An empirical investigation of creation and application of brand equity in Kenya: the case of the pharmaceutical sector.
Abstract
This study sought to investigate the various methods and
practices deployed by pharmaceutical firms in enhancing the
market value of their products. The research was conducted
between June and September, 2000. The sampling frame
comprised one hundred and thirty seven (137) pharmaceutical
firms dealing with manufacturing and distribution of drugs as
listed in the Medical Directory, 2000. Sixty nine (69) firms
operating both within and outside Nairobi were selected using
simple random sampling process.
The underlying premise was that there have lately been a
lot of hue and cry on the question of the quality and
wholesomeness of various pharmaceutical products. Claims have
been made of a number of firms trading in substandard, expired
and relabeled drugs which have found their way into the local
market irregularly or through dumping. Inadequate regulatory
and lengthy bureaucratic procedures have led to inefficient and
insufficient costly supplies of pharmaceutical products. Alongside
these revelations, a wave of mergers, acquisitions and
divestitures have also hit the local industry necessitating this
study.
Owing to these challenges, the need for a strong brand
equity cannot be overemphasized especially in light of serious
fragmentation and segmentation within the sector. The study
had the following three objectives:
1. to determine the extent to which the concept of brand
equity is being applied by pharmaceutical firms in
Kenya;
2. to assess the relative importance of various factors which
explain the degree of application of brand equity concept
in the pharmaceutical sector; and
3. to identify and assess the relative importance of factors
that hamper the-application of brand equity concept in
the pharmaceutical sector.
Both primary and secondary data was collected. Secondary
data was obtained from extensive review of literature while
primary data was collected using a partially structured
questionnaire comprising of three parts. The techniques for
analyzing the data comprised the use of descriptive statistics
such as charts, tables, graphs and percentages.
The study found that many of the firms which profess to be
adhering to the brand equity concept are far from grasping its
value and mode of implementation. The firms do not have
adequate procedures and systems necessary for the execution of
the brand equity concept.
The author recommends that local pharmaceutical firms
should deliberately adopt and implement fully the concept of
brand equity rather than continue applying it haphazardly,
thereby failing to realize its full benefits. Further, managers
should be specifically appointed and charged with the
responsibility of protecting and promoting brand equity with a
view to realizing a brands' full potential.
Marketing managers need factual, market-based
information that will help them design innovative ways and
strategies on how to keep their market share and profitability
intact and growing, both in the short and long run.
The study findings reported represent the population of the
pharmaceutical industry that is involved with marketing
activities. That is both the manufacturing and distribution firms
while leaving out the consumer and the retail/wholesale chain. It
is through the actions and decisions of these respondents that we
are able to measure, learn and make conclusions and
recommendations on how brand equity is created and applied .
Publisher
School of Business, University of Nairobi
Description
Master of Business and Administration Degree