SURVEY ON USING MARKETING PROMOTION BY PHARMACEUTICAL PRODUCERS IN EGYPT

Лагуткина Т.П.¹, Бахлол М.М.²

¹Профессор кафедры управления и экономики фармации медицинского факультета,

²аспирант, магистр делового администрирования

Российский университет дружбы народов

ИЗУЧЕНИЕ ОРГАНИЗАЦИОННЫХ АСПЕКТОВ ПРОДВИЖЕНИЯ НА ФАРМАЦЕВТИЧЕСКОМ РЫНКЕ ЕГИПТА

Аннотация

Научно обоснована программа анализа маркетинговых коммуникаций, используемых различными субъектами фармацевтического рынка Египта, предложен инструментарий исследования, изучены приемы и методы формирования оптимальной политики продвижения для национальных и иностранных фармацевтических компаний-производителей.

Ключевые слова: фармацевтические компании, фармацевтический рынок Египта, маркетинговые коммуникации, продвижение.

Lagutkina T.P.¹, Bahlol M.M.²

¹Professor of Pharmaceutical Management and Economics of Pharmacy,

²Post Graduate Student, Master of Business Administration

Faculty of Medicine, People’s Friendship University of Russia

SURVEY ON USING MARKETING PROMOTION BY PHARMACEUTICAL PRODUCERS IN EGYPT

Abstract

Pharmaceutical market in Egypt has important economic value. Pharmaceutical companies use marketing promotion to promote their products. They use both mass communications and personnel communications to inform, stimulate and remind consumers; patients (directly or indirectly) about their products. We surveyed 85 pharmaceutical companies that work in Egypt with appropriate investigation of used marketing promotional tools by pharmaceutical companies. There are Egyptian and foreign pharmaceutical companies that compete in the market and have different characteristics. These different characteristics have effect on using of different marketing promotional tools by pharmaceutical companies e.g. age of pharmaceutical companies, orientation of activities of the pharmaceutical companies, categories and types of drugs and using help of advertising agent.  

Keywords: pharmaceutical companies, Egyptian pharmaceutical market, marketing communications, promotion.

Introduction

Pharmaceutical market is considered to be one of the biggest markets in the world and it has its own features. For that pharmaceutical market has a great economic value. There is a need for investigation of the used of marketing promotional tools in their real life context and the market situation.

The importance of marketing promotional tools is highly recognized. Marketing communications (or marketing promotion) is divided into two to general groups; mass communications and personal communications.

1- Mass communications

Pharmaceutical marketer tries to use mass communications with the best way in the market. Mass communications include advertising, sales promotions and public relations. Nowadays, there is high increase in using personal communications, because of technological revolution of internet and other electronic communication factors. On the other side, mass communications has dramatic effect on promotion e.g. the fortunes of a company or its brand (4).

2- Personal communications

Personal communications includes personal selling and direct marketing. Presently, the sale to customers should not only require working hard, but also working smart. Marketing communications provides interaction between the company and its customers. The idea nowadays is not only how the pharmaceutical company can reach customer, but also it is about how the company can enable customers to reach the company. Due to technological development of communications, peoples are converting from traditional media (e.g. Fax and newspapers) to more advanced tools (e.g. Internet and mobile). Day after day, pharmaceutical companies depends more on the new advanced communications media, because of it is more cost effective and more targeted communications. Personalizing communications leads to doing the right thing at the right time to the targeted customer with more impact (4).

We investigated the marketing promotional tools in pharmaceutical field with the features of the companies e.g. age of companies, orientation of activities, categories of drugs, and type of drugs and using of advertising agent and analyze them.

Literature review

By reviewing literatures of marketing promotion, we founded a gap in studying effective marketing promotional tools for pharmaceutical industry in Egypt.  Other researchers investigated promotional tools in other industries or some of them. Because of that study of marketing promotional tools for pharmaceutical industry in Egypt is important.

Marketing communications (or marketing promotion) is the way by which the pharmaceutical company can inform, stimulate and remind consumers; patients (directly or indirectly) about its products. It is a mean to build a relationships and dialogues with customers; distributors, pharmacists and physicians. Marketing communications enables pharmaceutical companies to link their products to other people, events, feeling, places and delivering the important information to the customer in the right time (5).

In pharmaceutical market, the marketing communication mix has five modes of communication that is divided into two groups:

1- Mass communications

1.1- Advertising: it is paid form of non-personal communication of ideas, goods and services by a certain sponsor.

1.2-sales promotion: a set of different short term incentives to stimulate trial or buying of a pharmaceutical products.

1.3-public relation and publicity: programs are designed to enhance a company’s image or its pharmaceutical products in the community.

2- Personal communications

1.2- personal selling: it is personal interactive mode (face to face) between a seller e.g. medical representative and one or more customers e.g. physicians and patients in order to making presentation, active communications and making orders.

2.2-Direct marketing: it is using mail, E-mail, telephone, internet and other tools to communicate with customers (2).

To achieve a strategic position and effective message all marketing communication activities should be integrated together. Pharmaceutical marketers should know the character and effectiveness of each marketing communication tools in buying process and decision making (when, where, why and extend of using it). Such knowledge will help them to allocate communication budget efficiently and develop and implement right communication programs in campaigns of pharmaceutical company.

According to these, pharmaceutical marketers should be media-neutral and evaluate all communication tools according to their effectiveness and efficient in a specific situation, local market and international market (1).

In pharmaceutical field, multinationals companies have a great effect on formulation of pharmaceutical market and marketing promotional tools. The role of marketing communication is directed towards certain people; e.g. physicians, pharmacists and patients for promoting the pharmaceutical products by companies. Marketing promotion is known as one of the important element of marketing mix. It helps to achieve the total marketing objectives of the company by the following tasks: 1-motivation of the customer, 2-generation, formation and update need of purchasing, 3-establishing good frame of the company (image), 4-information of the community about activities of the company, 5- Presentation of information about the manufacturing company and its products, 6-stimulation of purchase, 7- Formation of preferences about a certain brand and the need of buying it by the customer, 8- Remind about the company and its products (5). Each marketing promotion tool has its own characters and tasks. The following table has a comparison between the different types of marketing promotional tools.

Table 1 – A comparison between the different types of marketing promotional tools (5)

	advertising	Sales promotion	public relation	Personal selling	Direct marketing
time frame	Long term	Short term	Long term	Like Short term, like Long term	Short term
the main motive	Emotional	Rational	Emotional	Rational	Rational
major task	Image / brand positioning	sale	favorable attitude	sale /mutual relations	sale
contribution to profitability	moderate	high	low	high	high

Research methods

The purpose of the research is to study strategies of promotional and communication activities of pharmaceutical companies in Egypt. When a broad and representative overview of a situation is required, the survey is a suitable approach (3). For that, survey was used in this research for data gathering. The personal interviews were used to conduct this survey.

Sampling

We used in this research simple random probability sampling, where the pharmaceutical companies in Egypt are asked to respond to questionnaires.

The minimum sample size was determined by the following equation:

                              

Where -n- minimum sample size, -t- confidence factor, -G- Dispersion that characterizes the variability of the studied traits in the general population, d - Margin of error.

The dispersion is 0.25 (maximum value used in the case study populations unknown). The degree of accuracy of the research is 0.90 (respectively, the coefficient of reliability takes a value of 1.64), assume the ultimate sampling error of 0.1 (10%). Under these conditions, the minimum size of the aggregate sample is equal to 67, i.e. the possibility of error in determining the properties of the population was less than 10% in 90 cases out of 100, according to that  our questionnaires must be collected from at least 67 pharmaceutical companies(6). In this study, 85 pharmaceutical companies answered the questionnaires.

Data collection

In this study, we focused on communication mix of pharmaceutical companies in Egypt. We collected information from secondary and primary data. At first we started review of literatures of promotion and communication mix in pharmaceutical field.  After that, we established structured questionnaire for data collection, where the questions of questionnaire were designed to collect data from pharmaceutical companies.

Fig. 1 – Scheme of survey on using marketing promotion by pharmaceutical producers in Egypt

 

Findings and discussion

In this survey, the total number of companies is 85 pharmaceutical companies. 72% of them are Egyptian companies and 28% of them are foreign companies. We found that most of surveyed foreign pharmaceutical companies are from USA (25%), followed by countries from European Union as Denmark, Germany and Switzerland. There are three Arab pharmaceutical companies which are Saudi Arabia, Emirates and Jordan. There is only one African pharmaceutical company from South Africa.

 

Fig. 2 – Using of different promotional tools

 

By arranging using different promotional tools in Egyptian pharmaceutical market in a descending order, we found in this research the following;  personal selling are used by all companies (100%), sales promotions (83.5 %), Public relations (51.%), advertising (38.8%) and the last one is direct marketing (23.5 %). Different promotional tools have the same order of arrangment in both Egyptian and foreign pharmaceutical companies ( figure 1) . Using of personal selling by all companies may be a result of absence of pharmaceutical companies that have only non-prescribed products , where communication of both physicians and pharmacies is important for non-prescribed and prescribed products .

 

Table 2 – Using of different promotional tools depending of companys’ age

Percentage of companies % depending on age	Promotional tools
	Advertising	Sales promotion	Personal selling	Public relations	Direct marketing
less than 10 years	38.5	69.2	100	61.5	30.8
From 10 to 40 years	34.9	90.7	100	48.8	20.9
More than 40 years	42.3	80.8	100	57.7	26.9

According to table 2, advertising is used by pharmaceutical companies that have aged more than 40 years (42.3 %) with higher extent than other companies, but sales promotion is used by pharmaceutical companies that have aged from 10 to 40 years (90.7 %) with higher extent than other pharmaceutical companies. Public relations and direct marketing are used by pharmaceutical companies that have aged less than 10 years with higher extent than other pharmaceutical companies.

 

Table 3 – Using of different promotional tools depending of orienations of activities of companies

Percentage of companies %	Promotional tools
	Advertising	Sales promotion	Personal selling	Public relations	Direct marketing
Companies that practice sales	38.5	76.9	100	46.2	30.8
Companies that practice manufacture and sales	21.9	81.3	100	43.8	18.8
Companies that practice manufacture, sales and developing of new drugs	52.5	87.5	100	60	25

In table 3, we observed that by comparing the companies according to orienations of activities,  pharmaceutical companies that practice manufacture, sales and developing of new drugs use advertising and public relations more than pharmaceutical companies that do not develope new drugs. Using of advertising and public relations achieves long term effect. On the other hand, companies that practice only sales use direct marketing in higher extent to achieve short term effect .

Table 4 – Using of different promotional tools depending of category of drugs

Percentage of companies %	Promotional tools
	Advertising	Sales promotion	Personal selling	Public relations	Direct marketing
Prescribed drugs	34.8	65.2	100	52.2	30.4
Prescribed and non-prescribed drugs	40.3	90.3	100	51.6	21

Companies that have in their profile both prescribed and non-prescribed drugs use sales promotion to higher extent more than companies that have only in their profile prescribed products ( table 4). This is an indication of using sales promotion more frequently with non-prescribed products. Public relations and advertising are used with the same extent by both companies that have in their profile both prescribed and non-prescribed drugs and companies that have only prescribed products in their profile. Direct marketing is used by companies that have only prescribed products in their profile more than companies that have in their profile both prescribed and non-prescribed drugs.

Table 5 – Using of different promotional tools depending of using adverising agent

Percentage of companies %	Promotional tools
	Advertising	Sales promotion	Personal selling	Public relations	Direct marketing
Using adverising agent	42.4	75.8	100	60.6	30.3
Not using adverising agent	36	90	100	46	20

In table 5, Pharmaceutical companies that use help of advertising agent use promotional tools; public relations, advertising and direct marketing more than pharmaceutical companies that do not use help of advertising agent. This indicates that using of advertising agent leads to increase the level of contacting with customers to induce effect and build communication with customers. Besides that, Pharmaceutical companies that use help of advertising agent less depend on sales promotion than companies that do not use help of advertising agent, because it creates strong demand in the market by help of advertising agent.

 

Table 6 – Using of different promotional tools depending of type of drugs

Percentage of companies %	Features of the range
	Promoted preparations Yes                         no	Established preparations yes                              no	Preparations that should be removed yes                                               no
Advertising	39.4                       25	35.7                         41.7	52.6                                           31.7
Sales promotions	86.4                      68.8	84.3                            75	100                                             77.8
Personal selling	100                       100	100                           100	100                                             100
Public relations	56.1                      31.3	47.1                           75	68.4                                              46
Direct marketing	28.8                       6.3	24.3                         25	36.8                                            20.6

According to table 6, we observed the following;

1 – Presence of promoted products in the company profile led to more using of advertising, public relations, sales promotion and direct marketing, because promoted preparations are new in the market and there is more need to inform customers about their usage, features and its availability for the customers.

2 – Presences of established preparations led to less using of advertising, public relations and direct marketing, but more using of sales promotion. Established preparations are well known to customers, for that less need to use advertising, public relations and direct marketing, but more need to increase sales by using sales promotion.

3 – In case of presence of preparations that should be removed more using of advertising, public relations, direct marketing and also all companies use sales promotion. Increase using of promotional tools to counteract the decrease in sales of these preparations by more informing customers about these preparations to increase sales volume.

Conclusion

We surveyed 85 pharmaceutical companies in Egypt that are practicing marketing communication tools and divided them into two groups; Egyptian companies and foreign companies. The number of pharmaceutical companies from USA and countries from European Union are higher than the number of pharmaceutical companies of Arabic countries which indicates strong position of pharmaceutical industry and ability to make business for companies from USA and European Union. All pharmaceutical companies use personal selling. By arranging using of different promotional tools in Egyptian pharmaceutical market in a descending order, we found in this research the following; personal selling has the first rank followed by sales promotions, public relations, advertising and the last one is direct marketing.

We found that there are differences in using of marketing promotion with certain characteristics e.g. age of pharmaceutical companies, orientation of activities of the pharmaceutical companies, categories and types of drugs and using help of advertising agent. We found that age of the company has effect on using of communication tools. Increase age of companies is combined by increase using of advertising and on the other hand, decrease the age of the companies is combined with increase using of public relations and direct marketing. Developing of new drugs is important to any pharmaceutical company and their customers. Pharmaceutical companies that developing new drugs depend more on both advertising and public relations to inform about its new drugs. Pharmaceutical companies that has only prescribed drugs use sales promotion with less extent, but they use direct marketing with higher extent. Using of advertising agent by pharmaceutical companies is combined with a changed in pattern of using promotional tools. By using of advertising agent, pharmaceutical companies increase using of public relations, advertising and direct marketing, but decrease using of sales promotions. Types of preparations have effect on using of promotional tools. There are three types of preparations; promoted, established and preparations that should be removed. Presence of promoted preparations and preparations that should be removed led to increase use of promotional tools; sales promotions, public relations, advertising and direct marketing. Presence of established preparations led to increase using of sales promotions and decrease using of advertising, public relations and direct marketing.

Finally, there are different characteristics of companies that may decrease or increase using of different promotional tools by pharmaceutical companies as age of pharmaceutical companies, orientation of activities of the pharmaceutical companies, categories and types of drugs and using help of advertising agent.

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