product (no transparency, separation of medical, scientific research, and promotional activities) The flexibility on the company's activities has increased the acceptance of the product by doctors when prescribing 3.5.2.2 Weaknesses The biggest weakness of Eisai and DKSH is the investment in human resource, specialist MRs for the product is not strong and consistent throughout the periods With Pariet product, number of MRs in charge of is so little that they can not cover most of the area With Pantoloc, after transferring the distribution from Hyphens to DKSH (2009), all the before marketing activities were waste The instability in human resource has made the relationship with customers interrupted In addition, these companies not invest much in research and development, the main reason of the doctor prescribing is for the companies’ taking care and behavior, not for the doctors’ perception of products Therefore, changes in personnel have a huge impact on the prescription of doctors CHAPTER 4: DISCUSSION AND RECOMMENDATION FOR ASTRAZENECA IN MARKETING GI PRODUCT 4.1 DISCUSSION 4.1.1 Discussion of the competition in the PPI market It can be noticed that the PPI market is fierce competition with the presence of many active ingredients and different dosage forms All new active ingredients, unique dosage forms are the products of multinational Pharmaceutical companies 60 Domestic and medium pharmaceutical companies primarily focused on the classic ingredients such as omeprazole with classical dosage forms are tablets that not have other forms Currently active ingredient omeprazole alone accounted for more than 50% of the total number of registered PPI drug in the Vietnam Pharmaceutical Market Most of the active ingredients of the PPI drug has expired patent protection so that the proton pump inhibitor market competition is fierce, domestic and medium Pharmaceutical companies’ PPI products are imitations Products of these company are mainly dosage forms of tablets, and inject forms with classic active ingredient is omeprazole, market segments that the companies aims to are clinics, pharmacies across the country or outpatient insurance list of hospitals The brand products, with more variety of active ingredients and dosage forms, in addition to competing with generic products, the target markets of these products are in-depth treatment department, in cases: peptic ulcer bleeding, gastro esophageal reflux diseases in pediatric 4.1.2 Discussion of PPI drug information activities: Drugs is a special product, affects directly to people health so the drug information advertisements must comply with the strict regulations of MOH Currently, drug information advertisements must comply with Circular No 13/2009/TT-BYT dated 1/9/2009, for drug advertising agencies, organizations and individuals related to drug advertising information activities in the territory of Vietnam The proton pump inhibitors are in the list of prescription drugs must be prescribed, according to the regulation, it is only be informed, not be advertised The drug information on the website must also comply with the provisions for drug information 4.1.3 Discussion of Promotion activities 61 According to the Pharmacode (global pharmaceutical code) and Decree No 68/2009/ND-CP dated 08/06/2009 of the Government about supplementing Clause of Article of Decree No 37/2006/ND-CP dated 04/04/2006 of the Government, the Commercial Law regulated: "Do not use medicines for human, including drugs that have been licensed to promotion, except for promotional drug traders " the form of promotion: discount Drugs, samples for the PPI was prohibited, applying for a leading Pharmaceutical companies Marketing activities mainly focused on information and communication on the drug information for the doctor, raising product quality on the top Do not be allowed to advertise, scientific conference organization agreed to inform drugs is priority Meanwhile, for the domestic and average, small Pharmaceutical companies promote the form of promotion to increase the stimulation of consumption to compete with the PPI drug products of foreign leading firms Stimulate consumption forms that Pharmaceutical companies are applying is direct discount on the bill of sales The producers began promotion for the drug delivery so the form of sales promotion in the pharmaceutical industry will become more flexible The promotion of sales can be implemented by extra more quantity of consumption, the company revenue may be decreased but this is the solution to decrease promotion payment much than the form of discount for the distribution According to statistics, more than 80% of medicines consumed in Vietnam are in the hospital, so that the strategy of the company is always looking for the ways to get in hospital tender and listing for doctors’ describing This is the reverse of Pharmaceutical Marketing when the application moves the impact on the people have decisive role in the hospital (head of the Department of pharmacy, drug committee, etc.) 62 The form that foreign companies also attend to is organizing events, sponsor to community activities to promote the image of the product, the company's brand, this makes increased the prestige of the company so much 4.1.4 Discussion of Mix Marketing strategy and its results If a product is applied marketing Mix strategy effectively, it will undoubtedly succeed in the market, like A Onassis said: "The secret of business is to know what others not know." Products GI IV 40mg (inject form) of Astra Zeneca is a typical case Nexim 40mg IV has been presented in Vietnam since 2005, was introduced as a completely new drug, the next generation of Omeprazole At this time, PPI in the market only used with the designation of GERD or stomach ulcers, preventing ulcers by stress or use NSAIDs Strategy that Astra Zeneca applied was a new product development strategy (with new designation) focus on the message: GI is PPI maitain the longest time of pH> (the effectiveness of high dose GI) In 2008, Pantoloc and GI share the market of inject forms, but with the professional MRs team, as well as double the number of TDV, focusing on the potential market is gastroenterology, intensive care, severe patients, focusing on major markets: Bach Mai, Viet Duc, Huu Nghi, Hanoi Medical University The company has used the new product development strategy based on the outstanding features, the difference of the drug, get GI be the first PPI official indicated in upper gastrointestinal bleeding GI is a prescription drug, according to provision, it is only permitted transfer information but can not be advertised Thus, to transfer product information, the company has invested so much in seminars introduce drugs, the article about the product, supporting the community activitie Astra compliances these activities very seriously the provisions of the MOH and Pharmacode 63 Sales activity via the personal sales team is very focused company, this is the leading strategy of Astra Zeneca to succeed in the market Whether Astra did not have samples, use of money, or "commissions" to influence the prescribing behavior of doctors, this product is chosen by the doctor to prescribe for patients, because they have confidence in the products bring real effective treatment to patients that product advantages bring This not only comes from information and communication activities of Astra but also the effort of professional MRs team It can be seen that Astra Zeneca has applied the policy and strategy for GI basically, professionally and timely The application of GI marketing policies and strategies meet the requirements of the Pharmaceutical Marketing, so GI IV quickly dominate the market inject forms of the PPI group and gradually took over the market share of Pantoloc 4.2 RECOMMENDATION 4.2.1 Product strategy Perform more clinical studies in Vietnam to demonstrate the effectiveness of the drug on the market, patient host countries, convinced doctors by the quality of the product 4.2.2 Pricing strategy Reduce production costs, to price policies more flexible to accommodate more patients object 4.2.3 Placing strategy More flexible delivery through multiple sales channels, distributors, avoid monopoly led to sometimes not timely provide the drugs to customers 64 Promotion strategy 4.2.4 - Need to continue investing resources in the Vietnamese market with professional marketing activities in order to sustain the market, bringing many good drugs to patients - Take the development of human resources and marketing the quality products to be primary for the company's strategy - Development of the class of drugs "brand-generic" in order to many patients have the opportunity to use, adapt to payment ability Push and pull policies are defined as two core policies of promotion policy for GI products in the future  Pull policy Pull policy is implemented by directly influencing doctors, pharmeacists who sell and give consultancy on medicine use Some promotion tools is considered to apply in pull policy as follows:  Advertisement • Advertising on papers, specialty magazines such as Digestion magazine, Medicine and Health magazine, MIMS, etc • Brochure: providing information relating to outstanding characteristic of GI products, new Clinical researches as well as GI products messages to doctors, health officers in making out prescription and using of medicine • Gimmicks: including glass, desk diary, raincoat, notebook, pen, etc with name and images of GI products or health equipments such as 65 Stethoscope, electric syringe to remind doctors about GI products when making out prescription • Advertising on website: through website on digestion such as Gastrosource.com or website of AstraZeneca  Public relation • International workshops: participating in international workshops relating to digestion to introduce GI products and present relevant science reports • Science workshops: organizing annual science workshops to introduce GI products and update new researches • Customer conferences: so that the company meets, directly exchange with customers (doctors) to collect and find out feedbacks regarding GI products • Sponsorship and Event: support community, GERD patients in performance of suitable fare and medicine use  Personal selling and sales force • Set up and develop professional staff of Sales Representatives who have sufficient and intensive knowledge on GI products and diseases of digestive system to introduce to doctors Sales Representatives are not only sellers but also people who connect AstraZeneca with doctors and provide information regarding GI products as well as update new therapies to doctors  • Develop drug information activities via conference in and out of the country Hold conferences about GERD (Gastroesophagy Refluct disease) and PUB (peptic ulcer bleeding) to promote GI oral and GI IV in March and November Speakers are reputative professional specify 66 • Invite key of leader to take part in specific conferences oversea such as: Digestive Disease Week in Chicago, Asia Pacific Digestive Week in Hongkong, gastro-intestinal Summit in Singapore, Clinical pharmacy in Phillipines… These participants will influence to the treatment of digestive diseases of other doctors  Push policy Push policy focuses on pushing GI products from AstraZeneca to intermediate agents (hospitals, pharmacies) Promotion tool used in push policy is Sales promotion Sales promotion program which is going to apply in the year of 2012 for hospitals, pharmacies is to be get discount rate of more than 2% (10-20%) of the total invoice value when giving Zuellig an order for GI 67 CONCLUSION In recent years, AstraZeneca has achieved certain successes in the implementation of marketing strategies for GI products in Vietnamese market However, the level of competition in the market is increasingly fierce, competitors are constantly working to improve their business performance and with the downing growth of the economy, possibly it has huge impact to the performance of AstraZeneca Therefore, seeing the opportunities, challenges, based on the achieved results, the firm needs to find the right direction for its marketing activities to maintain and further develop the effectiveness of business in the market With the content has been presented above, the thesis has solved several key issues: • In theory: identified key competitors of GI and analyze, systematize these PPIs’ marketing strategy • In reality: analysis and evaluation of the strengths and weaknesses of each strategy for PPIs and then oriented marketing strategy for GI in the future 68 • With this thesis, I hope the solution is given will be done in practice to help improve business performance GI product line with the economic context of the country today LIST OF REFERENCES English references I Books: Michael E Porter (1980), “Competitive Strategy”, USA Philip Kotler (2000), “Principle of Marketing”, Prentice Hall Thesis: Do Tu Anh, (2011), “Improving Marketing Mix for personal credit at Petro Vietnam Finance Corporation”, Hanoi Duong Thuy Hang (2009), “Enhancing Pharmaceutical Joint Stock Company”, Hanoi II Vietnamese references competitiveness of Hanoi 69 Books: Department of Pharmacology (2005), “Clinical Pharmacology”, Hanoi University of Pharmacy, Hanoi Department of Clinical Pharmacology (2005), “Pathology”, Hanoi University of Pharmacy, Hanoi Tran Minh Dao (2002), “Principle of Basic Marketing”, Education Publisher, Hanoi Thai Nguyen Thi Hang, Khong Duc Manh (2001), “Marketing – Pharmaceutical Marketing”, Hanoi University of Pharmacy, Hanoi Pham Doan Trang, Le Khanh Vy (2006), “22 immutable Laws of Marketing”, Youth Publisher, Ho Chi Minh City Ho Chi Minh City Magazines, reports National digestive science magazine Drug Administration (2011), “Report the Business in 2010 and 2011, implementation of the plan in 2012”, Hanoi Thesis: Nguyen Thi Lan Anh (2007), “Researching the application of promotion policies in marketing activities of some foreign pharmaceutical companies in the pharmaceutical market Vietnam for the period 1999-2006”, Master of Pharmaceutical Thesis, Hanoi University of Pharmacy, Hanoi 70 Son Thi Lan Anh (2009), “Researching the Marketing activities of the company Astra Zeneca products in Vietnam for the period 2003 -2008”, Bachelor thesis of Hanoi Pharmaceutical University 10 Do Bich Ha (2011), “Researching marketing activities of PPIs Product line in Hanoi market from 2007 to 2010”, Master of Pharmaceutical Thesis, Hanoi University of Pharmacy, Hanoi APPENDIX In-depth interview guideline: 1) How many PPI products are there in your company? What are they? 2) In these PPI products: - Which product is the new one? - Indication of the product? - High investment in marketing activities - The biggest sales? 71 - Highest market share? - Outstanding feature compared to other PPI products? - The customers of these PPI products? (department, hospital) 3) These products: - When are they launched in Vietnam? - The outstanding features of the product? - The message of the products sent to customers? - The dosage? Forms? Packing? Target patients? - Price of products in some hospitals in Hanoi? - During the last years, what changes in the prices? - Distributed? - The company has organized conferences, seminars to doctors? How often? Where? The contents of the report? Speaker? Number of guests? Invited audience? - Is there any promotions for this product? - This product is published in scientific journals, specialized medical information or any website? - How many MRs for products? Divided areas for your products? - The main area? And the most sales? - Key competitors? Level of competition with this product? - Sales of the product in recent years? - The market share of the product compared to competitors? ... author to analyze the information 1.4 RESEARCH SCOPE 10 Research object: Marketing mix of main current competitors of Gastro- Intestinal product to help AZ company distributing in the market Location:... thesis: “Analyzing current competitors of AstraZeneca Pharmaceutical Company in marketing GI product in Vietnamese market” Competitor Analysis is an important part of the strategic planning process... products in the market - Find weaknesses, strengths in marketing strategy of each PPI products - Proposed solutions to improve the performance of Marketing Mix for GI Based on the theory of Marketing