Bayer Aspirin Case Analysis and Sales Promo Plan
CASE ANALYSIS: BAYER ASPIRIN
INDUSTRY SITUATION:
Over the Counter (OTC) medicines specifically the Analgesic, Anti-inflammatory, Antirheumatic and Antipyretic category is one of the major OTC segments in the Philippines comprising 14% of the total OTC market sales. It has a growth rate of 8% per annum over the past 5 years[1] and had been valued of more than P2 Billion.
Currently, United Laboratories led the market with 4 of its entries among the top 10 brands: Alaxan, Biogesic, Medicol and Aspilet.
The industry segment can be divided further by ingredient that targets different market segments:
1. Acetyl Salicylic Acid (Aspirin or ASA)
a. First used as a drug for rheumatism and over the years, more applications had been discovered. It is also effective as an anti-inflammatory, anti-pyretic and analgesic.
b. Local prices ranged from P0.60 to P1.00 per tablet depending on dosage.
c. However, aspirin should be taken on a full stomach otherwise gastric irritation could occur.
d. Aspirin is also not advised for children under 12 years old as it can result to incurring Reye’s syndrome.
2. Paracetamol
a. Considered as the most popular ingredient in the country, it is effective as a pain reliever (for headaches) and as an antipyretic.
b. Price varies from P0.75 – P1.50 per table depending on dosage.
c. However, when taken in large doses, could cause irreversible liver damage.
[1] This case will assume the year 2001 as per the reporter indicated in the case footnotes.
a. Compared to aspirin, it has very weak anti-inflammatory properties, which made it ineffective for treating pain with inflammation such as muscle and joint pains.
2. Ibuprofen
a. Ibuprofen has an anti-rheumatic drug effective for joint pains. It has a good anti-inflammatory properties and has the ability to reduce fever.
b. Price varies from P3.50 – P5.00 per tablet.
c. Locally, brands containing ibuprofen included Alaxan and Midol.
3. Mefenamic Acid
a. Mefenamic acid has good anti-inflammatory and analgesic properties making it preferred remedy for muscle and dental pains.
b. However, this medicine was not considered as a full OTC product. Since the Bureau of Food and Drugs requires the higher dosages (500mg) to be prescribed by doctors, the 250mg is the only dosage sold OTC without a prescription.
c. Brands that have this ingredient are Ponstan and Dolfenal.
Since the entire segment is in the growth stage, there are opportunities and threats that need to be considered.
OPPORTUNITIES
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THREATS
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Heart attack is a leading cause of death in the Philippines therefore there is a need to come up with inexpensive medicines that target this segment
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Other companies can develop cheaper alternatives and the big players can easily penetrate the market with its existing communication and distribution channels and since the properties are easily replicated.
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If clinically proven, the property Aspirin can be used as a chemoprophylactic agent that can compete with another category like antibiotics.
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If clinically proven to be safe for chemoprophylaxis, Aspirin might be reevaluated by the BFAD and taken out as an OTC drug. Therefore hurting the OTC market share and will be competing in a different category.
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There is an increase of budget conscious consumers for medicines that values low price and proven effectiveness.
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The rise of the generic brands can kill sales for branded medicines and lessen their market share.
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COMPANY SITUATION
Bayer Philippines, Inc. is a subsidiary of Bayer AG Germany that has 4 main business units – health/consumer care, chemicals, polymers and agriculture. Among the 4 divisions, the Consumer Care division is the biggest with three major business units: Insect Control, Air Care and Over the Counter (OTC).
Among the three, Insect Care is the biggest and very stable and is the sales and profit generator of the organization. Bayer is the market leader in this segment. While OTC and Air Care is the same business size.
Focusing on OTC, this presented the biggest growth opportunity for the company because Bayer is still a small player in the Philippine Market. Globally, OTC is the biggest business segment for the Consumer Care Division.
As of 1998, Bayer Aspirin has only 1% market share in the Philippines. But looking at the global performance of this product, it continued to be the best selling non-prescription analgesic brand outside the United States and is the market leader in Europe and Latin America. Worldwide sales approximated DM1Billion with total sales volume of 17 billion tablets worldwide a year.
Because of this, the OTC segment in the Philippines, specifically Bayer Aspirin, has been identified as one of the products that could deliver growth to the Consumer Care Division.
Data shows the following Strengths and Weaknesses of the Bayer Aspirin product:
STRENGTHS
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WEAKNESSES
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Continuous Research and Development of the brand supported by the head office
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Findings are easily replicated by competitors in the local scenario (i.e. Unilab not investing in R&D)
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The 300mg and 100mg are positioned differently and targets different applications.
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The positioning of these doses aren’t communicated effectively therefore less awareness of its applications.
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It has a strong brand image supported by 100 years of proven efficacy and being the original aspirin.
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Newer generation is not aware of the brand since communication is less for Bayer Aspirin.
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Price is cheaper than most of the leading competitive brands (P1.00 per tablet)
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Compared to generic aspirins, it is 20-25% higher.
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Currently, Bayer Aspirin is not the market leader and its growth is static at 1% compared to other brands.
Main issue being faced by Bayer Philippines for it’s aspirin brand is it’s low support in terms of promotions therefore resulting to low awareness compared to its competitors that heavily advertised its products in TV, Print and Radio.
As per the case facts, the Bayer Aspirin brand is in the ‘investing’ stage for the next years to fully capture the awareness of the market and therefore increase market share.
STATEMENT OF THE PROBLEM
What programs can the Consumer Care Division initiate in order to increase brand awareness as well as increase market share of the Bayer Aspirin brand positioned as an anti-thrombotic drug?
OBJECTIVES
· To increase market share by 25% by the end of 2002.
PRIMARY TARGET MARKET
1. Medical Authorities
Rationale: Most people refer to doctors as the ultimate source for medical advice and value their inputs when it comes to the drugs they can take and therefore is the main influencer when it comes to purchasing medicines. Most communication materials for brands that are allowed be advertised are usually tied with the image of doctors to further strengthen the brand image. Targeting this group of individuals with a good sales promotion will definitely increase awareness and sales of the brand.
2. Relatives and Friends
Rationale: Aside from doctors, family members are the next big influencers when it comes to OTC medicines since most of the recommendations come from personal experience. Targeting this group with a good advertising campaign coupled with a good sales promotion can increase brand awareness and also penetrate the younger generation.
3. People/patients prone to heart attack
Rationale: Since the brand will be positioned as an anti-thrombotic drug where the competition is weak, these group of people who has a history of heart attack in the family as well as those that undergone a heart attack and survived can be a potential market since the Bayer Aspirin brand is much affordable than other competing brands. These can capture the B-C socio economic class who are budget conscious but still considers branded versus generic medicines.
PROPOSED SALES PROMOTION PROGRAM
OPTION 1: Incentivize Medical Doctors through the following promos:
· Quarterly Allowance
· Sponsored trips to medical conventions
· Specialty promotions offering Doctors useful, low-cost items bearing the Bayer Aspirin brand (i.e notebooks, pens, paper bags, calendar, pen light, etc)
· Free Samples to encourage trial
Rationale: Since doctors are the biggest influencers, they will be incentivized to push the products to the consumers. This will be done through the above-mentioned promos. Since Bayer Aspirin will be positioned as an anti-thrombotic drug, the sales promotion for the doctors will be coupled with an educational seminar/talk showing clinical test results of the product further increasing doctors’ confidence in the product.
PROS
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CONS
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Directly targets main influencers to push the product to consumers.
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Promo is too costly and with other competing brands, the doctor may not be able to push the brand effectively since they are not bound to push one product.
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The promo and lecture can encourage doctors to switch their prescriptions to Bayer Aspirin specially if positioned as an affordable alternative to other brands therefore capturing the price-conscious patients.
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Since majority is done through personal selling by medical representatives, sales representatives of competing brands may start a smear campaign that will discouraged doctors to push the products.
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OPTION 2: Price packs (Buy 10 tablets Get One FREE) and Price-Offs consumer promo
Rationale: Since the recommendations of family and relatives are also a factor for the purchase decision, offering a seasonal price pack and price-off promos can further strengthen brand preference and recommendation by these individuals. If partnered with a good ad campaign showcasing the promo will help spike sales as well as penetrate the younger generations.
PROS
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CONS
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Penetrate younger market through seasonal offers via recommendation by family and friends. Induce trial usage
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Since people only buy when they are sick, a seasonal promo can be cost-inefficient if not properly scheduled
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If executed properly, switching can be expected from other brands to Bayer Aspirin
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The misconception about the high price will be demystified since the campaign will focus showcasing its affordability.
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Product off take might be slow or stagnant if not properly advertised. Can still lead to further misconceptions (like brand ineffectiveness, low quality, etc).
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OPTION 3: Tie-up with Frequency/Loyalty Programs (targeting consumers and retailers)
Rationale: On the advent of loyalty cards (mercury drug suki card, credit card rebates tie ups with drug stores), more and more people are taking advantage of using their cards to purchase frequently in one store to accumulate points that they can later on exchange/trade/claim. Partnering with these stores and loyalty cards can further penetrate the market if special offers are made only through a specific brand (i.e. Bayer Aspirin).
PROS
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CONS
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No need to advertise further since the loyalty card will present the options when card holder wants to redeem points
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No assurance of purchase since other brands might be of preference or other generic counterparts.
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Repeat purchase or bulk purchase since the program can be tied with bulk-purchasing schemes
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How to effectively tie up with the card manufacturer and the store that is both mutually beneficial
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Further enhancements can be made with the card (like design will include Bayer Aspirin) for brand awareness purposes
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RECOMMENDATIONS
The following programs are recommended to achieve the objective of increasing brand awareness and market share.
· Incentivizing medical doctors
· Price packs and Price-offs
OPERATIONAL PLAN
The following programs and activities will be conducted to execute the above-mentioned programs:
Activity
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To Dos
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Budget
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Doctor Incentives
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Quarterly Allowance: create a database of doctors that are interested to carry the brand.
Target: 1000 doctors nationwide
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PHP10,000 per quarter per doctor.
Total budget: 40M
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Sponsored trips to Medical Conventions: Look for doctors with specialization in heart attacks to send them to special medical conventions.
Target: 100 specialized doctors
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PHP 50,000 per doctor
Total budget: 5M
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Specialty Promos: generate materials and give it in supplement of the quarterly allowance or the sponsored trips. Items includes but not limited to the following: pen, notebooks, fans, calendars, penlight, lanyards, and paper clips.
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PHP100,000
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Free Samples: each doctor will be given 500 samples to distribute to their patients.
Target: 1000 doctors
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PHP500 per doctor
Total budget: 500K
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Price Packs
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Buy 10 Get 1 FREE: nationwide execution targeting 10,000 retail stores.
It will include posters and radio ads to support the promo.
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Php 200,000
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Price-offs
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10% straight discount for 10 or more tablets:
This promo will be for select retail outlets targeting 5,000 retail stores.
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PHP 5000 (assuming per tablet cost Php1)
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[1] Since there’s no definite date indicated in the case facts, the year is assumed to be 2001 as per the submission of the case reporter.
Gantt Chart:
Activity
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Jan
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Feb
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March
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April
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May
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June
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July
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Aug
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Sept
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Oct
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Nov
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Dec
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Doctor's Incentives
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Quarterly Allowance
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Sponsored Trips
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Specialty Promos
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Free Samples
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Consumer Promos
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Price-packs
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Price-offs
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INTEGRATED MARKETING COMMUNICATION PROGRAM INTEGRATION
Advertising
Since this campaign will focus primarily on the education of doctors as well as consumers, a nationwide TV, Print and Radio ad campaign will be implemented to support the repositioning of Bayer Aspirin as an anti-thrombotic drug.
Direct Marketing
Targeting health magazines focusing heart health, sample tablets will be inserted with a brief description of what the drug’s capabilities are focusing on the anti-thrombotic properties as well as highlighting Bayer’s proven track record as a manufacturer of affordable anti-thrombotic medicines globally.
Personal Selling
Medical representatives will be trained to sell the anti-thrombotic properties of Bayer Aspirin and also equip them with flyers and info sheets that shows clinical results of the drug. Door to door strategy will be done in hospitals, home and barangay clinics.
Public Relations
Since Bayer is a global brand, PR initiatives will revolve around heart-health awareness and how to prevent heart attacks. Programs will include educating both doctors and consumers. Merchandising materials that will be stationed in hospitals and clinics will be provided to further the cause.
Events Marketing
Since these are ethical drugs, Bayer Aspirin can sponsor events but not necessarily be the event organizer. Events can be both hospital wide, barangay-wide or city wide as long as it supports the main cause of promoting good heart health.
Digital Marketing
Internet marketing will be deployed by updating the company website to include Bayer Aspirin as an affordable anti-thrombotic drug. All information relating to Bayer Aspirin will be revised and uploaded as soon as the campaign starts.
There will be no plans to include social media marketing since primary objective is to inform and not to interact with consumers.
Mobile marketing will be used for information dissemination.
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