16 SINERGI, Volume 9 Number 2 SEPTEMBER 2019 Carolina Ditan RETROSPECT OF THE MARKETING STRATEGIS AND SERVICES IN A CHINEE PHARMACEUTICAL COMPANY RETROSPECT OF THE MARKETING STRATEGIES AND SERVICES IN A CHINESE PHARMACEUTICAL COMPANY Carolina Ditan College of Business, Management and Accountancy, De La Salle Araneta University Email : carolina.ditan@dlsau.edu.ph Submit : 8th August 2019, Revised : 19th August 2019, Accepted : 27th August 2019 ABSTRACT The study was conducted to determine the effective marketing strategies in terms of promotion, product, pricing and place, and services in terms of availability, reliability, responsiveness, completeness and professionalism rendered of a Pharmaceutical Company in China as perceived by the two groups of respondents, employees and customers/clients. The four marketing strategies obtained a very effective descriptive rating by the employee and client-respondents. Among the four marketing strategies, Pricing gained an effective rating from employee-respondents and Place has a significant difference in the perceptions of the two groups of respondents. In terms of services rendered a very effective descriptive ratings were given by the employee-respondents; whereas, client-respondents only obtained an effective descriptive rating. Among the five services rendered, only professionalism was perceived as very effective and was tagged as no significant difference by the two groups of respondents. High relationship between the marketing strategies and services rendered by the Pharmaceutical Company to its clients in the obtained r value of 0.74 which means that the marketing strategies of employees directly affect the clients’ services. At 0.05 Alpha, it was concluded that if the marketing strategies of the employees improved, so as their services to the clients. It is recommended that a successful pharmaceutical company must build customer knowledge competence through improvement of the current processes that include customer data acquisition and data interpretation. Key words: pharmaceutical company, marketing strategies, services I. INTRODUCTION In today’s changing business, the challenge for pharmaceutical companies is how to become customer-centric companies, as it is obvious that product-centricity can no longer be sufficient for the success of a company (Hazboun, 2010).With this environment, there is new pressure on the pharmaceutical industry to evaluate and implement better ways of doing business and to find new ways to build competences which can be considered meaningful and challenging to the industry. It is therefore a very important issue for pharmaceutical companies to make their clients satisfied not only with their marketing strategies but also their services. There are certain situations like after receiving a service, clients would usually describe the service 17 SINERGI, Volume 9 Number 2 SEPTEMBER 2019 Carolina Ditan RETROSPECT OF THE MARKETING STRATEGIS AND SERVICES IN A CHINEE PHARMACEUTICAL COMPANY provider as fast, always available when needed and polite. These descriptions represent different aspects of the service like responsiveness, availability, and professionalism. Another situational concern of pharmaceutical company is: Should they spend more on marketing activities (advertising, offers, sales, promotional activities of market research, competitors’ analysis) or should they just spend more money on their sales force or maybe lower the price a little bit to sell more (Kotler, 2011). Delivering quality to customers in a competitive market place dictates the need to continually enhance a customer’s experience and satisfaction. However, evidence indicates that satisfying customers would still defect at a high rate in many industries. This suggests that businesses must strive for 100% effective marketing strategies and services rendered by the company. A client’s model adapted from WassemFarouqMasroujeh (2010) consisted of five satisfaction factors on services rendered by the company such as availability, responsiveness, reliability, completeness and professionalism were tested on achieving customer satisfaction in the pharmaceutical market. On the other hand, marketing plays an important role as an organizational function and a set of processes for creating, communicating, and delivering value to customers, and for managing customer relationships in ways that benefit the organization and its stakeholders. The traditional view of marketing is that a firm makes something, and then sells it. The smart competitor must design and deliver offerings for well-defined target markets, and companies should see themselves as a value delivering process (Kotler 2011). Today, marketing is recognized as the vital process that binds the organization together. It is marketing sales in China in 2016 that hit $ 139 billion surpassing Japan to take the number two position globally contributing to a number of factors for China to continue its drive-in expanding demand for pharmaceuticals (Wang, 2018). Such dynamics have led pharmaceutical companies to move aggressively into China and efforts until now have been largely successful. The major priority of the Chinese government is the reform of the health care system so as to make the development, production and marketing of medication significantly visible in the global market. One of these Chinese pharmaceutical enterprises was established in April 2011, and the first “GSP” and “ISO9000” double certification unit in HeBei province. The sales tax of 2016 is 14.2 billion yuan. The company has various pharmaceutical products, ranging from antibiotics formulations and bulks, nutrition and vitamins, immune/suppressant, biotech and pesticide for veterinary drugs. At present, the company’s business scope includes: Chinese and western medicine, traditional Chinese medicine, biological products, anesthesia psychotropic drugs, toxic drugs for medical use, pharmaceuticals, health food, medical equipment, chemical reagents, glass apparatus andvarious categories of goods more than 28000 specifications of varieties. The sales network covers 100% of the third and second grade hospitals in HeBei province; 80% of county-level medical institutions; 60% of the pharmacies, community outpatients and township hospitals have more than 10,000 other end customers. With more than 4100 domestic and outside suppliers at the same time, more than 3600 distributors maintain close business cooperation; become the domestic well-known enterprise with more than 85% of the products, imports 100% of the level 1 agent for the sale of the enterprise in HeBei province (Chinese Pharmaceutical Company, Annual Report, 2018). China accounts for 20% of the world’s population but only 1.5% of the global drug market exist. Health- care reform and changes done are designed to extend or expand basic health insurance to a larger portion of the population and give individuals greater access to products and services (Hazboun, 2010). As of 2009, has around 2,000 to 5,000 domestic pharmaceutical manufacturers and around 12,000 domestic pharmaceutical distributors. Most often cited adverse factors include a lack of marketing strategies and satisfaction of customers with regard 18 SINERGI, Volume 9 Number 2 SEPTEMBER 2019 Carolina Ditan RETROSPECT OF THE MARKETING STRATEGIS AND SERVICES IN A CHINEE PHARMACEUTICAL COMPANY to services rendered through their pharma staff, staff representatives, and employees.Following this period of change coupled with cited adverse factors, the pharmaceutical industry still has continued its expansion. The researcher, seeks to determine the relationship between marketing strategies and services offered by the Chinese pharmaceutical company to their clients and suggest suitable recommendations for improving the customer care based on the study results. China’s Pharmaceutical Industry The Chinese biopharmaceutical market has huge opportunities for growth. This industry will significantly affect the international healthcare market and has enormous potential for investment. China’s healthcare sector continues to develop at an astonishing rate. The nation’s healthcare spending is projected to grow from $357 billion in 2011 to $1 trillion in 2020. Across key categories, from pharmaceuticals to medical products and consumer health, China remains one of the world’s most attractive markets, and is by far the fastest growing of all the large emerging markets. It is not surprising that multinationals are flocking to take advantage of the opportunities, but long-term success for all participants is by no means assured but still optimistic about the overall outlook for the healthcare market in China. At a high level of analysis, three themes will shape China’s healthcare market in the coming years: the continuation of economic and demographic trends, further healthcare reform, and the policies articulated in the government’s 12th Five-Year Plan (FYP). Some of these forces will have positive implications for multinational companies, for example, improvements in infrastructure, the broadening of insurance coverage, and significant support for innovation. Some of them will have negative implications, for example, pressures on pricing, and the rise of local champions. In some situations, the forces come into direct opposition, for example, in the bid to reconcile universal healthcare coverage at low cost with rewarding innovation. Marketing is Everyone’s Business. Traditionally, marketing has been labeled as one of the four key functional areas of a business. However, with marketing’s role changing in the late 1990’s to building customer relationships, there has been a subsequent change in the way the overall function is regarded internally within corporations. In the early 1950s, Neil Borden redefined the position of the marketing manager by introducing “marketing mix” as an integrated set of marketing “tactics” to realize organizational objectives and create a closer, higher value relationship with customers. In the late 1950s, Jerome McCarthy condensed the number of variables in a marketing mix into four principal categories: 1. Product: select the tangible and intangible benefits of the product; 2. Price: determine an appropriate product pricing structure; 3. Promotion: create awareness of the product among the target audience; 4. Place: make the product available to the customer. McCarthy (2015) stated the importance that the Four P’s be regularly reviewed to take into account changes in customer needs and other external influences and that marketing managers adapt their set of controllable variables to face the new conditions. He further advised that promotion and price be adjusted in the short term, neither the product itself nor its place of distribution. To get the most out of Marketing and bring some real advantages to business there’s nothing better than reviewing the principle concepts from the mind of the most renowned scholar in Marketing, no less than the Father of Marketing, Philip Kotler.Kotler (2011) states that “Marketing is an administrative and social process through which individuals and groups obtain what they need and desire by the generation, offering and exchange of valuable products with their equals”. Business is focusing on people, so as marketing. Marketing is about people’s need, and then provides customers the appropriate price, which can bring 19 SINERGI, Volume 9 Number 2 SEPTEMBER 2019 Carolina Ditan RETROSPECT OF THE MARKETING STRATEGIS AND SERVICES IN A CHINEE PHARMACEUTICAL COMPANY handsome profit to the company (Sexton, 2011). Following Kotler and Keller’s (2011) words, it manages customer and satisfies customers’ needs, the way to bring the exchanged relationships through creating value and satisfying needs and wants.Johnson and Scholes (2010) define the strategy as follows: “Strategy is the direction and scope of the organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations.” Changing consumer needs and business environment has necessitated pharmaceutical companies to adopt marketing mix strategies to gain competitive edge hence attracting and retaining customers. Product, price, place, promotion, people, process and physical evidence strategies have remained as the key roadmap of any successful pharmaceutical company. Adoption of effective marketing mix strategies promotes customer loyalty hence social economic developments in China can be achieved. Marketing Strategy is needed by any organization that is faced with intelligent opposition that can affect the organizations’ desired outcome. Most firms operate in environments that are potentially vulnerable to competitive actions and so they need effective marketing strategies to determine the way in which they intend to compete in the market place. Due to dynamic business environment, both small and large organizations need to adopt marketing strategies to survive by attracting and retaining customers hence increased productivity (Woodward, 2011). Woodward argues that marketing strategy is a process by which one can envision the future and develop the necessary procedures and operations to influence and achieve the future. Pharmaceutical companies invest billions of dollars annually on marketing drugs they manufacture. They use direct methods to consumer marketing, physician speakers, representatives and catered foods while introducing products to a target audience (Kotler, 2011). An appropriate marketing strategy for any pharmaceutical company would be to build on proven strategic marketing principles, along with a focus on changing customer behavior. Use of digital media through Internet marketing plan is the best marketing strategy that can provide the basis for a changed business model. To formulate a marketing strategy, it is also crucial to know the existing markets as well as emerging markets of pharmaceutical drugs as stated by (Ganey, 2012). Pharmaceutical companies in the world engage in providing more than one service to its customers. The companies identify gaps, which must be filled in order to meet customers’ needs and they endeavor to fill these gaps by offering a range of services to them. They identify weakness in the market segment that are emerging, neglected or poorly served by competitors after which they select a strategy using the marketing mix as a resource (Kotler, 2010). Any competitive pharmaceutical company that wants to dominate a larger market share in China should adopt effective marketing strategies in order to survive. Marketing strategy therefore, is a long- term response to the changing environment and involves fundamental decisions about how to match resources to that changing environment (Kotler and Keller, 2013). To survive, Pharmaceutical companies have to differentiate themselves mainly by being as close to the customer as possible. Product marketing strategies have been developed in response to the tremendous increase of competitors in the pharmaceutical industry. The strategy that an organization implements is an attempt to match the skills and resources of the organization to the opportunities found in the External Environment. Kotler (2011) argued that decisions and actions taken would lead to the development of an effective marketing strategy that will help to achieve organizational objectives. The Concept of Strategy Scholes and Whittington (2010), strategy is what a company does and how it actually positions itself commercially and conducts the competitive 20 SINERGI, Volume 9 Number 2 SEPTEMBER 2019 Carolina Ditan RETROSPECT OF THE MARKETING STRATEGIS AND SERVICES IN A CHINEE PHARMACEUTICAL COMPANY battle. Any Organization cannot operate without a strategy because Strategy formulation is vital to the well-being of an organization. A strategy is needed by any organization that is faced with intelligent opposition that can affect the organizations desired outcome. Most firms operate in environments that are potentially vulnerable to competitive actions and so they need a strategy to determine the way in which they intend to compete in the market place (Hisrich, 2010). Marketing plays a pivotal role in strategy development. In its strategic role, marketing consists of establishing a match between the firm and its environment. It seeks solutions to problems of deciding; what business the firm is in and what kinds of business it may enter in the future and how the chosen fields of endeavor may be successfully run in a competitive environment by pursuing product, price, promotion, and distribution perspectives to serve target markets (Pearce, 2012). Because pharmaceutical companies can directly contact wholesaler, in order to enable wholesalers to make bulk purchase from them, pharmaceutical companies have developed a lot of new methods to attract wholesalers. And they establish a mutual benefit relationship between them over time, that is, wholesalers buy pharmaceuticals from the pharmaceutical company and the company guarantees the wholesalers certain benefit. Sometimes, bribery is one method the pharmaceutical companies use to attract wholesalers. Although pharmaceutical companies do not directly contact customers, customers are the direct user of their products and the importance of customers is well known. So, attracting customers’ attention or promotion is considered to be another important marketing strategy for pharmaceutical companies. Many companies use advertisements to attract customers and improve the popularity and reputation of their brand. Chen, (2011) summarized China’s Top 5 industries which put the most advertisement on TV in 2008. They are: cosmetics / bathroom products, medical product, commercial and service industry, food and drink. China’s pharmaceutical companies have paid a lot attention to attract wholesalers and customers, but they are ignoring the retail pharmacies in their marketing activities. Because the pharmaceutical companies put lots of money into advertising/promotion, their prices are increased. The advertising effect made some brands more famous among customers, so, the companies of these products do not worry about their sale in retail pharmacies, and they took most of the profits. Increased cost and little profit made retail pharmacies dissatisfied (Li, 2013). So, the relationship between pharmaceutical companies and retail pharmacies are not very well established. The battle between them broke out on 2013. Several retail pharmacies combined together to resist purchase from one famous pharmaceutical company. II.RESEARCH METHODS The study aims to address the effectiveness of marketing strategies and services in a Chinese pharmaceutical company. The following research question is intended for this study: 1. What are the perceptions of the two groups of respondents on the marketing strategies of the Chinese pharmaceutical company in terms of promotion, product, pricing and place? 2. How do the two groups of respondents perceive the services quality offered to clients by the Chinese pharmaceutical company in terms of availability, responsiveness, reliability, completeness and professionalism? Framework As shown in Figure 1, Kotler’s marketing theory using 4 Ps in the marketing mix was utilized to examine the marketing effectiveness of Chinese Pharmaceutical Company, . China. Thus, to resort in the effectiveness of services rendered in this pharmaceutical company, Commitment trust theory was also taken into consideration to determine the effects of the key services rendered as perceived by the respondents. Commitment and trust are “key” because they encourage marketers to (1) work at preserving relationship investments by cooperating with exchange partners, (2) resist attractive short-term alternatives in favor of the expected long-term 21 SINERGI, Volume 9 Number 2 SEPTEMBER 2019 Carolina Ditan RETROSPECT OF THE MARKETING STRATEGIS AND SERVICES IN A CHINEE PHARMACEUTICAL COMPANY benefits of staying with existing partners, and (3) view potentially high-risk actions as being prudent because of the belief that their partners will not act opportunistically. Therefore, when both commitment and trust not just one or the other is present; they produce outcomes that promote efficiency, productivity, and effectiveness. In short, commitment and trust lead directly to cooperative behaviors that are conducive to relationship marketing success. Figure 1. Theories on Marketing Strategies and Services This study covered the period from June 2018 to September 2018. Specific methods of data gather- ing, such as interview and the survey questionnaires were employed. It covered the pharmaceutical com- pany in Hebei, China. The respondents of the study include the customers and employees. The researcher used the mixed method of investigation. The utilization of the quantitative data required the use of statistical treatment proce- dures to assure a valid result. The descriptive survey is deemed to be appropriate since its purpose is to determine the marketing strategies and services ren- dered in the pharmaceutical company.One hundred (100) questionnaires were given to 50 customers and 50 personnel of the pharmaceutical company. Inter- view–protocol was used and answered by selected customers and employee respondents, their respons- es of which were integrated in the findings, conclu- sions and recommendations. The employees and customers in the Chinese Pharmaceutical Company understudy were the respondents during the data gathering. The study was made carefully by using Likert-type sur- vey analysis approach to bring substantial outcome. This analysis was used to get competitive customer satisfaction on the effective marketing strategies of the Chinese pharmaceutical company. Several ques- tions could have been introduced when probing fur- ther into the detail of the entire specific problem in this study. In spite of the study being taken up about competitive customer satisfaction with its effective marketability of the health-related products and it concentrated only on the marketability effects of the health-related products and critical satisfaction fac- tors to achieve customer satisfaction. Cronbach's Alpha ranges between 0.817 and 0.937. This range is considered high; the result ensures the reliability of each field of the ques- tionnaire. Cronbach's Alpha equals 0.937 for the en- tire questionnaire, which indicates an excellent reli- ability of the entire questionnaire. Thereby, it can be said that the researcher proved that the questionnaire was valid, reliable, and ready for distributionfor the population sample. 22 SINERGI, Volume 9 Number 2 SEPTEMBER 2019 Carolina Ditan RETROSPECT OF THE MARKETING STRATEGIS AND SERVICES IN A CHINEE PHARMACEUTICAL COMPANY III. RESULT AND DISCUSSION The perceptions of employees and client-respondents on the marketing strategies of Chinese Pharmaceutical Company as to promotion, product, and place was very effective as revealed in the general means of 4.53, 4.54, and 4.57 respec- tively. Meanwhile, pricing was rated effective with general means of 4.49 in the perceptions of the two groups of respondents. Table 1 Perceptions of Two Groups of Respondents on Mar- keting Strategies of Chinese Pharmaceutical Com- pany Legend: 1.00-1.49 (VI); 1.50-2.49 (I); 2.50-3.49 (ME); 3.50-4.49 (E); 4.50-5.00 (VE) The significant differences in the perceptions of the two groups of respondents were revealed as no significant difference in terms of promotion where the t - Stat Value obtained is 0.39. In terms of prod- uct, there was no significant difference where t - Stat Value obtained of - 0.81 or + 0.81. In terms of pricing there was no significant difference where the t - Stat Value obtained is - 0.15 or + 0.15. In terms of place, there was a significant difference where the t - Stat Value obtained is – 4.78 or + 4.78 in the perceptions of the two groups of respondents. Legend: t - Stat Value >t -Crit Two Tail Value (Re- ject H_0 / Significant);t - Stat Value t -Crit Two Tail Value (Re- ject H_0 / Significant);t - Stat Value