(Tiểu luận) principles of marketing communication innovation plan mien dong pharma j

Mien Dong Pharma is a pharmaceutical company specialized in dietary supplements and various medical products, ranging from bone strengthening to cough syrup.. As a young corporation with

SCHOOL OF ADVANCED EDUCATION PROGRAMS

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PRINCIPLES OF MARKETING COMMUNICATION INNOVATION PLAN MIEN DONG PHARMA

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Lecturer: Assoc Prof Dr Le Thi My Linh

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Mien Dong Pharma is a pharmaceutical company specialized in dietary supplements and various medical products, ranging from bone strengthening to cough syrup Founded by Nguyen Van Danh on May 29th 2017 in Binh Duong province, the company officially went into operation as a corporate organization after two months Mien Dong Pharma consists of four departments, with the headquarter situated in Binh Duong, while the other three branches are set up in different domains along Vietnam: Sai Gon Branch in Go Vap, Northern Branch in Ha Noi and Central Branch in Nghe An

Mien Dong Pharma’s principal activity is distributing medicine and dietary supplements to drug stores nationwide Its product line supplies more than 30 units, which are totally manufactured and stocked domestically Some of remarkable and best-selling products are dietary supplements called Curcuma caesia, Ginseng energy capsules and cough lozenges

Regarding target audience, the company aims at middle-income customers of all ages and conditions, since it provides a wide range of products from supplement for the elders to nasal spray for children It is addressed as affordable and easily-approached

As a young corporation with only 4 years of operation, relying mostly on traditional marketing, namely through pharmaceutical representatives, accompanied by the competitiveness and volatility of the market, marketing innovation is vital to the success of Mien Dong Pharma The marketing innovation aims at the aspect of communication, namely the use of Key Opinion Leaders This method is adopted with

a view to building profitable relationships with young parents who have babies or toddlers

I MARKETING AUDIT

1 External Environment

1.1 Economic factor

Vietnam's GDP grew by 4.48 percent in the first quarter of 2021, 3.68 percent

higher than that in the same period last year, despite a new Covid-19 outbreak linked to

new strains This time, after customer experience of the last Covid 19, their awareness

of healthcare has been fostered, which increases the demand for healthcare products

Since 2019, the pharmaceutical industry has reached the growth rate of 11% In 2020,

according to Nieslen, however, the demand for healthcare products decreased by 3%

1.2 Social and cultural factor

W&S Vietnam Market Research has shown that 50.2% Vietnamese people will

buy drugs for themselves when they face health problems Additionally, from 2013,

82.9% people surveyed paid great attention to healthcare and 79.1% expressed the

opinion that those healthy are ones with high resistance As a result, people are buying

more healthcare products to prevent diseases other than curing them

1.3 Technological factor

Social media dominates every aspect of life It is not simply effective but virtually

a must-have means to promote the product Platforms such as websites, Facebook,

Instagram, Youtube have become a potential land to increase the brand awareness of the

products and build profitable relationships with customers

1.4 Political environment

Legislation determines a huge number of marketing decisions such as labeling,

designing, distribution, packaging, advertising, promotion of goods and services

However in the pharmaceutical market, the impact of legislation can also extend to

obtaining sale licenses A level of regulation of the prices of pharmaceutical products is

also commonly found

Commented [LML1]: Cần có nguồn trích dẫn Các phần phân tích trong external environment thiếu nhiều trích dẫn Nên xếp thứ tự các nhân tố theo như lý thuyết

products as long as they are reasonable Regulation arises to ensure that firms take charge of the social costs When these drugs are crucial to a human’s lives, it is unethical

to price them so highly As such, the government has taken an interest in limiting the medical prices Eventually, pharmaceutical companies are left with less profit

1.5 Demographic environment

First, elderly people show great interest in health products and medicines due to the health conditions of aging In Vietnam, the number of people above 65 accounts for 10.9% of the country’s population In 2050, this rate is forecasted to continue rising and reach 20.4% Vietnam's population is aging, while the number of adults, or children of the elderly is increasing This can significantly affect the marketing strategy since the way to approach this target group is different from the youngsters

Besides, research shows that about 25% of Vietnamese people have a tendency

to prescribe themselves medication instead of getting prescription medicines from ,

doctors or pharmacies Accordingly, that is a challenge for the pharmacy firms, in order

to have customers choose their brand, they have to build customer trust in their products, based on online commercials, word- -mouth marketing and so on of

Additionally, Vietnamese household size tends to shrink in current periods, people’s demand about the number of children has changed, parents tend to have fewer children but better nurturing and caring Therefore, pediatric patients might be a large target customer for the pharmacy firm nowadays

2 Internal Environment

2.1 The Company

With the slogan “Health for Globe”, Mien Dong Pharma’s vision is improving quality, investing in research and development, building production lines according to the highest standards of the world’s pharmaceutical industry, bringing Mien Dong Pharma become a leading enterprise in the pharmaceutical industry in Vietnam, serving public health towards a more sustainable future and the development of the country

- Quality: maximally affirms quality, for the benefit of consumers, for the benefit of the community and society

- Respect: respect colleagues, respect partners, respect customers

- Ethic: Respect ethical standards, promote health and safety

- Future: towards a sustainable development with a new health foundation with a foundation for the future

Mien Dong Pharma’s missions:

Committed to bringing the community safety, highly effective health care products and products with their own dedication and appreciation of their love and responsibility for human life and society

Always aim at customer satisfaction with enthusiasm and high responsibility for the job, creating jobs that ensure income and promotion opportunities for employees Provide Eastern Pharmaceutical branded products with international quality and reasonable and diversified prices to satisfy the needs of consumers towards the development of the community

2.2 Customers market

2.2.1 Indirect customers

Indirect customers are people who buy medicines from hospitals, treatment facilities or pharmacy stores, etc Characteristics of the group of domestic indirect customers:

- Many Vietnamese people have not trusted much in domestic medicine They have a preference for foreign and expensive medical products

- High demand for low costs

- Habit of often buying drugs by themselves according to personal experience or

on the advice of relatives and pharmacists

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- Living standards are increasingly improved, health issues are paid attention more

carefully

2.2.2 Direct customers

This is the target group of customers of the company The buying quantity in is

accordance with the amount purchased by indirect customers The direct customer group

is divided into two subgroups:

Group 1: hospitals and treatment facilities at all levels

Group 2: branches, agents, distributors, pharmacies (pharmaceutical import -

export companies, trading companies, retail outlets, etc.)

Characteristics of direct customer groups:

- Requirement for products with quality and prestige

- Priority of profitability

- Requirement for conformity to signed contracts

- Puts high pressure on Mien Dong Pharma because:

+ They purchase a large number of products, accounting for high sales in

the total sales of the pharmaceutical industry

+ Distribution function

+ They have a wide choice of sellers

2.3 Suppliers

Local pharmaceutical production accounts for nearly half of Vietnam’s drug

needs Most of the local products are low-cost generics produced by about 170

pharmaceutical companies in Vietnam Almost 10% of them are foreign investors, with

another 4% operating under joint venture agreements To boost domestic production of

higher-quality drugs, Vietnam has recently encouraged manufacturers to obtain Good

Manufacturing Practice (GMP) certification However, so far only about one-third of

Vietnamese pharmaceutical companies accomplished this

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are among Vietnam’s leading manufacturing and processing cooperations for pharmaceutical and health food products After nearly 60 years of striving for public health, these suppliers have been customer-focused businesses, with high-sophisticated technology and facilities and always consider quality as the critical goal

2.4 Competitors

The competitive level in the pharmaceutical industry is relatively high There are about 178 drug manufacturers nationwide, of which 98 manufacture modern medicines, accounting for 55.1% and 80 companies produce drugs from herbs

Currently, Vietnamese pharmaceutical companies mainly serve the domestic market, so the determination of competitors will be based on the market share of companies in the Vietnamese pharmaceutical industry such as: Domesco, Imexpharm, Traphaco, Vien Dong and OPC

Traphaco Pharma is the pioneer in the pharmaceutical industry cultivating and collecting natural herbs from GACP-WHO-standardized material areas, namely Sapa and Bac Ha (Lao Cai) with artichoke and panax pseudoginseng, ligusticum wallichii; Nam Dinh with polyscias fruticosa Traphaco’s long time of development and reputation also serve as the competitive edge to other counterparts in the medical market

Danapha pharma has successfully used modern Western pharmaceutical factories for the manufacturing processes With the advance of technology, Danapha is believed

to provide quality and various kinds of products to a huge range of customers

II CURRENT MARKETING PERFORMANCE

1 Product

The firm mostly concentrates on distributing functional foods and medical supplements that are produced by well-known pharmaceutical companies in Vietnam like Hai Duong Pharmaceutical Medical Materials JSC, Santex Pharmaceutical JSC, Currently, the company has nearly 30 products

Lion, etc The “Chanh Dao” product has been a best-seller for years since the company was established It contributes significantly to the company's sales revenue

Core benefit: improve and maintain people’s health

Turnover: In terms of business’ sales stream, annual revenue fluctuates between

20 to 30 billions VND Indicated in the interview, the income of the company in the beginning of the year is lower than year-end income because the manufacturing depends

on the climate, weather and customers’ demand

From 2017 to 2019, the net profit accelerated as a result of solid performance The last 6 months of 2017, when the company first started up, the sales were quite low, about 13 billion VND In contrast, in 2019, the sales reached 27 billion VND as a result

of the positive growth rate However, in 2020, due to the pandemic crisis, a 30% - 40% plunge in quantity was witnessed compared to that in the previous year Consequently, the total sales of 2020 slightly decreased

Customer service:

- They provide walk-in customers, who use hot-line, with effective and timely solutions to any issue related to product’s use

well as the comment section where customers can interact

- A hotline number is provided on the official website, and each product is

imprinted with a distinctive phone number so that customers can contact 24/7

2 Pricing

The price range is from 39.000 VND to 290.000 VND

Mien Dong Pharma applies different types of pricing strategies:

- Bundle pricing: The more items are purchased together, the lower costs become

This not only helps clear out inventory, but it also gives consumers the

impression that they are gaining benefits, because the company is providing them

with discounts: buy 5 get 1, buy 10 get 2 or get a discount from 5-10% with a

larger amount of purchasing

- Psychological pricing: The 49.000 VND price setting is more appealing to

customers than the 50.000 VND price setting, despite the fact that the actual

difference here is minimal The reason for this is quite simple: most consumer

psychology would depend on the first number of prices to make a purchasing

decision The aim of this pricing strategy is to increase demand by giving the

customer the illusion of value

- Market penetration pricing: Since there is a huge competition in the

pharmaceutical industry, this pricing scheme would help the company gain

market share from its rivals by rapidly creating a consumer base due to the low

price of the product

3 Pl ace

- Indirect: This is the most used method by Mien Dong Pharma Normally, when

a new product is launched, their pharmaceutical representatives contact or

directly visit drugstores to promote it The drugstores - as retailers - subsequently

sell the product to customers

Commented [LML2]: Ngoài mức giá chung thế này, cần

có phân tích cụ thể cho mặt hàng mà em quan tâm, có so sánh với đối thủ cạnh tranh

Mien Dong Pharma only sells directly to customers if they contact through hotlines

4 Promotion

The most used marketing tactic is traditional marketing Normally, the pharmaceutical representatives who are in charge of promoting and selling the company’s products directly approach pharmacies with products’ catalogs then introduce the product in terms of the information and functions Even though this is a traditional way, this is extremely effective when promoting products and approaching customers in provinces such as Tay Nguyen and Ha Giang - small areas with a low standard of living and significant socio economic difficulties

The company also offers a multitude of discount programs such as: buy 5 get 1, buy 10 get 2 (especially when a new product is launched) or discount from 5-10% with

a larger amount of purchasing or exclusive discount on holidays like: Tet holiday, International Women’s Day, World Health Day,

Occasionally, the firm makes donations with banners for charity clubs or events

in order to increase the brand’s awareness Meanwhile, running advertising on the company’s website and Facebook is seldom used

1 Strengths

Mien Dong Pharma’s market is at national level, as the departments are divided

in four regions in Vietnam This helps the company understand different customer behaviors and needs in distinct areas in Vietnam Accordingly, Mien Dong Pharma has specific and local approaches to customers

The company utilizes direct advertising, namely pharmaceutical representatives promoting products to retailers These employees are thoroughly recruited and trained

so that they can effectively boost the company’s profit In the first quarter of 2020, due

to the pandemic crisis, a 30% - 40% plunge in quantity was witnessed compared to that

in the previous year Consequently, the total sales of 2020 slightly decreased Below is

a bar chart showing movement of revenue in the later half of the year from 2017 to 2019

Range of products: various products suitable for the majority of Vietnamese residents from children to adults, including pregnant women

One notable shortcomings of Mien Dong Pharma is the lack of online marketing

As of 2019, the firm’s sales were mainly generated from representatives’ activities

From the chart, representatives accounted for 87% revenue, while website and facebook only contributed 1% and 0,3% respectively Not promoting on social networks for brand awareness possibly hindered the company’s growth and made the firm less competitive in the industry Besides, in the pandemic outbreak, the profit saw a downfall

as the representatives could not work due to the lock down In this situation, lack of investment on online commerce would absolutely be a disadvantage

The pharmacy also confronts the risk of losing proceeds when advertising in remote areas of Lao Cai and Thai Nguyen Those inhabitants have limited access to the Internet Retailers here mostly purchase products advertised on television

Additionally, exogenous habits put Mien Dong Pharma’s products in a disadvantageous positon, as they are only manufactured from native ingredients The company may thus not be able to compete with pharmacies which provide both domestic and imported goods Take Hanoi as an example, amajority of residents were reported to choose imports over local products found in local retailers, especially when it comes to supplements Turnover of the office in Hanoi is thus recorded to be lower than the others

Brand identity of Mien Dong Pharma is not also strong, because it does not have brick-and-mortar shops The main way of selling products is distributing to retailers Consumers barely recognize the product’s brand but are only familiar with the retailers

To begin with, the product quality of Mien Dong Pharma is likely to be significantly improved The 4.0 revolution has brought about advanced biological technology like nanotechnology which extraordinarily improves absorption rate of existing medicine If Mien Dong Pharma can approach and apply such advancements in their production line, the chances are that the products will be considerably more attractive to the market and more profitable to the company

Besides, the Internet, as well as social media, continues to welcome a increasing number of users, which helps spread information and connect businesses and customers Mien Dong Pharma can initiate online communication for potentially more promising results of reaching and building profitable relationships with customers

fast-Moreover, the global pandemic COVID-19 raises people’s awareness about the importance of proactivity in self-care As a result, dietary supplement products of Mien Dong Pharma stand a better chance of consumption and investment

4 Threats

Both national and international logistics have been impacted by COVID-19 pandemic The lockdowns have been disrupting the flow of goods and ingredients necessary for production Even finished products face obstacles in reaching distributors and customers Mien Dong Pharma cannot neglect the possible struggle like the previous Hai Duong lockdown Even in normal situations, the case of the cargo ship Ever-given blocking the Suez canal serves as the reminder of the value chain vulnerability

Business digitalization also poses a threat to Mien Dong Pharma because with the reliance on mostly traditional marketing, namely pharmaceutical representatives, the company can be left far behind compared to leading brands such as TRAPHACO, Nam

Ha Pharma and so on

The emergence of advanced technology like nanotechnology may also widen the gap between those able to make use of it and the rest of the market As Mien Dong Pharma is still young and disadvantaged in terms of capital, the corporation may lag

behind