The aim of this report is to identify appropriate promotion and pricing strategy that Korwin Pharmaceuticals should use to market its products while at the same time maintaining the companies` values of social responsibility. For the company to experience success with its new products in the market,it has to come up with appropriate marketing strategies. This will ensure that customers are aware of new product in the market and the benefits that it has to them. Pricing strategy is the method that a company uses to arrive at a price for its products while considering a variety of factors. This is very important because it plays a huge role in determining the success of the product in the market. The assignment also discusses the the strategies that Korwin Pharmaceuticals will use to create awareness for its products. The strategies designed are in line with the companies` values of social responsibility.
- In order for Korwin Pharmaceuticals to maintain its values of being responsible towards its customers,it is important to come up with a written and clear code of conduct that will guide the new employees while discharging their daily responsibilities at the company. The new employees must understand that the company has the interest of the customer at heart and the main objective of developing the new drug is to provide a cheaper alternative drug to patients with life threatening allergic reactions. The following is the code of conduct for employees relating to product promotion and pricing
- Integrity
- All our employees have to ensure that they are truthful and honest in all communications pertaining our products and the companies` brand. This involves revealing all the relevant information that a consumer may need beginning from effectiveness of the drugs as well as side effects if any. Employees are also discouraged from making exaggerated and false information when advertising our products.
- Professionalism
- All employees must have proper knowledge and understanding of their work.
- Corruption and bribery
- The company discourages employees from accepting gifts from clients and partners.
- Conflict of interest
- Employees are expected to avoid personal, financial or other interests that may hinder them from discharging their duties.
- Television ads
- Our anti-allergen medication has been developed after a very thorough scientific research with the aim of developing medications that effective and friendly to the body. Unlike the anti-allergen drugs developed by other companies. The television advert will use graphics to demonstrate how a person with allergies and uses Korwin Pharmaceutical medicine is relieved fast compared to a patient who uses another drug. This will help to put across a message that our products are of superior quality to that of the competitor. The advert will also compare the price of our products with those of the competitor.
- Magazine
- The company will advertise in leading medicine journals in US. The adverts should cover an entire page of the magazine preferably as the cover of the magazine. The message is that the anti-allergic drugs are unique and have more benefits than competitors. The self injecting devices will also be portrayed as being original and of better quality than competitors.
- Online and social media advertising
- Online platforms such as google and youtube will be used to inform customers of the new products and their respective prices. Social media platforms such as Facebook and Twitter will be essential in carrying out this campaign.
- The public relations strategy will focus on children suffering from allergic reactions. The company will carry out free medical camps in poor neighbourhood across the country. This will foster the image of the company and reinforce the founders values of social responsibility. This activities will be used in advertising and the companies products. The company will organize a charity half-marathon race to carry out awareness on allergic diseases and how they can be treated.
- The special pricing strategy will be used to promote sales of the medicine and self injection devices. During the first month of launching the product, customers will buy the product at a 30% discount. This will encourage customers to purchase the product before the price increases once the offer comes to an end.
- Personal selling
- The company will use point of sale merchandising as a method of personal selling. The sales persons of the company will be hired to visit pharmacies to encourage retailers to stock the product. This will ensure that the product is readily available to the final consumer.
- Social media
- The company will use social media platforms such as Facebook, twitter and Instagram to reach to the final consumer and encourage them to buy. The advantage of this tool is that it offers the company an opportunity to get feedback from customers (Koku,2014). Many customers will be reached because of the wide popularity of internet and social media.
- Attention
- The company needs to make customers aware of the existence of the product. To do this,the company will carry out advertising using billboards, newspapers,magazines and TV ads. The attention of the customers will also be captured by offering them an attractive price that will entice them to purchase.
- Interest
- The target customers will become interested after learning about the brand and its benefits. Once customers realize that the medicine is different from the once existing in the market and the price is favourable,they will try out the product.
- Desire
- With time,the customer develops a favourable disposition towards the brand. This mainly depends on how the message resonates with the target audience. The customer develops a strong desire to buy since they are convinced that the product meet their need.
- Action
- The customer shops around for the medicine and the self injecting devices with the intention to purchase. The customer then purchases and uses the product for the first time.
- Price is a very essential aspect of marketing. This is especially critical for a market where customers are price sensitive. The following are some of the pricing methods that Korwin pharmaceuticals can use;
- Penetration pricing
- Penetration pricing involves setting a low price with the aim of attracting customers and market share. Korwin can start by setting a price that is 70% of the original price. The company can raise the price of the product after one month to a reasonable price that can meet the cost of production and help the company break even. After this period,the company will have gained substantial market share and the customers will have tried the product.
- Target pricing
- This is the pricing method whereby, the selling price of a product is calculated by setting a particular rate of return on investment for a specific volume of production. This method may however result to underestimation of product price since it does not consider the demand of the product.
- cost plus pricing
- This is a pricing method which is based on costs. Under this approach, the cost of direct material, direct labor and overhead costs are summed up and added to a markup percentage (Kapferer, Bastien & Dawsonera, 2012). The company can decide that they want to achieve 20% of return on investment. The company will calculate all the costs involved from production to consumption and set a mark-up price that is 20% above the cost.
- The primary objective of Korwin Pharmaceutical is profit making. It is therefore crucial that when setting product price,the new employees consider the profit aspect of the business. For the penetration pricing technique, the company sets a price that either caters for its cost of production or that is slightly below production cost. The price is set with the objective of attracting new customers and the company does not make any profit.
- To determine profit in when the target pricing method is used,you have to set a production target and calculate the cost of producing those commodities. Profit is determined by setting a profit target and then adding it to the cost. The target profit is the profit the company will get from selling the product.
- In order to determine profit when the cost plus method is used,the company has to determine per unit cost of production. Profit is determined by subtracting the total cost from the selling price to determine per unit profit.
Conclusion
- The aim of this assignment is to determine the strategies that Korwin Pharmaceuticals should apply for product promotion and pricing. The report begins by designing a code of conduct that governs the behavior and conduct of new employees to be in line with the vision and mission of the company. The report also outlines an advertising campaign that the company should conduct to create awareness of its products and encourage customers to purchase.In addition to this, the report also contains a public relations strategy and pricing strategies that the company should apply in order gain substantial market share and to encourage customers to purchase.
References
- Koku, P. S. (2014). Decision making in marketing and finance: An interdisciplinary approach to solving complex organizational problems.New York:Page 124-126
- Kapferer, J.-N., Bastien, V., & Dawsonera. (2012). The luxury strategy: Break the rules of marketing to build luxury brands. London: Kogan Page.
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