A survey of market-share growth strategies adopted by pharmaceutical companies in kenya for branded prescription medicines
Ojung' a, Kennedy O H
MetadataShow full item record
Kenyan pharmaceutical marketplace has expanded and attracted many more entrants. This has caused increased competition and changed the industry structure somehow. The pharmaceutical firms must therefore pursue strategies that will guarantee them a desirable level of growth in market share of their brands. This study sought to find out the strategies employed by pharmaceutical companies to increase market share of their prescription-only branded medicines. This was a descriptive survey. According to the Kenya Medical Directory (2003), there are 143 registered pharmaceutical companies in Kenya existing either as marketing agencies, distributors or manufacturers. A sample size of 45 companies was drawn for the study. Disproportionate stratified sampling method was used to ensure that even those strata that were smaller in size were still represented in the final sample. From each stratum, the sample elements were then randomly selected. Primary data was collected using a semi-structured questionnaire which was dropped and picked later from the respondent firms. The response rate was 69%, and was considered satisfactory since it was above the industry average (Ongubo, 2003). The data collected was analyzed using frequencies, percentages, cross- tabulations, means and standard deviation. Selling existing products to existing customers, selling existing products to new customers, selling new products and services, selling more through new delivery approaches, selling to new geographies, establishing new industry structures and finding new competitive arenas were the growth strategies under study. From the research findings, it was found that pharmaceutical firms in Kenya pursued strategies for market share growth. Selling existing products to existing customers was the market share growth strategy that was pursued most by majority of the firms, followed by selling of new products and services and selling existing products to new customers. Finding new competitive arenas, selling to new geographies, selling more through new delivery approaches and establishing new industry structures were moderately pursued growth strategies, and the extent of their use varied more from one company to another. No single strategy appeared sufficient to deliver the ideal market share growth that the surveyed pharmaceutical companies desire. A similar observation has previously been made by Kotler & Armstrong (1998) and Andrawes (1971). The companies therefore designed unique combinations and permutations of different strategies, tactics and activities that conferred them the necessary competitive advantages to realize their growth objectives. The choice of strategy that a company pursued and the extent of its use appeared to be influenced by factors that determined the competitive position that the firm occupied, such as the nature of business and products as well as ownership of the firm (Lee & Masao, 1990). They also relied on superior product quality, better customer relationship and improved service quality, rather than price reduction to gain competitive advantage. Despite the assurance of confidentiality of information that the researcher gave to all respondents, some did not fill the questionnaire, hence 100% response rate was not achieved. A further study should be carried out to determine the relationship between the strategies and market share growth.
University of NairobiSchool Of Business, University Of Nairobi
Subjectsurvey of market-share
kenya for branded