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THE ROLE OF PROMOTION ON THE EFFECTIVE MARKETING OF PHARMACEUTICAL PRODUCTS IN NIGERIA A RESEARCH SEMINAR PAPER TO THE FACULTY OF MANAGEMENT SCIENCE LADOKE AKINTOLA UNIVERSITY OF TECHNOLOGY, OGBOMOSO IN FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF MASTER IN BUSINESS ADMINISTRATION (MBA). JULY 2010 INTRODUCTION Overview Promotion is an adjunct or a function of imperfect competition.
In one study of almost five hundred successful products, promotion was perceived by management as being the most important facet of marketing strategy leading to this success. Several factors point up the need for promotion today. In the first place, as the physical distance between producers and consumers increases, and as the number of potential customers grows, the problem of market communication becomes a significant one. Furthermore, improvements in physical distribution facilities are expanding these geographic limits of markets.
The intensification of competition between different industries as well as between individual firms within given industries has placed tremendous pressures on the promotional programmes of individual firms. In the development of our economy of abundance, want satisfaction has replaced, to great extent, the mere necessity of fulfilling basic physiological requirements. As consumers engage in the satisfaction of wants rather than needs, they become more selective in their choices of alternative expenditures.
Promotional effort looms important in the overall marketing of pharmaceutical products in Nigeria. Although everyone whether friend or foe of the pharmaceutical industry, recognizes the contribution of the industry to the health and welfare of the public, it was important to realize that all the developments in the pharmaceutical field and the availability of pharmaceutical care and to the general public had not merely occurred by chance.
Although most of the praise was accorded to those in the pharmaceutical industry concerned with research and development, few appreciated the contributions made by the pharmaceutical marketing system, especially, the promotional system used, in making the public to be aware of the new products in the market, at the right time, at the right place, in the right quantity, at a reasonable price, with the right information. Although, drugs alone cannot be considered to be the sole reason for the progress in medicine achieved in Nigeria, a glance back to at least, as 40 years ago indicates that according to Siskind, D-A. 1978) “At that time, there were no antibiotics, tranquilizers, few vitamins, no oral contraceptive drugs, no effective oral diabetic drugs, and no vaccines against polio, measles or mumps” But many experts agreed that by the end of this century, pharmaceuticals may be of even greater important in our lives because of anticipated major break-through in the field of Immunology, molecular biology, cellular differentiation, cell membrane studies and Genetics.
Pharmaceutical marketing, as a sub-specialty of marketing, can be defined as a process by which market for pharmaceutical care is actualized. It encompasses all the activities carried out by various individuals or organizations to actualize markets for pharmaceutical care. The emphasis in pharmaceutical marketing is on pharmaceutical care, and not just on drugs. As stated by Mickey Smith (1983), P. 5 “Pharmaceutical marketing is not synonymous with, but is significantly broader than the marketing of pharmaceuticals.
Any party interested in the exchange of pharmaceutical marketing activities; Hospital pharmacies, community pharmacies, 3rd party Insurance Companies, Consulting pharmacies and many other organizations and individuals in addition to manufactures and drug wholesalers are involved in pharmaceutical marketing”. In a broad sense pharmaceutical companies produce and market two types of products; prescription or Legend product, which may be obtained by consumers only upon the presentation of authorization by a licensed prescriber. The other type is the over-the-counter product, which maybe purchased without a prescription.
Though the most fundamental business of pharmaceutical company still remains the production and marketing of prescription pharmaceutical, there has been a rapid expansion of the over-the-counter pharmaceutical market in recent years in Nigeria. In the marketing segment of this activity, the industry is unique in that it does not market its products to the ultimate consumer, the patient, but instead to an intermediary, the physician and the pharmacists. Firms make decisions that involve the means required to place the manufactured goods in the hands of the ultimate consumers.
The traditional means of promoting awareness or communicating to the ultimate consumers of the availability and the uses of the products. Drugs also get to the ultimate consumer through self-medication. Self medication is the people’s first line of defense in health care, usually associated with non-prescription on-the-counter products. For the individual, self-medication is a familiar, in-expensive, and interfere with the routines of daily living. This practice necessitates the distribution of counterfeit and fake drugs in the country and thus calls for the Decree No. 7 of 1989 ??? counterfeit and take drugs (Miscellaneous provision) Decree 1989 promulgated by the Federal Government of Nigeria. The Government had also come into pharmaceutical promotion lamplight by not only promulgating the National Drug Formulary and Essential Drugs List Decree 1989, but went further to remote (Advertise) this essential drugs by publicizing certain pharmaceutical products to the public, and aiding the hospitals in the purchasing of this essential drugs, and revolving loan to the Local Government to purchasing of essential drugs for their primary health care scheme by the Local Government Area in the country.
The introduction of Expanded Programme on Immunization (EPI) by the Government to guard against six (6) killer diseases helped the manufacturers of pharmaceuticals to research, manufacture and promote their products. To say the least, the promotion of pharmaceutical products is greatly influenced by laws than the promotion of every other goods. REVIEW OF RELATED LITERATURE This research is a study of the Role of promotion on the effective Marketing of Pharmaceutical products in Nigeria.
Studies in pharmaceutical marketing are hardly to come by. This research enables the researcher to get grip with the pattern of drugs promotion in Nigeria as a whole as it affects the health care of the people. The researcher proposes to review the existing literature which has a limited to the use of very few pharmacy textbooks, non-pharmacy textbooks and the use of outside materials, such as personal interview. Bearing on the subject of present research Seminar paper. It might be necessary to define and explain what is meant by marketing.
It will make it understandable what is being talked about Everyday, each of us comes into contact with some aspect of marketing advertising, selling promotion, merchandising or distribution, for example but none of these activities above is marketing. It is only when things are all brought together that the result can be called marketing. Therefore, Marketing is total system of interacting business activities designed to plan, price, promote and distribute want-satisfying goods and services to potential customers. Stanton 1971) According to him, Stanton explicitly noted the activities of planning, pricing, promoting and distributing goods and services. He stress that these marketing activities are interrelated in a system. The term “system” means that a set of elements are related to one another by some common objectives. Communication in Marketing provides information. It tells consumers in the market that a particular product exists, and it attempts to show how the product matches that market’s wants and needs.
The purposes of communication are to inform and persuade. The consumers who make up in market must know that products exist; otherwise they cannot recognize how the product can satisfy their needs and wants. Hence, some persuasion is necessary to encourage consumers to cross the threshold of exchange behavior and actually take steps toward owning the product. This persuasion aspect of marketing communication overcomes consumer’s hesitancy by inducing or creating a favourable psychological disposition toward making an exchange.
Marketing communication in a developing economy ranges from primitive hard-fact information to the most modern, sophisticated advertising campaigns. After heavy introduction, and promotional campaigns, (P ) Crest toothpaste shot-up to 41 percent market share from 35 percent the year before. Persuasion is needed to induce the exchange ??? Schewe and Smith (1980) P. 481 PURPOSE OF MARKETING COMMUNICATION Marketing communication is an especially important element of the marketing mix for a number of reasons.
In our affluent society, we seek to satisfy a huge number and variety of wants. Marketers must provide a great deal of information to help the public understand how certain pharmaceutical product will satisfy those wants, Schewe (1987) P. 474. We noted that, the exchange process begins with the recognition of a need; this is followed by an influencing period a time of decision, the actual exchange, and consumption. And this entire sequence is followed by evaluation of the exchange.
In short, any exchange is the result of various stages of experience. When marketers develop promotional activities, they know that, consumers will go through these stages before the actual exchange of the product. More specifically, these stages are referred to by the acronym AIDA: Awareness, Interests, Desire and Action. A marketer knows that no exchange (Action) will result unless consumers want (Desire) the product. And, of course no consumers can be interested in the product unless they are aware of its existence.
Thus, these stages are sequential, and they represent viable goals for a promotional programme ??? Schewe and Smith (1987) Marketers first want to build awareness for the product, which is consistent with their basic purpose in communicating to inform. But once consumers are aware of the product, marketers turn to the persuasive aspects of communication to build interest in and desire for the product and ultimately, to obtain action in the form of exchange. Some promotion however is aimed at creating immediate action. Sales promotion activities come closest to this objective on a regular basis.
Often, even in the cases of advertising and personal selling, the market has sufficient awareness, interest, and desire to bring about the product’s characteristics, ingredients, and capabilities, and create a favourable impression of the product so that, when a want or needs arises, consumers will both know about the product and want to make the exchanges. Thus, we can say that, the promotional mix attempts to communicate a message as well as to secure an immediate exchange. Promotion, then, attempts to create future as well as current exchange.
Figure 2 shows the relationship between the four stages of AIDA and the effectiveness of each of the five promotional methods. Advertising is seen to be highly effective in creating awareness, but its persuasive impact is less during later states. Personal selling (with its fewer contacts) is less effective in creating awareness, but it is most effective in creating desire and action. Sales promotion has its greatest effect when pushing consumers over threshold and into exchange, as noted earlier, its impact is greatest at the oint of purchase (or exchange). Finally, public relations and publicity are helpful in creating awareness, but then have little sales impact. Schewe and Smith (1983), Charles D and Reuben M. 1983. SIGNIFICANCE OF THE STUDY Marketing as a discipline is still new in our society. The marketing of pharmaceuticals, though, fundamentally remains the production and marketing of prescription pharmaceuticals, do not adequately show the reality of pharmaceuticals marketing practices in our society.
Hence this study is designed to help: a}The undergraduate students in pharmacy whose background in marketing is limited b}Those actually involved in pharmaceutical marketing, and the adoption of promotion strategy would enhance the effective marketing of pharmaceuticals, and this will help to achieve the long-run survival in a complex and dynamic environment. c}To find out the impact, promotion as a communication tool has make in the area of pharmaceutical marketing. OBJECTIVES OF THE STUDY
The objectives of this Seminar research were to provide benefits to various users of this research by: a}Discussing the major important of promotion and conditions favouring the use of promotion in effective marketing of pharmaceuticals. Or discussing the role of effective promotion in marketing of pharmaceutical products in Nigeria. b}Discovering the factors that affect promotional choice c}Explaining the various factors influencing a promotion of a particular pharmaceutical product. }To show the possible benefits derived from the application of this concept (promotion) by manufacturers of pharmaceutical products e}To identify the role of government in promoting of pharmaceutical care in Nigeria as a whole. DEFINITION OF TERMS The following terms are defined as they are used in this study, according to the Pharmaceutical Remembrance Diary and Directory (1992-94): {a}PHARMACY ORDINANCE: Is an ordinance to regulate the promotion and Advertising of Drugs. {b}PHARMACEUTICAL MARKETING: A process by which market for pharmaceutical care is actualized. c}OVER-THE-COUNTER (OTC) MEDICINE: Are those that are lawfully sold over the counter for the public to use in self-medication without professional supervision on the basis of labeling, and precription that provides adequate directions for proper use, {d}PRESCRIPTION DRUGS: Are those, that, because of their potential for harmful effect, the method of their use, or the collateral measures required are not safe for self-medication and, accordingly must be dispensed only under supervision of a prescribing physician. These products must bear the prescription legend and are restricted to sell in pharmacy only. e}SELF-MEDICATION: Is a convenient method of dealing with ordinary health problems that cause discomfort and interfere with the routines of daily living {f}MARKETING: Is the business function that identifies current unfulfilled needs and wants, defines/measures their magnitude, determines which target markets the organization can best serve, and decides on appropriate products, services, and programmes to serve these markets Philip Kotler (1984) {g}PROMOTION: Basically, promotion is an exercise in information, persuasion, and communication, sale of drugs and poisons and to provide for the registration and licensing of chemist, drugs and dispense. {i}CHEMIST: A person holding a Diploma granted by the Board, or possessing other prescribed qualification who, by virtue of this holding such diploma or possessing other qualification, has been granted a license.
Under the ordinance to import, mix compound, prepare, dispense and sell drugs and poisons which license is still force. {j}DISPENSE: Supplying a medicine or a poison on, and in accordance with a prescription given by a registered or licensed physician. {k}DRUG: Includes any substance of vegetable, Animal or Mineral origin, or any preparation, or mixture thereof, which is used for internal or external application to the human body in the treatment of disease. {l}PATENT MEDICINE: Any medicine held out by advertisement, label or otherwise in writing as efficacious for the prevention, cure or relief of any malady, ailment, infirmity or disorder affecting human beings. m}`PHARMACY: Or any cognate expression, when used in connection with a business carried on any premises, shall be deemed to be reasonably calculated to suggest that the owner of the business and the person having the control of the business on those premises registered under the ordinance Mickey Smith 91983) These three are related, because to inform is to persuade, and conversely, a person who is being persuaded is also being informed. And persuasion and information become effective through some form of communication. Prof Neil H. Borden (1942). RESERCH METHODOLOGY In an attempt to assess the role of promotion on the effective marketing of Pharmaceutical products in Nigeria, it was pertinent noting that, the promotion of pharmaceutical products is rather as new as the development of the industry itself.
However, the theme of this research is narrowed down to pharmaceutical care and not on drugs. The study is therefore set to achieve the following objectives: 1}Highlighting the importance of promotion and conditions favouring the use of marketing promotion in marketing pharmaceutical products; 2}Finding out what factors affect choice of promotion; and 3}Show possible benefits derived from the application of this strategy. To achieve these objectives, some hypothesis was developed and data collected to test the validity of the hypothesis using the Chi-square: X2 = (Fo ??? Fe) Fe This research, enables the researcher to get grip with the pattern of drugs promotion in Nigeria as a whole as it affects the health care of the people.
The researcher proposes to review the existing literature which has a limit to the use of very few pharmacy textbooks, non-pharmacy textbooks and the use of outside materials, such as Pharmaceutical Journals, Newspaper, personal interview. RESEARCH HYPOTHESIS Considering the objectives of this research, a test will be conducted to at-least near completed accuracy: TABLE OF ANALYSIS |CATEGORIES |2003 |2004 |2005 |2006 |2007 |TOTAL | |OBSERVED FREQUENCIES |5. 42 |7. 25 |9. 64 |12. 24 |46. 25 |80. 83 | |EXPECTED FREQUENCIES |16. 17 |16. 17 |16. 7 |16. 17 |16. 17 | | Expected frequencies is calculated by dividing total observed frequencies 80. 83 by n=5 The Hypothesis is Ho: promotion is the only effective way in the marketing of pharmaceutical product. H1: promotion is not only effective way in the marketing of pharmaceutical product. Test statistics Since the hypothesis implies that promotion is the only effective role in the marketing of pharmaceutical product, the probabilities are the same for all categories (years) and each. Equal p=1/16. 17 With this the X2 as follows” X=(5. 42-16. 17)+(7. 28-16. 17)+(9. 64-16. 17)+(12. 24-16. 17)+(46. 25-16. 7) 16. 17 16. 17 16. 17 16. 17 16. 17 =7. 15+4. 89+2. 64+0. 96+55. 96=71. 6 Degree of freedom=(r-1) =(5-1)=4 DECISION: SINCE 71. 6 IS Greater than X=11. 070 we reject the Ho at the 0. 05 level of significance. We conclude that promotion is not the only effective way in the marketing of pharmaceutical product. Hence other factors contribute greatly in marketing pharmaceutical product such as : The effectiveness of the product The cost of the product The regulatory certification of the product The quality control /standardization of product to conform with best practices RECOMMENDATIONS
Owing to the analysis of health problems in Nigeria, the following recommendations are made: {1}From the findings, over-the-counter (OTC) method promoted more drugs than other strategies, hence there exists a duty for the Pharmaceutical Board to thoroughly select educated and trained persons to manage Patent Medicine Stores, and Pharmacists to fully create the needed awareness to reduce drug abuse. {2}The Pharmaceutical Board of Nigeria through is membership in the states Ministries of Health is in a better position to give unbiased and equitable approvals to applications with the objective of ensuring even promotion of pharmaceutical products in the country to educate the ultimate consumer the availability and usage of drugs. {3}The Federal Government should fully address the high cost of medicines as a key strategy for the achievement of the National Health Policy which is the provision of safe, effective drugs of good quality for the health needs of the people at affordable costs, to achieve better health for all as planned. 4}From the study, there exists difference between the marketing promotion of pharmaceuticals and that of consumer items, the strategies for promoting pharmaceutical items should be fully imbibed and followed closely so that pharmaceutical products could be used effectively for the purposes for which they were meant. {5}The Federal Government and State Task Force, should then enforce the provisions of the counterfeit and Fake Drugs (Miscellaneous Provision) Decree. They should proceed to inspect, ransack and scale illegal pharmaceutical and other outlets for the promotion of drugs and medicinal products. {6}Drugs Dealers should strive for an effective drug promotion and satisfactory medical on appropriate range of products on inventory through availability of all products sought by customers. Appropriate pricing and good storage facilities and optimum location of outlet for maximization of customers’ reach.
The government need to remain alert in monitoring the pharmaceuticals, promotion and ensuring that quality is consistently assured and is not compromised for economic gains. REFERENCES {1|Akpakpan, Bassey A. “Guidance on Seminar/Project writing, Introducing Students to Research” Calabar, Centaur Publications 1987 {2}Adenika, F. B “Pharmaceutical Wholesalers and Why Some Fail” Ikeja, Literamed Publications Ltd (1974) P. 9 {3}Adenika F; B; “Pharmacy Practice Management in Developing Communities”, Literamed Publication (Nig) Ltd (1975) {4}Dyer, Gillian”Advertising Communication”, London Methuen & Co. ,Ltd(1982) P. 1 {5}Gregory, Devek & Ward, H. Statistics for Business”, McGraw-Hill, Englewood Cliff (UK) Ltd. England (1974). {6}Heidings Field, “Marketing” New York Barness & Noble, (1973) P. 314 {7}Jerkin, Frant :”Advertising Made Simple” (2nd Ed. ), New York, Mac-Graw Hill Book Company (1973) P. 46 {8}Kothler, Philip “Marketing Management, Analysis, Planning and Control” (4th Ed. ) Englewood Cliff, New Jersey Prentice-Hall Inc. , (1981), P. 418 {9}Smith, Mickey C. “Principles of Pharmaceutical Marketing” (3rd Ed. ) Philadelphia, Lea & Febiger Publication (1983) {10}Schewe, Charles D & Smith, Reuben M. “Marketing: Concepts and Application” (2nd Ed. ) McGraw-Hill Book Company, 1983, P.