The Analysis of Marketing Strategy of Plendil

Fu Geyang,Tian Lijuan

(School of Business Administration,Shenyang Pharmaceutical University,Shenyang 110016,China)

Abstract Objective To provide marketing strategies suitable for the characteristics of the Chinese market by determining the strengths,weaknesses,opportunities and challenges of Plendil through SWOT analysis.Methods SWOT analysis of Plendil shows that the product is well-known with safety,tolerance,excellent performance,and good brand image.In addition,great market potential,and the gradual improvement of the medical market and the health insurance system all provide an exciting opportunity for its development.However,weaknesses and threats still exist,including unsound marketing policy and remuneration incentive system,poor channel control,fierce market competition,competition from foreign companies and domestic generic drugs,and the intensified state supervision efforts.Accordingly,our company shall speed up the design of marketing portfolio strategy through 4P theory.Results and Conclusion Establish brand image and ensure high quality products are conducive to maintaining advantages; Improve sales cost policy and salary incentive system,and strengthen channel control are conducive to overcoming disadvantages; Actively carrying out academic promotion is conducive to seizing opportunities; Accelerating product upgrading,formulating reasonable pricing strategies and developing relationship marketing are conducive to the company to cope with threats and maintain an advantageous position in the fierce market competition.

Keywords:Plendil; SWOT analysis; 4P theory; marketing strategy

Hypertension is a disease with continuous high blood pressure,which can cause complications such as stroke,heart disease,cerebral vascular accident and nephropathy,bring physical and mental pains to patients and impose a heavy economical burden on their families and society.In recent years,the number of hypertensive patients in China has been on the rise year by year.The latest research shows that 27.9%of adults in China have hypertension.However,the control rate is only 16.8%[1].Analyze the drug usage of the sample by referring to the economic level of all regions and calculate the theoretical market capacity of hypertensive drugs based on the incidence rate of hypertension.The result shows that the theoretical market capacity of hypertension drugs in China is about RMB 20 billion.With the improvement of the living standard,people pay more and more attention to their health,and the control rate of hypertension has increased year by year.Therefore,the antihypertensive drug will continue to expand its market size.At the same time,it is also facing increasingly fierce competition.Therefore,it is of great significance for enterprises and the entire industry to develop a correct marketing strategy of antihypertensive drugs.

1 Overview of Plendil

Plendil,commonly known as Felodipine Sustained-Release Tablets,is the third-generation long-acting (half-life period of 25-30 hours)dihydropyridines calcium antagonist and manufactured by Company A.The drug has moderate and longlasting antihypertensive effect,and has no adverse effects on blood fat,blood glucose metabolism and cardiac function,and can prevent target organ damage caused by hypertension.In addition,it can reverse the changes in vascular structure caused by left ventricular hypertrophy and hypertension,and protect the kidney.Therefore,it is more suitable for hypertensive patients with renal damage.Currently,it enjoys the best reputation at home and abroad as a dihydropyridines hypertensive drug.

In 2018,Plendil had a sales revenue of RMB 917 million in the Chinese market,with a decrease of 32.4% compared with that in 2017 (RMB 1 357 billion).Therefore,the Company urgently needs to analyze the characteristics of Plendil to readjust its market strategy and further enhance its market competitiveness.

2 SWOT analysis of Plendil

2.1 Strengths

(1) Good brand image and high popularity.Company A is a global pharmaceutical company founded in 1913 and headquartered in London,UK,with a research and development (R&D) headquarters in Sweden.With strong R&D capability,the Company has 17 R&D institutions in 8 countries and 13 000 staff engaging in the R&D of new drugs.In 2018,Company A had a global sales of US$ 21.05 billion,of which the sales in the Chinese market was approximately US$ 3.795 billion,which provided abundant capital and technical support for expanding a larger market of Plendil.

(2) Product technology and effect advantages.Plendil,commonly known as Felodipine Sustained-Release Tablets,has been used for more than 30 years.It has perfect safety evaluation data,and is well tolerated.After continuous medication,it has short or gradually reduced adverse reactions.In the hypertension optimal treatment (HOT),the systolic blood pressure (SBP) and diastolic blood pressure(DBP) were reduced to 139 and 83 mmHg[2]after treatment of hypertension with Plendil for 3.8 years.And in the Felodipine event reduction (FEVER),the incidence rate of fatal and non-fatal apoplexy of the patient with moderate hypertension who has received low-dose Plendil as a supplementary treatment drug was reduced by 27%,the cardiovascular (CV) incident was reduced by 27%,and the death rate was also reduced by 31%[3].In the STOP-2 European test of elderly hypertensive patients,its protective effect on apoplexy was slightly better than that of angiotensin converting enzyme (ACE) inhibitor,β-receptor antagonist and diuretic.It can effectively lower blood pressure as a single drug of mild to moderate primary hypertension.The test result shows that a certain dose of Plendil is safe when used together with most other antihypertensive drugs,and can have a synergistic effect[3].

Since the patent protection of the original drug expires,a large number of generic drugs have been successfully developed and entered the market,and is challenging many pharmaceutical companies in China.In spite of same ingredient between the generic drug and the original drug,they have different bioequivalence.As an original drug,Plendil has great technical advantages.

2.2 Weaknesses

(1) Inadequate policy of sales expenses.Good sales performance is inseparable from the support of the perfect company system.To achieve organizational goals in the marketing process,the enthusiasm of the first-line sales staff alone can only get half the result with twice the effort without a good system and policy.When the company expands the market,insufficient marketing activity costs and less preferential policies relative to other competitive products will affect the overall sales performance.However,the ratio of expenses to sales of its competitor Pharmaceuticals Company B in 2016 was as high as 55.60%.With sufficient marketing activity costs,the sales staff have a certain range of decision-making power of providing customers with some preferential policies,which is conducive to the expansion of the market by the sales staff.

(2) Incomplete salary incentive policy of sales staff.The company does not adjust the salary structure based on the performance appraisal result and work difference of different staff.Its salary level is lower than its main competitors,the sales staff have low satisfaction with the salary,and the company neglects the staff’s spiritual needs.All these factors have constituted the main reason for the departure of sales staff.The departure of sales staff will cause market instability and affect the overall sales performance.Its competitor Company P advocates position performance and personal capabilities,and has a diversified welfare structure suitable for the needs of staff.And some state-owned pharmaceutical companies have a sound security system,and can even solve problems for staff,such as their registered permanent residence and enrollment for their children,which has become an important factor in attracting talents.

(3) Poor channel control.When inviting a bid,some small commercial companies are listed in the supply catalogue.However,because of their smaller scale,lower reputation,and poorer anti-risk capability,once the funds cannot be turned over in time,the capital chain will break and the company’s products will be affected; or overdue refund will also lead to supply shortage and affect the sales of Plendil.Some pharmaceutical companies evaluate the performance of channel members,and their economic standards,control standards,and fitness standards to ensure the qualification of the bid winner.

2.3 Opportunities

(1) Aging of population.Currently,global aging problem is increasing.Large aging population has become the primary cause of hypertension in addition to obesity,lack of exercise and unhealthy diet[4].In 2000,there were 972 million adult hypertensive patients worldwide,and by 2025,global hypertensive patients will grow to 1.56 billion[5].The increasingly serious aging trend urges the market to provide a lot of drugs for hypertension.

(2) Great market potential of antihypertensive drugs.In November 2017,American College of Cardiology (ACC) and American Heart Association(AHA) updated the guidelines for hypertension,which reclassifies hypertension and changes the standard for hypertension from 140/ 90 mmHg and above to 130/ 80 mmHg and above.The change has greatly increased the population (from 75 million to 103 million Americans[6]in need of medication.At present,although most patients can be treated with antihypertensive drugs,the control rate of hypertension is still not ideal.Therefore,antihypertensive drugs have a great market potential.

2.4 Threat

(1) Fierce market competition.In recent years,a variety of antihypertensive drugs have been recommended as potential first-line drugs in most areas,including Diuretic,Angiotensin Receptor Blocker (ARB),Angiotensin Converting Enzyme(ACE) Blocker,Calcium Channel Blocker (CCB),Beta Blocker and Fixed-Dose Combination (FDC).At present,in view of higher price of most of the original drugs of foreign companies,similar forms of academic promotion,gradually reduced participation of doctors,and many generic drugs for heart and cerebral vessels in China,low market concentration,serious product homogenization,advantageous generic drugs in price,the market competition is fierce.Competitors for generic drugs and other original drugs pose a greater threat to the market position of Plendil.Therefore,the company needs to innovate its own marketing mode to maintain a dominant position in the competition.

(2) The State’s intensification of supervision over the pharmaceuticals industry.With the implementation of policies such as concentrated procurement of hospital drugs by inviting a bid,compulsory price reduction of drugs,opening of distribution service system of drugs,fees control of national medical insurance,and control of proportion of drugs,the State has intensified its supervision of the pharmaceuticals industry,so that profit margin in the circulation of drugs is compressed and the retail price of drugs is reduced.The operating income and net profit of Company A decreases year-on-year,and it bears higher performance pressure.

Combined with the above statement,the SWOT analysis table of Plendil is integrated as shown in Table 1.

Table 1 SWOT Analysis Table of “Plendil”

The following conclusion can be drawn based on the SWOT analysis in Table 1:The marketing environment of Company A’ s Plendil has changed,and Plendil is facing increasingly fierce market competition.The company should choose the WO strategy in marketing strategy and give full play to environmental opportunities to make up for its current weaknesses.

3 Suggestions on the marketing strategy of Plendil

3.1 Improve the policy of sales expenses and salary incentive system

3.1.1 Reasonable planning and use of sales expenses

First,analyze the sales status and market position of products in the market.Second,determine the amount of expenses based on the company’s marketing plans and policies.Third,determine the direction of sales expenses and the goals to be achieved in a certain stage.Fourth,understand the information such as customers’ cognitive characteristics,propagation modes of product information,propagation power,scope of influence,product price,etc.Only accomplishing the above four tasks can we make a reasonable planning of sales expenses and have a definite object in view.Finally,use general expenses reasonably.At present,the company is managing the sales expenses strictly,and strictly regulates the proportion of expenses for different projects.The sales staff often overdraft one or several expenses when using the sales expenses,while other expenses remain.Therefore,balance and reasonable use of expenses are an effective way of solving the expense problem.

3.1.2 Designing of a reasonable salary system

First,conduct a survey of the salary situation in the industry and evaluate the salary satisfaction within the company to understand staff’s satisfaction degree with the salary.Then determine the corresponding salary of sales staff at different levels according to the survey result in the industry.Secondly,establish an incentive salary structure according to the work nature of sales staff and set the corresponding salary level for staff at different positions and levels.At the same time,adopt a performance management method,that is,salary is based on performance.In the process of implementing the remuneration plan,it is necessary to ensure the implementation of the plan and adjust the problems arising in the implementation of the new plan in a timely manner.In addition,raise salary according to a certain percentage every year based on the economic level and the price index,combined with the enterprise revenues,and constantly improve the compensation plan to make it more reasonable and effective.

3.1.3 Combination of material incentive and spiritual incentive

The market survey in the industry shows that in order to achieve the best incentive effect,the company should combine the material incentive and spiritual incentive to stimulate the enthusiasm of sales staff.In terms of material incentive,the company can implement multistep rewards based on the performance of sales staff.The company can share out bonus to the outstanding sales staff to fully stimulate their work enthusiasm.In terms of spiritual incentive,the company should arrange high-quality training for staff on a regular basis,commend outstanding staff and create multiple promotion channels for outstanding staff.

3.2 Implement a rich product strategy

3.2.1 Hold public lectures and establish a brand image

As the aging trend is increasingly serious,the market needs a large number of drugs for hypertension.Compared with that in foreign countries,the treatment control rate of hypertension in China is still at a low level.Therefore,enhancing the patients’understanding of hypertension and health concept of preventing hypertension are also important ways to promote the sales of Plendil.The company can preach the hypertension knowledge with the education department and labor union to achieve the purpose of product promotion through public welfare.

3.2.2 Maintain a high quality strategy

The quality of drugs is closely related to the safety of patients,therefore the government,society,pharmaceutical enterprises and patients are highly concerned about the quality of drugs.As a worldrenowned pharmaceutical enterprise,Company A still has to produce high-quality products to ensure medication safety even in the face of fierce market competition.Only unified quality requirements can ensure consistent quality.The company should adopt consistent standards to manage and control the production process,quality system,personnel training,etc.to ensure product quality and provide high-quality international brand antihypertensive drugs for patients.

3.2.3 Speed up upgrade of products

In recent years,with the improvement of people’s living standards,people’s health concept has gradually changed and the market for antihypertensive drugs has developed rapidly.Since the introduction of Plendil into the domestic market,new antihypertensive drugs have been continuously developed.With the frequent upgrade of antihypertensive drugs,no company can maintain market share with just one or a few products.In response to future competition,coupled with the huge demand for antihypertensive drugs in an aging society,the company must strengthen product development and output,and introduce its own upgraded products to China as soon as possible.

3.3 Price strategy

The setting of the price not only ensures the economic benefits of manufacturing enterprises,but also considers the affordability of consumers.The value of the price depends on the profitability of manufacturing enterprises and the affordability of consumers.It can be said that pricing has a negligible impact on the existence of enterprises[7].Plendil is a high-quality original product in the market that focuses on brand effect.Therefore,it is recommended that the price of Plendil should be slightly higher than that of generic drugs to differentiate from generic drugs.However,its price should not be higher than that of products of other foreign pharmaceuticals companies,which is in line with the market positioning of Plendil as a popular antihypertensive drug with international quality.

3.4 Channel strategy

The qualification evaluation of dealers is very important in choosing dealers.Factors such as good distribution network,excellent profitability,abundant funds,good remittance records,etc.are the company’s evaluation standards of dealers.

For poor channel control,it is recommended that the company should sign agreements with dealer.If the refund is made in time,the company will consider extending the payment days in the next year and provide a certain percentage of sample return or rebate.The company should also convene the dealers at the end of each year to carry out year-end appreciation,in order to strengthen the communication between senior management.In addition,it will also reward the dealers who performed well that year.

Some dealers delay the refund or default on payment maliciously,the business manager should include them into the list of bad refund,communicate the reason of the problem with them timely and stop delivery.After problem solving and receiving of the refund,the company will consider whether to continue cooperation.

3.5 Promotion strategy

Face-to-face and one-to-one sales is an important method of drug marketing.At present,the specialists for medical information communication hold a product presentation meeting every week in the department,several small regional academic conferences in different forms every month,and large city meetings every quarter to consolidate the product concept of Plendil.This kind of propagation mode is more suitable for the academic atmosphere of major hospitals,and also conforms to the company’s consistent professional academic image.However,the form of academic promotion of foreign companies is similar and the participation of doctors is gradually decreasing.The company needs to innovate its own marketing mode.The specific suggestions are as follows.

3.5.1 Personalized sales techniques to seize the market of edge cities

Screen and lock the most important customers,collect and establish doctor files to learn more about doctors’ perceptions of products and competitive products,doctors’ personality and family background,and develop corresponding public relation programs.Hold patient education conferences for a certain type of patients on a regular basis and hold small salon meetings according to the doctor’s level or concept.These academic activities can facilitate the target doctor to understand the products,strengthen the application,and cultivate a large number of loyal prescription customers,and then differentiate the competitive products and increase prescription.Strengthen the construction of sales force and increase urban coverage.In addition,entrust the promoters to promote and sink the sales scope of Plendil in some edge cities,districts and counties that cannot be covered to increase sales.

3.5.2 Publish product information in high-level academic journals

Many doctors acquire product knowledge and quality perception of hypertension and antihypertensive drugs through professional journals,and doctors’ perception has a great influence on consumer choice.Therefore,the company’s medical department should actively contribute in the authoritative journals in China and carry out academic promotion of products through publishing the product introduction,safety and effectiveness data of Plendil to increase the impact on doctors.

3.5.3 Strengthen patient education

With the development of the Internet,many consumers can understand the strengths of products through Internet channel.In view of the fact that the treatment control rate of hypertension in China is much lower than that of foreign countries,promoting the hazards of hypertension and strengthening consumers’ concept of preventing hypertension are also important ways to improve the sales of Plendil.In the promotion strategy,consumer education can be strengthened through forms such as online advertorial promotion,TV,newspaper media promotion.

3.5.4 Strengthen the company’s image building and actively fulfill social responsibilities

Establishing a good corporate image is conducive to the promotion of Plendil.As a world-renowned pharmaceutical enterprise,Company A should actively participate in social welfare activities and assume corporate responsibility to establish a good corporate reputation among the society and the public.For example:holding public lectures,participating in disaster relief,donating drugs and relief supplies and donating drugs to densely-populated and povertystricken areas.

In summary,holding public lectures,establishing a brand image and ensuring high-quality products are conducive to maintaining the company’s strengths;improving policy of sales expenses and salary incentive system and strengthening channel control are conducive to overcoming the company’s weaknesses;publishing product information in high-level academic journals,strengthening patient education,enhancing corporate image building and actively fulfilling social responsibilities are beneficial for the company to seize the opportunity and occupy the market; speeding up upgrade of products,developing reasonable price strategies,personalizing sales techniques and grabbing the market of edge cities are beneficial for the company to respond to threats and maintain a dominant position in the fierce market competition.