Stage One (Where are we now?

)
Strategic marketing analysis raises the question of where the organization is now in terms of its competitive position, product range, market share, financial position, and overall levels of capability and effectiveness. In addressing this question we are seeking to establish a baseline from which we can move forward. Strategic analysis focuses on understanding the strategic position of the organization: What changes are taking place in the environment? How will these changes affect the organization and its activities? What resources does the organization have to deal with these changes? What do those groups associated with the organization wish to achieve? Strategic analysis requires an assessment of: 1. 2. 3. 4. Organizational capabilities. Threats from environmental forces. Competitors strengths & weaknesses. Customers needs.

1. Strategic Marketing Audit

A. Environment audit
Every company needs to see their way through changing markets. The Marketing Audit is committed to improving strategic decision making when companies are faced with specific business challenges. Marketing Audits part of monitoring and feedback. It reflects the observance on the strategies decided by management, on the marketing part. Audit contains details on sales generated, deviation from projections, feedback from customers, product improvement and market development. It also contains details on strengths and weaknesses and potential threats likely to arise owning to competition. An audit is specifically designed on the situational demand. It could be product focused, market focused or it could be decision making model.
Company Summary

1.1 Company At-a-Glance Pfizer Inc. engages in the discovery, development, manufacture, and marketing of prescription medicines for humans and animals worldwide Pfizer, Inc. also involves in contract manufacturing and bulk pharmaceutical chemicals businesses. It serves doctors, nurse practitioners, physician assistants, pharmacists, hospitals, pharmacy benefit managers, managed care organizations, and government agencies. The company was founded in 1849 and is headquartered in New York, New York.

1.2 Business Description It is the world's largest research-based biomedical and pharmaceutical company. Pfizer direct competitors in Drug manufacturing are BAYRY.PK, Merck & Co. Inc. , Novartis AG 1.3 History Since Pfizer was founded by cousins Charles Pfizer and Charles Erhart in 1849, our pharmaceutical company has remained dedicated to discovering and developing new, and better, ways to treat and prevent disease and improve the health and quality of life for people around the world. From the miracle of penicillin to the patient support program weve developed along with CHANTIX, a prescription medicine to help people quit smoking, we focus on finding answers to the biggest health challenges of the times. We invite you to explore our rich history and see how we have continually evolved our organization to keep pace with the needs and expectations of our stakeholders and society as a whole. Mission They will become the world's most valued company to patients, customers, colleagues, investors, business partners, and the communities where they work and live. Our Purpose They dedicate themselves to humanity's quest for longer, healthier, happier lives through innovation in pharmaceutical, consumer, and animal health products. Vision& Values They demand of themselves and others the highest ethical standards, and their products and

processes will be of the highest quality. They recognize that people are the cornerstone of Pfizer's success, they value our diversity as a

source of strength, and they are proud of Pfizer's history of treating people with respect and dignity. They are deeply committed to meeting the needs of their customers, and they constantly focus on

customer satisfaction.

They play an active role in making every country and community in which they operate a better

place to live and work, knowing that the ongoing vitality of their host nations and local communities has a direct impact on the long-term health of their business. Innovation is the key to improving health and sustaining Pfizer's growth and profitability.

They know that to be a successful company they must work together, frequently transcending

organizational and geo graphical boundaries to meet the changing needs of their customers. They strive for continuous improvement in their performance, measuring results carefully, and

ensuring that integrity and respect for people are never compromised. They believe that leaders empower those around them by sharing knowledge and rewarding

outstanding individual effort. Leaders are those who step forward to achieve difficult goals, envisioning what needs to happen and motivating others. Since 1849, the Pfizer name has been synonymous with the trust and reliability inherent in the

word Quality. Quality is ingrained in the work of their colleagues and all thier Values. They are dedicated to the delivery of quality healthcare around the world. their business practices and processes are designed to achieve quality results that exceed the expectations of patients, customers, colleagues, investors, business partners and regulators. They have a relentless passion for Quality in everything they do.

1.3.1 TimeLine
1849 1899

In 1849, cousins Charles Pfizer and Charles Erhart founded Charles Pfizer & Company in a red brick building in Brooklyn, NY.
1900 1950

The new century brought prosperity to Pfizer. The pioneering of the mass production of citric acid from sugar through mold fermentation fueled growth for years.
1951 1999

The second half of the 1900s saw intense pharmaceutical research and great successes for Pfizer.
2000 Present

After successfully merging with Warner-Lambert and Pharmacia to create the world's fastest-growing major pharmaceutical company, Pfizer continues its mission to become the world's most valued company to patients, customers, colleagues, investors, business partners, and the communities where we work and live. 1.4 Products/Services Each year, Pfizer pharmaceuticals help over 150 million people throughout the world live longer, healthier lives. With medicines across 11 therapeutic areas, it helps to treat and prevent many of the most common, and most challenging, conditions of our time. it also builds partnerships to help ensure access to our medicines and 4

educate and empower consumers. And, with a broad range of animal vaccines and medicines, it helps to protect the health of both pets and farm animals. Pfizer pharmaceutical products

Aricept Aromasin Caduet Camptosar Celebrex Chantix Detrol/Detrol LA Eraxis Genotropin Geodon/Zeldox Lipitor Lyrica Key Pfizer Animal Health Products: Draxxin Excede Naxcel/Excenel RespiSure/Stellamune Dectomax Rimadyl Revolution/Stronghold Clavamox/Synulox BoviShield Lutalyse Slentrol Cerenia Convenia Improvac

Norvasc Rebif Relpax Revatio Spiriva Sutent Vfend Viagra Xalatan/Xalacom Zmax Zoloft Zyvox

1.5 Suppliers Pfizer has Supplier Diversity strategic business process which aims at providing companies owned by minorities and women an equal opportunity to become suppliers to Pfizer
Minority Business Enterprise (MBE)

An MBE is a for-profit enterprise, regardless of size, physically located in the United States or its trust territories and owned, operated and controlled by minority group members

Woman-owned Business Enterprise (WBE)

A WBE is a for-profit enterprise, regardless of size, physically located in the United States or its trust territories and owned, operated and controlled by a woman or women. Ownership by women means the business must be at least 51 percent owned by a woman or women, who control the management and daily operations of the business.

1.6 Competitors Bayer

The company, which created aspirin in 1897, makes health care products (diagnostic equipment and pharmaceuticals), agricultural products (crop protection and animal health), and specialty materials(plastics and synthetic rubber). It operates in the US through Bayer corporation . Bayer has reorganized, spinning off its divisions and becoming a management holding company. Merck

Merck helps those who are hooked on hamburgers. Drugs treating ailments associated with American eating habits -- high cholesterol, hypertension, and heart failure -- are Merck's biggest business. Its drugs include hypertension fighters Cozaar and Hyzaar, cholesterol combatant Vytorin, and Zetia which the pharma produces separately as well. Novartis

It's based in neutral Switzerland, Novartis has been aggressive in attacking illnesses. The company's prescription drugs include treatments for nervous system and ophthalmic disorders, cardiovascular diseases, and cancer.

B. Strategy Audit:
This focuses upon a review of the organizations marketing objectives and strategy; with a view to determining how well suited they are to the current and forecasted market environment.

Pfizer
Pfizers strong marketing and sales operations have enabled the company to become the partner of choicefor the marketing innovative products developed by others.Pfizer has been extremely skilled in creating aliiances with other pharmaceutical companies via co-promotion agreemments. Pfizer promotes and markets such highly promising products as celebrex, bextra, aricept and so on with alliance partners:pfizer provides cash,staff and other resources to further develop,market promote and sell the products in exchange for a share of revenues.

Other alliances include a partnership with IBM and Microsoft to create Amicore an independent company that is developing practice management systems and a chronic disease management program developed with the state of Florida's agency for health care administration.

C. Organization Audit
There are two segments which divide Pfizer: Consumer Products and Pharmaceutical Products. The Pharmaceuticals are prescription drugs which are discovered, developed, manufactured, and marketed for humans as well as animals and are developed for a wide variety of different diseases and conditions. Some of the most familiar pharmaceutical products distributed by Pfizer include Viagra, Lipitor, and Celebrex. Consumer Products is the segment which includes medications for self-care, including well-known products such as Listerine, Rolaids, Sudafed, and Visine.

The products can be found in over 150 countries around the world. Pfizer has approximately 120,000 employees worldwide and competes with companies such as Bayer, Merck & Company, and Novartis. The Pfizer dedication to consumers is revealed in the purpose statement which reads as follows: We dedicate ourselves to humanity's quest for longer, healthier, happier lives through innovation in pharmaceutical, consumer, and animal health products.

D. Systems Audit
This covers the quality of the organizations systems for analysis, planning and control.

Pfizer
The NORG Information Management System (NIMS) developed at Pfizer Central Research as part of the systems where the information is stored as ASCII files in a directory structure managed by an analysis software. The data is uploaded to the SOCRATES database written in-house in S1032 running on the main VAX cluster. A full investigation of the system of the system would involve analysis, design, development and implementation. In the time that was available for the project, only the first stage, i.e., the analysis was viable. The analysis comprised of examining in some detail the information needed to carry out the functions identified, and the information to be provided on the ire completion. This includes finding out in more detail what the system's problems are and what users require of any new or changed system through structured interview questions and some discussion with the users. Data flow diagrams and entity-relationship models (data analysis) were used as tools for the analysis. Form the answers obtained, data flow diagrams were drawn. The data flow diagrams (DFD) were used to help define user requirements. The entity-relationship model was used to identify all the natural relationships between the basic

information components. After the entity and relationship sets were identified, the attributed (or properties) of objects in the sets were also determined. Attributes are characteristics of the entity. In the investigation, the requirement list and problems of the system were classified under the following main headings:
(a) (b) (c) (d) (e) (f) Security Computer System System Users Data and Results Samples General Requirements

E. Productivity Audit
This examines the profitability of different aspects of the marketing program and the cost-effectiveness of various levels of marketing expenditure.

Pfizer
Profitability Ratios 1. Return on equity: 2007 2006 0.28 0.27 - The ratio is increasing, which means that Pfizer increases the rate of return on the shareholders total investment. - Thinking of lowering prices using shareholders investment would be of great help.

F. Functions Audit
This involves a detailed evaluation of each of the elements of the marketing mix.

Pfizer
- Pfizer has a wide range of products (Health- Animal- Pharmaceutical). - Pfizer exists worldwide. - Pfizer prices are relatively high, but compensated by its super quality. -Pfizer doesn't depend heavily on promotion, the BRAND says it all.

B. SWOT Analysis
Faced with a constantly changing environment, each business unit needs to develop a marketing information system (MIS) to track trends and developments. Each trend or development can then be categorized as an 8

opportunity or a threat, and an assessment made of the feasibility and action needed if the organization is either to capitalize upon the opportunity or minimize the impact of the threat. For our purposes an opportunity can be seen as any sector of the market in which the company would enjoy a competitive advantage. Those opportunities can then be assessed according to their attractiveness and the organizations probability of success in this area. In order to make better use of the SWOT framework, Piercy proposes 5 guidelines: 1. Focus the SWOT upon a particular issue or element, such as a specific product market, a customer segment, a competitor, or the individual elements of the marketing mix. 2. Use the SWOT analysis as a mechanism for developing a shared vision for planning. This can be done by pooling ideas from a number of sources and achieving a team consensus about the future and the important issues. 3. Develop a customer orientation by recognizing that strengths and weaknesses are largely irrelative unless they are recognized and valued by the customer. 4. In the same way that strengths and weaknesses must always be viewed from the viewpoint of the customer, so the analysis of opportunities and threats must relate to the environment which is relevant to the organizations point of focus. Anything else simply leads to a generalized and largely pointless- set of comments. 5. The structured strategy generalization, which involves: Matching strategies. S must be matched to O, since a S without a corresponding O is of little strategic value. Conversion strategies, that are designed to change W into S and T into O. Creative strategies for developing the business which emerge as the result of a detailed analytical process rather than the vague and unfocused lines of thought. Iteration. As the planner goes through the process of identifying hidden S, matching S to O, converting W to S, and so on, there is a periodic need to go back to the beginning of the process in order to identify how the situation that is emerging changes the SWOT model and initial assumptions. Since inception in 1849, Pfizer has grown from a small family with 2 employees into a global enterprise with 95,000 employees on 6 continents. Pfizer has increasingly focused its efforts on R&D and this remains its core business strategy. Pfizers Strengths lie in its strong pipeline of innovative pharmaceutical compounds and strong marketing capabilities. Pfizers performance is characterized not only by size, but also by growth. In 1999, Pfizer achieved 20% revenue growth. Pfizer has also set records to year 2003 with the most successful product launches in pharmaceutical history Lipitor, Viagra and celebrex. Pfizers Strength in R&D, marketing, and sales has made them a partner of choice for many companies in the pharmaceutical industry and they are involved in a wide variety of research collaborations and a large number of licensing agreements with universities, institutes and organizations.

Pfizer

Strengths R&D innovation with a broad therapeutic coverage. Market strength in major geographical & therapeutic areas. Existing patent protection for a number of years on key products.

Weaknesses Discontinuation of products in the later stages of development. Co-Marketing agreements can limit Pfizer's global presence. Increased size& operational complexity makes Pfizer a less agile company.

Opportunities Decreased development time through favorable R&D collaborations & internal efforts. Emergence of integrated global Market & globalization for new products. Co-Market agreements with companies wishing to capitalize on Pfizer's market strengths, providing Pfizer with strong products& therefore revenue growth.

Threats Increased competition for core products like Viagra as its high cost encourages the use of cheaper alternative treatments. An increase in the number of safety issues surrounding Viagra. Competition from products similar to Pfizer's R&D that reach the market close to or even before Pfizer's products. The new economic potential of emergent China, India& competition in diverse regional market.

Pfizer has done quite well historically and analysis has revealed that they are looking to position themselves strategically for the future. But as we enter a new era in the pharmaceutical industry with increased patent risks and lower marginal product returns, pharmaceutical firms like Pfizer must restructure their huge organizational mass to reduce structural inefficiencies, cut cost which is required to enable them complete better in the changing global environment. Due to its massive R&D push, Pfizer suffers a relatively high rate of discontinuation in pre-approval products and more focus is required to reduce resources wastage. Pfizer's lack of promising products in its early stage pipeline has left its combined pipeline relatively weaker. This pipeline deficit will not manifest for a number of years yet, and Pfizer is perhaps well positioned than most to ensure that it balances its R&D pipeline before it becomes a cause for concern in the future. Pfizer's imbalanced geographical presence (the US accounts for over 60% of Pfizer's market area) may cause potential geographic limitations and can limit revenue growth should UD demand weaken. While the numbers of co-marketing and collaborative agreements, which Pfizer has established, are currently proving very favorable, agreements that geographically limit Pfizer's activities will ultimately reduce its long term potential and must be guarded against. Finally, economic emergence of mass production economies like India& China into the pharmaceutical fray will require new containment strategies. While this is not an immediate threat, over time the nature of competition will change and the bug pharmaceutical firms must develop strategies to enable them reduce threats and seize the opportunities that era created in increasingly integrated global markets.

Strengths& weaknesses Analysis:

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Power Point Presentation

C. TWOS
As a strategic modeling tool, SWOT analysis can be very subjective and is not always a reliable guide. Because perspectives differ, two people rarely come up with the same final version of SWOT so its best use is as a guiding tool, it is not prescriptive. The limitations that Piercy suggests typically characterize SWOT analyses have also been highlighted by Weihrich. His principal criticism of SWOT is that having conducted the analysis, managers frequently fail to come to terms with the strategic choices that the outcomes demand. In order to overcome this he argues for the TOWS matrix which, while making use of the same inputs, recognizes them and integrates them more fully into the strategic planning process. The TOWS matrix relates to point in time and therefore there is a need to review the various inputs on a regular or ongoing basis in order to identify how they are changing and the nature of the implications of these changes. It is also useful if, when planning and having made particular assumptions, the planner then produces TOWS matrices for 3 to 5 years ahead with a view to identifying how the strategic options and priorities may change. In this way there is a greater likelihood that the planning team will come to terms with what the future truly demands.

Pfizer
SO R&D innovation with a broad therapeutic coverage. (+) Decreased development time through favorable R&D collaborations & internal efforts. Market strength in major geographical & therapeutic areas. (+)Emergence of integrated global Market & globalization for new products. WO Discontinuation of products in the later stages of development. (+) Decreased development time through favorable R&D collaborations & internal efforts. Co-Marketing agreements can limit Pfizer's global presence. (+)Emergence of integrated global Market & globalization for new products.

ST R&D innovation with a broad therapeutic coverage. (+)An increase in the number of safety issues surrounding Viagra.

WT Co-Marketing agreements can limit Pfizer's global presence. (+)The new economic potential of emergent China, India& competition in diverse regional market.

Pfizer can work on its strong presence in R&D to capitalize upon the decreased development . It also can use its market strength in major geographical& therapeutic areas to build upon the emergence of integrated. Pfizer can protect its image and entity by minimizing the increased number of safety issues surrounding Viagra, this minimization can be done through Pfizers R&D innovation with a broad therapeutic coverage. 11

Pfizer can exploit the emerging O of decreased development time through favorable R&D collaboration., to combat its discontinuation of products in the later stages It can also overcome the weakness of its limited global presence due to co-marketing agreements by ceasing the opportunity of the emergence of integrated global mkt.& globalization for new products. Pfizer can cope with the threat of the new potential of emergent China, India& competition in diverse regional market by its co-marketing agreements.

D. Segmental Analysis
For the fourth quarter, the world's largest drug maker (PFE: Pfizer Inc Sponsored by: PFE17.10, +0.09, +0.5%) posted net income of $9.45 billion, or $1.32 a share, compared with $2.73 billion, or 37 cents, earned during the same period in 2005. This year's quarter included $7.9 billion in gains related to the unit sale and the company's ongoing restructuring plan. Excluding various items, Pfizer earned 43 cents a share. Revenue for the quarter rose slightly to $12.6 billion, up from $12.55 billion in 2005. Although the top line was largely flat, Pfizer's results edged out analysts' average estimates of 42 cents for profit per share and $12.26 billion for revenue. "While we attained nearly all of our financial targets for the year, we continue to face a difficult operating environment, including competitive challenges and the risks inherent in drug development," Chairman and Chief Executive Jeffrey Kindler said in a statement. Pfizer also updated investors on its business strategy and forecast Monday afternoon, including job cuts totaling 10,000 employees by the end of 2008. The company's been engaged in an ongoing restructuring designed to save about $4 billion a year in costs. Pfizer's top line has been under considerable pressure in recent quarters due to the expiration of patents on such once-hot products as Zoloft and Zithromax. Adding to investor concerns, key patents on the cholesterol medication Lipitor -- the company's primary revenue driver -- will begin expiring around 2010. Fourth-quarter sales of Lipitor came in at $3.34 billion, a 1% drop from last year. The drug has faced increased competition in recent months due to the introduction of generic versions of two competing products, Pravachol from Bristol-Myers Squibb (BMY: Bristol-Myers Squibb Company Sponsored by: BMY23.10, -0.11, -0.5%) and Zocor from Merck & Co.

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In addition, Pfizer was dealt a surprise blow in early December, when late-stage clinical trials revealed potential safety problems with a planned successor to Lipitor, a cholesterol drug called torcetrapib. As a result, Pfizer has discontinued development of the drug, which investors had hoped would help keep the lucrative Lipitor franchise alive past 2011. "Our decision to discontinue development of torcetrapib/atorvastatin ... was disappointing and brought into sharper focus the need to transform Pfizer over time to succeed in a dynamic health-care marketplace," Kindler said Monday. Sales of blood-pressure medication Norvasc, the company's No. 2-selling drug, grew 6% to $1.32 billion. Of its newer products, pain reliever Lyrica showed the most impressive growth, up 131% at $353 million. The quarter also saw a continued rebound in sales for Celebrex, up 15% at $540 million. Sales of the pain reliever were chilled in 2005 when Merck (MRK: Merck & Co., Inc Sponsored by: MRK29.00, -0.27, -0.9%) pulled a similar product, Vioxx, off the market over safety concerns. Analysts on Monday said that while Pfizer's top-line performance was a bit better than expected, they remained were eager to hear how Pfizer planned to shore up its balance sheet in the long term. "Overall fourth-quarter results were largely in line with Street expectations," wrote J.P. Morgan analysts Jami Rubin, in a note. "Revenues were higher, but expenses were higher." "With the shares having moved up in anticipation of a big-cost cutting announcement, we expect attention to shift to top-line growth, which remains underwhelming," Rubin added. "We think investor attention will turn to Pfizer's top line after today's cost-cutting meeting," wrote Merrill Lynch analyst David Risinger. "We expect investors to fret about the potential negative impact of significant selling & marketing cost reductions on the company's top line," Risinger saidd, adding: "As a result, we anticipate close scrutiny of the company's top-line performance in the first half of 2007." Shares of Pfizer, part of the Dow Jones Industrial Average, traded down nearly 2% in afternoon action, weakening in the wake of the company's cost-cutting announcement and updated financial outlook.

E. Ratio analysis
Typically, financial ratios provide the most benefit when they are compared with other identical ratios. A company's ratios are used comparatively in two main fashions: over time and against other companies. Comparing the same ratios for a firm over time is a great way to identify a company's trends. If certain ratios are steadily improving, it may suggest an improvement in a company's operations or financial situation; conversely, if certain ratios seem to be getting worse, it may highlight some troubling prospects about the firm. It's also important to compare a company's ratios against those of others in the industry. A company's ratios may be improving over time, but how do they stack up against their peers' ratios? If they aren't as rosy as those of competitors, this may indicate that the company isn't as well positioned or managed as well as other industry players.

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At Morningstar, we evaluate many ratios as we perform our analyses. Four of the major types we consider are efficiency, liquidity, leverage, and profitability ratios. As we describe some of the main ratios within each category, we'll discuss what each one attempts to measure and what changes in them may indicate.

Leverage Ratios
A company's leverage relates to how much debt it has on its balance sheet, and it is another measure of financial health. Generally, the more debt a company has, the riskier its stock is, since debt holders have first claim to a company's assets. This is important because, in extreme cases, if a company becomes bankrupt, there may be nothing left over for its stockholders after the company has satisfied its debt holders.

Debt/Equity: The debt/equity ratio measures how much of the company is financed by its debt holders
compared with its owners. A company with a ton of debt will have a very high debt/equity ratio, while one with little debt will have a low debt/equity ratio. Assuming everything else is identical, companies with lower debt/equity ratios are less risky than those with higher such ratios. Debt/Equity = (Short-Term Debt + Long-Term Debt) / Total Equity

Interest Coverage: If a company borrows money in the form of debt, it most likely incurs interest charges on
it. (Money isn't free, after all!) The interest coverage ratio measures a company's ability to meet its interest obligations with income earned from the firm's primary source of business. Again, higher interest coverage ratios are typically better, and interest coverage close to or less than one means the company has some serious difficulty paying its interest. Interest Coverage = (Operating Income) / (Interest Expense)

Activity (efficiency) Ratios

No matter what kind of business a company is in, it must invest in assets to perform its operations. Efficiency ratios measure how effectively the company utilizes these assets, as well as how well it manages its liabilities.

Inventory Turnover: Inventory turnover illustrates how well a company manages its inventory levels. If
inventory turnover is too low, it suggests that a company may be overstocking or overbuilding its inventory or that it may be having issues selling products to customers. All else equal, higher inventory turnover is better. Inventory Turnover = (Cost of Sales) / (Average Inventory)

Accounts Receivable Turnover: The accounts receivable turnover ratio measures how effective the
company's credit policies are. If accounts receivable turnover is too low, it may indicate the company is being too generous granting credit or is having difficulty collecting from its customers. All else equal, higher receivable turnover is better. Accounts Receivable Turnover = Revenue / (Average Accounts Receivable)

Accounts Payable Turnover: You'll notice that the accounts payable turnover ratio uses a liability in the
equation rather than an asset, as well as an expense rather than revenue. Accounts payable turnover is important 14

because it measures how a company manages paying its own bills. High accounts payable turnover may be a signal that a firm isn't receiving very favorable payment terms from its own suppliers. All else equal, lower payable turnover is better. Accounts Payable Turnover = (Cost of Sales) / (Average Accounts Payable)

Total Asset Turnover: Total asset turnover is a catch-all efficiency ratio that highlights how effective
management is at using both short-term and long-term assets. All else equal, the higher the total asset turnover, the better. Total Asset Turnover = (Revenue) / (Average Total Assets)

Liquidity Ratios
In a nutshell, a company's liquidity is its ability to meet its near-term obligations, and it is a major measure of financial health. Liquidity can be measured through several ratios.

Current ratio: The current ratio is the most basic liquidity test. It signifies a company's ability to meet its
short-term liabilities with its short-term assets. A current ratio greater than or equal to one indicates that current assets should be able to satisfy near-term obligations. A current ratio of less than one may mean the firm has liquidity issues. Current Ratio = (Current Assets) / Current Liabilities

Quick Ratio: The quick ratio is a tougher test of liquidity than the current ratio. It eliminates certain current
assets such as inventory and prepaid expenses that may be more difficult to convert to cash. Like the current ratio, having a quick ratio above one means a company should have little problem with liquidity. The higher the ratio, the more liquid it is, and the better able the company will be to ride out any downturn in its business. Quick Ratio = (Cash + Accounts Receivable + Short-Term or Marketable Securities) / (Current Liabilities)

Cash Ratio: The cash ratio is the most conservative liquidity ratio of all. It only measures the ability of a
firm's cash, along with investments that are easily converted into cash, to pay its short-term obligations. Along with the quick ratio, a higher cash ratio generally means the company is in better financial shape. Cash Ratio = (Cash + Short-Term or Marketable Securities) / (Current Liabilities)

Profitability Ratios
How good is a company at running its business? Does its performance seem to be getting better or worse? Is it making any money? How profitable is it compared with its competitors? All of these very important questions can be answered by analyzing profitability ratios.

Gross Margin: gross profit is simply the difference between a company's sales of goods or services and how
much it must pay to provide those goods or services. Gross margin is simply the amount of each dollar of sales that a company keeps in the form of gross profit, and it is usually stated in percentage terms. The higher the 15

gross margin, the more of a premium a company charges for its goods or services. Keep in mind that companies in different industries may have vastly different gross margins. Gross Margin = (Gross Profit) / (Sales)

Operating Margin: Operating margin captures how much a company makes or loses from its primary
business per dollar of sales. It is a much more complete and accurate indicator of a company's performance than gross margin, since it accounts for not only the cost of sales but also the other important components of operating income we discussed in Lesson 301, such as marketing and other overhead expenses. Operating Margin = (Operating Income or Loss) / Sales

Net Margin: Net margin considers how much of the company's revenue it keeps when all expenses or other
forms of income have been considered, regardless of their nature. While net margin is important to take note of, net income often contains quite a bit of "noise," both good and bad, which does not really have much to do with a company's core business. Net Margin = (Net Income or Loss) / Sales

Free Cash Flow Margin: The free cash flow margin simply measures how much per dollar of revenue
management is able to convert into free cash flow. Free Cash Flow Margin = (Free Cash Flow) / Sales

Return on Assets (ROA): Return on assets measures a company's ability to turn assets into profit. (This may
sound similar to the total assets turnover ratio discussed earlier, but total assets turnover measures how effectively a company's assets generate revenue.) Return on Assets = (Net Income + After-tax Interest Expense) / (Average Total Assets) we are adding back the company's after-tax interest expense to net income in the calculation. Why is that? Return on assets measures the profitability a company achieves on all of its assets, regardless if they are financed by equity holders or debt holders; therefore, we add back in what the debt holders are charging the company to borrow money. Why are we adding interest back in on an "after-tax" basis? Interest expense is one of the many line items that are either added to or subtracted from revenue to calculate the pretax income amount. This pretax income amount is then taxed to come up with net income. Thus, when the income-reducing effect of interest expense is ultimately filtered down to net income, it is on an after-tax basis. A company's after-tax interest expense is easy to determine. First, determine its tax rate by dividing its income tax expense by its pretax income. Then plug that figure into the following formula: After-tax Interest Expense = (1 - Tax Rate) x (Interest Expense) Return on assets is generally stated in percentage terms, and higher is better, all else equal.

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Return on Equity (ROE): Return on equity is a straightforward ratio that measures a company's return on its
investment by shareholders. Like all of the profitability ratios we've discussed, it is usually stated in percentage terms, and higher is better. Return on Equity = (Net Income) / (Average Shareholders' Equity)

Pfizer
Activity (efficiency) Ratios
1. Total-Assets turnover: 2007 0.42 2006 0.41

- The ratio is increasing, which means that Pfizer generates a sufficient volume of business. - Thinking of lowering prices& using assets at the same level of efficiency would be of great help.

Profitability Ratios
2. Return on Equity (ROE): 2007 0.28 2006 0.27 The ratio is increasing, which means that Pfizer increase the rate of return on shareholders' total investment. Thinking of lowering prices using shareholders' investment would be of great help.

F. Customer Analysis
Pfizer has introduced a new Medical Enquiry Handling System, MedInfoSys from Berkshire-based NIP, that has enabled it to improve customer care and call response times, despite a doubling of customer calls since the introduction of male erectile dysfunction drug Viagra.

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Every pharmaceutical company needs an effective enquiry handling system. As in other industries, customer enquiry handling in the pharmaceutical industry can contribute key market intelligence, helping companies market their products more effectively. A well-designed customer enquiry handling system can detect key customer and product trends long before these become obvious. Any problems with a new product can be nipped in the bud, while new market opportunities can be identified in advance of the competition. But customer care and enquiry handling in the pharmaceutical industry goes far beyond the requirements of a washing machine or car manufacturer. Pharmaceutical companies have a legal and regulatory obligation to handle enquires effectively. Increasingly, as with EBR and cGMP, regulators are looking for companies to follow established best practice benchmarks. Pharmaceutical customer enquiry systems assume a particular importance at the launch of a new product. This is the point at which it is most important to have an efficient system fully up and running: able to handle all the enquiries that may be generated by a new drug's launch. Most new drug launches follow a fairly recognizable pattern. Likewise, the volume and nature of queries to be handled by the pharmaceutical company follow a fairly set pattern as well. A general if moderate increase of queries from doctors and pharmacists, settling down after an initial period, and a modest number of queries from those members of the public who have been prescribed the new drug by their doctor. Once in a while a new drug arrives that overturns all assumptions. Few drug launches, however, have had the impact of Pfizer's male erectile dysfunction drug Viagra. Launched in September 1998, its arrival became a global media event. Television and newspaper articles pored over its claims, and followed couples as they experimented with the new drug. The launch created political storms in several countries, including the USA, England and Japan, as well as in several US states such as California and Minnesota, over whether the new drug should be available on demand, and paid for by the state. Some cultural commentators predicted the emergence of a Viagra culture. What was certain was that the launch created the single greatest world-wide explosion of interest in a medical drug in modern times, with enormous interest from both public and doctors in the new drug's potential. The manufacturer of the new drug, Pfizer, was inundated with queries, from the public and from doctors and pharmacists. Pfizer had however anticipated that its new drug would unleash a storm of interest. Already in the run-up to the drug's approval by the US FDA and its availability for prescription, the company had been subject to a steadily rising tide of interest from journalists and doctors. Pfizer's management realised that this would soon translate into a flood once Viagra became generally available for prescription. Pfizer's management also realised that their existing medical enquiry system would probably not cope with the expected level of enquiries. Their installed system was already experiencing some throughput and reliability limitations. Based on a central, host-based legacy database system, it was also difficult to scale up or extend core functionality. In particular, Pfizer was especially concerned that the new system should be able to provide additional management information, such as trend analysis and departmental performances. Accordingly, a set of requirements was drawn up for the new medical enquiry handling system. It had to be.

18

Absolutely stable and capable of high performance from the outset: it was expected to undergo a baptism of fire with the launch of Viagra, and Pfizer needed a high performance, rugged system from the word go. In addition, the new system had to be simple to use, and very fast in operation. A key requirement of Pfizer's was that all calls should be fully logged while in progress. This meant that the system had to be both fast enough and simple enough in use to allow enquiry handlers to be able to navigate screens at speed and capture all a caller's details during the course of a call. Lastly, the new medical enquiry handling system had to be fully Y2K compliant, based on modern, Open technology and easily extended, both across platforms and in functionality. In particular, the new system had to be fully configurable in its reporting and be able to interoperate automatically with analytical tools such as spreadsheets and presentation packages such as Freelance and Powerpoint. After an exhaustive series of benchmarks, Pfizer selected the MedInfoSys system from NIP. Based in Crowthorne, Berkshire, NIP (New Information Paradigms) is a leader in Customer Enquiry, Case Management, and Knowledge Management systems. NIP is one of the UK's leading Lotus Notes developers and systems integrators. A medical enquiry handling system written in Lotus Notes, NIP's MedInfoSys is the pharmaceutical industry's leading medical inquiry system. MedInfosys records and organises medical enquiries while maintaining customised statistics on process variables. NIP provided Pfizer with an evaluation set of software to help the Pfizer team become familiar with the software. The Pfizer team identified a number of changes, principally in the screen layouts and design. Utilising Lotus Notes protocycling rapid application development tools, these changes were rapidly accomplished. NIP held early training sessions to ensure users got up to speed with the new system as soon as possible. This was followed by full training sessions a week before the system went live. By August, the Pfizer MedInfoSys System, PREMIS as it is called within Pfizer, was ready. Final training sessions were carried out, and NIP migrated enquiries from the legacy host system into MedInfoSys using NIP's reformatting toolkit. Finally, Pfizer's PREMIS MedInfoSys system went live fully on schedule, one week before the launch of Viagra in September 1998. The PREMIS MedInfoSys system encapsulates the whole enquiry handling process, focusing on team operations. Amongst its benefits, PREMIS MedInfoSys provides Pfizer with: increased efficiency through better process monitoring reduced turnaround times for enquiries better quality decisions based on enquiry statistics customer needs matched to the most appropriate internal response personalized customer responses ability to link into other systems

Performance
In operation, the Pfizer PREMIS MedInfoSys system has proved to be both resilient and high performance. In the first three months of its operation, enquiries doubled to two thousand a month. The system has handled this increased traffic smoothly, with none of the performance and reliability

19

problems that plagued the old system. "The real beauty of the system," says Jamie Griffin, Senior Medical Information Officer, "is how responsive it is. The design of the system makes it really fast and very simple to use. You can call up an existing query within seconds with a few key strokes, whereas our former system often took minutes."

Reducing Customer Friction

One feature of the PREMIS MedInfoSys system is postcode lookup. "With the old system," says Jamie Griffin, "we would often have problems dealing with customers. Taking details of their addresses would often take minutes, which could cause unnecessary irritation. With the new

postcode lookup system, we can enter the address very quickly, and save our callers' time and our receptionists any unpleasantness."

20

Enhanced Management Reporting

As enquiries are recorded and process through the system, their progress can be tracked. This can provide powerful reporting on departmental and workgroup performances. MedInfoSys provides powerful reporting facilities, enabling standardized trend reports to be created with ease. In addition, MedInfoSys allows data to be exported into Windows spreadsheets, such as Excel, for trend analysis and workflow tracking.

Future Developments
Pfizer anticipates that the level of customer queries will continue to be substantial, as it has several high profile new drug launches in the pipeline. The PREMIS MedInfoSys will continue to be developed within Pfizer to provide ever greater sophistication of trending data and performance benchmarks. The underlying architecture of the MedInfoSys application allows it be scaled up over an enterprise platform, while its protocycling toolkit allows Pfizer and NIP to continue to customize and extend its features and reporting capabilities.

Future Developments
Pfizer anticipates that the level of customer queries will continue to be substantial, as it has several high profile new drug launches in the pipeline. The PREMIS MedInfoSys will continue to be developed within Pfizer to provide ever greater sophistication of trending data and performance benchmarks. The underlying architecture of the MedInfoSys application allows it be scaled up over an enterprise platform, while its protocycling toolkit allows Pfizer and NIP to continue to customise and extend its features and reporting capbilities.

Pfizer Public Policy: Patient Assistance Programs

Pfizer invests heavily in research and development to discover new treatments that will alleviate suffering and give hope to patients around the world. But inventing medicines isn't enough if the people who need them can't get them. Pfizer believes that having a limited income should not limit access to medicines, so Pfizer is taking steps to improve access to prescription drugs.

Key Points
Pfizer, along with other drug companies, supports the broadest access possible to medicines. Pfizer has established its own programs to help patients who need but cannot afford our drugs. Pfizer actively supported extending drug coverage to elderly and disabled Americans through the recently enacted Medicare Prescription Drug Improvement and Modernization Act. Pfizer and other pharmaceutical companies have established special programs to help ensure that patients on limited incomes and those without insurance can obtain needed drugs. Pfizer Helpful Answers is a family of programs to help Americans without prescription coverage save on many Pfizer medicines, no matter their age or income. People with limited incomes may even qualify to get their Pfizer medicines for free. For more information, see Pfizer Helpful Answers. Pfizer's programs build on health insurance programs available through state and federal governments. Many low-income Americans are eligible for health insurance coverage through the Medicaid program, administered by the states. The Medicaid program includes a drug benefit that offers prescription drugs at little-to-no cost. Most Americans over the age of 65, regardless of income, are eligible for Medicare, which now offers a prescription drug benefit. Pfizer actively supported the Medicare Prescription Drug benefit which became law in 2003. Under the new Medicare law, Medicare beneficiaries will have all or part of their prescription drug costs covered by the government. Learn More About Medicare Drug Benefits.

Patient Assistance Programs

For more than twenty years, Pfizer has maintained a commitment to making its medicines available to patients in need by donating its most advanced medicines to low-income, uninsured patients. Learn more about medicine donation programs around the world.

G. Competitor Analysis
PFIZER INC Top Competitors

Bayer

The company, which created aspirin in 1897, makes health care products (diagnostic equipment and pharmaceuticals), agricultural products (crop protection and animal health), and specialty materials(plastics and synthetic rubber). It operates in the US through Bayer corporation . Bayer has reorganized, spinning off its divisions and becoming a management holding company.

Merck

Merck helps those who are hooked on hamburgers. Drugs treating ailments associated with American eating habits -- high cholesterol, hypertension, and heart failure -- are Merck's biggest business. Its drugs include hypertension fighters Cozaar and Hyzaar, cholesterol combatant Vytorin, and Zetia which the pharma produces separately as well.

Novartis

It's based in neutral Switzerland, Novartis has been aggressive in attacking illnesses. The company's prescription drugs include treatments for nervous system and ophthalmic disorders, cardiovascular diseases, and cancer. Rivalry The rivalry among competitors in the Major Drug Industry has caused the buyout of several companies over the past few years. For this reason Pfizer has almost tripled the size of its business over the past five years. The competitors push to get new and improved products out to the customers to improve their sales. The industry is growing so rapidly that no ceiling for profits has been hit. In other words, there are very few restrictions on how well a company can prosper and grow right now. This will change in the future when the companies start to slow down and compete for market share. Threat of new entrants: Capital investment is very high and over $1.7 billion dollars; therefore, Pfizer took over five years to get approval from Federal Drug and Administration (FDA) Main competitors in the Animal health products are focused on various animal products; skin infections, parasitic epidemics, pain relievers and dentals. Pfizer focused on well-care of the pets in addition to other Animal products. Slentrol is patented product. Pfizer drug technology is very sophisticated; Slentrol is a new chemical entity that triggers a lower fat absorption. Interrelated business - Pet owners are loyal to other Animal products that Pfizer distributes.

Pfizer has vast network of Sales people (30,000), they cover most of the sales terrorities, locally and internationally. Distribution channels-- wholesalers and retailers -- are highly motivated to keep Pfizer products. The end-users, pet hospitals and Vetenerians are convinced on the usage of this drug. Threat of substitute products: In the Major Drug Industry the subject of substitutes for products is unclear. Hospitals and doctors may tend to buy the cheapest of the drugs supplied, but because there are so many different aspects to each, it can diffuse some of the allowance for substitutes. Although some customers tend to be more conservative with their buying and chose generic brands, the majority of these brands are actually supplied by the same companies. The threat of substitutes is low to moderate. Generic competition is a major threat as it offers improved and or lower prices. There is also a low switching cost among generics. Bargaining power of suppliers: Supplier power is moderate. The industry is supported by the strong biotech industry in which many drugs are developed from. The industrys long term growth depends on the ability to innovate and R&D make up a large part of the industrys cost. Except Pfizer, there are no sellers in the market. Profitability for supplier is high. Once the drug side-effects are taken care, suppliers can raise the price. Quality and service is excellent from Pfizer; there are hot-lines and web-sites that will help to resolve the after-effects of the drugs. Even veterinarians and pet hospitals provide good guidance and support to the pet owners It is easy for suppliers to find new customers; the switching cost is low. Product is well branded; the brand personality and brand equity is strong. Pfizers relationships with the pet hospitals and veterinarians are very strong. Bargaining power of buyers: Buyer power is moderate. The major buyers for the industry are the government, which includes seniors. Patients have the freedom to choose their medications and make purchasing decisions based on its unique value. There is a lack of substitutes for products in their early years, as well as a lack of brand loyalty in the industry as a whole. Buyers are concentrated; over 1.5 million buyers with a significant market share Product is not standardized; there is less differentiation. The drug benefit for buyers are high. Pfizer can be tough on drug pricing. There is high switching cost because there are no competitors in the market.

Main comparison parameters: % Last Change ChangeVolumeNews

Symbol

Company Name

Charts

PFE

PFIZER INC

17.0 3

0.02

0.12 8.52 M

BAYRY

BAYER A G

54.9 9

0.78

1.44 17,831

MRK

MERCK & CO INC

28.8 6

-0.41

-1.40 2.28 M

NVS

NOVARTIS A G

47.7 8

0.50

1.06 408,279

PFE

BAYRY

MRK

NVS

Analyst Recommendation

Buy

Hold

Buy

Buy

Last

17.03

54.99

28.86

47.78

Change

0.02

0.78

-0.41

0.50

EPS (Mean)

2.379

4.86

3.295

3.697

Revenue

48.43 B

44.68 B

24.2 B 38.27 B

Market Capitalization

114.83 B

42.03 B

61.01 B 126.31 B

EPS Change vs. Year Ago

8.1364

-12.5899

2.9688 32.0357

5 Year Annual EPS Growth

-4.93784

25.47307

-13.85079 8.37969

Top Competitors Key Measures: PFE PFE BAYRY MRK NVS

Valuation

Price/Earnings (TTM)

19.26

19.79

39.00

19.23

Price/Cash Flow

6.65

7.16

5.87

65.57

PFE

BAYRY

MRK

NVS

Price/Sales (TTM)

3.26

1.46

5.27

3.29

Price/Book

1.87

2.17

3.41

2.42

Per Share Data

Last Dividend

82.05

76.44

66.67

49.57

Book Value

9.82

33.53

9.88

22.51

EPS (TTM)

1.55

2.11

2.81

Revenue

48.42 B

44.67 B

24.19 B

38.26 B

Profitability

EBIDTA

14.87 B

8.32 B

2.88 B

9.58 B

Operating Margin

28.75 %

12.05%

23.22%

19.63%

Profit Margin

16.82 %

14.85%

13.54%

31.38%

PFE

BAYRY

MRK

NVS

Gross Profit Margin

75.79 %

50.39%

74.62%

72.70%

Dividend

Dividend Yield

7.57%

3.96%

5.62%

3.27%

Payout Ratio

82.05

76.44

66.67

49.57

Annual Dividend (TTM)

2.16 B

831.1 M

Dividend Yield 5 Year Average

3.10%

2.05%

3.55%

1.57%

Growth

Net Income

8.21 B

3.18 B

3.27 B

6.57 B

EPS (TTM)

1.55%

2.11%

2.81%

Revenue

48.42 B

44.67 B

24.19 B

38.26 B

PEG

6.76%

0.94%

1.97%

1.68%

Financial Strength

PFE

BAYRY

MRK

NVS

Quick Ratio (MRQ)

16.82

14.85

13.54

31.38

Current Ratio (MRQ)

2.24

1.19

1.35

1.17

LT Debt to Equity Ratio (MRQ)

10.63

51.67

20.13

4.07

Total Debt to Capital (MRQ)

16.79

45.40

21.80

10.50

ROE

12.02

14.87

18.18

14.39

ROA

9.93

6.03

10.01

9.86

ROIC (Return on Invested Capital) 10.66

19.25

13.27

23.53

Assets

Asset Turnover

0.43

0.61

0.53

0.53

Asset per Employee

1.3 M

694,638.418 761,321.070 732,073.8930 55 23 1

Inventory Turnover

1.14

2.18

2.28

1.65

It is recommended that Pfizer actions a resource/competence based analysis of its innate capabilities, those characteristics that offer Pfizer distinct competitive advantage over its industry rivals. There may be a role for using 'Mckinsey's 7S Framework' to determine the firm's core advantages.

Stage Two (Where we want to be?)

Understanding the strategic situation confronting an organization is an essential starting point in developing a marketing strategy. Stage two is concerned with where the organization should go in the future, which requires the specification of ends for objectives to be achieved. While top management in the organization will have discretion over the choice of ends, this is often constrained by vested interests.

1. Vision, Mission, and Objectives

Strategic Focus and Plan Mission/ Vision Not to be confused with the Company Mission, this statement is what you would like to get out of the marketing plan. If this is a marketing plan for a single product, then this statement should state what your company expects out of the product and they plan to achieve this. Objectives The objectives of the marketing for the particular product, service or company should be outlined in this section. If one of the objectives is to make 50,000 people aware of your new product then this is something that should be included in your objectives. You can also include company objectives in this section if they are directly affected by your marketing. For instance, if your goal is to make one million dollars in sales the first year, then this is an objective that comes in direct contact with the marketing program.

Pfizer
Pfizer will strive to achieve and sustain its leading place as the world's premier research-based pharmaceutical company. The company's continuing success benefits patients, customers, shareholders,

business partners, families and the communities in which they operate all around the world. Pfizer's mission is to become the world's most valued company to all of these people.

Mission
Becoming the world's most valued company to patients, customers, colleagues, investors, business partners, and the communities where they work and live.

Purpose
Dedicating ourselves to humanity's quest for longer, healthier, happier lives through innovation in pharmaceutical, consumer, and animal health products. To achieve our Purpose and Mission, we affirm our values of Integrity, Respect for People, Customer Focus, Community, Innovation, Teamwork, Performance, Leadership, and Quality.
Integrity

Demand of ourselves and others the highest ethical standards, and our products and processes will be of the highest quality.
Respect for People

Recognize that people are the cornerstone of Pfizer's success, we value our diversity as a source of strength, and we are proud of Pfizer's history of treating people with respect and dignity.
Customer Focus

Deeply committed to meeting the needs of our customers, and we constantly focus on customer satisfaction.
Community

play an active role in making every country and community in which we operate a better place to live and work, knowing that the ongoing vitality of our host nations and local communities has a direct impact on the long-term health of our business.
Innovation

Innovation is the key to improving health and sustaining Pfizer's growth and profitability.
Teamwork

know that to be a successful company we must work together, frequently transcending organizational and geographical boundaries to meet the changing needs of our customers.
Performance

Strive for continuous improvement in our performance, measuring results carefully, and ensuring that

integrity and respect for people are never compromised.

Leadership

Believe that leaders empower those around them by sharing knowledge and rewarding outstanding individual effort. Leaders are those who step forward to achieve difficult goals, envisioning what needs to happen and motivating others.
Quality

Since 1849, the Pfizer name has been synonymous with the trust and reliability inherent in the word Quality. Quality is ingrained in the work of our colleagues and all our Values. We are dedicated to the delivery of quality healthcare around the world. Our business practices and processes are designed to achieve quality results that exceed the expectations of patients, customers, colleagues, investors, business partners and regulators. We have a relentless passion for Quality in everything we do.

2. Segmentation, Targeting, and Positioning

Pfizer operates in two business segments: Pharmaceutical and Animal Health. Pharmaceutical: The Company's Pharmaceutical business segment includes products that treat cardiovascular and metabolic diseases, central nervous system disorders, arthritis and pain, infectious and respiratory diseases, urogenital conditions, cancer, eye disease,endocrine disorders and allergies. Animal Health: Pfizer's Animal Health business segment discovers, develops and sells products for the prevention and treatment of diseases in livestock and companion animals. Make vaccines, antibiotics, heartworm, etc. Animal Health has segmented the portion of its market serving US cattle ranchers. The company has segmented its market according to herd size, giving its greatest attention to producers with herds of more than 500 head of cattle. Pfizers Animal Health Segment The Animal Health segment of Pfizer was able to obtain increased revenues by twenty-two percent, adding two billion US dollars. This success has been attributed to the companys inline product brands like Draxxin and Excede, a medication for treating cattle and swine respiratory diseases. Clavamox, Revolution and Rimadyl are all medications for companion animals that have contributed greatly to Pfizers animal health segment. These product segments were able to contribute a significant 3.7 percent to its total revenue in 2004, 3.6 percent in 2003 and 3.5 percent in 2002. From these records, it is clear that Pfizer is able to acquire consistent growth in its animal health products. Pfizer Animal Health segment markets a number of products, including anti-inflammatories, parasiticides, antibiotics, vaccines and other related products. Among these products, medication for animal parasites constitutes the largest market, particularly for companion animals as this product line is primarily composed of medicines for parasites like worms and fleas. The brand Revolution is the largest selling parasiticide of the company for

companion animals. Rimadyl on the other hand is a medication used as a pain and inflammation reliever for dogs with osteoarthritis, or those who have undergone soft tissue orthopedic operation. This product may also be used as a medication for animal arthritis, and come in tablets, capsules and injectable forms. Another popular product is Clavamox which is used as a skin antibiotic and soft tissue infections for both dogs and cats. Vaccines for livestock animals are also produced by Pfizer. One of which is RespiSureOne that is for pneumonia prevention among swine. Cattle vaccine is also manufactured by Pfizer and comes by the brand name Bovi-Shield Gold, and used to prevent respiratory and reproductive disorders. Dectomax is also distributed among cow-cattle operators for controlling and removing both internal and external parasites in beef cattle. Respiratory and other internal infection among cattle and swine may also be treated through an antibiotic called Naxcel/Excenel RTU. From this wide array of product lines, it becomes clear that high market coverage is among the many factors that contributed to Pfizers success. On the products manufactured for cows and cattle, Pfizer used a market segmentation strategy known as the herd-size market segmentation approach . Pfizer Animal health has focused its marketing efforts on herd-size market segmentation approach. While this approach is practical as the company can concentrate on large cow/cattle business owners, other market segments, particularly the small operators, are not given much attention. As product development and distribution can be demanding in terms of labor and other resources, gaining support from a more diversified market segment is then essential. Hence, applying other market segmentation approaches by Pfizer may be helpful in improving its sales and business status. At present, businesses are becoming more and more customer-oriented. Thus, most marketing efforts are focused more on what the customer needs and prefers. Pfizer can then apply the suggested market segmentation approaches in response to changing customer trends. In general, Pfizers market segmentation based on herd-size may be improved further by applying other appropriate strategies. Most importantly, Pfizer should focus itself more on generating customer satisfaction and loyalty rather than on profit generation assurance alone.

In order to enhance the current market segmentation applied by Pfizer, the process described above should be performed. In addition, below are some of the approaches that can be applied by the company: Behavioristic Segmentation In this approach, consumers are segmented into groups based on their attitudes, uses, knowledge or

responses to a certain product. In this segmentation approach, the focus is on buying situations, which tend to vary depending on circumstances and buyers time. With behavioristic segmentation, Pfizer may be able to identify other market segments that respond positively to its animal health product. Current trends suggest that customer preferences tend to change rapidly, and that most businesses are becoming more and more customer-oriented. Hence, applying the behavioristic segmentation approach is very much applicable to this industrial change. In implementing this approach, Pfizer may conduct a consumer study focusing on their product and brand preferences as well as current needs. Buying trends may also be included in this market segmentation approach. Rather than focusing on herd-size alone, Pfizer need to be more focused on the needs of the customers found in other market segments. Usage Segmentation Usage segmentation is aptly named as this approach focuses on how market segments use a particular product. When a company makes use of this segmentation approach, a new and distinct product is usually developed. In addition to product development, special prices, promotional activities and distribution methods are established. In most instances, these special activities are beneficial as they enable the establishment of customer loyalty. In utilizing the usage segmentation for identifying market segments, companies and marketers are able to target various segments even when the customers are the same. The case of Pfizer may be used as an example for this tendency. For instance, a market segment may be price sensitive in one situation, such as purchasing cattle/cow vaccine for everyday use, and price insensitive to other situations, like purchasing vaccines in times when epidemics and pests are likely. Hence, inexpensive vaccines may be offered to consumer for everyday use and more expensive vaccines for other cases and emergencies. Psychographic Segmentation This approach is primarily composed of motivation, lifestyle and personality variables. A single psychographic variable may be used on it own in identifying a market segment, or it may be combined with other psychographic variables. Consumer personalities like compulsiveness, aggressiveness, introversion and extroversion are some examples which can be used to divide a market. Motive on the other hand, is the drive that provides the consumers with the direction to move towards goal achievement. While it is hard to accurately measure the extent of a motive, marketers have used this segmentation approach to markets. Among the most common motives that may affect the types of products purchased and where these products are purchased. Lifestyle is also part of this segmentation approach. Lifestyle and market segmentation are considered to be related concepts and are potent tools for maximizing profitability and satisfying consumer preferences. When lifestyles are analyzed, opinions, interests and activities of the consumers are usually considered. Thus, activities like work, hobbies and leisure, or opinions such as on social, political and educational issues are take n into account in this segmentation approach. This approach can help Pfizer identify which of the consumers are considered hobbyists or traditionalists.

Targeting

Pfizer is targeting Perceptual MAP Price efficiency

Quality

Pfizer considered the best quality among competitors but the price is little bet higher than their competitors. Positioning Best quality

3. Strategies for analyzing product portfolio

Pfizer is a research-based, global pharmaceutical company. The company discovers, develops, manufactures and markets prescription medicines for humans and animals. It operates in 2 business segments: pharmaceutical and animal health. The company also operates several other businesses, including the manufacturing of gelatin capsules, contract manufacturing& bulk pharmaceutical chemicals. In January 2008, the company completed the acquisition of Coley pharmaceutical group Inc., a company whose area of capability is immunotherapy with emphasis on toll-like receptor research and development. In January 2008, it completed the acquisition of CovX Research LLC. In June 2008, Pfizer completed the acquisition of all remaining outstanding shares of common stock on Encysive pharmaceuticals Inc. through a merger of Pfizers wholly owned subsidiary, Explorer Acquisition Corp., with and into Encysive. The growth strategies of Pfizer include optimizing thee companys patent-protected portfolio; generating revenue from established products; accelerating growth in emerging markets; focusing on continuous improvement and innovation; and investing in complementary businesses. Throughout this year and the next, the company anticipates a number of medicines progressing from phase II to phase III, including a total of 15 to 20 phase III starts by the end of 2009 in disease areas ranging from cancer, to diabetes, to pain. The company plans to increase phase III by 5o to 75% to 24-28; with 15-20 regulatory submissions between 2010 and 2012. With respect to opportunities for global growth, Pfizer highlighted new commercial models that take advantage of its existing medicines and its global R&D, manufacturing, sales and marketing. The company will continue to focus on delivering revenues from certain in-line medicines (Pfizers Cash Cows) including Geodon, Zyvox, Xalatan, and Vfend are growing at doubledigit rate and hence Pfizer is to hold on them to generate maximum cash flows, and revenues from a bit new medicines (Pfizers Stars) Chantix, Lyrica and Sutent more than doubled to $ 3.3 billion in 2007, versus $ 1.5 billion in 2005. Seemingly (Pfizers dog) is Norvasc and efforts to harvest it to gain the maximum amount of money are taken in consideration. Pfizer also announced plans to capture greater revenue in emerging markets in Latin America, Eastern Europe and Asia. For example in Asia, the company plans to expand operations in China from 110 cities to more than 650 cities, growing established products and new products. By pursuing growth strategies in the right geographies, with the right products and business models, we will drive change, seize opportunities and create value for customers. Said Ian Read, president of worldwide pharmaceutical operations. We are meaningfully diversifying our risk, which will be significant advantage to us as we compete in this fast-changing market place.

Porter

identified 3 generic types of strategies - overall cost leadership, differentiation, and focus- that provide a meaningful basis for strategic thinking. In doing this he gives emphasis to the need for the strategies to identify a clear and meaningful selling proposition for the organization. In other words, what is our competitive stance, and what do we stand for in the eyes of our customers? Any failure on the part of the strategist to identify and communicate the selling proposition and strategy is, he suggests, likely to lead to a dilution of the offer and the company ending up as tuck in the middle or a middle-of-the-roader. Porters thesis is therefore straightforward: to compete successfully the strategist needs to select a generic strategy and pursue it consistently. Obviously there is no best strategy even with a given industry, and the task faced by the strategist involves selecting the strategic approach which will best allow it to maximize its strengths vis--vis its competitors. This needs to be done, Porter suggests, by taking into account a variety of factors, the 5 most significant of which are:

1. 2. 3. 4. 5.

The bargaining power of supplier. The bargaining power of customers. The threat of new entrants to the industry. The threat of substitute products or services. The rivalry among current competitor.

It is quite obvious that Pfizer takes the strategy of differentiation. It is able to create strong brand identities through its large number of patents, its consistent pursuit of those factors which customers perceive to be important as Pfizers performance is characterized not only by size, but also by growth and that led to its positive image. Also, Pfizers high performance in a number of spectrums of activities, such as R&D and market. By pursuing a strategy of differentiation, the organization gives emphasis to a particular element of the marketing mix that is seen by customers to be important and that as a result provides a meaningful basis for competitive advantage. The firm might therefore attempt to be the quality leader, marketing leader, or technological leader. Clear enough Pfizer chooses to be the market Quality Leader in pharmaceutical industry. Differentiation can, however, prove costly if the basis for differentiation that is chosen subsequently proves to be inappropriate. Despite this, differentiation is potentially a very powerful basis for strategic development. Its potential is also illustrated by McGraw Hill study of industrial buying which estimated that most buyers would require incentives that equated to a price reduction of between 8 and 10 per cent before considering a switch to a new supplier. It should be apparent from this that if a strategy of differentiation is to succeed there is a need for a very different set of skills and attitudes than is suited to cost leadership. Instead of a highly developed set of cost control skills, the strategist needs to be far more innovative and flexible so that me-too companies are kept at a distance.

Value disciplines
Treacy and Wiersema consider 3 value disciplines to be so important, these value disciplines are:

1. Operational excellence: companies which pursue this value and discipline are not product or service innovators, and nor are they concerned with developing deep and long-lasting relationships with their customers. Rather, they offer middle market products at the best price with the least inconvenience; it is this no-frills approach which characterizes many of the low price grocery retailers such as: Netto, Lidl, Kwik Save, Lo-Cost and Aldi. 2. By contrast, Product Leadership involves focusing upon developing and offering products which consistently push at the boundaries of innovation; both Intel and Nike are examples of this. 3. The third value discipline is Customer Intimacy and is based on the idea that the organization concentrates upon building relationships and, in many cases, satisfying specialized or unique needs.

It is important to recognize that the choice of which Value Discipline to pursue cannot be chosen in an arbitrary way. Instead, it involves a detailed understanding of both the company and its markets. Equally, Treacy and Wiersema argue, it cannot simply be grafted onto an organization but is instead a central act that shape every subsequent plan and decision a company makes, coloring the organization from its competencies to its culture. The choice of value discipline, in effect, defines what a company does and therefore what it is. Pfizer chooses the Product Leadership; it focuses upon developing and offering products which consistently push at the boundaries of innovation.

Stage Three (How might we get there?)

One of the cornerstones of good business is knowing where you want to go and how to get there. In most cases, companies create numerous layers of marketing in order to achieve its goals while staying on the long-term growth path. This goes beyond single marketing efforts for specific products and means developing a strategic marketing plan that encompasses identifying strengths and weaknesses, improving certain aspects of the company, market positioning, and expansion. Stage three of the management process deals with the question of how desired ends might be achieved. This begs the question of how alternative means to ends might be identified. We can use any variety of strategies related to the four elements of the marketing mix or whichever is relevant among them to achieve the stated objectives. It certainly doesn't happen overnight and many companies find themselves shifting and changing as the plan unfolds. One such company was Pixelera, which recently shifted direction and adapted its successful web development offerings to kiosks. The company took the new product and promptly won the contract to provide the information system for the new Canadian War Museum. While the shift fit into the company's long-term strategic vision, it also took some thought and planning to ensure the rest of the operation continued without losing a step. Pixelera chief executive Stephen Foley spoke to the OBJ about developing a strategic marketing plan and how to ensure it remains in focus through short-term change. OBJ: When you are contemplating a marketing campaign, what kind of research do you have to do to decide on the strategic direction you want to take? What aspects of the business do you have to take into account? FOLEY: We approach the research aspect just like we would with a new client who has come to us with a specific need to develop a website or custom database application. We look at various aspects of our business including the product or service we want to promote, who we intend to target and what their needs are, who else is competing in this space, how they are promoting their products and services, the timeframe in which we intend to run the campaign and the amount of budget we will allocate. Regarding aspects of our business, we mainly take into account our production capacity and create a plan to ensure that we will be able to maintain a high level of service to our existing client base while servicing new clients that are brought in through the marketing campaign. OBJ: What is the planning timeline? How long before the marketing campaign is set to begin do you start planning the strategy? FOLEY: The specific amount of time it takes is based on the scope of the marketing campaign. The timeframe is also extended when we outsource production elements like the printing of kit folders and brochures. We keep our planning sessions informal by kicking off with an introduction to the topic to get everyone on the same page. At this point, everyone is encouraged to share information with each other.

Brainstorming sessions are used to gather ideas, which lead to the design of action plans. The plans often involve our creative design team who develop concepts for us to consider. We will also bring our technical team into play if we are planning to launch an e-mail based viral marketing campaign for example. OBJ: How do you decide the target audience and/or the area that you want to improve with the strategic marketing plan? FOLEY: We always look for ways to leverage upon our existing success stories and capabilities when researching new target markets. For example, our Web-based Virtual Community software called OntheFly E-community has been successful in government and non-profit circles and we've discovered through consultation with out private industry clients that they also have a need to connect their staff and clients together within a password protected website. When we make a discovery like this, we simply add it into the marketing plan. We treat the plan as a living document that is subject to change on a regular, ongoing basis. The last thing we want is to grow stagnant and get too comfortable with our position. We need to continually revisit the plan and make adjustments on the fly. OBJ: What kind of market research do you have to do and how much of a role does it play in the strategic plan? How do you examine markets outside the local area? FOLEY: Market research is an important element and involves looking at the market itself size and growth potential, price, how sensitive the market is to price, what is the competition is charging and the competition who are they, is the market already saturated, what are our competitors' strengths and weaknesses and how do they compare to our strengths and weaknesses? When looking at markets outside of the local area, we will often use the Internet as a research tool. There are numerous community-based web sites that are available which provide useful information that helps us make informed decisions about the market in question. While the Internet can be a very powerful research tool, it is not the only option available to us. There are instances when we use our in-house sales team to call into a potential market to gather information and to understand their requirements further. While we may not connect with many, the information we glean from these calls allows us to further our knowledge and understanding of the marketplace. Further to this, we also engage our existing client base to ask them for input and gather their opinions. Often we will use web-based surveys to collect this type of feedback. OBJ: When you are playing in a niche market and you want to expand into a broader area, how do you ensure the strategic marketing plan doesn't detract from the strength that you are already known for? FOLEY: When we decide to expand into new markets, we look for ways to play on our existing capabilities. We also spend a considerable amount of time researching markets that have similar requirements to those that we are already in. Take for example our recent entry into interactive touch screen development with the New Canadian War Museum. Here, we were able to leverage our web experience by using similar development methodologies and technology that we have been using for over nine years to build interactive, database driven Web sites. This has resulted in a new stream of business for Pixelera.

This new stream of business doesn't change our marketing plan as the type of service provided for touch screens is a direct complement to the work that we do on a daily basis. In fact now when we target museum clientele, we are able to use much of our existing marketing collateral and other support information. OBJ: What are the possible pitfalls? How do you plan to ensure that they don't become part of your plan? FOLEY: If you run a successful marketing campaign that drives new business, you must be ready to deal with the increase in volume. You also have to consider how you will support your existing client base as you continue to bring in net new revenue. Your existing clients are the most important part of your business and supporting them should be your first priority. Our plan includes a human resource strategy that addresses when we must hire new resources to pickup the additional production. Using Web-based recruiting sites such as Monster.ca and our own recruiting product OntheFly E-recruiter we are able to access resumes at a moment's notice. We also perform a number of tests to qualify resources before extra production comes in so that we are ready to hire on a moment's notice. OBJ: Pixelera has won a number of awards for its work. When awards or accolades are presented, how do you fit them into the strategic plan? FOLEY: We are proud to have been recognized by the business community. These awards have helped us to raise our profile locally and establish credibility with clients that are not in the National Capital Region. While awards are important to the marketing plan in that they give us more credibility in a very crowded market space, we certainly don't define ourselves by them. Instead, we promote the success of our clients and how our products and services have provided value and benefit to them. Awards reflect the acknowledgement of the broader business community in that we are a competent and reputable firm and that in selecting Pixelera, you are choosing a vendor with a successful track record.

Pfizer
Branding Strategy:
One would expect that an annual marketing budget of more than a billion dollars would buy you a very well-positioned corporate brand. But that has not been the case for Pfizer. This decade, the world's biggest pharmaceutical corporation launched some very successful drugs, including Lipitor and Viagra. But when it comes to its own corporate brand Pfizer is, like many multinationals, a mess of generic and insipid brand values. All the usual suspects are there: integrity, innovation, customer focus, respect for people, community, teamwork, performance, leadership and, of course, quality. It is a roll-call of the generic from a corporation that sees branding as a superficial patina and not the fundamental core of its business.

Does it matter? With profits on average in the billions does it even need brand values at the core of its business? We might get a different perspective from the people of Kano in Nigeria. In the mid-nineties, with a meningitis epidemic raging in the region, a team of Pfizer researchers travelled to the city in what the company claims was a philanthropic mission. The team arrived with large quantities of Trovan, an experimental and, at that time unapproved, drug. The Pfizer team recruited a Nigerian doctor to act as its leader, who has since claimed that he was little more than a front man. They then administered Trovan in oral form to 100 children selected from meningitis sufferers admitted to a Kano field hospital. The Pfizer team also administered cef-triaxone, a registered drug for meningitis, in lower-thanrecommended doses to another 100 children also suffering from the illness. Pfizer said that it had received the verbal approval of the families of the patients, although in filing a lawsuit, the families have claimed that the company did not obtain their consent. Meanwhile, those children admitted to the hospital who were not selected by the Pfizer team were treated with the correct dosages of the antibiotic chloramphenicol, an internationally accepted treatment for bacterial meningitis, by a team from Medecins Sans Frontieres. Once the Pfizer team had ended its mission, it returned to the US, though the epidemic continued. Of the 200 children involved in the trial, 11 died - although there is no evidence to suggest the drug played any part - and many others were afflicted with serious medical conditions, despite surviving. After and since the affair came to light Pfizer has rejected any wrong-doing, claiming it is 'proud of the way the study was conducted'. A Nigerian commission, however, has concluded that the episode was a 'clear case of exploitation of the ignorant'. Where are brand values when you need them? Respect for people does not seem to stretch to gravely ill African children. Community, I would suggest, does not apply to the 30 families from Kano now trying to sue Pfizer. Integrity did not apparently preclude the drugs company from using a forged ethics document as evidence that the Trovan trial was legitimate, something to which it has since admitted. When an organisation takes branding seriously, it goes beyond the superficial and instils in its products, its people and its operations the values that define it. There are companies, such as BP and Nike, that take their brand values very seriously and, as a result, are able to make money and make the world a better place at the same time. There are also companies such as Pfizer that see brand values as a page on a corporate website and which, as a result, operate with an inherent imbalance between what makes them money and what makes them human.

New brand strategy

Pfizer's new brand strategy has, by the help of Dropit, been implemented on the Web. Pfizer are now able to work in a more cost-effective and focused way with the content on their Web site and with the communication with their target group.

The need
Pfizer has had some 30 different Web sites, all with their own graphic profiles and on different platforms. It was expensive and inefficient to provide information on different areas of treatment and medicines. Since the need were the same for all of the Web sites, Pfizer wanted to coordinate their Web sites and create condition for coordination and streamlining. According to Pfizer's new brand strategy, there will be two levels of the graphic communication - Pfizer and the pharmaceutical brands.

The challenge
The challenge lay in creating both a cost efficient and a communicative and technological platform that would: be created and designed from the audience's needs and requirements strengthen the trademark of Pfizer create conditions for the organization to work with the network to be able to build relationships with their target groups simplify the work with the Web site for better communication

The solution
"Dropit understand both Pfizers needs and the needs from our target groups and they have actualize the strategy in a solution that is attractive, easy to use and functional," Ulrika Engars, Web communications manager at Pfizer. A key word for the solution that Dropit created for Pfizer is re-using. Pfizer has become a central technology platform based on EPiServer CMS with the additional modules Extension and File Organizer from Dropit. The platform contains a great variety of applications collected in a function library. Added is also a flexible and independent graphic framework, which is easy to adjust for each products graphical

profile. All functionality is completely separated from the graphical framework which means that each new feature being developed is released from the graphic presentation and can be used for all Pfizer Web sites by fetching the wanted graphical framework. We estimate that the new framework will help us to save more than 75% per new Web site compared to today's cost. This means that more resources can be spent on the content on the Web sites but also create benefits for doctors, health professionals and patients, "said Ulrika Engars.

Distribution Strategy
How Pfizer's plans could be disruptive? Pfizer's recent decision to take its business away from wholesalers and carry out trade on its own terms has met an unenthusiastic response. Solidarity on the issue, it seems, mainly exists between UniChem the manufacturer's appointed distributor and Pfizer itself. Matthew Wright (on the staff of The Journal) investigates. Every pharmacy in the UK will, at some time, need to purchase a Pfizer product. Up until now, the companys products have been available from a wholesaler of the pharmacists choice, but from March next year the situation will change; some say for the worse. Pfizers announcement a fortnight ago that it was taking over the sale of its prescription medicines has stunned pharmacists and representative bodies (PJ, 7 October, p413). Like GlaxoSmithKlines agency scheme introduced by the then-Glaxo some 15 years ago (PJ, 9 November 1991, p644), Pfizers plan is to sell its medicines direct to its customers (hospitals, community pharmacies, dispensing practices) but with one fundamental difference: it will use one wholesaler exclusively as a logistics service provider. UniChem has been awarded the contract and will be required to distribute Pfizer products to every pharmacy in the UK twice a day. The impact of Pfizers plans remains to be seen. Some contractors could end up out of pocket. Some fear that pharmaceutical wholesalers, particularly those with small, regional operations, could go out of business. A move against counterfeiting David Watson, Pfizers head of trade, says that the companys main reason for the change is to secure the UK supply chain against counterfeiting. If you are buying directly from Pfizer, he maintains, pharmacists can be sure they are receiving genuine Pfizer products. Mr Watson explains that there are a lot of criminal organizations making some sophisticated counterfeits, so it is a situation that Pfizer is taking very, very seriously. A spokeswoman for Pfizer adds: In the past 12 months there have been three separate cases of counterfeit Lipitor in the legitimate UK supply chain, and we believe that even one case is one too many.

Donald MacArthur, a pharmacist and pricing strategy consultant from PriceSpective (a team of experts that offers strategic guidance in pricing and reimbursement to the pharmaceutical industry), says that not too many people believe the issue of counterfeiting. Counterfeiting has always been with us, he says, but Viagra a Pfizer product brought it to the forefront: a consequence of it being a successful lifestyle drug. John DArcy, chief executive, National Pharmacy Association, says: We certainly are opposed to counterfeiting and want to do everything we can to stamp it out. But I think the best long-term approach to that is to have industry-wide solutions rather than have individual manufactureres or individual wholesalers taking their own particular approaches. But he adds: If you are a manufacturer that has a problem with counterfeits, clearly thats high on your agenda and needs to be dealt with. Richard Freudenberg, secretary general of the British Association of European Pharmaceutical Distributors, comments: Pfizers stated reason of trying to stop counterfeiting does not hold up. He believes that Pfizer is trying to put an end to parallel trade. A spokesman for the Medicines and Healthcare products Regulatory Agency concurs: It is often cited that parallel importation is a source for counterfeit medicines. Currently there is no evidence in the UK where the repackaging process of parallel traded medicines has been the route for introducing counterfeit medicines into the legitimate UK supply chain.

And there is also the elusive grey market to consider. Grey market is a term used to encompass trading of a manufacturers own products which occurs through channels other than those intended by the manufacturer. Mr DArcy says that the NPA has challenged Pfizer on whether its distribution plans are driven by a desire to suppress the grey market in Pfizer products. Pfizer has denied that this is the motivation. The spokeswoman for Pfizer says that grey market activity is independent of Pfizer but it does include our products. We anticipate that a grey market will still exist once our new arrangements come into place. However, Mr DArcy says that the issues of grey market and parallel trade cannot be looked at in isolation of what is happening in the wider market. Certainly Pfizer has attempted to operate quota systems (which restrict the amount of product sold to wholesalers) for certain parts of Europe, he adds. One cant help feeling that, if youre controlling all of your product into the marketplace, that must have an impact on the grey market. That seems to have been the case with GSK as there is less of a grey market in its products, Mr DArcy points out. The spokeswoman for Pfizer comments: Pfizer doesnt and cant stop its products being sold by UK traders into other parts of Europe. However, we are concerned that this activity leads to shortages for UK patients, as is the case in other countries where products are exported. We have a supply policy in the UK that aims to supply enough product to meet the demand for UK patients. But the issues surrounding counterfeiting and parallel trade are complicated, and the waters are often muddied.

Counterfeit has been raised as an issue often in the same breath as parallel trade, Mr MacArthur says. The Government has insisted that there is no link, he points out.

MHRA views on counterfeiting and the scale of the problem

The Medicines and Healthcare products Regulatory Agency shares Pfizers concerns regarding the increase in counterfeit medicines in the legitimate supply chain and regularly meets with industry bodies to discuss the issues, a spokesman for the MHRA reveals. However, the MHRA has confirmed that Pfizers decision is a commercial one. According to the spokesman, the legitimate supply chain in the UK is tightly regulated and is judged to be safe from large-scale contamination from counterfeit medicines. He says that the MHRA operates a longterm anti-counterfeiting strategy led by its Enforcement and Intelligence Group. The World Health Organization estimates that up to 10 per cent of medicines worldwide may be counterfeit and that the cost to the pharmaceutical industry is $32bn, says the MHRA spokesman.

Over 700 million prescriptions are written annually in the UK. There have been five discoveries of counterfeit medicines that have reached patients through the legitimate UK pharmaceutical supply chain since 2004, he says. While the legitimate pharmaceutical supply chain is tightly regulated and has one of the best international records for being difficult to breach, it is recognized that no supply chain is impenetrable, whatever the regulatory and surveillance safeguards that may be in place, he adds. Guidance for pharmacists on counterfeit medicines, published by the MHRA and the Royal Pharmaceutical Society, is available as a PDF file (160K).

Impact on contractors
Graham Phillips, member of the Independent Pharmacy Federations steering group, believes that this is bad news from almost every perspective. Clearly it will damage relations between pharmacy and Pfizer at a time when the pharmacists role is becoming more clinical and a strong link to industry is needed. Mr DArcy says that pharmacists might be required to deal with additional paperwork to set up UniChem and Pfizer accounts. It would be a great travesty, he says, if at a time when we are suppsed to be spending more time on patient care we are having to divert some of that into administration. And Mr Phillips insists that, with the new contract, pharmacists should be working together to get the best care for patients rather than talking about funding. Mr DArcy points out that, whether a contractor holds a UniChem account or another wholesale account, Pfizer products that are currently included in the basket of products will no longer be available to contribute to the discount. So depending on your mix of Pfizer products, that might have an impact, he says. Over time that will be reflected in the discount clawback, but we will wait to see exactly how that pans out.

Sue Sharpe, chief executive of the Pharmaceutical Services Negotiating Committee, says that it is too early to say what the impact will be until Pfizer releases details of its discount plan, expected imminently. She says: The pharmacy contract structure determines overall the amount that contractors receive through purchase profit income as a contribution to total income. The mechanisms of the contract, she explains, should adjust for any changes that Pfizer makes to the discounts. The issue of course is if any changes affect particular contractors, Mrs Sharpe says. Mr DArcy elaborates: The whole system of remuneration and reimbursement works on an averaging basis. Any change to the system that pushes a pharmacy either deeper below the line or from above the line to below the line is bad news. And thats certainly one of the things that came up with the GSK distribution scheme if you were a pharmacist that had a high density of GSK products and if the discount arrangements changed so you were worse off under that, then clearly you werent happy. A Price strategy bulletin published this month by PriceSpective states: Pfizer emphasises its aim is not to save money. Like all UK brand manufacturers it currently pays wholesalers a gross margin of 12.5 per cent of the value of stock handled at NHS prices, with wholesalers giving about 10 per cent of this away as discounts to pharmacy customers. Some is then clawed back from pharmacy remuneration by the Government through the discount recovery scheme, along with part of pharmacy purchase profit from generics and parallel imports. The bulletin goes on to say: As well as paying UniChem an agency fee for whatever package of services it requires of it, Pfizer will need to offer pharmacies and dispensing doctors comparable discounts to those now obtained from wholesalers. Otherwise it will incur the wrath of these two groups who will lose remuneration until the claw back scales are adjusted. Mr MacArthur says that manufacturers probably think a 12.5 per cent margin is too generous and, with the increasing price of products, that the returns are disproportionate.

AAH speaks out against scheme

Steve Dunn, group managing director of AAH Pharmaceuticals, gave his view of Pfizers distribution plans at the Pharmacy Show, which took place at the NEC, Birmingham, this week (1516 October). Now is not the time to drive out choice and competition in pharmacy at the very time the NHS is seeking to increase choice and competition in health care provision, he stressed. He added: We believe that Pfizers new scheme will inevitably lead to a reduction in discounts in an attempt to boost Pfizers profits costing the NHS several millions of pounds. Discounts in general will have to fall costing pharmacy and the NHS dearly. It will bring about a complete loss of wholesale competition, he said, competition that has served pharmacy contractors so well in the past. It removes a pharmacy contractors choice in who they choose to partner with. It disrupts and potentially destroys the stable and essential pharmacy supply chain model based on twice a day delivery and wholesalers carrying a full range of pharmaceutical goods.

Mr Dunn went on to say: Pfizer have the right to run their business as they see fit but they should consult widely with all interested stakeholders to achieve a model which fulfils some or all of their objectives while at the same time maintaining the essential, stable and time-proven supply chain model which has served pharmacy, pharmacists and patients so well in the past and will continue to do so in the future.

Wholesale market
Mr DArcy says that, if the other wholesalers lose out on 15 per cent of their product portfolio because of the Pfizer/UniChem deal, they are going to have to make adjustments to their discount threshold or their provision of added value services. He points out that the current system of multiple wholesalers ensures competition and guarantees that pharmacists benefit from a key service twice daily delivery. We sincerely hope that [Pfizers plan] doesnt throw those arrangements out of kilter and prejudice services to patients, he says.

Mr MacArthur says: In the UK, pharmacies choose their main and back-up wholesalers knowing they will stock the full range of products. The nature of the whole business changes when you go from a multiple to a single channel system. He explains that with the multi-channel system, like that found in the UK, pharmacists have some control they can choose which wholesaler to use and the wholesalers compete for pharmacy business by offering high quality service; manufacturers have no choice but to supply the wholesalers in order to sell their products. However, he says that in the single channel system the manufacturer is in control it chooses an exclusive wholesaler (or distributor) which has fought with other wholesalers for that contract and the pharmacist has no choice but to use that wholesaler to purchase that manufacturers products. Allan Karr, chairman of the Guild of Healthcare Pharmacists procurement and distribution interest group and pharmacy business services manager, University College London Hospitals NHS Trust, comments: This is a major strategic initiative on behalf of Pfizer, with complicated ramifications for the marketplace which need to be worked through over time. The pharmaceutical industry has the natural desire to manage the supply chain more closely and also to have a closer and direct relationship with customers. Mr Karr explains that normally the wholesaler purchases and legally owns the stock to sell under its own terms, whereas distributors get paid a fee for moving the stock from point A to point B. UniChem will not own any Pfizer stock under the new scheme and will therefore have an unusual role as being a wholesaler performing a distribution role in a similar manner to the Glaxo agency scheme, he adds. Over the past few years, manufacturers appear to be using more distributors in the hospital sector, he says. From an NHS hospital perspective, there doesnt appear to be a significant impact. He explains that, in the past, hospitals have had contracts for products requiring a single wholesaler distribution arrangement. He adds: I would imagine that UniChems service will be excellent and that Pfizer will also closely monitor UniChems supply performance to ensure that no shortages arise.

However, Mr Phillips says the deal feels anti-competitive: Small independent wholesalers are far more vulnerable. How much damage is done to these businesses when some 15 per cent of turnover is lost? He says that anything that undermines the distribution network is bad news for pharmacy. Mr DArcy says: We are seeing a fundamental change within the supply chain system and there will inevitably be adjustments to that. Of broad concern, he says, is: Will there be unintended consequences of this? And what will they be?

Pricing Strategy
Influential British NGO Oxfam yesterday accused pharmaceutical giant Pfizer of aggressively enforcing patents in poor countries, thereby forcing prices of life-saving drugs beyond the reach of most patients in developing countries. In its latest report entitled "Formula for Fairness: patient rights before patent rights" launched during the weekend in eight countries including Thailand, Oxfam said Pfizer used its position as "the most powerful" political lobbyist of the industry to encourage the US to threaten trade sanctions against poorer countries. This report is the second in Oxfam's series of analyses on the human development impact of multinational corporations. "The company's bottom line seems to matter more than the lives of the world's poorest people," said Oxfam policy director Justin Forsyth. The report says the multinational firm appears to adopt a uniform pricing strategy and its policy is not to issue licences to generic manufacturers. "The result is that its drugs are often priced beyond the means of poor people and their governments," Oxfam said, adding that diseases under control in developed countries cause millions of premature deaths in the developing world. Limited access to life-saving drugs that were widely available in rich countries was an important factor, said the report, pointing out that unlike many of its competitors, Pfizer has not significantly cut the price of its branded drugs in the developing world despite mounting international pressure on drug companies. Despite owning three important drugs for infectious diseases-the antifungal drug Diflucan, the antibiotic Zithromax, and the Aids anti-retroviral Viracept-Pfizer, unlike a number of its competitors, has shown little flexibility on pricing and patent enforcement in poor countries. Although Diflucan, generically known as fluconazole, is not patent protected in Thailand, Pfizer enjoyed the status by exclusively marketing it until three Thai companies began to produce the drugs in generic form in 1998, the report said. "Pfizer then dropped its Diflucan price from US$7 (320 baht) per 200mg capsule to $3.60. Having regained market share helped by intensified marketing, Pfizer then raised its price back to $6.20-as of July 2001, it is priced at $5.15-per 200mg capsule, compared with the much lower generic prices of Biolab sold at 29 cents for the same dosage," the report said. According to the report, the US government successfully pushed for the introduction of protection levels which exceed those contained in Trips (Trade-Related Aspects of Intellectual Property Rights of the World Trade Organization) in developing countries like Thailand, Vietnam, Jordan, Brazil and Egypt.

The agreement on Trips-the new 20-year patent regime the WTO requires all member states to implementwas likely to keep prices of vital new medicines higher than they would otherwise be, and this exacerbates the vast health disparity between rich and poor countries, the Oxfam report said.

Packaging Strategy
Pfizer Inc. discovers, develops, manufactures and markets leading prescription medicines for humans and animals, as well as many of the world's best-known over-the-counter (OTC) consumer brands. The company has three business segments: Health Care, Animal Health and Consumer Health Care. Its products are available in more than 150 countries. Q: What were your top achievements in 2003 in business and in packaging? A: Pfizer continues to invest heavily in research and development (approximately $7.1 billion in 2003) to discover and bring to market the life saving drugs of the future. For example, we intend to submit New Drug Applications to the Food and Drug Administration (FDA) for 20 products during a five-year interval that ends in 2006. Six of these were submitted through 2003. We also have three new products that either were approved recently, or are undergoing regulatory review in the U.S. and/or the European Union. Similarly our Animal Health group, which is the largest business of its type in the world, continues to grow with the support of new products such as Spirovac (a reproductive cattle vaccine) that was launched in the U.S. during the first quarter of 2003. Our Consumer Healthcare business is expanding at a rapid pace as well, with 13 products presently ranked #1 in their therapeutic areas. Packaging plays a key role not only in guaranteeing the successful introduction of these products, but strategically as our needs change over time due to our rapidly changing business environments. Most recently, Pfizer's Packaging Services organization has worked with our sites to accomplish the following key initiatives: * During 2003, Pfizer introduced bar codes for its Hospital Unit Dose (HUD) blister packages which contained the National Drug Code (NDC), lot number and expiration date. These bar codes provided hospitals a means to automatically identify product to prevent dispensing errors and mitigated the need for repackaging and re-labeling on their part. The bar code is comprised of a linear and two-dimensional code (Reduced Space Symbology and Composite Code) and can be read with conventional laser bar-code scanners. This achievement was accomplished with minimal expenditure and had no impact on production efficiencies. * As a result of customer requests over the years regarding closures which were difficult to remove, in 2003 Pfizer introduced a new family of container closure systems to be used where child-resistant closures are warranted. This system features a squeeze-and-turn style closure which has been proven to perform better than our previously used push-and-turn style closure in child resistant and senior adult use effectiveness protocol testing with both the children and adult seniors.

The closure uses a polyethylene foam-backed heat-induction lining system aimed at improving the moisture vapor protection of the system once the heat-induction seal is broached and the closure is placed back on the bottle. This system also allowed our bottle sizes to be harmonized from 15 to four, footprints from nine to two and closures from eight to two. Q: What industry issues concern you the most and why? A: Patient safety is a topic Pfizer takes very seriously. We want patients who receive our medicines to be certain the product is genuine and safe to use. Today's distribution environment in the U.S.--while one the securest in the world--does have weaknesses. Pfizer has instituted a variety of practices over the past year aimed at addressing some of these weaknesses. In addition, Pfizer has been quite active in supporting the FDA's objective of establishing policies and practices in this area as well. The FDA's expectations for implementing "track and trace" solutions using mass serialization for all products by 2007 is an ambitious objective. Pfizer is committed to this objective and is considered a leader in the development of strategies for the industry to migrate toward those expectations. Q: What are the trends in your market and how is your packaging addressing them? A: In the pharmaceutical industry, needs are becoming more and more focused on the customer who is receiving our product. Unit-of-use packaging is becoming a package of choice by our marketing teams as their efforts continue to focus more on patient education and compliance. Use of these types of packages for pharmaceutical products is often constrained by the indication(s) targeted, dosing regimen (chronic or acute) and toxicity (which come into play when determining failure levels for child-resistant packages.) These constraints force our package design and development teams to be creative to meet a particular product's needs. Q: How important is packaging in your company and why? A: Pfizer believes packaging is quite important to any product we market. Its purpose is to protect the product from the environment, not interact with the product and convey relevant information to the targeted customer. Pfizer's Packaging Services organization, as well as the manufacturing sites they support, work collaboratively to achieve this.

Q: What are your company's goals for the coming year? A: In the packaging community, Pfizer continues to take a leading role in many areas. Examples for 2004 include: * development of strategies to implement the Electronic Product Code (EPC) in the drug product supply chain;

* technical evaluations involving the use of radio frequency identification (RFID) or bar codes in support of anti-counterfeiting and patient safety; and * the Product Quality Research Institute's (PQRI) Container Closure Work Group's efforts to improve test methods to be used in support of the FDA's PACPAC (packaging post approval change) guidance.

Like most pharmaceutical companies, Pfizer's business is divided between prescription products and what it calls "consumer health care" products. The latter includes over-the-counter (OTC) medications like Sudafed and items that are not normally thought of as medicine, such as Listerine mouthwash. As with any other products, beating the competition to market is a priority. But the time window differs dramatically between OTC and prescription medication. Getting ahead of competitors "means one thing for a pharmaceutical product, where the development timeline tends to be in years, and another thing for a consumer health care product, where the timeline tends to be in months," Hollander says. From a marketing standpoint, the importance of packaging for consumer products is obvious. But it can't be discounted for prescription medicine, either, especially for an increasingly important segment: physicians' samples. The marketing of prescription medication directly to consumers, via print and television ads, has been credited with enormously increasing pharmaceutical sales and profits. One study estimates that for every $1 the industry spends on direct-to-consumer advertising, it gains $4.20 in sales. Physicians' samples are a vital link in this process, and shelf appeal is as important in a doctor's office as in a drugstore. "When you design physicians' sample packages, we're conscious of competing in the physician's office with other companies' physicians' samples," Hollander says. "The physicians' sample serves many purposes. One is to enable a patient to try the product and see if it works, without having to wait to have a prescription filled before they can take their first dose. The sample may also contain patient targeted information about the product, the indication they are being treated for or how to take the medicine. So there are a lot of things that go on there." Even for a well-established product, physicians' samples can be an important vehicle for corrective action. Viagra is perhaps the most prominent example. It was one of the most spectacularly successful new drugs in decades, but soon after its 1998 release, it became evident that many patients were not taking it properly. Pfizer responded by redesigning the physicians' sample packaging. "Right now we are producing Viagra samples that have three booklets," says Juan Rivas, director/team leader packaging at Pfizer's facility in Barceloneta, Puerto Rico. "One booklet for the physician, one for the patient and a business reply card. Whenever you have those additional components that you have to place in the process, it starts to make the process more challenging." Spelling out the dosing regimen is the motivation behind another type of prescription packaging: unit of use. These are blister packages, completed by the manufacturer, that pass directly through the pharmacist's hands to the patient or nurse. They can be especially useful for patients who might not understand a

complex dosing schedule, or for physicians who don't have the time to explain it. For instance, Zithromax[R], an antibiotic, comes in the Z-Pak[R] a blister card that folds out to explain that the patient needs to take different numbers of pills on different days. "We presented the information to them in such a way that you couldn't help but read the information on the package before you started taking your first day's dose," Hollander says. Serving the club store market Unit of use doesn't necessarily mean one-time use. For many medicines, especially those for chronic conditions, the "unit" may consist of bottles holding 30, 60 or 90 pills. "That's driven by a lot of factors, including reimbursement programs which may limit a prescription to only a one or three month supply," Hollander says. Bulk sizes also come into play in over-the-counter medication, because club stores are starting to sell them. And club-store packages have to have more going for them than just size.

Club stores "are more perfectionist in their design requests," says Miguel Maldonado, packaging director of the Pfizer facility in Vega Baja, Puerto Rico. The packaging has to fit the club-store pattern of being loaded onto the shelf without removal from the case. In addition, since most club stores don't have pharmacists on staff, the packaging must carry an extra burden of explanation. Blended family Acquisitions have played a vital role in Pfizer's rise to the top. The 2000 takeover of Warner-Lambert Co. and last spring's purchase of Pharmacia Corp., for a combined $150 billion, brought some heavy-duty moneymakers into the Pfizer stable. These include Warner-Lambert's cholesterol-cutter Lipitor--the world's best-selling medicine--and Pharmacia's pain reducer Celebrex. Melding acquired companies into the existing operation always is a challenge, says Nat Ricciardi, vice president for Pfizer Global Manufacturing. "Obviously when you combine various large pharmaceutical companies you're going to have differences in the way you operate from plant to plant, and you're going to have opportunities to combine similar functions and facilities," Ricciardi says. "Our first order of business has been to establish consistency across Pfizer Global Manufacturing and to identify opportunities for synergies. This is a very deliberate process, by the way, that will take us several years to complete." Integration of Pfizer's packaging operations began on the people level. "I think we do a pretty good job at welcoming the new people and immediately getting them involved," says Bill Wimmer, packaging team leader for Pfizer's plant in Parsippany, N.J. The packaging management team proved to be a good vehicle for this integration: "We were very conscious about ensuring that the new plants were represented on the legacy Pfizer teams so that we quickly became aligned."

The integration process went smoothly enough for packaging personnel, says Ernesto Ramos, director of Pfizer's plant in Caguas, Puerto Rico. "I was legacy Pharmacia and, definitely, the integration process has been very smooth," Ramos says. "The folks were very conscious at headquarters to assure that Pharmacia was integrated into Pfizer immediately upon the acquisition's close." Pfizer's packaging strategies are determined by new technologies, many of which are introduced through machinery and material suppliers. Working with suppliers is key to developing well designed, functional packages and filling them efficiently. But speed isn't the only thing Pfizer asks of its suppliers. Rivas says Pfizer needs equipment that merges flexibility with high speeds for optimal efficiency. This is not always an easy task because where equipment may have high speeds, it may not have the required flexibility. And flexible machinery may not be capable of high speeds. "Mainly, what we're looking for is equipment to be flexible enough so that we can run multiple applications on that equipment and not be limited to one specific application.

Advertising and Promotion

"Ignorance is bliss"or so the saying goesbut when it comes to patients health and their ability to make well-informed health decisions, it's hard to argue that less information is better. Pfizer believes that patients benefit from information about diseases and medical treatment options because when they learn about symptoms and therapies, they can engage in a more informed discussion with their health care provider. One way that disease and treatment information is made available is through advertising. Direct-to-consumer (DTC) advertising of pharmaceuticals affords Pfizer the opportunity to inform patients about diseases and about particular treatment options. Key Points DTC advertising has significant, proven value to consumers in helping them to identify disease conditions and engage in more informed conversations with their health care providers. By helping patients identify problems early, DTC advertising can prevent unnecessary patient suffering and the need for high-cost acute-care medical interventions that result from untreated conditions. Pharmaceutical companies spend much more on research and development than they do on advertising and promotion of drugs. DTC advertising is strictly regulated by the FDA and must contain approved language describing product risks. Pfizer recently announced improvements to our DTC advertisements that strengthen their educational benefits. These improvements include increased information about the benefits and risks of our medications, and information about our prescription drug access programs, among other changes. In order for patients to make good decisions about their health, they need access to health information. An overwhelming majority (91%) of consumers want to know as much as they can about their health conditions and how to treat them.1 DTC advertising contributes to the public health by bringing important

health information to patients and encouraging them to discuss their health with their health care providers. A key health problem that we are facing right now in the U.S. is underdiagnosis and undertreatment of serious health conditions. DTC has been an important way to reach patients, talk about symptoms, and inform them of available treatments. For instance, a study by the Harvard School of Public Health of patients who visited their doctor because of DTC advertising found that 25 percent were diagnosed with a new condition, as shown in Chart 1. Notably, among those who were diagnosed with a new condition, 43 percent of the diagnoses were for a "high priority" condition - a designation of the Centers for Disease Control (CDC) which includes such conditions as diabetes, high cholesterol, and arthritis.

Chart 1: The Only Way for DTC Ads to Work is for Patients to Speak with Physicians, which Often Leads to New Diagnoses

By preventing chronic conditions from escalating and identifying health problems before they require acute care, DTC advertising may help address overall costs to the health care system. Underdiagnosis, undertreatment, and untreated conditions are costly both in terms of lives and money. Each year more than 1.5 million Americans die from cancer, diabetes, heart disease or stroke. It is estimated that these chronic diseases cost the U.S. more than $600 million each year.3 A few studies by U.S. government agencies, such as the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC), have confirmed the value of DTC advertising to patients and physicians, as have a number of studies by private organizations, including Prevention magazine and the Kaiser Family Foundation.4,5,6,7 Despite such studies' findings, misunderstanding about the impact of pharmaceutical advertising may be fueling resistance to it. Two of the most persistent myths about prescription drug advertising are that pharmaceutical companies spend more money on it than on research and development, and that spending on advertising raises the prices of drugs. There is no evidence for either claim. In 2004, pharmaceutical companies spent $38.8 billion on research to develop new treatments for diseases - a higher R&D to sales ratio than any other U.S. industry, and far more than the $4.15 billion the industry spent on advertising and promotion.8 An FTC report concluded that there was no evidence to suggest that advertising of medicines increased the cost of medicines.9

It is important to know that every DTC ad is strictly regulated by the FDA and must contain approved language about the product and balancing information about the product's risks. Pfizer also sponsors advertising that seeks to educate patients about diseases without referencing a specific product. In all advertising to the patient, the underlying message is "see your doctor" for appropriate diagnosis and treatment. Pfizer recently announced changes to its DTC ads to make them an even more valuable resource for patients. You will soon see that our ads have increased risk-benefit information, reinforcing messages about the importance of a patient's relationship with his or her doctor, and information about our prescription drug access programs. Additional information about these changes can be found in the Pfizer press release from August 2005 which announced the changes.

Promotion Strategy:
Pfizer today is focussing on its corporate image as they have brands bigger than the company. Thus we get to see Pfizer on TV with old men chat communicating their association with hypertension and depression. Internationally Pfizer is rated highest for its MPR for their selective media and message. You cannot miss their Celebrex interactive in yahoo.com. One of their best MPR is the Pfizer forum in The Economist, which is an advertising series sponsored in the interest of encouraging public discussion on policy questions and featuring a wide variety of views from leading policy experts. MPR contribution Philip Kotler, one of the worlds leading authorities in marketing, has been a consultant to Merck (his only pharma client). But when it came to stating a successful case study of MPR in his latest 11th Edition of Marketing Management he quotes: Viagra, Pfizers most successful prescription drug launch in history used PR to inform the customers about the drug before the launch, but as the small blue pill grew into a genuine pop-culture phenomenon, Viagra got vast quantities of PR gratis. The pill got unofficial endorsements from celebrities like Hugh Hefner and newspaper columnists all over the country who testdrove the drug to phenomenal success. MPRs contribution to the bottom line is difficult to measure because it is used with other promotional tools. The easiest measure of MPR effectiveness is the number of exposures carried by the media. A better measure is the change in product awareness, comprehension, or attitude resulting from the MPR campaign. Pfizer Global Business Technology, the company has a custom built TPM system that manages sales forecasting and promotion planning. Lift predictions are calculated using account/sku information. Cost Per Incremental Dollars is calculated and used as quick reference instead of ROI. Traditional ROI measurements were too much to handle for some accounts, says Norris. CPI was more doable. Promotion effectiveness is measured by Pfizers sales, finance, and consumer promotions groups. Sales teams typically use POS data as their information source and large account teams have more intense analytical support. The Consumer Promotions Group has partnered with AC Nielsen on an ad-hoc basis to understand effectiveness by vehicle (e.g. FSIs). Norris says the company generates a tremendous amount of POS data, which is being folded back into the trade management tool.

Norris is open about the need to improve the system at Pfizer. She says the company needs to find a way to be more consistent in how its information is measured and managed across the company. Pfizers work is an example of change in the consumer goods retail approach. Business intelligence is driving this change. Tracking the results of trade promotions gives both sides of the consumer goods equation an opportunity to learn greater detail about the effects of pricing, advertising and placement. In order for this to happen however, a cultural change must take place between consumer goods vendors and retailers. It will be necessary for retailers to collaborate more and give up more data, and in the mass market business, data is leverage.

R & D:
Pfizer Pipeline Our Medicines in Development Our pipeline of new medicines in development is the largest in the pharmaceutical industry, focusing on a broad range of unmet medical needs spanning 10 Therapeutic Areas. Pfizer invests more than $7 billion annually in the research and development of new products across more therapeutic areas than any other company in our industry. Relying on the strength of our pipeline and scientific talent, Pfizer has generated a steady stream of breakthroughs over the years. Our researchers continue to work around the clock and around the globe to ensure the best medicines for our patients in the years to come. Pfizer's human research and development organization is headquartered in New London, CT while their animal health research and development organization is headquartered in Kalamazoo, Michigan. The company has R&D labs in the following locations: Groton, Connecticut; Sandwich, England; Nagoya, Japan; Amboise, France; La Jolla, California; Cambridge, Massachusetts; Kalamazoo, Michigan; St. Louis, Missouri. Spending $8.1 billion in research & development (R&D) in 2007, Pfizer has the industry's largest pharmaceutical R&D organization: Pfizer Global Research and Development.[29] In 2007, Pfizer announced plans to close or sell on the Loughbeg API facility, located at Loughbeg, Ringaskiddy Co.Cork Ireland by mid to end of 2008 In 2007, Pfizer announced plans to completely close the Ann Arbor, Nagoya and Amboise Research facilities by the end of 2008, eliminating 2,160 jobs and idling the $300-million dollar Michigan facility, which had seen millions of dollars of expansion in recent years.[30] On June 18th, 2007 Pfizer announced it will move the Sandwich, England Animal Health Research (VMRD) division to Kalamazoo, Michigan.[1] At Pfizer Global Research & Development (PGRD), Pfizers visionary discovery and development division and the largest research-based biomedical and pharmaceutical company in the world, we're not content waiting to witness the evolution of our industry. Instead, were driven by science, building on our current successes and capabilities, playing a critical role in developing the most compelling story of scientific discoveries. To date, PGRD has brought to market a wide range of medicines, such as Lipitor (atorvastatin calcium), Zithromax (azithromycin), Viracept (nelfinavir mesylate), Zoloft (sertraline hydrochloride), Viagra (sildenafil citrate), and our newest smoking cessation medicine, Chantix (varenicline). And, today, with

a broad research pipeline that spans many therapeutic areas, we are determined to bring even more cures to the marketplace. But there is much more work to be done and we cant do it alone. Were always seeking those who share our belief that science can improve our world, that by working together we can bring exciting new therapies to patients on a global scale and forever change the way we improve the health and well-being of all people.

Conclusion& Recommendation:
Though established in the heart and mind of all customers as the most powerful and the best quality pharmaceutical company, customers still see Pfizer as the most expensive pharmaceutical company; especially when it comes to the less developed countries customers who would prefer a relatively lowpriced medicines. Thus, reconsidering its prices would be one of the most powerful steps Pfizer would ever take, especially with the noticed increase in total assets turnover and Return on equity turnover. Such a step would enable Pfizer to be rooted in the customers' minds as the best quality and best price pharmaceutical company in the whole industry.