Wednesday, October 24, 2012
Blog 3: Marketing Segmentation
The pharmaceutical industry can be divided into multiple segments. First of all, the pharmaceutical industry is segmented by customers. This is not difficult to guess, since not every medicine is designed for every customer, and customers have varying needs. Some medical products have warnings labels alerting consequences of consumption towards pregnant women or children, or even customers which health problems (Smith 2012). Some companies, like Teva, make products pandering to the needs of different types of consumers, whereas other companies make products for specific consumer needs. For example, Novo Nordisk makes products for patients with diabetes, including growth hormone therapy and hormone replacement therapy. Additionally, another important part of the pharmaceutical industry is the cost of the product. Pharmaceutical products are always in high demand because people are always sick. For brand name products, this can lead to price inelasticity, in which they raise the price of their product, knowing that the consumers will still purchase the product. However, in order to reach a targeted market (and to compete with generic products at cheaper price points), products must be maintained at an appropriate price. Another segmentation in this industry is the geography and product distribution. Products should be readily accessible to consumers. The United States is one of the world’s top leading competitors in product distribution, along with Europe and Asia. United States used to be the lead competitor of product distribution, but in recent years, Europe and Asia have been dominating the market. These segmentations continue to morph and expand the pharmaceutical industry.
Smith, Brian. (April 2012). Super segmentation in pharma marketing. Retrieved from
http://www.pmlive.com/pharma_news/superior_segmentation_pharma_marketing_397304.
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concerning the price, how has the pharmaceutical industry affected by the 2008 recession. the pharmaceutical industry is always in demand, but is the cost a more prevalent concern with the consumers. can the pharmaceutical industry really raise prices in today's economy?
ReplyDeleteI found it very interesting that the United States is not dominating the market when it comes to product distribution. Why do you think that Europe and Asia are the dominant continents? Why is the United States falling behind when they should be dominating? It would be beneficial for the United States to dominate the product distribtion market in order to help bolser our economy.
ReplyDeleteIts not surprising that the US is at the top in distribution. We're the biggest in manufacturing, so it makes sense. I'm really interested in how much Asia and Europe will grow in the next decade. I feel like they're really catching us to the US.
ReplyDeleteIn terms of investment possibilities I believe that the companies with the products that are price inelastic are a safe investment, because if they were able to withstand the previous recession then they are more stable. However, I think that could be dangerous as that may lead a company to underestimate the power of research and development which as we know an industry trend. We should probably decide whether the high investment in these companies is the better way to go than investing in a company with a strong competitive edge in terms of research and development which have the potential of becoming price inelastic.
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