Determinants of distribution intensity among firms in the Kenyan pharmaceutical industry
Abstract
As a strategic marketing tool, the field of marketing channels had, for many years taken a
"back seat" to the three strategic areas of marketing i.e. product, price and promotion.
But in recent years this relative neglect of marketing channels has been changing in many
cases to a keen interest area. This has been due to greater difficulty in gaining sustainable
competitive advantage; need to reduce distribution costs and new stress on growth. One
of the key elements in channel management is deciding how many sales outlets should be
established in a given geographic area. It was therefore necessary to conduct a study to
find out distribution intensity used by firms in the pharmaceutical industry and to
determine the factors they consider when deciding on the distribution intensity strategy to
pursue.
To aid this study a survey was undertaken using a structured questionnaire. The
questionnaire was administered using drop and pick later method. The questionnaire was
adopted because of the high degree of anonymity it gives to respondents who considered
certain responses strategic and sensitive to their business. The populations of the study
were pharmaceutical companies based in Kenya. The sampling frame consisted of
manufacturers, franchise importers, and generic importers of pharmaceutical products. A
sample frame of sixty firms was picked for the study. The respondents of the study were
the marketing or distribution managers of the respective companies. Data analysis was
done using mean scores and factor analysis.
The study findings showed that most pharmaceutical firms follow intensive distribution
strategy but a few companies with high end prescription products follow a selective
distribution strategy.
The greatest limitation to this study was the reluctance by many respondents to disclose
information deeming it strategic to them. Further research should be done on factors that
determine distribution intensity on specific product categories.
Citation
MBAPublisher
University of Nairobi School of Business, University of Nairobi
Description
Master of Business Administration