Segmenting targeting positioning of cezipro in ethical market

Figure 2:Cefzipro product formsFigure 3:GDP and GDP per capita in Vietnam from 2004-2010f Figure 4:Expenditure for medicine by value and volume Figure 5:Share value by region IMS – MAT 2

MBMM PROGRAM

BUI KIM HOANG

SEGMENTING – TARGETING – POSITIONING

OF CEZIPRO IN ETHICAL MARKET

FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT

Advisor: Professor Doctor NGUYEN NGOC HOA

Ho Chi Minh City, Vietnam

2007

Any data, result or quote in the project is clearly identified.

BUI KIM HOANG

I would like to take this chance to express my sincere thanks to Professor Doctor Nguyen Ngoc Hoa who helps me as my coach and guidance, supports and comments on my final project In spite of the complexity and scope of the topic, he guides me with scientific

instruction and valuable advice from the beginning to completion of this project My great thanks also expressed to professors in the role

of arguments and defense for contributing valued ideas, science and practices which really motivate me.

I would like to thank deeply professors of Final project defense committee who spare their time to pay attention to my presentation, give comments and pose valuable questions, which help me to be more comprehensive of the Final project topic My gratefulness extended to MBMM program, Professor Doctor Tran Anh Tuan and Professor Jean-Pierre Baeyens, Vietnamese and Belgian Professors, Coordinators of the MBMM Vietnam – Belgium program that I’m honored to pursuit through out last two years.

Last but not least, I’m grateful to the Management board of Bristol-Myers Squibb Co., my classmates for providing me valuable support to finalize this project.

BUI KIM HOANG

- WTO:World trade organization

- MOH: Minister of health

- IMS:Intercontinental Marketing Service – Pharmaceutical

research company

- Ethical: Prescription product

- OTC: Over the counter (no need prescription)

- URS: Upper respiratory system which includes ear, nose, throat,

- URTI:Upper respiratory tract infection

- CAC: Clinical advisory committee

- KOL:Key opinion leader of industry

- GP:Group presentation

- STP:Segmentation – Targeting – Positioning

- ENT:Ear – Nose –Throat disease/ physician

- GP:General practitioner

- MVP:Marketing value proposal

- Generic:Different Brand which has the same active substance butpromoted in cheaper price due to no fee of research and development

Figure 2:Cefzipro product forms

Figure 3:GDP and GDP per capita in Vietnam from 2004-2010f

Figure 4:Expenditure for medicine by value and volume

Figure 5:Share value by region IMS – MAT 2006

Figure 6:Michael Porter’s five forces

Figure 7:Customer demand in importance ranking

Figure 8:Trend of syrup usage

Figure 9:Sales trend of brand-name and generic product

Figure 10:Sales trend of brand-name syrup and sachet

Figure 11:Main competitors in pediatric market

Figure 12:Sales and share of Bristol-Myers Squibb Co 2002-2006

Figure 13:Competitive strategy – Michael Porter

Figure 14:Cefzipro sales in South Africa

Figure 15:Model of Market segmentation from Professor Jean-Pierre Baeyens

Figure 16:Segmenting on characteristic of Product/ characteristic of potentialclients

Figure 17:Segmenting on characteristic of product/ usage of product

Figure 18:Full view of the two ways of segmentation

Figure 19:Analyzing of targeting base on Characteristics of product – form /characteristics of potential clients – age

Figure 20:Analyzing of targeting base on Characteristics of product –

bactericidal spectrum/ Usage of product – diseases

Figure 21:Targeting decision of Cefzipro

Figure 22:Evaluation of Cefzipro and competitors

Figure 23:Competitors’ positioning

Figure 24:Cefzipro image

Figure 25 :Communication Action plan

2.1.2 Development of industry and threat from pollution 6 2.1.3 Development of education and interest toward health care 6 2.1.4 Social opinion toward pharmaceutical industry 6 2.1.5 Government policy toward pharmaceutical industry 6 2.1.6 Geography economic factor influences toward

4.1 Segmenting 15

4.1.2 Market segment base on Characteristic of product 15

4.2.4 Targeting of Cefzipro in consolidated view 19

4.3.2 Understand how target-clients make their choices 20 4.3.3 Describing and localizing the competition 22

CHAPTER 1: INTRODUCTION

1.1 Company introduction:

is an American pharmaceuticalCorporation, which is in top twenty in leading pharmaceutical corporation in theworld In 2006, the position ranking of the Corporation in Vietnam is numberfour (after GlaxoSmithKline, Sanofi-Aventis, Servier)

Top ten leading corporations in Vietnam from IMS – 20062

THE VISION and MISSION of BMS Vietnam from 2006-2008:

– Upgrade to 3rd position of leading corporation list in Vietnam and goes

beyond Servier - French pharmaceutical company (occupying 3rd position)– In order to do that, its strategy is launching 3 potential products from globalportfolio, especially in antibiotic sector, to gain more sales and share Forcurrent product, it maintains market share of current products in efficient way– Re-target customer, develops new form of mature products, develops

Customer relationship management program (CRM), develops promotionalnetwork and enlarge territory

One of new key products launch in 2008 is CEZIPRO with its objective:

- To get benefit from the most growing market – antibiotic cephalosporin

- To replace some antibiotics which visa will be expired at the end of 2007

- To utilize reputation of BMS product quality

- To utilize strong sales force and their current relationship with customers

Figure 1

FINANCIAL GOALS OF CEZIPRO:

To have sales of 1.8 $MM and occupy 20% market share at the end of 2010(after 3 years launching)

1.2 Product introduction:

What’s CEZIPRO?

- CEZIPRO is in a class of medications called cephalosporin 2nd

generation antibiotics It works by stopping the growth of bacteria

Why is this medication prescribed?

- CEZIPRO is used to treat certain infections caused by bacteria, such asbronchitis and infections of the ears, throat, sinuses, and skin

- CEZIPRO has two types of presentation:

 Suspension syrup: bubble gum taste

 Tablet 250mg and 500mg

Who can be prescribed?

Diagnosed patients suffered from upper

respiratory tract infection and skin infection

 Children over 6 months

of treatment, antibiotics are key strategic agent in treatment script and the

demand of effective antibiotic is increasing together withbacteria resistance

Figure 2

Aware of potential antibiotic market, many

antibiotics have been launched in Vietnam

since 1995, but their promotional efforts have

dispersed on all kinds of customers and not yet

had clear position in customer’s mind In a

crowded market, it’s difficult for customers to

make their choice That is current issue of

pharmaceutical companies and also an opportunity for a new antibiotic productwhich has a good strategy of Segmenting, Targeting and Positioning in

customer’s mind

Bristol-Myers Squibb Co also wants to exploit this market by preparing for

launching a new antibiotic – CEZIPRO in 2008; and they aware that Segmenting,Targeting and Positioning are vital steps, which will navigate marketing mixactivities and lead promotional efforts to success

To do it well, having suitable theory and market information is critical, this

project utilizes all support theory, product knowledge, available secondary data

of market dynamic, insight survey of customer’s need and trend… to segment themarket, target and position of CEZIPRO

This project includes:

- Analyze external and internal factors of current antibiotic market,

especially pediatric market which is potential for launching new product

- Define company and CEZIPRO strength and unique factor

- Conduct SWOT analysis of CEFZIPRO

- Segment of cephalosporin pharmaceutical market to find opportunity forCEFZIPRO

- Target most potential segment based on practical criteria

- Position CEFZIPRO based on customer’s demand and competitor analysis

1.4 Executive summary:

In order to successful launch a new antibiotic in market and achieved sales of1.8 $MM and occupied 20% market share at the end of 2010 Segment marketfor product opportunity, target right customers and then position product properly

in customer’s mind right at the launching is very important To do it well, BMShas analyzed all external and internal environments; utilize all support

information from internet, medical industry, all advantages of product knowledgeand marketing knowledge in last 2 year MBMM studding They also utilize alllatest quality and quantity survey, product testing, latest market research fromIMS, product in vivo and in vitro trials

The market was segmented by both way product’s characteristics – form ofusage/ characteristics of potential clients – age Notification that that segmentcephalosporin is crowing, but it is also crowded of competitors They found that

an only chance is a niche market – cephalosporin pediatrician which is less

competition and developing To focus more on most potential customer andmaximize efficiency of investment, they segmented again base on

Characteristics of product – bactericidal spectrum/ Usage of product – diseases.After analyzing base on criteria of targeting such as size, growth, competitiveadvantage… Balance between advantage and disadvantage, opportunity and risk.The ultimate choosing target is segment of premium cephalosporin pediatricproduct used to treat upper respiratory tract infection

Positioning was next step to project, the analyzing of strength and weaknessbetween main competitors/ current positioning, based on customer’s criteria ofchoice, shows that the good chance for CEZIPRO is position on safety whichcharacteristic is exceeding competitors’

As result, communication plan of CEZIPRO was built base on Segmenting,

Targeting and Positioning above as action plan to make objective come true

CHAPTER 2: ENVIRONMENT ANALYSIS:

2.1 Internal environment analysis:

2 1.1 Development of Vietnam economy:

Vietnam economy is increasing in recently year, GDP of Vietnam has increasedconsistently in last three year and forecasted to be increased in upcoming year:

As consequence, Pharmaceutical industry is developing fastly It is valued 563million US and increased 23% in 2006 (IMS source MAT 2006) The medicalexpenditure has increased time to time:

Source: Business forecast report Q3/ 2006 - Business monitor international LTD1

Source: IMS – MAT 2006 2

10 30 50 70 90 110 130 150 170 Weighted Avg Price

Value Million US$

Pack Million

Figure 3

Figure 4

2.1.2 Development of Industry and threat from pollution:

The exceeding development of factories and industrial zone are increasingpollution in Vietnam Waste treatment systems which should follow of industrialdevelopment, has not gotten enough attention Channel, river, well and air arepolluted and that is the reason of disease increasing

Besides, too much traffic with exhaust fumes in big cities is another source ofdisease Respiratory tract infection increased 4.5 times from 1996 to 2005 inPediatric hospital 1 (Dr Ha Anh Tuan – Vice president of Pediatric hospital 1 –HCMC) So it facilitates development of the health care market

2.1.3 Development of education and interest toward health care:

The more people know and aware about disease, the more they pay attention ofprevent and treatment of disease People learn through internet, newspaper,magazines and public education about how to protect them from disease Theynow pay more attention to regular examination, medical insurance When

acquired disease, they are more respect of method, dose and treatment period

As consequence, the frequency usage of medicine increases accordingly

2.1.4 Social opinion toward pharmaceutical industry:

Public opinion turned to bad due to bad behavior of some pharmaceutical

companies: discount on prescription, influence prescription by gift, oversea trip…and set high price for heath service product likes medicines This dissonancemakes promotional communication becomes more costly and difficulty

2.1.5 Government policy to ward pharmaceutical industry:

Minister of Health (MOH) were criticized of unable to maintain the medicineprice increase recently (Tuoitre newspaper 8/4/20075) This pressure pushesMOH members to show their determination of price control by using product

registration, visa extension, and promotional activity (brochure, leaflet, boothexhibition, conference…) permission as tools of price control.

One of price control method had been applied is encourage generics and localmanufactured generics Local pharmaceutical products have received priority inHospital drug assessment, Hospital tender All preferential treatments havefacilitated booming of local generics recently

2.1.6 Geography economic factor influences toward Pharmaceutical

of prosperous patients come to be treated in these prestige hospital That’sreason why having a good sales force and distribution network in two biggestcities is one of key success factors

Source: IMS – MAT 2006 2

Figure 5

influenced by patients’ request or global treatment trend.

- Indirect customer or end-user – patient in Medical center, Hospital and privateclinic: really consumes medicine based on doctor’s product prescribe Theyalmost comply with the prescription and rarely change it

That’s reason why, all pharmaceutical marketing activities focuses on Doctorsand BMS also focuses on their needs as an opportunity of new antibiotic

So what kind of antibiotic they preferred?

Secondary data: IMS source – MAT 2006 showed that Cephalosporin and comb

is most preferred – 65% antibiotic share Its market is valued 53.1 million US$and has increased 22% in 2006 in treatment, there are 3 forms:

- Table: This market increased 17%, less than the increase of general antibioticmarket in 2006 (17% vs 22%).This is traditional form and physicians can havemany choices from brand name to generic (49 competitors, 100 brands)

- Pediatric form – Sachet, Syrup, Drop increased 21%, almost equal the increase

of general antibiotic market in 2006 (21% vs 22%) Physician reserves it mainlyfor children

- Injection: This market increased 28% Physician reserves it for serious disease

Figure 6

So what customer expected from new antibiotic?

Primary result:Qualitative survey for general idea exploring (appendix 2) andconfirmation of quantitative survey (appendix 3) show that:

Comment of quality survey (appendix 2): Susceptibility key for antibiotic

choosing but less side-effect and convenient form are more and more important.These demands are increasing as result of income increase and high quality lifeexpectation

Quality survey (appendix 3) indicated that syrup is more and more preferred:

In Qualitative survey (appendix 2), the reason for their preference of syrup is:

- In trend of quality life, doctor would like to have a good smell, taste anddelicious medicine for their children as a way to enhance their image inpatients’ mind

- Doctor expected children patients complying their prescription (no vomit orrefusing to take) to make sure the effectiveness of treatment

- Besides, when they’re going to respect requested full treatment duration (5-9days treatment), syrup is cheaper that sachet

5%

68%

27%

Tablet Sachet Syrup

5%

54%

41%

Tablet Sachet Syrup

Current use (n=60) Future use - in a year (n=60)

-Large spectrum Susceptibility Less side-effect Reasonable

price Convenient form Good taste &

2.2.2 Power of competitors:

This market was considered one of the most competitive markets in the industry.There are many strong competitors have presented in this market But the mainissue is most players are generics which price are cheaper These genericsalmost do nothing but they live off brand-name promotion by same active

substance and similar form and presentation These generics were produced byKorea, India, Malaysia… and Vietnam companies That made sales of brand-name has decreased recently, for example in pediatrician market:

In deeply analyzing of pediatric market, most of generic has attacked to sachetbecause this presentation is easy to produce Syrup form has less been attackeddue to difficult of production This form has recovered and is replacing partlysachet form This could be an opportunity for new antibiotic in sachet form

So main competitor of CEZIPRO in market includes

 Not yet generic of CEZIPRO presenting in Vietnam

7/04-Brand Generic

Source: IMS – MAT 2006 2

4/04-Brand Sachet Brand Syrup Brand Generic

Source: IMS – MAT 2006 2

Figure 9

Figure 10

 Zinnat of GlaxoSmithkline Promoted in Vietnam for long time ago, have goodimage and brand awareness Promotion investment is still strong with one ofbiggest sales team in Vietnam, having good clinical supports.

 Ceclor of Eli Lilly Promoted in Vietnam for long time ago, image and brandawareness but now promotion investment and sales force team is very limited

in term of finance and scope

To detail, there are main competitors in pediatric market:

2.2.3 Threat of new entrance and substitute product:

 New cephalosporin molecule: The new cephalosporin in pharmaceutical

pipeline is exhaust in the world So in next three years, there is less risk ofnew molecules will be introduced in Vietnam

 Generic: Generics will be produced locally or imported year after So

choosing a difficult producing product, good positioning and price skimmingstrategy is essential

 Substitute product: People have not had any meaningful substitute product

2.2.4 Power of supplier and the company:

- Supplier:CEZIPRO has been researched and produced by BMS factory in

Europe This source is stable in term of production and quality

- Bristol-Myers Squibb Co.

Presence in Vietnam for more than 10 year, the prestige of activities and quality

of BMS’s products has been proven toward customers

Source: IMS – MAT 2006 2

Oralcefal is belonging to BMS but is going to stop due

CECLOR 125 MG 3 G 12 SAC PWD - Elililly ZINNAT 125 MG 4 G 10 SAC PWD - GSK ZINNAT 125 MG /5ML 50 ML SUSP DRY - GSK

CECLOR 125 MG /5ML 60 ML SUSP DRY - Elililly ORACEFAL 250 MG /5ML 60 ML SUSP DRY - BMS CEFADUR REDIUSE 250 MG 3 G 10 SAC PWD - Okasa

Figure 11

Sales and share of Bristol-Myers Squibb Co 2002-2006:

So far, Bristol-Myers Squibb Co has built themselves as premium and hightechnique pharmaceutical producer and promoter in customer’s mind

Bristol-Myers Squibb Co has a lot experience in promotion of both Ethicalproduct and OTC product (Over the counter) Their Marketing plan is preparedand desired by marketing function included of 5 Brand managers Their

promotional activities are performed mainly by 80 Medical representativeslocated in 5 biggest cities of Vietnam: HCM, HN, Cantho, Danang, Haiphong.The main way to promote their products to customers is Face To Face detailing.Cefzipro is a new antibiotic which is planned to launch in 2008 In the world, thisantibiotic has been launched in many countries: USA, Italia, French, Egypt,South America, Australia… and more or less got successful

Cefzipro sales in South

Africa

Source: IMS – MAT 2006 2

Competitive strategy– Michael Porter

0 1,000 2,000 3,000 4,000 5,000 6,000

05 Feb- 05 Mar- 05

Jan-A 05 May- 05 Jun- 05 Jul- 05 Aug- 05 Sep- 05 Oct- 05 Nov- 05 Dec- 05 Jan- 06 Feb- 06 Mar- 06 Apr- 06 May- 06 Source: IMS – MAT 2006 2

Differen-Concentration COMPETITIVE ADVANTAGE

CHAPTER 3: PRODUCT SWOT ANALYSIS

3.1 STRENTH:

 High susceptibility to target pathogens including resistant bacteria, arecord of sustained efficacy over time versus market leaders was made intrial clinic As result, Cefzipro promises sustained effective on prevalentpathogens event they resisted to leading antibiotics

 Normal flora protection, low risk C difficile diarrhea It’s less possibility

of side-effect of diarrhea – most concern of antibiotic treatment and itdifferentiates Cefzipro from competitors’

 Available and continue study support of efficacy and tolerance Hence,there is full evidence of supports for persuading physicians

 Unique tasting - Bubble gum flavored oral suspension It can help todifferentiate product from others’

 Skillful and experience sales force support, developed relationship work has been developed in targeted market Therefore, Cefzipro getsadvantage for new product developing

net-3.2 WEAKNESS

 Cefzipro belongs to second generation which was presented in the worldfor years ago So it’s difficult to persuade physicians who want to beleader of treatment trend

 No patent protection in the world, there is a risk of generic production

 Sachet is still popular, so it’s time consuming to persuade them to switch

 New product in market, then we have to initiate eagerness to try

3.3 OPPORTUNITY:

 There is a trend to use new and susceptive antibiotic to replace the formerones which is resisted by pathogens Therefore, this is an opportunity forCefzipro when it’s brand-new in Vietnam

 Physician tends to look for a less side-effect antibiotic to limit productwithdrawal It’s a chance for Cepzipro which is less side-effect.

 Increased using of syrup form instead of sachet or tablet in children

market So it’s a chance for suspension syrup form like Cepzipro

 Oral suspension is difficult to imitate production As result, it could limitgeneric production Cepzipro is only cephalosporin without a genericproduct presented in Vietnam and the coming of them is not foreseen SoBMS has time to prepare the market before generic coming

 Limited antibiotic pipeline So it is less risk of new antibiotic replacement

is difficult for Cefzipro to get their share

 Possible generic entry in future Thus it is potential of competition inhospital enlisting and tender in future

 MOH policy: Price control will make difficult for price strategy such asskimming strategy Enforcement of key brand generic substitution byMOH, medical aids will make difficult to reach market, enlist in drug list

CONCLUSION:

After SWOT analyzing, we can see that there are chance for BMS to launchCezipro This product has better safety profile than other ones and present inthe form – suspension syrup which is more and more preferred in market Thebig issue is how to compete with Zinnat – the strong and traditional competitor

in market In long term, the entrance of generics is potential risk ThereforeSTP well is key success factor for competition strategy