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PRODUCT MIX Decision and Strategies BY: GROUP 3

Pharmaceutical Management: Product mix

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PRODUCT MIXDecision and Strategies

BY: GROUP 3

Objectives:

To explain the meaning of such terms as

Product, Product line, Product Mix, Product’s

position, Product life cycle, Brand, Brand Mark,

Brand name, and trademark

List down the drug products according to

product line and product mix width

Illustrate by way of a diagram, the product life

cycle and describe the characteristics and

strategies of each stage

PRODUCT

Is anything that can be offered to the market

for attention, acquisition, use, or

consumption that might satisfy and delight

the needs and wants of the target clientele.

Product Planners

- Also called as brand associates, brandmen,

and product managers

Three levels of a product:

CORE

Most basic in levels.

product is NOT the tangible physical product. You can’t touch it.

That’s because the core product is the BENEFIT of the product that

makes it valuable to you.

ACTUAL

Product is the tangible, physical product

AUGMENTED

product is the non-physical part of the product. It usually consists of

lots of added value, for which you may or may not pay a premium.

Product Formats

All drug products that are available in both

traditional and nontraditional markets and

manufactured by either the local or multinational

drug companies

Brand or Generic

Name Decisions

Brand

-is a name, term, sign, symbol, design or combination

of these intended to identify the goods or services

one seller or group of sellers and to differentiate

them from other competitors

Brand Name

-part of brand that can be vocalized- is utterable

Brand Mark

-a part of a brand which can be recognized but is not

utterable such as symbol, design or distinctive

coloring or lettering

Trademark

-brand or a part of brand that is given for its legal

protection

Copyright

-exclusive legal right to reproduce, publish and sell

the matter and form of literary, musical or artistic

work

Blanket Family Name

Blanket family name

Policy that are followed by many drug companies.

REASON

Cost of introducing the drug product will be less

because there is a brand name already widely recognized,

accepted and preferred by target consumers, hence no

need to spend readily on advertising and other

promotional activities

Blanket family name

Example is the enervon family comprising of

enervon c tablets, enervon c drops, enervon c liquid,

and now enervon HP Powder chocolate and vanilla

flavors that gets instant recognition because of the

popularity of the brand name enervon.

Brand extension decision

Is any effort to use a successful brand name to launch

new or modified products.

Example is the neozep tablets, neozep syrup, neozep

otic, neozep nasal spray, neozep medicated cod rub. It

used the strength of neozep, popularly known as “cold

specialist” and the brand extension saves the company

the high cost of promoting new brand names for the

products.

Multibranding decision

In this strategy, the seller develops two or

more brands in the same drug product

category or the same generic equivalents.

ADVANTAGES:

More shelf space at the selling area of drug outlets.

Very few consumers of a drug product are that loyal to a brand they will not try to another company.

Creating new brands develop healthy competition within the manufacturers organization comprising several product division or subsidiary companies.

Multibranding strategy positions brand on different benefits and appeals and each brand can attract a separate following when positioned in several target market segments.

Packaging Decision

Packaging a marketing activity of creatively

designing and producing the container for a drug

product suitable to target markets relative to

competitions product.

Primary package is the products immediate container for

example the bottle holding allerin expectorant and its

corresponding label is the primary package

Secondary package the packaging material that protects the

primary package and that is thrown away when the drug

product is about to be used by the target clientele, it is the

cardboard containing the allerin expectorant is the secondary

package that allows for additional protection and promotion

Shipping package used primarily to store, identify,

and ship the product to target markets, the

corrugated box that contains the allerin expectorant is

a shipping package. Labeling is part of product

packaging and consist of printed information

appearing on or within the package in accordance to

BFAD Labeling Guidelines.

Packaging is highly important and valuable

marketing tool for drug products.

Many of these Rx products are either ethical-OTC, semi-OTC

or OTC classified already by the consumers themselves who

frequently buy the product and since there are no complaints or

reprimand whatsoever from the BFAD inspectors the habits

become accepted practice in the drug industry.

BFAD admittedly lacks monitoring teams to go around the

thousands of drugstores all over there country on regular basis.

It has become very costly a doctor for minor infections and ask

for a prescription of an antibiotic preparation, which are readily

available anyway in all drugstores without a prescription.

Presently, drug products either generic or branded, OTC or

ethical oriented consider several different package designs for

new and existing product lines, selecting the best balanced

choice,

That will satisfactorily cater to the needs of

drug outlets in terms of convenience and ease

of handling

That end users will favorably respond to at

short notice

Physicians and dentists to prescribe with higher

confidence

Pharmacist and allied professionals will readily

endorse out of a high quality perception of the

drug product

That will generate greater products awareness,

immediate trials and repeat purchases associated

with the distinct and unique power of good

innovative packaging.

PRODUCT LINE

DECISION

A product line , according to kotler, is a group

of products that are closely related, either

because they are:

(1) function in a similar manner,

(2) are sold to the same customer groups,

(3) are marketed through the same types of outlets,

or

(4) fall within given price ranges.

Product Mix Decisions

Product mix or product assortment, is the set of

all product lines and items that a particular seller

offers for sale to buyers.

Anti-infectives Cough-Colds Analgesics

Antipyretics

Vitamins-

Minerals

Anti-TB Steroidal

Antihistaminics

UL Amoxicillin line UL Anti-cold UL Paracetamol line UL Ascorbic acid line UL Pyrazinamode line UL Chloramphenamine Maleate

UL Ampicillim line UL Bromhexine Line UL Diclofenac

sodium 50mg

UL Thiamine line UL Rifampicin

300/450mg

UL Dexamethaspne

PRODUCT LINE

LENGTH

UL Chloramphenicol line

UL

Dextromethorphan

UL Mefenamic acid

500mg cap

UL Ferrois fumarate

tab

UL Isoniazid INH UL Prednisolone

UL Cotrimoxazole line UL Guaifenesin line UL Ethambutol INH

UL Erythromycin line

UL Gentamycin line

UL Penicillin G line

UL Tetracycline 250mg tab

UL Penicillin VK line

PRODUCT WIDTH

Pharmaceutical

Product Life Cycle

Strategies

Characteristics:

INTRODUCTORY STAGE

Is a period of very low sales performance during the first few months to

one year or more after being formally introduced into the market

depending on the degree of awareness level acceptance, and actual

product trials.

Profits tend to be negative or at least break-even from one to two years

because of the low sale outputs, low production, high promotional costs,

and other marketing-related expenses.

GROWTH STAGE

A period of increasing sales and profit performance because

the new drug product has entered the growth stage.

It has also tremendously gained wide acceptance, patronage,

and repeat sales in bigger volumes from either the present or

new markets being served.

Drug companies still pursue an investment-spending

strategy for the product that has reached the growth

stage for a number of reasons such as:

To preempt entry of similar competing products.

To maintain or strengthen its market growth and share in

the on the specified market segment thereby marking it

doubly difficult for competition to come in or dislodged

the product.

The major strategies employed by drug companies to sustain

its rapid market growth in the target market segment are as

follows:

Continuous improvement or innovation product.

Entering completely new markets, new segments, expanded

distribution channels, more incentives for trade outlets to carry

and endorse the product to clients.

Lowering prices to previous levels in order to allow more buyers

to shy away from competitor’s products and increase frequency

of usage.

More aggressive and proactive promotions efforts.

Fine-turning product’s position in the market or repositioning

competitor’s products in the minds of target consumers.

Additional logistics support to fight head-on and cripple

emerging products of competition.

Drug companies protect their existing market positions

from inroads of competition by way of:

Well-balanced marketing mixes

Tactical and strategic marketing programs

By periodically conducting marketing intelligence and

marketing research to adjust the fast changing needs and

wants of targeting markets.

MATURITY STAGE

A period characterized by the slowing down of the

product's sales volume reaching a plateau or

remaining at constant volumes which may be

attributed to many similar products competing in the

same market segment or significant competitor's

activities pouring in heavy investment-spending to

gain control of the desired market segment at all

costs.

STRATEGIES FOR

THE DRUG

PRODUCTS:MATURITY STAGE

A. Roll-back of prices by way of additional discounts,

offering of product deals in the form of free

goods, additional allowances or subsidies, and

other amenities to encourage trade outlets to

support the product in terms of stock availability,

endorsements to end-users, and continuing

reorders at frequent intervals.

B. Increase advertising and other promotions support

for the product.

C. Increase R and D budgets

D. Periodically modify the market, the product and overall marketing mix, to

closely jibe with the fast-changing trends in marketplace, by means of:

1. Looking for new ways to increase product usage among existing

customers.

2. Looking for new users and market segments

3. Repositioning the brand to appeal to a larger or faster-growing segment

4. improving the attractiveness of the product by means of a new look in

packaging

5. Adding improvements to expand the product's usefulness, safety or

convenience

6. Implementing quality improvement towards increasing the performance

of the product

7. Offering new or improved services to valued clients

DECLINE STAGE

a period characterized by continuous drops in sales of

most product formats and brand, at a low level for many

years

STRATEGIES FOR

DRUG PRODUCTS:DECLINE STAGE

a) When sales and profits continue todecline, companies immediately

withdraw from the market, phase-out the product to avoid further

loses in certain geographical areas or nationwide.

b) Reduce the number of product offerings, concentrate on potential

formats, sizes and supply

c) Discontinue operations in smaer market segments and marginal

trade channels.

d) Reduve promotions and overall marketing efforts and promptly

rechanneling resources to drug products either in the introductory

or growth stage.

e) Replace weak products with similar or related generic names or an

improved version under a new brand name and new positioning

scheme.

f) Sell drug product to another company or simply liquidate it at

salvage value.

Classifying the products in accordance to product life

cycle serves to accomplish the following:

I. Identifying products and related lines that are continuously

generating sales for the period of product review

II. Determine allocation of resources on products with

potentials for growth

III. Match or pinpoint direct ompetitors products for market

growth and market share leadership

Product Life Cycle

Characteristics

INTRO GROWTH MATURITY DECLINE

Sales

performance

Low High Steady Very low

Market growth High Very high Steady Very low

Market share Low High Low/high Very low

Profit Negative Peak level Declining Low/ zero

Cash flow Negative Moderate High Low

Competition Few Growing Many rivals Declining

Customers Innovative Mass market Mass markets Laggards

Expenses Very high Very high Low/none Very low/ none

Product Life Cycle

Responses

INTRO GROWTH MATURITY DECLINE

STRATEGY Expand Penetrate Defend Efficiency

EXPENDITU

RES

High High Falling Low

EMPHASIS Awareness Preference Loyalty Selective

DISTRIBUTI

ON

Patchy Intensive Intensive Selective

PRICE High Lower Lowest Rising

PRODUCTS Basic Improved Different Rationalized

Definition of Terms