Building and developing hydrotrim brand in Vietnam market

HCMC OPEN UNIVERSITY UNIVERSITEÙ LIBRE DE BRUXELLESMASTER IN MANAGEMENT PROGRAM MMVCFB 6 HO VAN THAI BUILDING AND DEVELOPING HYDROTRIM BRAND IN VIETNAM MARKET THESIS TUTOR : Assoc..

HCMC OPEN UNIVERSITY UNIVERSITEÙ LIBRE DE BRUXELLES

MASTER IN MANAGEMENT PROGRAM (MMVCFB 6)

HO VAN THAI

BUILDING AND DEVELOPING HYDROTRIM

BRAND IN VIETNAM MARKET

THESIS TUTOR : Assoc Pro Dr NGUYEN DONG PHONG

MASTER IN MANAGEMENT THESIS

Hochiminh City

2006

WARRANT STATEMENT

This is my original work All data and results stated in the thesis are completely true

Ho Van Thai

ACKNOWLEDGEMENTS

I wish to express my deep gratitude to Professors, Universiteù Libre de Bruxelles, Solvay Business School and Hochiminh City Open University for providing knowledge and giving valuable experience during my study

I would like to give my special thanks to my Tutor, Associate Professor Doctor Nguyen Dong Phong, for his valuable guidance, advice and encouragement throughout my research study

Deep appreciation and thanks are also extended to my colleagues, classmates, Mega Lifesciences Company and my family for their support and

encouragement throughout the program

Ho Chi Minh City, 20 November 2006

Ho Van Thai

TABLE OF CONTENTS

Acknowledgements

Comments

List of figures

List of tables

Introduction ……… 1

1 Problem statement ……… 1

2 Objectives of research study ……… 2

3 Scope and limitation of research study ……… 2

4 Study method ……… 3

5 Structure of the study ……… 4

Chapter 1: Literature review ……… 5

1.1 Definition of brand ……… 5

1.1.1 What is a brand? ……… 5

1.1.2 Brands versus products ……… 5

1.2 Brand building and developing ……… 6

1.2.1 Brand orientation model ……… 7

1.2.2 Corporate branding ……… 9

1.2.3 Building Brand Value through Customer Service ……… 13

1.2.4 The role of public relations in branding ……… 13

1.3 Branding in pharmaceutical industry ……… 15

1.3.1 Pharmaceutical brands ……… 15

1.3.2 The Brand Value Pyramid – Functional vs Emotional Benefits ……… 17

1.3.3 Laying the Foundations ……… 18

Summary of chapter 1 ……… 20

Chapter 2: Introduction to Mega Lifesciences, Vietnam pharmaceutical market

and reducing weight product market ……… 21

2.1 Overview of Mega Lifesciences Company Limited (Mega We Care) 21

2.1.1 Mega Lifesciences International ……… 21

2.1.2 Mega Lifesciences Vietnam ……… 25

2.1.2.1 History ……… 25

2.1.2.2 Operation……… 26

2.1.2.3 Organization ……… 26

2.1.2.4 Medicap’s philosophy, objectives and strategy……… 29

2.1.2.5 Medicap’s products ……… 30

2.1.2.6 Medicap’s sales performance ……… 31

2.2 Pharmaceutical Market in Vietnam ……… 33

2.2.1 Overview of pharmaceutical market in Vietnam ……… 33

2.2.2 OTC pharmaceutical market in Vietnam ……… 34

2.3 Reducing weight product market ……… 34

2.3.1 Overweight and obesity concepts ……… 34

2.3.1.1 What are overweight and obesity? ……… 34

2.3.1.2 Facts about overweight and obesity……… 36

2.3.1.3 Overweight and obesity in Vietnam ……… 37

2.3.2 Survey on reducing weight product market in Vietnam ……… 38

2.3.3 Analysis of Hydrotrim competitors ……… 41

2.3.3.1 Classification by price and scientific proof ……… 41

2.3.3.2 Strenghts and weaknesses of Hydrotrim competitors ……… 42

2.3.4 Opportunities and threats of Hydrotrim ……… 44

2.3.4.1 Opportunities ……… 44

2.3.4.2 Threats ……… 45

Summary of chapter 2 ……… 46

Chapter 3: Building and developing Hydrotrim brand in Vietnam for the last period……… 47

3.1 Targeting and positioning Hydrotrim ……… 47

3.1.1 Hydrotrim consumer profile……… 47

3.1.2 Customers ……… 48

3.1.3 Positioning ……… 48

3.2 Hydrotrim identity ……… 49

3.2.1 Hydrotrim brand as a product ……… 49

3.2.2 Hydrotrim price ……… 50

3.2.3 Hydrotrim image……… 50

3.2.3.1 Hydrotrim name, color and symbol……… 50

3.2.2.3 Communication ……… 52

3.3 Integrated marketing programs to build and develop Hydrotrim brand in Vietnam ……… 52

3.3.1 Marketing objectives of Hydrotrim for the first 12 months ……… 52

3.3.2 Hydrotrim trial campaign to build the credibility ……… 53

3.3.2.1 The trial research cooperated with Traditional Medicine Institute 53

3.3.3.2 Two trial researches by Mega Lifesciences itself ……… 55

3.3.3 Hydrotrim launching campaign ……… 56

3.3.3.1 Pharmacy meeting in Hochiminh city and Hanoi ……… 56

3.3.3.2 Television talk show ……… 58

3.3.3.3 Press articles ……… 59

3.3.3.4 Tele-consulting program……… 60

3.3.3.5 Consumer promotion ……… 62

3.3.3.6 Trade promotion ……….… 63

3.3.3.7 P.O.S display ……… 63

3.3.3.8 Medicap Sales Force……… 65

3.3.4 Hydrotrim post-launching campaign……… 65

3.3.4.1 Television programs ……… 66

3.3.4.2 Press articles ……… 66

3.3.4.3 Trade promotion ……… 66

3.3.4.4 Promoter Girl at pharmacies ……… 67

3.3.4.5 Promoter Girl at supermarkets ……… 67

3.4 Evaluation of building and developing Hydrotrim brand ……… 68

3.4.1 Sales performance ……… 68

3.4.1.1 Sales of Hydrotrim from June 2005 (launching month) to June 2006 68

3.4.1.2 Sales evolution from June 2005 to June 2006 ……… 69

3.4.1.3 Sales vs target for the first 12 months ……… 70

3.4.1.4 Ranking of Hydrotrim ……… 70

3.4.2 Availability of Hydrotrim at pharmacies ……… 70

3.4.3 Survey on Hydrotrim brand awareness ……… 72

3.4.3.1 Consumers surveyed and methodology ……… 72

3.4.3.2 Results of the survey……… 72

3.4.4 Survey on consumer perception of Hydrotrim brand ……… 73

3.4.4.1 Objectives of the survey ……… 73

3.4.4.2 Criteria to select consumers ……… 74

3.4.4.3 Methodology ……… 76

3.4.4.4 Results of the survey ……… 76

3.4.5 Survey on pharmacy perception of Hydrotrim brand ……….………… 83

3.4.5.1 Objectives of the survey ……… 83

3.4.5.2 Criteria to select pharmacies ……… 83

3.4.5.3 Results of the survey……… 84

3.5 SWOT analysis ……… 95

3.5.1 Strengths ……… 95

3.5.2 Weaknesses ……… 97

3.5.3 Opportunities ……… 98

3.5.4 Threats ……… 99

Summary of chapter 3 ……… 100

Chapter 4: Recommendations for developing Hydrotrim brand in Vietnam market for the next years ……… 101

4.1 Marketing objectives for the years from 2007 to 2010 ……… 101

4.2 Marketing programs for the years 2007 to 2010 ……… 102

4.2.1 TV programs ……… 102

4.2.1.1 TV channels ……… 102

4.2.1.2 Programs and contents ……… 103

4.2.2 Press articles ……… 103

4.2.2.1 Newspapers and magazines ……… 103

4.2.2.2 Contents ……… 103

4.2.3 P.O.S materials ……… 104

4.2.4 Tele-consulting activity ……… 105

4.2.5 Trade promotion and consumer promotion ……… 106

4.2.6 New programs ……… 106

4.2.6.1 TV commercials……… 106

4.2.6.2 Press advertisements ……… 106

4.2.6.3 P.O.S display ……… 107

4.2.7 Market research ……… 107

4.2.8 Sales Force ……… 108

Summary of chapter 4 ……… 109

Conclusions ……… 110

Lessons ……… 111

Appendices References

LIST OF FIGURES

Figure Content Page

Figure Content Page

LIST OF TABLES

Table Content Page

2 Marketing objectives of Hydrotrim for the first twelve months 52

4 Sales performance of Hydrotrim from June 2005 to June 2006 69

5 Sales versus target of Hydrotrim for the first 12 months 70

8 Top of mind brand awareness of three top reducing weight

brands

73

16 Reasons of dissatisfaction with the reducing weight result 79

Table Content Page

22 Suggestions for improvement of tele-consulting activity 81

24 Suggestion for improvement of Hydrotrim gift to consumers 82

34 Summary of evaluation of all Hydrotrim marketing activities 90

35 Suggestions of pharmacies for other marketing activities 91

38 Marketing objectives of Hydrotrim for the years from 2007 to

2010

101

INTRODUCTION

1 PROBLEM STATEMENT

Branding is a hot topic these days Especially, when Vietnam joins WTO, Vietnamese businesses will face with opportunities and challenges to exist and develop and they realize the importance of the issue However, many local firms still wonder whether to focus on manufacturing quality products or building and developing strong brands On the other side, many other Vietnamese companies realize the importance of branding but do not know how to build a strong brand They are not confident enough to compete with famous brands from foreign multinational corporations

Mega Lifesciences is a medium pharmaceutical company from Thailand, an Asean country It is one of the fastest growth pharmaceutical companies in Vietnam (IMS report Quarter II 2006) Working for Mega Lifesciences, I know that its management board deeply understands the importance of building product brands together with corporate brand They are continuously building their brands to compete with strong brands from The United States and European countries According to the management board, Hydrotrim, a reducing weight brand, is the most successful brand in a sense of sales and profit for the first year

of launching We know that reducing weight market is a potential market with too many competitors Two of them are from two famous multinational pharmaceutical companies in the world It means that it is not easy to be in the top of this category

The following questions were raised when I prepared for this thesis:

Is Hydrotrim successful in the brand building process?

Why is it successful?

What should Mega Lifesciences do to develop Hydrotrim brand?

What lessons can Vietnamese businesses learn from the case of building and developing Hydrotrim brand in Vietnam?

To find answers to the above questions encouraged me to make this research study

2 OBJECTIVES OF RESEARCH STUDY

The objectives of the research study are described as follows

First of all, the study will state the importance of brand building and developing

in the survival and development of a product

Secondly, this research will help us to study the building Hydrotrim brand in Vietnam for the last year and then to understand the evaluation of consumers and pharmacies on the brand

Finally, we will give some recommendations for developing Hydrotrim brand for the next years

3 SCOPE AND LIMITATION OF RESEARCH STUDY

This research will concentrate on the building and developing Hydrotrim brand since the launching in Vietnam market in June 2005

It will only focus on Hydrotrim of Mega Lifesciences in big cities such as Hochiminh city, Hanoi, Haiphong, Hue, Danang, Nhatrang, Bienhoa, Mytho, Cantho, Longxuyen and Camau

Finally, we will give some recommendations for developing Hydrotrim brand in Vietnam market for the period from 2007 to 2010

Marketing survey or field research

We intend to implement two marketing surveys The first one will be interviews

by phone of 100 consumers who fulfill the course of eight weeks of using Hydrotrim This survey is to understand consumers’ perception of Hydrotrim The second one will be interviews of 280 pharmacies which are selling Hydrotrim This research is aimed at knowing pharmacies’ perception of Hydrotrim

Primary data will be processed by SPSS software to become secondary data and they will serve the analysis of consumers and pharmacies’ perception of Hydrotrim

5 STRUCTURE OF THE STUDY

Introduction

Chapter 1 Literature Review

Chapter 2 Introduction to Mega Lifesciences, Vietnam pharmaceutical market and reducing weight market

Chapter 3 Building and developing Hydrotrim brand in Vietnam for the last period

Chapter 4 Recommendations for developing Hydrotrim brand in Vietnam market for the years from 2007 to 2010

Conclusions

Chapter 1 Literature Review

1.1 Definition of brand

1.1.1 What is a brand? 1

Branding has been around for centuries as a means to distinguish the goods of one producer from those of another In fact, the word “brand” is derived from the Old Norse word “brandr”, which means “to burn”, as brands were and still are the means by which owners of livestock , mark their animals to identify them

According to the American Marketing Association, a brand is a “name, term,

sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those

of competition.” Thus, the key to creating a brand, according to this definition, is

to choose a name, logo, symbol, package design, or other attribute that identifies

a product and distinguishes it from others We can call these different components of a brand, which identify and differentiate it, brand elements

1.1.2 Brands versus products 1

It is important to contrast a brand and a product According to Philip Kotler, a

product is anything that can be offered to a market for attention, acquisition, use

or consumption that might satisfy a need or want Thus, a product may be a physical good, service, retail store, person, organization, place or idea

Kotler defines five levels of a product:

1 The core benefit level is the fundamental need or want that consumers

1 Kevin Keller Klane, Strategic brand management

satisfy by consuming the product or service

2 The generic product level is a basic version of the product containing only

those attributes or characteristics absolutely necessary for its functioning but with no distinguishing features This is basically a stripped-down, “no-frills” version of the product that adequately performs the product function

3 The expected product level is a set of attributes or characteristic that

buyers normally expect and agree to when they purchase a product

4 The augmented product level includes additional product attributes,

benefits, or related services that distinguish the product from competitors

5 The potential product level includes all of the augmentations and

transformations that a product might ultimately undergo in the future

A brand is a product, then, but one that adds other dimensions to differentiate it in some way from other products designed to satisfy the same need These differences may be rational and tangible – related to product performance or the brand – or more symbolic, emotional and intangible – related to what the brand represents

More specifically, what distinguishes a brand from its unbranded commodity counterpart and gives it equity is the sum total of consumers’ perceptions and feelings about the product’s attributes and how they perform, about the brand name and what it stands for, and about the company associated with the brand

1.2 Brand building and developing

1.2.1 Brand Orientation Model 2

Urde (1999) presents Brand Orientation as a brand building model that focuses

on brands as strategic resources “Brand Orientation is an approach in which the processes of the organization revolve around the creation, development, and protection of brand identity in an ongoing interaction with target customers with the aim of achieving lasting competitive advantages in the form of brands” (p 117-118) Brand orientation focuses on developing brands in a more active and deliberate manner, starting with the brand identity as a strategic platform It can

be said that as a consequence of this orientation the brand becomes an

“unconditional response to customer needs and wants” (p 120) This should be, however, considered carefully given that “what is demanded by customers at any given moment is not necessarily the same as that which will strengthen the brand

as a strategic resource” (p 121) Following this reasoning, “the wants and needs

of customers are not ignored, but they are not allowed to unilaterally steer the development of the brand and determine its identity” (p 122)

According to the brand orientation model, “the starting point for a process of brand building is to first create a clear understanding of the internal brand identity The brand then becomes a strategic platform that provides the framework for the satisfaction of customers’ wants and needs” (Urde 1999, p 129) The point of departure for a brand-oriented company is its brand mission

Urde’s Brand Hexagon (1999), shown in Figure 1, integrates brand equity and brand identity with a company’s direction, strategy and identity The right side of

2 Francisco Guzman, Brand building towards social values: associating to public goods,

www.brandchannel.com

the model reflects the reference function -product category and product, which are analyzed rationally-, while the left side of the model reflects the emotional function -corporate and brand name, which are analyzed emotionally “A brand

is experienced in its entirety” (p 126), which means that both emotions and rational thought are involved The lower part of the model -mission and vision- reflects the company’s intentions towards the brand, while the upper part reflects the way that target consumers interpret the brand At the center of the model lies the core process of brand meaning creation, which includes the positioning and core values

Figure 1: Brand Hexagon (Source: Urde 1999)

In summary, “in a brand-oriented organization, the objective is -within the framework of the brand-to create value and meaning The brand is a strategic platform for interplay with the target group and thus is not limited to being an

unconditional response to what at any moment is demanded by customers” (Urde

1999, p 130)

Additionally, in a later article, Urde (2003) mentions that the brand building process is two-part: internal and external He defines the internal process as that used primarily to describe the relationship between the organization and the brand, with the internal objective being for the organization to live its brands Conversely, the external process is that concerned with relations between the brand and the customer, with the external objective of creating value and forming relationships with the customer

1.2.2 Corporate Branding 2

The most recent turn in branding literature emerged in the mid-nineties Businesses began shifting their focus from product brands to corporate branding (de Chernatony 1999, Hatch and Schultz 2003) The corporate brand perspective supports, and could be a consequence of, the strategic view of brands King (1991) is considered to be the first author to make a clear distinction between product and corporate brands, emphasizing the importance of a multidisciplinary approach in order to manage them It is after 1995 when more research on corporate branding is published Balmer and Gray’s (2003) literature review on corporate branding presents different visions that have been developed during the years prior They conclude that corporate brands are leading to the development of a new branch of marketing which should be known as

“corporate-level-marketing” (Balmer and Greyser 2003)

Aaker (2004a) defines a corporate brand as a brand that represents an

organization and reflects its heritage, values, culture, people, and strategy Corporate branding congruent with the strategic brand vision (Schultz and Hatch 2003), dwells on developing brands at an organizational level (Knox and Bickerton 2003) which requires managing interactions with multiple stakeholders (Balmer and Gray 2003, Knox and Bickerton 2003, Hatch and Schultz 2003, Aaker 2004b) A corporate brand is defined primarily by organizational associations (Aaker 2004b), and thus can develop and leverage organizational characteristics, as well as product and service attributes (Aaker 2004a) Urde (2003) states that corporate brands must reflect organizational values In other words, an organization’s core values must be the guiding light of the brand building process, both internally and externally They must be built into the product, expressed in behavior, and reflected in communication “Core values influence continuity, consistency and credibility in the building of a corporate brand” (p 1036)

According to Balmer and Gray (2003), corporate and product brands are different

in terms of their composition, constituencies, maintenance, management, and disciplinary roots Hatch and Schultz (2003) distinguish six differences between product and corporate branding:

1) The shift in focus from product to corporation of the branding effort;

2) The different exposure the organization is subject to, which makes the firm’s behavior and its interaction with society much more visible;

3) The relation of the brand to all company stakeholders, not just customers; 4) The requirement of organization-wide support;

5) The temporal dimension of corporate brands includes past and future, not just present;

6) the greater reach of corporate brands than product brands means that they take on more strategic importance

Given these differences, they describe a corporate branding framework which is based on three elements: strategic vision, organizational culture and corporate image They argue that developing the corporate brand involves articulating and aligning these three elements, which can be achieved when an effective dialogue between top management, external stakeholders, and members of the organizational culture is established Given the fact that corporate brands concern multiple stakeholders, Knox and Bickerton (2003) suggest that this framework should be extended in order to include a fourth variable: the competitive environment of the organization, both from the perspective of its current image and current culture

Figure 2: Elements of corporate branding (Source: Hatch and Schultz 2003)

Knox and Bickerton (2003) identify six “conventions” of corporate brand building, illustrated in Figure 3 They are:

Ü Brand context: understanding where the brand stands

Ü Brand construction: how the brand is positioned in accordance to customer

and stakeholder value

Ü Brand confirmation: the way the brand is articulated to the rest of the

organization and all of its audiences

Ü Brand consistency: delivering clarity to all stakeholders through its

Figure 3: The Six Conventions of Corporate Branding

(Source: Knox and Bickerton 2003)

In sum, from the corporate brand vision every activity of the company should be seen through the lens of the brand (Schultz and Hatch 2003)

1.2.3 Building Brand Value through Customer Service 3

Customer service that builds brand value is more than a smile or kind act When customers interact with us, they form perceptions of our brand that are far more powerful than the perceptions they form through exposure to our marketing communications Consider these ideas for ensuring that we optimize customer service to build the value of our brand:

1 Bring our brand values to life in all customer experiences

2 Build an understanding of our customers’ total experience

3 Allow our customer service providers to redefine the rules

4 Give “empowerment” time to work

5 Ensure that our customer service training is aligned with our brand

strategy

Our brand makes a promise and delivering on that promise builds trust The truism that “trust is built on a thousand deeds and lost by one” is as relevant for our brand as it is for any human relationship Aligning our customer service with our brand is the best way to build a solid relationship

1.2.4 The role of public relations in branding

Al and Laura Ries, in their book “The Fall of Advertising and the Rise of PR” suggested that advertising may be a waste of time in building a brand Advertising obviously generates a lot of excitement among ad agencies as well

as anxiety among brand managers with tight budgets To cite major advertising campaigns such as Budweiser's Whassup?, Milk's Mustache, Nike's Just Do It,

3 Alison R Eyring, Building brand value through customer service, www.brandchannel.com

MasterCard's For Everything Else and Taco Bell's Chihuahua as examples of brands that lost equity from advertising, as Ries and Ries have done, creates even more foaming at the mouth among those responsible for the brand or management of the account

"Relatively speaking PR has more credibility than advertising That's why a lot

of advertisers have tried to run ads that look like editorial And the media has fought back by labeling that ad with the word 'advertisement’ In general," he continued, "you'll find that PR has the credibility in creating interest and desire

on the part of a potential purchaser where advertising lacks that credibility Why would you believe what's in an ad? It's self serving; it's a one-sided message."

Still Ries maintained that although advertising has its place in a brand's life, introducing a new concept or product is not it Instead, advertising should act to reinforce an already known brand attribute

They insisted, "in most cases, successful brands—Playstation, Microsoft, MS Xbox, Apple, go down the list of powerful brands, and find that most of them got their initial launch primarily because of publicity and not advertising."

Answering to the question “why is PR a better way to launch a new brand than advertising?” in the Brand Marketing Conference held in the Philippines on June

23, 2006, Al Ries stated that “There are two reasons

1 Advertising doesn’t have the credibility to put a new brand (and a new category) into the mind Advertising works best with established brands

where credibility is less of an issue

2 New brands invariably take off slowly Red Bull took four years to reach

$10 million in sales and another five years to reach $100 million in sales Early on, there’s not enough money to launch a sizeable advertising campaign The only alternative is public relations.”

1.3 Branding in pharmaceutical industry

1.3.1 Pharmaceutical Brands 4

There are three categories of pharmaceutical brands:

1 Original brands or ethical drugs which are prescription-only medicines

2 Branded and identical “generic” drugs

3 Over-the-counter (OTC) medicines purchased without a prescription

They are branded or generic

Each of these categories requires very different marketing and branding

strategies

As opposed to the FMCG industry, the pharmaceutical industry has not been as efficient in leveraging the power of their brands This is primarily because drugs have always competed against each other based on functional attributes (clinical and product related features) However with patent expiry, this has become a difficult situation as generics create competition in the market

Additionally, the switch of drugs from prescription to over-the-counter is making

4 Kalinka Markova De Montille, Corporate branding in the pharmaceutical industry, www.brandchannel.com

it similar to consumer goods

As drugs switch from prescription-only medicines to being sold over the counter (OTC), consumer power in the healthcare industry is increasing exponentially Many pharmaceutical companies are slowly realizing that drugs are increasingly becoming like FMCG goods Higher healthcare costs and the rise in consumer healthcare knowledge have forced the government to promote consumer self-medication in UK

Several challenges face pharmaceutical brands today R&D expenses have risen significantly and the success rate of products is not high Hence it is difficult to constantly rely on new product development to achieve competitive advantage Also, as patents expire, me too products (generics) are available in the market Lower priced generic product sales have an advantage, as they are supported by public authorities who are trying to control health spending all over the world This leads to erosion of sales for branded products, which are generally more expensive Also with pharmaceutical products switching increasingly from

“prescription-only” status to “over-the-counter” (OTC) status, these OTC drugs are adorning an image comparable to FMCGs (fast moving consumer goods)

For OTC drugs where end consumers are an important part of the purchase decision, the role of brands is significant Also with patent expiry and the surge

of generics into the marketplace, the power of branded drugs has become significant to ensure consumer loyalty (Mintel Report, 2002) With the changing face of the Industry, branded drug manufacturers are slowly realizing that they may have to emulate some of the marketing techniques used by their FMCG counterparts in order to sustain brand loyalty

1.3.2 The Brand Value Pyramid – Functional vs Emotional Benefits 5

Once the functional benefits are met, the customer’s mind moves to other needs, which are intangible, emotional and often irrational This has been highlighted in the brand value pyramid (Davis, 2000) It is only at the pinnacle of the Brand Value Pyramid that a brand achieves highest level of loyalty Hence, it is important for pharmaceutical companies to relate to these needs by interacting with consumers at a more emotional level and ultimately becoming a trustworthy partner and sustain brand loyalty in the long run

Figure 4: Brand Value Pyramid (Source: Adapted from Davis, 2000 or Aaker, 1996)

5 Preeti Suchanti, Emotional Branding in the pharmaceutical industry, www.brandchannel.com

From the perspective of the pharmaceutical industry, the following functional benefits are important: 1 Efficacy – does the product work in its chosen therapeutic area; 2 Safety – is the product safe and without any adverse side-effects; 3 Convenience – does the product have a complicated dosage requirement or an unpleasant taste/way of being taken; 4 Cost-effectiveness – will the cost be a barrier?

1.3.3 Laying the Foundations 6

Optimizing the opportunity for the brand comes down to maximizing and maintaining the key brand variables—positioning, personality, brand name and identity Establishing clear and strategic foundations, therefore, is fundamental to underpinning the development of any brand The blueprint of great brands can

be seen to meet four key criteria:

• Relevance Understanding the existing brand dynamics of the therapy area, the unmet needs in the market, the hearts and minds of both prescriber and

patient target audiences, is crucial to determining the relevance of the window

of brand opportunity

• Credibility The paradigm shift in patient power has created a compelling push-pull dynamic, which has forever changed the way in which a pharmaceutical brand is brought to market Brand cues and communications,

therefore, need to be taken into consideration and be credible across all target

audiences Brands need to speak the patient’s language as much as the

6 Rebecca Robins, Building brands: brand lyfecycle management, myth or reality? www.brandchannel.com

prescriber’s language

• Differentiation It is vital that the branding foundations being put in place

are defined for differentiation vis-à-vis the future brand context, as much as the

current brand context

• Stretch. Ultimately, those branding foundations should be sufficiently flexible, to accommodate changes in the market and for the post-patent life of the brand

Pharmaceutical companies face a series of significant challenges that are affecting their ability to maintain growth and sustain earning levels To operate and succeed in the complex and highly regulated competitive environment, pharmaceutical companies know that brands are more than just products and services “They know that brands are also, what the company does and, more importantly, what the company is” (Davis, 2002:1)

Finally, four key criteria of branding in pharmaceutical industry were also stated They are relevance, credibility, difference and stretch

In the next chapter, we will start the research study by presenting the internal and external environment of Hydrotrim brand We will state the overview of Mega Lifesciences corporate and corporate branding, then the Vietnamese pharmaceutical market and reducing weight product market

Chapter 2 Introduction to Mega Lifesciences, Vietnam pharmaceutical

market and reducing weight product market

2.1 Overview of Mega Lifesciences Company Limited (Mega We Care) 2.1.1 Mega Lifesciences International 7

Mega Lifesciences is a pharmaceutical company which was established in

Thailand in 1987

Mega LIfesciences symbolizes a growing global organization with its presence in more than 20 countries across the globe through its subsidiary offices, affiliates and distribution partners which span across South East and Central Asia, Pacific, Africa, Europe and South America Mega Lifesciences’ key countries include Australia, Singapore, Thailand, Malaysia, Ukraine, Russia, Vietnam, Myanmar, Indonesia, The Philippines, Ghana, Kenya, Nigeria, Sri Lanka, Maldives,

Tanzania, Uganda and Yemen

Mega Lifesciences’ philosophy

Mega Lifesciences is a healthcare company dedicated to the wellness and being of humans Mega Lifesciences develops to provide safe and effective medicines, herbs and supplements

7 www.megawecare.com

Mega Lifesciences’ mission

The mission of Mega Lifesciences is to build a thinking organization which will change before it is forced to and live and grow beyond each of it

Mega Lifesciences’ vision

The vision of Mega Lifesciences is to build a visionary organization that lives its core ideologies, that is willing to persist for the long-term, that provides its customers the best products and services, that provides an environment to learn,

to create and grow, that innovates and develops new products, services and tomorrows markets, that contributes to the society by protecting the environment, following honest business practices and supporting the welfare of fellow humans, and that increases wealth of shareholders, employees and all those who support and contribute to its mission

Mega Lifesciences’ core values

Mega Lifesciences’ core values are hard-working and dedicated people, integrity and flexibility

Mega Lifesciences’ core competencies

Mega Lifescienes is an expert in marketing natural vitamins and herbal extract products

Technical and marketing support

Being a leading nutraceutical player, Mega Lifesciences provides ongoing

technical and scientific updates on alternate care products to the medical

fraternity and end users through continuing medical and scientific education work shops

As a marketing oriented company, Mega Lifesciences is responsive to

consumer's needs Mega Lifesciences maintains ethics in advertising and

promotion for claims on Nutraceuticals

To augment its marketing efforts, Mega Lifesciences offers a complete package

of services ranging from providing product information database, reference

materials, field force training, merchandising and other sales support materials

Customer Services of Mega Lifesciences

Customer services of Mega Lifesciences include designing products, providing a total perspective on the products, helping in differentiating products, providing with all the regulatory assistance needed to make products available to customers, developing products as per specifications and ideas, providing knowledge and ideas for marketing & promotional tools, continuous feedback on the global markets for the products and feedback with latest knowledge and development from global markets

Products

Mega Lifesceinces’ products are manufactured at its world-class pharmaceutical sites approved by German, Australian and other health authorities of the world Mega Lifesciences’ product range is originating from a clear philosophy of

offering high quality safe and effective healthcare products Mega Lifesciences strives to build brands based on traditional wisdom coupled with the modern age scientific rationale

Mega Lifesciences has a well established track record of building in various international markets

Mega Lifesciences offers a broad range of supplements, herbs and medicines for

a number of diseases and deficiency conditions satisfying the needs of different age groups and socioeconomic segments As an organization, Mega Lifesciences

is truly dedicated to the wellness and well-being of humans

Mega Lifesciences offers a wide range of nutraceuticals The product range comprises well established, scientifically developed brands targeting to a specific disease or a condition

Mega Lifesciences has a number of brands which are formulated as per specifications in “Commission E monographs” and are produced using standardized herbal extracts and raw materials

Milestones

1987 established

1990 bought some brands like Medic rafts/ started manufacture

1992 started own brands

1993 expanded to Vietnam, Myanmar

1996 marketing and distribution in Vietnam

1997 expanded to Malaysia, Singapore, Indonesia, The Philippines

1998 serious attempts of marketing own brands in Thailand and Vietnam

1999 serious attempts of selling own brands in Vietnam

2000 started manufacture in Australia, distribution in Australia

expanded to Sri Lanka, Maldives

2001 expanded to Africa: Tanzania, Uganda, Yemen

2002 expanded to Eastern Europe: Ukraine and Russia, manufacture in

Ukraine

2003 expanded to Nigeria,

2004 expanded to Kazakhstan,

2005 changed name to Mega Lifesciences and expanded to Kyrgyzstan

2.1.2 Mega Lifesciences Vietnam

2.1.2.1 History

Mega Lifesciences opened its representative office in Vietnam in 1993 At thattime, the name of the company was Mega Products Vietnam Main activitieswere regulatory affairs and logistics for Janssen, an international pharmaceuticalcompany, which was the first and key supplier of Mega In 1996, Mega ProductsVietnam started marketing and distribution activities for many principals Megacooperated with Hapharco, a public pharmaceutical company, to have warehouses in Hochiminh city and Hanoi, marketing and sales team to marketproducts of Mega’s principals in Vietnam In 1999, besides the representativeoffice, Mega opened Mega Products Company Limited and started to sell its own products with Medicap department In 2000, Mega Products Vietnam cooperated

with Dapharco, another public pharmaceutical company, to open a branch and awarehouse in Danang and started to sell Mega’s products in the central ofVietnam In 2005, Mega Products Vietnam changed the name to MegaLifesciences Vietnam

2.1.2.2 Operation

Distribution services

Distribution services of Mega Lifesciences Vietnam include logistics, clearingand handling, physical distribution and warehousing, product promotion andsales, marketing intelligence and information

Sales and marketing

Besides the distribution services, Mega Lifesciences has other key businesseswhich are sales and marketing its own products through Medicap department

operation Consulting departments includes finance, administration and personnel, MIS and regulatory affairs Operation departments are responsible forsales, marketing and distribution for Mega Lifesciences’ products and itsprincipals The main principals (suppliers) of Mega Lifesciences Vietnam areMedicap and Janssen Other departments such as non-exclusive and ethical are responsible for smaller principals The last department is warehouse whichincludes warehousing, delivery and logistics staff

Figure 5 Organization chart of Mega Lifesciences Vietnam