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EVALUATION OF THE EFFECT OF
ADVERTISING ON MARKETING OF
PHARMACEUTICAL PRODUCT IN NIGERIA
(A CASE STUDY OF SOME SELECTED COMPANIES)
ABSTRACT
Given the competitive nature of the business world today, firms must be up on their toes in order to meet the ever-increasing challenges of the economy. One vital way to succeed is for a firm to be able to strategically market its products or services.
With the present level of increasing and cutthroat competition in the pharmaceutical industry, companies must be prepared not just to provide the services, but to do so qualitatively and aggressively if they must survive.
The researcher has therefore decided to conduct this research analytically and empirically to determine the effective application of advertisement as a marketing tool in the selected pharmaceutical companies.
The findings have shown that the pharmaceutical companies have only just begun to grasp the full meaning and understanding of advertisement and its application to business. Unfortunately, there are still to be found traits of weak database, poor communication system, inadequate marketing skills of
the staff.
The efforts of the selected pharmaceutical companies have been sufficiently discussed and suggestion have be proffered on ways to improve on their advertising strategies generally.
It is therefore hoped that scholars in the field of marketing in general, will find this material interesting.
LIST OF TABLE
TABLE 4.1: QUALIFICATION – – – – – – 61
TABLE 4.2: SPECIALIZATION – – – – – – 61
TABLE 4.3 COMPANIES CURRENT ADVERTISING OBJECTIVE – 62
TABLE 4.4 EVALUATION OF EFFECTIVENESS OF MEDIA – 63
TABLE 4.5 EFFECTIVENESS OF ADVERTISING AGENCY – 64
TABLE OF CONTENTS
TITLE PAGE – – – – – – – -i
DECLARATION – – – – – – – – ii
CERTIFICATION – – – – – – – – iii DEDICATION – – – – – – – – – iv
ACKNOWLEDGEMENT — – – – – – – v
ABSTRACT – – – – – – – – – vi
LIST OF TABLES – – – – – – – – vii
TABLE OF CONTENTS – – – – – – – ix
CHAPTER ONE
THE BACKGROUND OF THE STUDY
1.1 BACKGROUND OF THE STUDY – – – -1
1.2 STATEMENT OF THE PROBLEM – – – -2
1.3 HYPOTHESIS – – – – – -3
1.4 PURPOSE OF THE STUDY – – – – -4
1.5 SIGNIFICANCE OF THE STUDY – – – -4
1.6 SCOPE AND LIMITATION – – – – -5
1.7 HISTORICAL BACKGROUND – – – – -6
1.7.1 SMITHKLINE BEECHAM NIG. PLC – – – -6
1.7.2 ZARIA PHARMACEUTICAL COMPANY LIMITED – -7
CHAPTER TWO
LITERATURE REVIEW
2.1 ADVERTISING: GENERAL OVERVIEW – – -9 THE ADVERTISER – – – – – -11
THE ADVERTISING AGENCY – – – – -11
THE MEDIA OWNER – – – – -12
2.2 IMPORTANCE AND EFFECTIVENESS OF ADVERTISING – -13
ADVERTISING EFFECTIVENESS – – – -15
METHODS USED TO MEASURE EFFECTIVENESS -16
2.3 ADVERTISING OBJECTIVES – – – – -17
2.4 ADVERTISING STRATEGY – – – – -19
1. CONSUMERS AND BUSINESS-TO-BUSINESS
ADVERTISING – – 20
2A PRODUCT AND INSTITUTIONAL ADVERTISING – 20
2B INSTITUTIONAL ADVERTISING – – – 21
2C PRIMARY DEMAND AND SELECTIVE
DEMAND ADVERTISING – 21
2.5 THE ROLE OF CORPORATE ADVERTISING IN INDUSTRIAL
MARKETING – – – – – – 22
2.6 MEDIA SELECTION – – – – – -23
SOME GENERAL FACTORS THAT INFLUENCE
MEDIA CHOICE – 24
2.7 DIRECT MAIL – – – – – 25
2.8 PHARMACEUTICAL MARKETING IN Nigerian AND THE
INFLUENCE OF GOVERNMENT – – – 25
NATIONAL AGENCY FOR FOODS AND DRUGS
ADMINISTRATION AND CONTROL (NAFDAC) – 30
2.9 ADVERTISING BUDGET – – – – – 30
2.9 PHARMACEUTICAL PRODUCTS OF SMITHKLINE BEECHAM
NIG. PLC – – – – – – – 32
2.10 PHARMACEUTICAL PRODUCT OF ZARIA PHARMACEUTICAL
COMPANY LIMITED – – -33
REFERENCES – – – – – -35
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 INTRODUCTION – – – – – – -35
3.2 TYPES OF RESEARCH – – – – – -36 a. HISTORICAL RESEARCH – – – – -36 b DEVELOPMENT RESEARCH – – – – -37 c EXPERIMENTAL RESEARCH – – – – -37 d DESCRIPTIVE RESEARCH – – – – -37 e CASE / FIELD STUDY RESEARCH – – – -37
3.3 METHOD OF DATA COLLECTION – – – – -38
3.4 METHOD OF DATA ANALYSIS – – – – -38
CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION
4.1 INTRODUCTION – – – – – – -39
4.2 ANALYSIS AND INTERPRETATION OF DATA OBTAINED AS A RESULT PERSONAL INTERVIEW – – -39
4.2.1 SMITHKLINE BEECHAM COMPANY’S ADVERTISEMENT
PROGRAMME – – – – – – -39
4.2.2 ADVERTISEMENT IN ZARIA PHARMACEUTICAL
COMPANY – – – – – – 40
4.3 QUESTIONNAIRE, DATA ANALYSIS AND
INTERPRETATION – – – – 42
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 SUMMARY – – – – – – – 47
5.2 CONCLUSIONS – – – – – – -47
5.3 RECOMMENDATION – – – – – -48
APPENDIX A – – – – – -50
APPENDIX B – – – – – -51
QUESTIONNAIRE A – – – – -52
QUESTIONNAIRE B – – – – -54 BIBLIOGRAPHY – – – – – – -58
CHAPTER ONE
THE BACKGROUND OF THE STUDY
1.1 BACKGROUND OF THE STUDY
There has been industrial expansion, which resulted in massive production, competition and aggressive selling. These developments forced producers to seek out buyers for their products. Advertising was therefore recognized by business enterprises as a profitable method of building demand for their product.
Marketing of pharmaceutical products demands a high degree of professionalism and knowledge thus the use of advertising as a selling tool does not automatically provide a profit to an organization, its improper use may contribute to loss just as its correct use may enhance a company’s profits. The business firm needs to make a careful and proper decision regarding the policies and methods of advertisement to use. Such factors as the financial position of the firm, the type of products the firm produces, the market segment it seeks to serve efficiently and effectively determine the advertising policies and method to be adopted by the firm within its competitive environment.
Advertising has been identified as an effective and economical means of influencing consumer demand and to build enough product recognition among customers to enable them select among competing products. A definition by the institute of practitioners in advertising states that: advertising presents the most persuasive possible selling message to the right prospect for the product or service at the lowest possible cost: a definition by Weilbacher (1979) states “as those activities by which visual or oral messages are addressed to the public for the purposes of informing them and influencing them either to buy merchandise or services or act to be inclined favorably towards ideas, institutions or persons featured. The activities included in advertising are messages carried in newspapers and magazines, outdoor boards and in circulars of all kinds, whether distributed by mail, person, through tradesman or by inserts in packages, dealer help materials, window displaying, store signs, radio broadcasts, motion pictures used for advertising and novelties bearing advertising messages or signature of the advertiser.
The pharmaceutical companies are facing a number of challenges from the economy such as inflation and adverse competition within the pharmaceutical industry. This alerted every business enterprise of the importance or significance of advertising in its marketing efforts. Advertising bridges the gap between producers and consumer, it serves effective weapon to fight competition, create awareness about the existence of a product, increases demand and sales volume of an enterprise. At this point it is important to state that an enterprise needs advertising for development and expansion and consumer acceptance of its product.
1.2 STATEMENT OF THE PROBLEM
The Nigerian business environment is facing dynamic and adverse economic challenges. There has been increased aggressive competitions as more firms are diversifying into the industry and the economy becoming more depressed, thus resulted to a decrease in the demand of products and service by consumers.
Economic factor such as the structural adjustment programme (SAP) in Nigeria which includes devaluation of currency has resulted to a decrease in consumers purchasing power etc. similarly the pharmaceutical companies are experiencing the same thing such that some pharmaceutical companies have had to be bought over e.g. sterling health had been bought over by SmithKline Beecham.
This study therefore seeks to study the extent to which and how advertisement has been used by the selected pharmaceutical companies as a marketing tool, its impact on the performance of these companies and suggest how it can be effectively used to improve their sales and thus increase turn over (profits).
1.3 HYPOTHESIS
Hypotheses are specified statements of theory in testable form, which enable the researcher to reach a conclusion. In conducting this research, the following assumptions were made:
- That advertisement is very important as part of an
organization’s marketing strategies.
- A firm needs advertisement to reach its target market.
- A business survival depends on its ability to meet the needs and wants of the customers.
1.4 PURPOSE OF THE STUDY
This research aims at examining the role of marketing in the pharmaceutical industry and to identify the advertising strategies adopted by the selected pharmaceutical companies, which makes its possible for these firms to be capable of making optimal and timely responses to the changes in the market place. At this point the researcher shall assess the following:
- Ways of performing marketing functions in the pharmaceutical industry.
- The extent to which the Nigerian pharmaceutical marketing tool.
- The importance of advertising for effective marketing of
pharmaceutical products in Nigeria.
- Appraisal on the effective advertising strategies that these companies can use in Nigeria within the competitive environment.
1.5 SIGNIFICANCE OF THE STUDY
Marketing being the heart of any business and the process that pulls together various aspects of marketing variables to achieve organizational objectives makes this study worthwhile, since advertisement as a marketing tool enhances the marketing
effectiveness of a business firm in its competitive environment. Businesses at present are adopting aggressive marketing strategies aimed at edging out competitors and maintain in a leading position within the industry.
Therefore the research will be significant to the pharmaceutical companies and companies of other industries as it will identify and explain the appropriate and proper use of the different mode or advertising in order to effectively and efficiently achieve organizational objectives.
1.6 SCOPE AND LIMITATION
This study focused on the effective and efficient use of advertisement as a marketing mix strategy by the selected pharmaceutical companies and the impact it has on the overall success of the company.
As a case study, the following pharmaceutical companies were selected: Zaria pharmaceutical company limited (ZARINJECT) Zaria, and SmithKline Beecham (Nig.) Plc Kaduna.
The time provided for the collection of information is relatively short as such, it becomes difficult to come out with a much more detailed work. This has a direct influence on the sample size.
Consequently. Among the problems is the concealment of vital information due to the nature of research i.e. advertising. Most organizations are sensitive and careful thus try to conceal any vital information of their marketing efforts so as to prevent other competitors know the strategies used by them.
In the course of this research it has been discovered that many companies in Nigeria do not keep a documented information about their marketing operations.
1.7 HISTORICAL BACKGROUND
1.7.1 SMITHKLINE BEECHAM NIG. PLC
SmithKline Beecham Nigeria Plc, an affiliate of SmithKline Beecham worldwide was incorporated in Nigeria on 23rd June, 1971 and commenced business on 1st July, 1972, under the name Beecham
limited. The company has its head office at Ojota, two factories in llupeju and Agbara and distributed its products through a network of twentyfour sales deports in strategic locations throughout Nigeria.
At the llupeju factory established in 1972 over the counter (OTC) medicines, pharmaceutical and oral care products are manufactured. This list include Phensic, Panadol range, Andrews Liversalt, Zental, Tagament, Macleans and Aquafresh. At Agbara, opened in 1982, health drinks are produced such as Lucozade Boost, Ribena (Concentrate and ready to drink) and Lucomalt.
The change of name of SmithKline Beecham Nigeria Plc resulted from the merger of Beecham group (UK) and SmithKline Beecham corporation (USA) in 1989 following the merger two of their affiliated Nigerian companies, SmithKline and French Nigeria limited (SK & F) and omnipharm limited went into voluntary liquidation while the biggest affiliate Beecham limited because the operating unit of the new
organization in Nigeria.
On the 29th August, 1994, SmithKline Beecham announced in London the acquisition of sterling Wintrop inc, a wholly-owned health care subsidiary of the Eastman Kodak. The acquisition was a very major step in SmithKline Beecham’s goal of becoming one of the world’s leading health care companies and also makes it the world leader in Over the counter (OTC) medicines.
1.7.2 ZARIA PHARMACEUTICAL COMPANY LIMITED
The Zaria pharmaceutical company limited (ZPC), located in the historic city of Zaria, Kaduna state, Nigeria, it is a wholly owned pharmaceutical company of the Kaduna state Government. It began as an idea in 1981. Twelve years later, on 5th may, the Kaduna State ministry of health and social development acting for and on behalf of the Kaduna State Government, signed an agreement with consortium Voist AlpineAustroplan of Austria for the supply and installation of machinery for a syringe manufacturing plant at about N714 million. The foundation stone of the factory was laid on 24th January, 1996 by the head of state commander-in-chief of the federal republic of Nigeria, the late General Sani Abacha, GCON, MNI ably represented by the then chief of Naval staff Mike Okhai Akhigbe.
Zaria pharmaceutical company has chosen “a plus to quality health care” as its operating philosophy. Since the mission in ZPC is “to manufacture high quality disposable syringes and hypodermic needles at economically affordable prices” in bid to provide functional healthcare delivery system and Nigeria and worldwide. Thus, efforts are therefore geared towards the
maintenance of the highest pharmaceutical standards, Good manufacturing practice, (GMP), Good laboratory practice (GLP) amongst other quality procedures.
Again, never in the history of Nigeria has a syringe been so subjected to extensive clinical trials in major university teaching hospitals with excellent results as ZARINJECT. The results of clinical trials confirmed clinical efficacy safety and sterility on the 2ml, 5ml and 10ml ZARINJECT syringes. ZARINJECT compared with other imported brands that are registered and gazetted by NAFDAC is much better. ZARINJECT became the first brand of disposable syringes and hypodermic needles to be formally launched into the Nigerian pharmaceutical market.
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