Impact Of Promotion On Consumer Patronage Of Pharmaceutical Companies

Project and Seminar Material for Marketing

Impact Of Promotion On Consumer Patronage Of Pharmaceutical Companies


Abstract


This research project is aimed at determining the impact of promotional strategies of pharmaceutical firms on consumer patronage. The study was expected to reveal at the end of the day the degree of these promotional messages on consumer patronage, and it will equally help the producers of pharmaceutical to understand the consumers’ attitude towards the use of their products.

The objective of the study were to find out the following:-

  1. To determine the extent, to which Gabbey pharmacy is aware of promo – tools.
  2. To determine the impact of direct marketing on consumer patronage at Gabbey pharmacy in Enugu Metropolis.
  3. To appraise the promotional strategies adopted by Gabbey Pharmacy product in increase profitability.

Secondly, information was collected through the use of structured question are administered to consumers. Oral interview were conducted among the producers of pharmaceuticals, consumers and patent medicine dealers.
Secondary data were collected from journals, publications and other related works.

Chi- square (X2) statistical tool was used in the analysis of primary data at 95% confidence level. It was found out that almost all the consumer respondent have at time or the other bought a brand of pharmaceutical products.
Also substantial number of the consumer respondents got to know of Gabbey brands through the company representatives.

On the basis of the above findings it was concluded that consumers seek constantly pharmaceutical product with desired attributes to solve their health problems.

However, the population of the study was made up of the resident of Enugu metropolis. The researcher used a census survey for the staff strength of the company of (10) persons, and the sample size was 246.

Finally, it was recommended that thee is need for NAFDAC and other regulatory bodies to shed off their current conservative and restrictive approach in promotion of pharmaceutical. Manufactures should be encouraged to interact to exchange information directly with their customer using interactive media like internet, e-mal etc.

Current Global trends where drugs are promoted as fact moving consumers goods like putting a lot of pressure on marketing/promotion approaches of pharmaceutical firm. These firms should therefore invest more regularly on researches that track the dynamic consumer behaviour in order to articulate promotional programmes base on current anticipated needs of the consumers.

The researcher believe that if these recommendations are religiously carried out, pharmaceutical firms will laugh loudly well as they will witness a stupendous and astronomical increase in their sales turnover and even on return on investment.


Chapter One


Introduction

Consumers have diverse motivation, taste and preference. They constantly seek solutions to the various state of deprivation (needs) through product offerings and bombardment of promotional messages.

Consumer’s perception of his needs and desired solutions sharpened by his socio – economic and cultural background of the study will determine how he reacts to an element or a mix of the promotional variables.

The challenge of marketing/promotion rests on predicting current and future consumer’s needs and preferring suitable solution to them. accurate prediction of consumer’s variables will ensure consumer’s preference/patronage of one’s brands over competitors.

This research therefore attempts to determine the impact of promotion on consumer patronage using Gabbey pharmacy limited, a pharmaceutical marketing company as a case study.


1.1 Brief History of the Company

Gabbey pharmacy limited is a pharmaceutical marketing company with head office located at 8 Awkunanaw street Achara layout Enugu. The firm came into existence in 1972. The company was blessed with supportive customers and committed staff and that helped it handle effectively, its internal and external problems. It was not long before the industry noticed a strong competitor has come on stream.

It was not surprising that five year later January 3, 2000, the co-marketing arrangement broke down and Gabbey pharma ltd was faced with the option of quickly introducing and entrenching new brands. It was therefore a nervous moment when on January 4, 2001, the company took the bull by the horn and introduced a portfolio full of new products.

Critics thought that the company has taken a suicide pill and eagerly waited for the expected to happen. It never did. The staff and management and the company customers rallied round and took a simple commitment. THE COMPANY MUST SUCCEED. The lot fell on the vibrant and lean sales and marketing department to provide the necessary marketing formular that will ensure quick entrenchment of the new products. The department after series of meeting with its ever supportive customers pioneered the motorcycles sales Reps scheme in Nigeria. the essence is to effectively cover the grassroot, reach the area not covered by the competitors and generate the necessary demand – pull. Communication between company and customer was made more effective and company’s reaction to changing market situation was very swift. This ensured grassroot implementation of consumers oriented marketing programmes. By middle of the year, it was obvious that the company has survived the “suicide pill” gaining a very big respect from other key players in the industry.

Today, the company is one of the leading pharmaceutical marketing firm in Nigeria.

Some of the product it sells are:-

  1. Septirn
  2. Actified
  3. Banocide
  4. Dara prim
  5. Linctified P
  6. Linctifed P
  7. Repler
  8. Fevokine
  9. Calpol
  10. Antepar
  11. Zinate
  12. Brinderin
  13. Tramal
  14. Imodium
  15. Normoritc
  16. Halfar 100mg
  17. Cenocide
  18. Smifed
  19. Primpex
  20. Novalor
  21. Tussirex P
  22. Metaprim

Other lines includes tacorage (flavoured vitamin C) chotrimax cream, deep head, woodward Gripe water.
SALES AND MARKETING STRUCTURE
(GABBEY PHARMACY LIMITED)
GM (Sales and Marketing

  1. National Sales Manager (Technology promotion manager)
  2. Area sales manager (Medical Reps)

Sales Reps (6)
The lean and flexible structure helps the department to react swiftly to change in the marketing environment.


1.2 Statement of the Problem

Consumers have diverse motivations, tastes and preferences. They constantly seek solutions to these various states of deprivation (needs). And, as they do these, they are guided or influenced by certain decisions which could be internal and external. Internally, consumers and influenced by their belief system. And, externally, they are influenced by their socio-economic and cultural background coupled with promotional messages.
Therefore, this work is systematically made towards uncovering the impact of promotional activities of product offering on a consumer as he makes his purchase decisions.
That is to say, the impact of promotion on consumer patronage.


1.3 Objectives of the Study

This research aims at

  1. Highlight the importance of consumer patronage and the need to monitor it
  2. And react accordingly to changes in customer motivation, taste and preference
  3. To relate consumer patronage to brand preferences
  4. To highlight the need to articulate promotional strategies based on uncovered and anticipated needs of the consumers.
  5. To highlight the need to consider the socio-economic and cultural background of consumers while articulating promotional strategies to influence consumer patronage.
  6. Identify relative relevance of promotional mix variables in different buying process, product life cycle of pharmaceuticals.
  7. Highlight the importance of encouragement consumers suggestions/criticisms as means of uncovering consumer want and thought and tailoring promotions strategies accordingly.

1.4 Hypothesis Research

The following hypotheses were postulated to guide the research.

  1. Ho: Promotional activities of Gabbey pharmacy do not lead to consumer patronage of their product.
    Hi: Promotional activities of Gabbey pharmacy lead to consumer patronage of their product.
  2. Ho: Gabbey do not create awareness of their products.
    Hi: Gabbey create awareness of their products.
  3. Ho: Promotional activities of Gabbey pharmacy impact negatively on the profit of the company.
    Hi: Promotional activities of Gabbey pharmacy impact positive on the profit of the company.

1.5 Significance of the Study

In every organisation there is need to plan sales promotion and there is impact which promotion create in a way that it will bring corresponding increase in sales and profit. This can be achieved through creative and innovative marketing activities.

This research will be of paramount importance to Gabbey pharmacy limited Enugu as a cooperate body, salesmen the customers, marketing practitioner and the economy at large.

1) Corporate body:

The continued existence of organisation depends on its ability to provide customers with the needed good and services and on a profitable condition. Corporate body like Gabbey pharmacy limited Enugu. Cannot afford to remain in business if sales promotional strategies are not well planned. The researcher believes that this project will serve as a guide for the formulation and implementation of sales promotion strategies.

2) Salesmen:

On the part of salesmen, there is need to be adequately equipped in skill and spirit with good working environment and conducive management attitude will not only enhance performance but also create satisfaction.

This study will be incalculable to salesmen in that it will them to improve upon their performance in the field. Moreso, the study will reveal their deficiencies and offer appropriate communication tools to arouse customer’s interest and attention.

3) Customers:

This research will be invaluable to customers who expect maximum satisfaction from the product of Gabbey pharmacy limited Enugu. It will inform they about sales promotion programmes such as refund offers, price off, give away and so?

4) Marketing Parishioners:

This research will be of immense value to marketing practioners. By marketing practitioners. Other pharmaceutical companies from different part of the Nigeria, more especially in Enugu.

5) Economy:

The economy will benefit a lot if sales promotion is practiced the way it should be. Proper implementation of sales promotion strategies will help in directing the creation of wealth by increasing the GNP, Gross National Product.


1.6 Scope of the Study

The scope of this study would be very wide if it were carried out in all pharmaceutical companies in Nigeria.
The study is limited, based on the fact that there is no time and material resources to see to the whole nation.

This study is limited to Enugu metropolis and the finding many not reflect the situation in the whole country.
And this finding may not be valid for the whole pharmaceutical companies in Nigeria, but by and large, what happens in pharmaceutical companies in Enugu metropolis can be said to apply to other pharmaceutical companies.


1.7 Definition of Terms

The following terms used in this study should be taken to mean the following: –

1) Patronage:

According to Ozor (2002 pg 314) he defined patronage as the impulses desire and consideration within the consumer or customer which induce the purchase of goods from certain outlets or company.

2) Consumer behaviour:

Refers to all activities or acts engaged by the consumer in the process of satisfying his need and wants. It is whatever the consumer does overtly (visibly or outside the mind) or overtly (in the mind) in the process of satisfying his need and want. (Ozor 2002: pg 21).

3) Promotional strategy:

It controlled integrated programme of communication method and material designed, present a company and it product to prospective customer (Ebue BC 2000 pg 49).

4) Advertising:

Is a group of activities aiming at an including dissemination of information in any paid non-personal from concerning an idea product or service to compare action in accordance with the import and an identifiable sponsor (Pitman 1983 pg 140).

5) Direct marketing:

It is an interaction marketing system that use one or more advertising media to effect a measure response (Kolter 2000: pg 107).


Chapter Five


Summary of Findings, Conclusion and Recommendation

5.1 Summary of Findings

Some of the consumer respondent have at one time or the other bought a brand of a Gabbey’s products.

This ranged from simple brands viz panadol, Enzor, paracetaonol, king tonic, Novadet etc.

The consumer respondent therefore may have been exposed to one or various promotional activities of Gabbey’s pharmacy. This firm promotional programme aimed at increasing awareness, sales turnover and realizing other promotional objectives.

Substantial number of the consumer respondents got to know of Gabbey’s product through the company representation, adverts, publicity and others through friend and relatives.

This indicates that Gabbey pharmacy relies substantially on personal selling to a lesser extent advertisement to promote their products.

Advertising content from and media influence retention/remembrance of advertising message and choice of media depends a lot on the states of product.

Radio was the preferred medium, followed by TV and bill board, choice of Radio might be due to affordable and variability of radio sets, especially their usage in area where there is no electricity, it is therefore nor popular with the low class.

An amazing of the consumer respond opted for a combination of two or more media for an effective result. So Gabbey promotion should therefore consider optimal use of the various advertising mix in his disposal to achieve his advertising goals objectives.

70% of the consumer respondents said that they react positively and favourably to the company’s Reps because they are polite and courteous.

The Reps were able to influence the respondent into buying the company’s product.

While other respondent could not say anything about the company’s reps because there are nosiy and disturbing, and of course not be influenced by them.

About 54% of the consumer respondent could not recal any of the company’s publicity programme. While some remembered that the company embarked on sales promotion of its products last year.

The company uses sales promotion mainly to sell off expiring product that are difficult to sell.

It was found out that most firms (Gabbey pharmacy inclusive) sees promotion as an expense rather than an investment provision made for the promotools and this usually short termed based on percentage of sales.

Low promotional budget has therefore forced many firm to stay away from broadcast media, and below the time advert have become the norm of the day, branded T-shirts, exercise, books, ruler other, biro are common features of most respondents promotional plans.


5.2 Conclusion

Based on the findings of the study the following conclusion could be made or drawn.

  1. Consumers constantly seek pharmaceutical products with desired attributed to solve their health problem.
  2. Consumer need information in product attributes in order to make an information choice. Information of quality, price availability and incentive is needed to help him reach a purchase decision.
  3. Consumers are filled with information on different product offerings can a clutter. Most of the information is more on what the companies want the consumer to buy and not what the consumer actually what to buy.

So firms that research into consumer needs and wants effectively meet these needs, stand to gain from high consumer patronage.

Pharmaceutical firms uses ales promotion to improve their sales over a given period, it can be used to reduce product stockpile or sell of near expiry – products.

Trade promotion, consumer promotion and field force promotion can be employed to complement other promo mix to achieve promotional objectives.

The biggest marketing asset of a firm is its sales forces, they should be managed, motivated to enable them achieve the firm’s desired goal. John Frazer- Robinson (1999: 38) noted that the delivery of quality to customer starts with quality people achieve by good recruitment scheme and proper training.

A combination of a optimal proportions of advertising mix variable, produces, enhanced effect especially when a wide audience is targeted.

Most pharmaceutical firms are shy of broadcast media because of capital outlay involved, beside management sees the programmes as waste of time and money.

PR/publicity programmes rarely attract management attention, things are changing gradually, and firm now associated with health awareness programmes to improve consumer perception of the company and its products.


5.3 Recommendations

There is need for NAFDAC and other regulatory bodies to shed – off their current conservative and restrictive approach to promotion of pharmaceutical.

Manufactures should be encouraged to interact (to exchange information) directly with their customers using interactive media like interact, e-mail etc.

Firms should liase with regulatory bodies, health providers to create health awareness programmes that will provide information to the current solutions.

An informed consumers self medicate safety. A patient that knows that cholognqine can treat malaria does not see a doctor before making decision to buy a brand of chlorogquine and taking the does as stated on the leaflet. Even the diagnosis for malaria could be possible with do – it yourself test kits being introduced into the market.

Current Global trends where drugs are promoted as fast moving consumer goods will put a lot of pressure on marketing/promotion approaches of pharmaceutical firms.

These firms should therefore invest more regularly on researches that track the dynamic consumer behaviour in order to articulate promotional programme based on current anticipated needs of the consumer.

As results of research on consumer patronage unfold, development of new product offering (solution) become imperative. Speed of innovation and rate of diffusion to target market will them become critical in achieving strategies edge. It is then recommended that the firm sales and marketing department should be learn, swift and should constantly liase with research and development unit to develop new customer oriented solutions.

Low capitalization has forced most firms to see promotion as an expense and not as an investment. Thus low promotional budget has forced pharmaceutical firm to shy away from broadcast media is currently the most effective media when large population is targeted. Even when an interesting innovation was made.

It is therefore recommended that firm’s management should see promotion as a long term investment a firm reaps for life and proceeds from a well promoted brand.

Whatever promotional approach a firm adopts, it should be in context of who where the target customers are: desired rate of diffusion of innovation or product information, desired quality and rate of feedback etc. Also, since field force is very crucial in promotional/marketing of products, firms should be very professional in recruitment of field staff, training and re-training them as situation demand.

Motivation of field force and provision of functional working material remain theory issue but it is very crucial for good sales management. Firms should show more interest on the design and outlay of their distributors shops. Big time firms (FMCG) for example cocaolcol, Nigeria breweries are fast becoming involved (at some cost to the firm) in how their channel members market/promote their brands.

Storage image attracts different class of customers and such stores could be contact point to reach out to desired customer segments.

In addition to having an active customer care unit, pharmaceutical firms should have their full address on point of sales materials and other below the line advert materials, product pack etc. to enable their consumer reach across to them for comments, suggestion or complaints on the products, employed promotional/marketing strategies. It is important to note that staff working in customer care, unit should be appropriately trained to know how to handles; customers, their comments or complaints.

Sales promotion programme should be backed with advert, personal selling and some elements of PR/ publicity (to impress on the consumers on what to gain from participating in such programme). Pharmaceutical firms should conduct more of consumer promotion as it will give them opportunity to interact directly with the current and potential customers.

Lastly, it is recommended that a more detailed research on the impact of individual promotional element on consumer patronage of pharmaceuticals be carried out.

Finally Gabbey pharmacy should also ensure that all their products are registered with drug regulatory agene ices like NAFDAC.


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