VirPharms Marketing Plan

Executive Summary VirPharm Company was established in St Petersburg in 2009. The firm is currently engaged in manufacturing of over-the-counter and prescription drugs. The company boasts of a wide range of extremely qualified staff with extensive knowledge in the development of novel synthetic drugs, clinical trials as well as their introduction into medical profession. The main objective of VirPharm is to augment sales volumes and expand the market share of its various products.Advertising We will write a custom assessment sample on VirPharm’s Marketing Plan specifically for you for only $16.05 $11/page Learn More Although the pharmaceutical market is subject to various criticisms from media outlets, the company has numerous competitive advantages that it plans to use in order to prevail over these challenges. For instance, VirPharm recently rebranded BOPREX into RELEVEN to capture new market. RELEVEN will be priced competitively in the OTC marke t in order to gain an upper hand over other competitors. The main target market for this newly packaged drug will be young executives (21-40 age categories) who experience various pains brought about by their busy schedules. The second target market for this product is the older generation (50-75 years) which are still actively engaged in career advancement. Virpharm also plans to employ various channels (i.e. online distribution and office supply stores, and vendor machines) to differentiate RELEVEN from other OTC drugs. The firm expects that RELEVEN will gain 20% of the OTC market share within 24 months after its introduction into the market. VirPharm’s Marketing Plan Current Marketing Situation Virpharm is a medium-sized pharmaceutical company that produces number of over-the-counter (OTC) prescription medicines. The main goal of Virpharm is to expand the market share for its various products. Although the company has achieved remarkable achievements through Hapizine (an a ntidepressant); the exclusive rights for this medicine will expire soon rendering its market share to generic competition. Recently, the company obtained permission to sell BOPREX over the counter as treatment for migraine and general pain (Ferrell Hartline 2010, p.664). According to the latest data, BOPREX is ranked sixth in terms of market share. The Virpharm plans to use this strategic market plan to augment the market share held by this product by launching it via OTC market (Buckley 2004, p.4). The firm aims to leverage BOPREX’s strength in a highly competitive and saturated market to achieve this goal. The main competitors for this product in OTC market include aspirin, nonsteroidal anti-inflammatory drugs (NSAIDs) and acetaminophen.Advertising Looking for assessment on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More One of the major weaknesses in the market is weak product differentiation. As of now, grocer y stores and drugstores are the two main outlets for OTC pain relief. The NSAID marketplace has a number of challenges. For instance, it is currently the subject of media criticism as a result of the adverse heart-related side effects. What’s more, the market is currently saturated by competitors making brand loyalty a seemingly difficult task to accomplish. Nonetheless, Virpharm possesses a number of strengths that it aims to employ to conquer these challenges. For example, the firm has an extremely inspired workforce and a market-leading sales force. In addition, the firm’s cost of production is somewhat lower compared to other competitors in the market (Ferrell Hartline 2010, p.665). Virpharm intends to enter into new markets yet to be explored by their rivals. For example, it plans to rename BOPREX as â€Å"RELEVEN.† The firm plans to competitively price this newly renamed product slightly lower than other rival brands in the market. The main target market for this product will be young professionals (aged between 21 to 40 years) with a principal focus on pain relief attributed to daily overexertion. The firm has also identified the elderly population segment (which is increasing) as another target market. Virpharm aspires to spend much of its efforts to market RELEVEN to the 50-75 years age category. What’s more, the firm aims to use new distribution channels (i.e. online platform and office supply stores) to differentiate RELEVEN from other drugs. Virpharm anticipates acquiring 20% of the market share for OTC pain relievers in a span of two year after the product is launched (Ferrell Hartline 2010, p.665). Marketing Goals and Objectives Virpharm has explicit marketing objective that have resulted in remarkable achievements and which will be employed as the basis for future accomplishments. The principal objective of Virpharm is to develop and expand the sales as well as market share for each drug it manufactures. It is worth mentioning that the pharmaceutical company has produced a number of high quality prescription and OTC medicines that have granted it a substantial market share and brand preference. One of the main goals of any public company is to maximize the wealth of the investors. It is against this background that the main marketing objective of Virpharm is evidently aligned with its mission given that it affects the value of investors. What’s more, the marketing objective (to expand sales and market share) grants Virpharm elasticity to react to adjustments in the external environment as well as the requirements of consumers (Ferrell Hartline 2010, p.665). According to Linn (2010), marketing is a pragmatic discipline grounded on several minor reasoning and concepts. It is a discipline that combines several activities in order to enhance sales volume of a particular product (p.2). Communication is thus a crucial ingredient in this endeavor since marketing applies to branded products on ly (Linn 2010, p.3). There are various theories that organizations employ in their marketing strategies.Advertising We will write a custom assessment sample on VirPharm’s Marketing Plan specifically for you for only $16.05 $11/page Learn More For example, the Transaction Model shows the interactive relationship between the merchant’s offer and the consumer’s perception about the product (Linn 2010, p.24). In other words the main objective of the merchant is offer a product/service that the consumer will perceive it as more valuable than its price tag. On the basis of careful consideration of SWOT analysis, the current main goal of Virpharm is â€Å"to launch and position RELEVEN as the convenient, prescription-strength, over-the-counter pain reliever† (Ferrell Hartline 2010, p.677). The major driving force for this marketing plan is expediency. One of the fundamental demands of consumers for drugs in the OTC market entails e xpediency; regardless of whether the drug is sold via an online platform or retail store. What’s more, RELEVEN possesses distinctive attributes in the OTC market. This will provide consumers the expediency, satisfaction and confidence of obtaining a prescription-strength drug without physician’s direction (Ferrell Hartline 2010, p.677). The first objective of the abovementioned goal is to â€Å"obtain a 20 percent share of the multipurpose pain relief market within two years of launch† (Ferrell Hartline 2010, p.677). While a majority of rival drugs are manufactured and marketed as relief for specific diseases, RELEVEN will be marketed as an all-purpose pain reliever for various ailments such as fever, pains, general aches, migraines and headaches. The targeted market will be young executives who undergo overexertion at workplace (due to noise, computer strain, stress, or tension) or at home (as a result of household chores). The second objective is to â€Å"g arner 20 percent of sales from online ordering system within one year of launch† (Ferrell Hartline 2010, p.678). As RELEVEN continues to gain market share, the accessibility of nonconventional procurement alternatives, such as accessibility from office supply retailers and online ordering will position RELEVEN as a frontrunner in the office environment (Ferrell Hartline 2010, p.678). This implies that online consumers will be able to procure this product from the comfort of their office Target Market, Customer Analysis and Positioning Main Target Market The main target market for Virpharm is made up of men and women in the 21-40 age categories and employed in an office setting. These individuals (with a diverse ethnic backdrop) are located in both metropolitan and suburban regions. They are usually single in their 20s and typically bear children in their 30s. What’s more, most of them posses advanced academic qualifications such as Bachelor’s and Master’ s degrees.Advertising Looking for assessment on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More These individuals earn substantial incomes but have limited leisure time. This market segment embodies an effortlessly identifiable and quantifiable group. This is a considerable consumer segment that is reachable via numerous diverse communication channels. In spite of the fact that young professionals constitute the main target market for Virpharm, the older active adults are the second target market for RELEVEN. This market segment (which comprises of men and women in the 50-74 age categories) continues to expand and is projected to become the biggest consumer of pharmaceutical merchandises in the future (Ferrell Hartline 2010, p.679). Classifying Characteristics Majority of the young professionals in VirPharm’s target market can access web via numerous locations such as home and workplace. What’s more, a number of them have a laptop or home office to work from home. This target group maintains a freestyle lifestyle in which they prolong their working hours for car eer advancement. In addition, they maintain robust social lives that encompass attending social meetings, bars, restaurants and sports events. Given their lifestyle, this target group values expedient access to medications because they have limited time for filling prescriptions or for physician’s visits. In addition, they anticipate swift relief for their ailments. The younger segment of this target is also conversant with internet, mobile phones and pagers hence are used to acquiring information via their fingertips (Smith Zook 2011, p.9). In order to capture this market, it is crucial to allow easy and swift access to RELEVEN (Ferrell Hartline 2010, p.679). This strategy echoes some postulations of Social Cognitive Theory. For instance one of the salient concepts of this theory is an environmental variable (observational learning). This theory creates an environment in which one (marketers) can observe the behaviors of others (shoppers) and gain insight on the consequenc es of those actions (Lefebvre 2000, p.7). The older population target is currently leading an active lifestyle that transcends the normal retirement age. The country’s baby boomers embody a substantial portion of the population and thus a considerable consumer segment. The baby boomers, in their 50s, are still pursuing career advancement. What’s more, many others remain actively employed well beyond 65 years with no prospect of retiring in the near future. The baby boomers also lead active lives such as pursuing primary and second careers, attending social gatherings (i.e. sports events) and redecorating their residential homes through gardening and landscaping (Ferrell Hartline 2010, p.679). With regard to pain relief, the primary target group (21-40 years) hunts for effective pain relief for several symptoms such as hangovers, eye strains and headaches. Given their busy schedules, this cohort seeks prescription-strength drugs that are accessible over the counter. Wh at’s more, the younger group is easily swayed by products that are deemed trendy and popular. On the other hand, the older cohort basically requires less costly but effective drugs. In terms of purchasing habits as well as tastes and preferences, the younger group procures products online on a regular basis. Apart from online shopping, most of them regularly visit local convenience stores to procure products (Shaw Jones 2005, p.249; McNeal 2000, p.10). What’s more, they are ready to pay more in order to save time. On the other hand, given the escalating cost of prescription drugs and healthcare, the older generation seeks less expensive medications as substitute for pain relief (Ferrell Hartline 2010, p.680). As noted above, the primary target is less concerned about price. They are willing to spend an extra coin to get effective drugs. In other words, convenience and effectiveness of a product are the main factors that influence the decision of younger generations t o procure drugs. It is also worthy to note that the primary target group has a tendency of enduring pain rather than treating it. VirPharm’s marketing strategy should thus focus on swaying non-consumers of pain relief drugs by providing an effective option to relief; one that can be utilized expediently on a temporary basis and with negligible side effects. On the other hand, the older group (secondary target market) is price-conscious and likely to procure renowned drugs in the OTC market (Ferrell Hartline 2010, p.680). Product Strategy One salient aspect of RELEVEN that VirPharm will give emphasis to relates to the product’s prescription-strength formula. RELEVEN is an effective cure for migraine headaches, osteoarthritis and general pain relief. The company plans to launch the product in capsule form comprising of single dosage strength. In order to abridge the RELEVEN’s initial offering, the product will presented as treatment for general pain such as arthr itis, migraines and headaches. Subsequent offerings will encompass optional product forms, such as tablets in different dosages. A salient advantage for the company is that RELEVEN copyright protection will run for three years after product launch. This product will thus be protected from generic imitations in the near future. In addition, VirPharm’s exclusive rights to RELEVEN will sustain the product’s initial pricing model during the patent period (Ferrell Hartline 2010, p.681). Product Branding and Packaging RELEVEN is poised to replace BOPREX in the OTC market. This name (RELEVEN) was chosen to cleverly convey its function in offering pain relief. The white capsule (with red RELEVEN inscribed on it) will at first be packaged in three various sizes: an Office Pack containing 250 capsules, Personal Relief pack (100 capsules), and a Trial Pack (10 capsules). Even though other rivals provide bigger packages (i.e. Family packs), VirPharm’s Office Pack is suitab le for office/work settings. Subsequent packaging will contain two capsules (a single-dose) that will be accessible via vending machines in all parts of the United States (Ferrell Hartline 2010, p.681). Product Differentiation and Positioning There are a number of aspects that differentiates RELEVEN product. First, this product will be packaged with an office presence; positioned as the finest remedy for various illnesses prevalent in an office/work settings such as migraines, headaches and eyestrains. The Office Presence will be improved further via online distribution as well as office supply stores. In addition, the product will be differentiated as an e-medicine that is easily available via online platform. It will be marketed as a brand choice for the main target group. The product will also acquire brand loyalty via its coolness factor, prestige and novelty. RELEVEN will be sold together with supplemental products. Nevertheless, given its distinctive attributes, RELEVEN will be sold as a supplemental drug in office supply stores. Apart from close collaboration with other retailers, including Office Depot, Office Max and Staples, the firm will collaborate with producers of explicit product line to display RELEVEN’s free trial packages together with their product offerings (Ferrell Hartline 2010, p.681). According to Lefebvre (2000), there are various marketing theories and model used by organization to position their respective products in the market (p.1). It is worth mentioning that the concept of value exchange is commonly used to describe social marketing programs (Gronroos 2006, p.320). This is because marketing is based on theories that explain consumer behaviors (Lefebvre 2000, p.2). For example, Social Cognitive Theory explains consumer behavior as a reciprocal determinism. In other words, environmental events, cognitive, interpersonal aspects and behaviors all work as interrelating determinants of each other (Lefebvre 2000, p.7). Accordi ng to this theory, an individual behavior is not a subject of intrinsic factors (i.e. an individual is not a product of environment). On the contrary, the theory postulates that an individual has direct control on his/her personal behaviors, what he/she do and the manner in which he/she react to their environment. Thus adjustments in any of these three factors are assumed to bring about adjustments in the other elements (Lefebvre 2000, p.7). Pricing Strategy RELEVEN is aimed at young generations who have expressed (in their shopping behaviors) that price is an irrelevant factor when procuring products. Expediency and status seem to be the crucial factors for this market segment. By marketing RELEVEN as the finest treatment for general pain as well as gaining a substantial office presence, the inexpensiveness of this product will remain the secondary focus of its attractiveness. In spite of the fact that price is not a salient aspect in marketing this product, the company can neverth eless take advantage of its access to less costly raw materials and thus reduce production cost. The pricing strategy, while principally reliant upon vendors, will position RELEVEN as an inexpensive treatment for general pain. Revenues will be acquired via sales volume as well as considerable profit margins. With a Personal Relief pack (100 capsules) priced at $5.63, VirPharm’s projected retail price for RELEVEN will be $8.99. This price is akin to Aleve and Advil and less costly than other drugs used to treat migraines. The Office Pack (250 capsules) and Trial Pack (10 capsules) will have a list price of $8.77 and $0.83 respectively (Ferrell Hartline 2010, p.681). Distribution Strategy VirPharm’s distribution strategy for RELEVEN is multifaceted. During the initial phase, shelf space will be acquired via conventional venues including mass merchandise retailers, grocery stores and drug stores. Nonetheless, the principal distribution channel will be via websites and of fice supply stores. During the growth stage, access to RELEVEN will be enhanced via less conventional locations (i.e. photocopy and shipping centers). This is because the main target group (young active generation) are known to frequent these locations. In addition, the product will be made available via online platforms such as OfficeDepot.com, OfficeMax.com and Staples.com. Firms that procure technological tools and supplies as well as office supplies will be able to access RELEVEN via their regular shopping activities. Another distribution strategy will entail single-dose packages via vending machines located in bowling alleys, golf courses, health clubs, shopping malls and offices. Besides, the firm aims to distribute RELEVEN nationally through online retailers (Ferrell Hartline 2010, p.682). Secondary Target Market Although the company’s secondary market will comprise of many retailers, the key focus will be on acquiring shelf space in online supplies warehouses as well as office supply vendors. VirPharm will also target other businesses (i.e. photocopy and shipping centers). In addition, the firm will also target vending machine services as an avenue to gain direct access to consumers. These merchants are critically needed to help increase sales via enhanced use and visitation of their product offerings. With respect to the vending services, VirPharm’s aim is to augment sales given that profitability is closely related with the quantity of goods sold (Ferrell Hartline 2010, p.682). Product Strategy The all-purpose pain relief provided by RELEVEN echoes the requirements of office supply consumers. For online vendors, providing this RELEVEN as an add-on sale product is an effective way to augment their sales. Given that the drug will be positioned in line with a strong office presence, office suppliers stand to gain immensely from their association with RELEVEN (Ferrell Hartline 2010, p.682). Pricing Strategy The principal pricing strategy is to merge considerable sales volumes and midsize profit margins for profitability. RELEVEN will be presented to vendors at a higher price than aspirin and generics, but at a lower price compared to numerous drugs specifically designed to treat migraines and arthritis. As noted above, the list price offered to wholesalers and vendors for Office Pack (250 capsules), Trial Pack (10 capsules) and Personal Relief (100 capsules) pack will be $8.77, $0.83 and $5.63 respectively (Ferrell Hartline 2010, p.683). Distribution Strategy VirPharm will employ discounts on some of its over-the-counter merchandises as well as slotting charges to acquire shelf space in key merchant stores. These inducements will be removed after RELEVEN gains brand name recognition. The company also plans to introduce free-standing display packs in key retail stores. In addition, point-of-sale exhibits will be presented to convenience stores, shipping and photocopy centers and office supply stores to attract shop pers at the exit points. What’s more, distribution of RELEVEN through vending machines will be subcontracted to a third-party vending supply firm. After the product is initially introduced to the market via both conventional and nonconventional channels, the firm will then adopt online distribution as its primary strategy. Smith and Zook (2011) assert that social media has opened up novel communication channels which offer markers direct access to consumers (p.6). For example, Web 2.0 facilitates communication between marketers and customers (Earls 2002). VirPharm anticipates a 50% increase in online distribution after initial distribution channels have generated brand name recognition. Given that the VirPharm will use its staff as well as consulting company, communication with the supply chain will be done mainly via sales negotiations as well as site visits. A sum of $125 million will be set aside for marketing activities such as trial packages displayed in several retail s tores, consulting services and to meet travelling expenditures of the sales personnel (Ferrell Hartline 2010, p.683). Marketing Implementation In light of the precise direction and focus of VirPharm’s marketing plan, the firm will abide by the initial structural strategy that is rather centralized. This strategy is preferred given that the firm has adopted untried channels. What’s more, the centralized strategy permits efficient utilization of limited financial and human resources. The Senior Vice President of the OTC Division will oversee the overall marketing plan and will serve as a sounding board to get feedback on emerging problems as well as provide assistance in dissipating any conflicts that might endanger the plan. In addition, a senior account administrator from the Consumer Group will oversee the implementation of the marketing plan. He/she will ensure that adequate resources are made available, enlist internal staff, ensure deadlines are met and supervise the completion of the marketing plan (Ferrell Hartline 2010, p.683). Apart from employing internal resources, VirPharm will engage the services of a consulting company that is experienced on procurement, advertising, promotion and online-based selling. Given that the driving force of the marketing strategy is particularly centered on online distribution of REVELEN, several challenges are bound to emerge since VirPharm has never used this channel before (Ferrell and Hartline, 2010, p.683). However, online-based marketing strategy promises limitless benefits in terms of product marketing and distribution. For example, Smith and Zook (2011) assert that social media has heralded a new era of marketing in which consumers are the main focus of organizations (p.4). In addition, social media has granted marketers novel tools that they can use to interact with consumers and encourage them buy their products. Thus, social media has brought about joined-up marketing strategy where the out-bou nd marketing methods (i.e. telemarketing, direct mail, and advertising) is combined with in-bound marketing-in which social media enhances communication between organizations and consumers (Smith Zook 2011, p.4; Ludicke 2006, p.7). As a result, a knowledgeable and skilled staff should be employed to alleviate problems associated with the novel marketing plan as well as to offer general feedback and direction to the project. One of the salient services that the consultant will offer will be scientific study about the purchasing behaviors of corporate shoppers as well as the locations and vendors that are most established and visited (Ferrell Hartline 2010, p.684). A comprehensive list of the implementation process is provided in appendix A. Evaluation and Control To ensure that VirPharm implements RELEVEN’s marketing strategy in an effective manner; relevant procedures must be implemented in order to measures real outcomes of the plan against stated objectives. As mentioned in the previous sections, the main objectives for the introduction of RELEVEN into the over-the-counter market are: (1) attain a 20% of the market share for the all-purpose pain relief in a span of two years after product launch; and (2) acquire 20% of sales from online distribution within 12 months of product launch (Ferrell Hartline 2010, p.684). The first objective will be evaluated through a blend of internal and external (third-party) reports. To be specific, VirPharm will employ the outcomes of Nielsen’s point of sale measurement data to monitor market share as well as sales in terms of merchant type and region. The second objective will be evaluated through a combination of internal sales records of VirPharm and data from partners within the supply chain. The company projects that approximately 9% of sales will be realized from online retail stores such as Amazon.com and Drugstore.com. Another 10 to 12% of sales will be realized from online ordering at conventional re tail stores such as Walgreen, CVS, Wal-Mart, Office Depot, Office Max, and Staples (Ferrell Hartline 2010, p.684). Implementation Timeline Appendix B shows a 3-month plan for the introduction of RELEVEN into OTC market. Given that several activities must be completed (i.e. product artwork and simulation of the website), RELEVEN will not be launched until the first week of June. However, a number of VirPharm’s promotional activities will commence simultaneously during the initial week of sales. These will include website banners, television ads and promotional gifts associated with office supply stores. The final production of the product (RELEVEN) will commence in the first week of May. This will offer adequate supply to retail shelf space and warehouses before product launch. After RELEVEN is introduced into the OTC market, VirPharm expects production to run on an uninterrupted basis. It is worth mentioning that this is merely a 3-month plan given that a number of these act ivities spin around the product launch. However, marketing activities are expected to continue in the future and will be modified on the basis of product demand and efficiency (Ferrell Hartline 2010, p.685). References Buckley, J 2004, Pharmaceutical Marketing: Time for Change, University College Cork, Cork. Earls, M 2002, Welcome to the Creative Age: Bananas, business and the death of marketing, Wiley, Chichester. Ferrell, OC Hartline, MD 2010, Marketing strategy, 5th edn, South-Western Cengage learning, Ohio. Gronroos, C 2006, ‘Marketing Theory: Adopting a service logic for marketing’, Marketing Theory, vol.6 no. 3, pp. 316-313. Lefebvre, RC 2000, Handbook of Marketing and Society, Sage Publications, Newbury Park, CA. Linn, CE 2010, General Theory of Marketing. Web. Ludicke, M 2006, A Theory of Marketing: Outline of a Social systems Perspective, DUV, Gabler Edition Wissenschaft, St. Gallen. McNeal, J 2000, Children as consumers of commercial and Social Product, Texa s University, Texas. Shaw, EH Jones, GB 2005, ‘Marketing Theory: A history of schools of marketing thought’, Marketing Theory, vol. 5 no. 3, pp. 239-281. Smith, PR Zook, Z 2011, Marketing Communications: Integrating Offline and Online with Social Media, 5th edn, Kogan Page, London. Appendix A: Tactical Implementation Activities Appendix B: Product Launch Plan This assessment on VirPharm’s Marketing Plan was written and submitted by user Carley Russo to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.