Market Development Strategies and Performance of Multinational Pharmaceutical Companies in Kenya
Marketing strategies of multinational pharmaceutical companies are highly influenced by availability resources and regulatory framework of the industry imposed. In Kenya, the pharmaceutical industry is regulated by the Pharmacy and Poisons Board and has been characterised by high influx of companies leading to increased competition for the current market. To achieve growth in highly competitive market, these companies may opt to develop a new market for already existing products as guided by Igor Ansoff’s theory of market development. This study sought to establish the strategies adopted by the twenty-two multinational pharmaceutical companies operating in Kenya, their performance and the influence of these strategies on the performance of these companies. By use of semi-structured questionnaire, a census of the twenty-two multinational pharmaceutical companies was carried out and data analysis showed that the multinational pharmaceutical companies operating in Kenya have excellent performance in employee training, customer satisfaction, sales growth and profitability. It is remarkable to note that only 22% of the multinational pharmaceutical companies were found not to be involved in market development with 45% implementing Base of the pyramid market development strategy and 9% implementing Blue ocean market development to improve their performance. To achieve best results in the new market, these multinational pharmaceutical companies have made some necessary changes which include price reduction, adding established distribution channel like KEMSA and MEDS to their regular distribution network, developing friendly means of payment for their products and to a lesser extent changing product packaging. The implemented market development strategies showed positive contribution towards sales, new customer acquisition and profitability though Base of the pyramid market development strategy showed likely hood of decreasing employee motivation and innovation. This study did not get into the details of how the identified market development strategies are implemented; it will be prudent for more studies to be done to for better understanding on how the market development strategies are implemented by the respective multinational pharmaceutical companies and advice on areas that need to be improved so as to get maximum benefit in improving performance of pharmaceutical companies.
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