Company overview and product background
Discuss about the Pharmaceutical Manufacturing Company And Working.
This report contains information related to Eagle brand Medicated Oil popularly known as Green oil. The medicated oil is useful for muscle or bone pain, Cough, Arthritis, Back pain, Respiratory infection, cramping, Bruising, joint pain, Bronchitis sinus pain and inflammation. This report assesses the option for marketing decision and entry strategy, which will help company in placing Green oil in Poland market. This report is designed to discuss the Marketing Mix for first 3 years and to identify the market conditions of Poland.
Eagle Brand Green Medicated oil, easily identified by its unique green colour and widely referred as the Green Oil in the market. Eagle Brand Green Medicated oil, the product was developed to provide relief to individuals when they are suffering from muscle or bone pain, Cough, Arthritis, Back pain, Respiratory infection, cramping, Bruising, joint pain, Bronchitis sinus pain and inflammation. It comes in 3ml, 6ml, 12ml, and 24ml packs, the packet are handy for any handbags. This product contains menthol, ethyl alcohol, methyl, salicylate, chlorophyll, mineral oil, and Otto of roses. The product has been in existence for more than 50 years, its goodness and value of quick relief has been handed down from generations to generations. Eagle Brand Green Medicated oil is made and manufactured in Singapore. The product priced at S $ 5.75 (Eagle Brand, 2018a).
Bordern Company (Pte) Ltd is a Singapore home grown Pharmaceutical manufacturing company and working since 1960. The company is well known for Eagle Brand Green Medicated oil Eagle Brand medicated oil was developed by a German chemist Wilhelm Hauffman in 1935, for J Lea & Co, owned by Tan Jim Lay. He was a well-known Chinese merchant and philanthropist in Singapore during early 1990’s. The Eagle Brand medicated oil under J Lea Co flourish, grew very significantly, and dominated the local market for medicated oil in the post war period. Later, the company began manufacturing and packaging their products at their first facilities located at River Valley in Singapore. The factory was relocated at Jalan Kilang in the early 1970s (Eagle Brand, 2018c).
Currently, the factory is producing 6 million bottles annually of Eagle Brand Medicated Oil. The Medicated oil is the core product of company beside medical oil the company also created an extended range of pharmaceutical products like, muscular balm, muscle rub, inhaler, spray, and eucalyptus oil for babies, capsicum plaster and alcohol swipes (Eagle Brand, 2018b).
Country background and why Poland’s market is attractive for investment
Poland popularly known as Republic of Poland is located in Central Europe. The country is divided in to 16 administrative subdivisions, which are covering area of 321,696 square kilometres. The climate of Poland is largely temperate seasonal. Poland is the sixth most populous member of European Union (EU), with approx. population of 38.5 million people (NAWA, 2018). Poland is a regional power and developed market it has the eighth largest and one of the most dynamic economies of EU. The country has achieved a high rank in human Development index. The Polish Stock Exchange in Warsaw is the most important and largest in Central Europe.
(Source: Revolvy, 2018).
In 2016, The GDP of Poland rise by 3.5%. The Polish economy has grown continuously and successfully at time of global recession also, and will grow continue in coming years. Polish public debt is among the lowest in the whole European Union it is 52.2% of GDP, deficit is 2.8% and unemployment rate is at 7%. The investment in Poland should be analysed through the success stories of thousands of companies that have made new investment in last 27 years in the economy of the country. Science 1989, Poland has become a central point of attraction for investors. Poland’s Attractive and large internal market with more than 16 cities with over 200000 inhabitants from which investors an source people for their operation has become an important factors for selection of Poland as a home for new projects. From last 27 years, Poland has experienced a continuous growth in its GDP (Stanfield, 2018). This is a remarkable achievement, unheard of anywhere else in the world, has not been missed by investors and it has increased the level of confidence and stability.
Confidence is the very important factor and most critical aspect that companies prefer before making investment. By selecting Poland for investment it is understood that the companies are speculating on their own business cases, their own future income, and also their own careers. Poland is a leader of change in the region for the last years and has also been a leader in attracting investors. EY conduct ‘EY Attractiveness Survey’ annually and in 2016, the results prove that Poland is still highly regarded by investors. In 2016, 211 new projects and almost 20000 jobs have been created and Poland has reached 5th position in the ranking of all European countries perceived as the best place for new investment (Kopania, 2018).
Identifying the Market
The Governments are changing in Poland but one thing is clear and confident about one thing that in Poland every Government will attract new businesses and open for discussion about how to convince other countries to select Poland for investment. EY strongly believe that talent pool and availability of people constitute is one of the greatest assets of Poland that can be offered to the new investors. The other countries will not offer many opportunities with perfect stability, availability of people, and a good mix of costs. There are always some challenges associated with foreign investment but Poland can be perceived as a safe choice and a safe harbour for new investment.
The muscle or bone pain, Cough, Arthritis, Back pain, Respiratory infection, cramping, Bruising, joint pain, Bronchitis sinus pain and inflammation are very common in present modern life style. For the citizen of Poland also these problems are same, so the market of Poland or any other country is good for Eagle Brand Green Medicated oil. In every part of world, the people are surfing from same health issue (Eagle brand, 2018d). By launching Eagle Brand Green Medicated oil, in Poland the company is helping citizens of Poland. Now the citizen of Poland need not to buy different medicine or oils for different types of pains and infection they just need to purchase one Eagle Brand Green Medicated oil for all health issues.
The total value of the Polish pharmacy market in 2008 was PLN 24.1bn that is 11.5% of GDP, which is more than 2016. The non-prescription medicines market, which account for about one third of the total market value, was worth PLN 7.5bn in 2016. This value includes non-drug and drugs such as dietary supplements, cosmetics, dressing, dental material, diagnostic tests and medical devices. The prescription medicines market was worth PLN 15.8bn (Export.gov, 2017).
Poland is a developing market. The life style of citizens of Poland is very busy and hectic. The people spent their most of time at office while working on laptops and sitting on their chairs that lead to different types of muscular and joint pain in their body. The women who have to work at office and at home the Eagle Brand Green Medicated oil is like a blessing for them. The Eagle Brand Green Medicated oil is very useful for both men and women of Poland because it is 100% and they can use it without prescription of doctor. In the busy life, it is hard for the citizen of the Poland to see Doctor for small pain, cough or infection, the introduction of Eagle Brand Green Medicated oil in Poland will be a big solution for all of their health issues.
Why Eagle Brand Green Medicated oil is suitable for Poland Market
It is very important for the companies to choose the right entry mode to enter into a new market, it become more crucial when company want to invest in Poland because many foreign companies are trying to open their business in Poland. The entry mode is depend on few factors that are geographical scope, scope in the market, and industry landscape by considering these factors Bordern Company (Pte) Ltd has selected Joint Venture business model to place Eagle Brand Green Medicated oil in Poland market. Joint Venture generally characterised by shared returns, shared ownership and risk, and shared governance (Schellenberg, 2018). The company has chosen the option of joint venture to access a new market, to gain scale efficiencies by combing assets and operations, to share risk for major investments or projects and to access skills and capabilities.
- For Bordern Company (Pte) Ltd the joint venture is necessary becausefor ingredients and other resources, which are useful in manufacturing of Eagle Brand Green Medicated oil, are available in Singapore. The company is not ready for open a fully independent unit in Poland. However, there are some resources and other things are available in Poland that is available for low prices, so the company can use those resources in place of importing them from Singapore.
- Joint venture is going to provide various opportunities to the company, the employees of Poland are really skilled and knowledgeable. The company can use their insight and expertise in understanding the market conditions of Poland.
- Like partnership the joint venture is not permanent in nature once the company get it product placed in the market they can start their separate unit without involving any other person or company with them.
- The joint venture is very important for the company because the company is entering into Poland market for the very first time the company has no idea is product will be excepted by the people of country or they will reject the product. In joint venture, both parties share the expenses and risk, so the whole burden of loss and expense will not come on the company alone.
- The company can utilised the production facilities of their partner, they need not to establish separate plant for the production.
- Joint venture will provide the company an access to new technology and strategic alliance, which will the company in growing their business.
- Joint venture will provide a chance of cost reduction
- By joint venture the company not only sale its product in Poland market but it also get the learning opportunities, the company will learn how the industry transfer their information and they will come to know about the secrets of its joint venture partner, and most important they will come to know about the business practice of their partner.
- The risk will be share by both partners of the joint venture
- By getting into joint venture, the company will get the access over the existing resources of the company (Ni Business, 2018).
- The company will have a limited managerial control over their business, they just have adequate amount of control.
- While getting into joint venture agreement it is impossible for the company accept all terms of their partner and because of that, the process will take time to have final negotiation.
- There may be a chances of imbalance in the expertise and professionalism
- The culture, believes organisational structure and management style are different in both Singapore and Poland that may develop into poor integration of two alliance and co-operation (Ni Business, 2018).
As mentioned previously in this report Eagle Brand Green Medicated oil is a standardised product of Singapore. Therefore Bordern Company (Pte) Ltd has the strong portfolio capable of international standard of its brands for following and being standardised by Singapore of standard products. All the products of company are tested through Singapore standards. However, Poland has its own standards to measure the quality and effectiveness of the product and the Eagle Brand Green Medicated oil will be tested in the laboratories of Poland and after their approval the product can be introduce in the market. The label of product is in English language to introduce the product in Poland the company need to add Polish language in the label because the maximum population of Poland speck Polish language. The product of company has large focus segmentation. The product is for both male and females (Professional Academy, 2018).
- Product Development- the Company need to transform its product according to the market of Poland, they need to change language on labels, and the fragrance of medicated oil would be change as per the preference of people of Poland.
- Introduction- the product of company is new in Poland market and the company is going to introduce their product for the first time, to gain the confidence of customers and to build reputation of product the company will take help of commercial and so on.
- Growth stage- the growth stage of any product is very important stage, therefore the company need to take care of other factors related to the medicated oil, the oil is not just for muscular or joint pain the product is useful in providing relief when people suffer from bone pain, Cough, Arthritis, Back pain, Respiratory infection, cramping, Bruising, joint pain, Bronchitis sinus pain and inflammation.
- Maturity stage- in the starting small decline is predictable, if the company will follow the procedure selected by them and find another market the product will get profits.
- Decline stage- this stage is not determined at the current position (Picariello, 2016).
In the beginning, for 3 years the company is going to import 10000 bottles of medicated oil every month, and if in 3 years the demand of the product will increase the company will increase the number of bottles according to the demand. To decide the final price of product for Poland market the company first need to calculate landing cost. The all expense will be included in the price of product.
List of components need to include while deciding the price of the product
- Total cost of product
- Shipping cost
- Custom duty
- Tariffs
- Taxes
- Insurance
- Currency
The company has decided to ship 10000 bottles of Medicated oil in Poland for sale. Importing one container from Singapore to Poland will charge $ 750 it’s depend on the size of the container. It is estimated that one container will contain 1000 bottles that means the company need 10 containers to ship 10000 per month therefore the company will pay $ 7500 to ship from Singapore to Poland via sea. The cost of product is $ 3.75 the company will pay $ 800 monthly for insurance.
Total landed cost: 2800 PLN
Convert in to $: S $ 1036
Per product: S $ 1.036
Exchange rates:
1PLN= .37 S $ (XE currency, 2018).
VAT on import items in Poland is 23% (TMF, 2018).
Poland is not a big country, it just having 16 sub divisions, so the company is planning to place the product in all 16 sub division of Poland. To place the product in the country the company and its joint venture partners need to place the medicated oil at various medical store and at some big departmental stores. The company need to plan so the product is at easy reach of customers.
Before entering into a market the company will add polish language with English on the pack especially direction to use and ingredients. Beside medical stores the company is planning to distribute their products at spas and clinics. The maximum number of its target audience watches television and are active on social media. To advertise the product the company has chosen a television and digital marketing.
Conclusion
To conclude, when the company want to enter into a new business market first they need to analyse the size and scope of industry and some specific characters of the market of particular country. The market condition of Poland is very beneficial for new investors. The Government of Poland encourage the foreign investment and import and export. Before entering into a market for company it is very important to understand and analyse the internal market conditions.
References
Eagle brand. (2018). Market. [Online] Available from: https://bordeneagle.com.sg/market/ [Accessed 22 July 2018].
Eagle brand. (2018). Brand History. [Online] Available from: https://bordeneagle.com.sg/brand-history/ [Accessed 22 July 2018].
Eagle Brand. (2018). Corporate Profile. [Online] Available from: https://bordeneagle.com.sg/corporate-profile/ [Accessed 22 July 2018].
Eagle Brand. (2018). Our Products. [Online] Available from: https://bordeneagle.com.sg/products/medicated-oil/ [Accessed 22 July 2018].
Export.gov. (2017). Poland- Market opportunities. [Online] Available from: https://www.export.gov/article?id=Poland-Market-Opportunities [Accessed 22 July 2018].
Kopania, D. (2018). Poland- a summary of selected investment opportunities in 2018. [Online] Available from: https://www.cliffordchance.com/briefings/2018/01/poland_-_a_summaryofselectedinvestmen.html [Accessed 22 July 2018].
NAWA. (2018). 10 things you should know about Poland. [Online] Available from: https://www.go-poland.pl/10-things-you-should-know-about-poland [Accessed 22 July 2018].
Ni Business. (2018). Joint venture- benefits and risks. [Online] Available from: https://www.nibusinessinfo.co.uk/content/joint-venture-benefits-and-risks [Accessed 22 July 2018].
PFR group. (2018). Why Poland. [Online] Available from: https://www.paih.gov.pl/why_poland [Accessed 22 July 2018].
Picariello, G. (2016). The Five Steps in the PM life cycle. [Online] Available from: https://www.brighthubpm.com/monitoring-projects/1907-successfully-guide-your-projects-to-completion-with-the-pm-life-cycle/ [Accessed 22 July 2018].
Professional Academy. (2018). Marketing Theories- the marketing mix. [Online] Available from: https://www.professionalacademy.com/-and-advice/marketing-theories—the-marketing-mix—from-4-p-s-to-7-p-s [Accessed 22 July 2018].
Revolvy. (2018). Administrative division of Poland. [Online] Available from: https://www.revolvy.com/page/Administrative-divisions-of-Poland [Accessed 22 July 2018].
Schellenberg, M. (2018). Mode of Entry into International Markets. [Online] Available from: https://www.marketingteacher.com/modes-of-entry/ [Accessed 22 July 2018].
Stanfield, J.L. (2018). Poland. [Online] Available from: https://www.nationalgeographic.com/wpf/sites/kids/NGS/wpf/printplace/poland.html [Accessed 22 July 2018].
TMF. (2018). VAT in Poland. [Online] Available from: https://www.tmf-group.com/en/services/companies/accounting-tax/vat/country-profile/poland/ [Accessed 22 July 2018].
XE currency. (2018). SGD TO PLN. [Online] Available from: https://www.google.co.in/search?q=about+poland+country&oq=About+poland+&aqs=chrome.1.69i57j0l5.10274j0j7&sourceid=chrome&ie=UTF-8 [Accessed 22 July 2018].
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