Ateneo de Davao University Graduate School of Business and Governance

A Case Study on Pfizer, Inc. Animal Health Project

BA 908 Marketing Management

Submitted by: Ramil A. Dinglasa MBA-APEX Student Submitted to: Dr. Danilo M. Te Professor Date: December 4, 2010 I-Summary Pfizer Inc. is a research-based, diversified health care company with global operations. Pfizer Animal Health is one of the corporations three major business

groups. The Animal Health Products Group accounted for roughly 12% of the companys revenues in 1998 (Pfizer Annual Report). Pfizer Animal Health products are sold to veterinarians and animal health distributors in more than 140 countries around the world for use by livestock producers and horse pet owners; the products are used in more than 30 animal species. Pfizer Animal Health is committed to providing high-quality, research-based health products for livestock and companion animals. As a result, Pfizer has many new animal health products in its research pipeline, a number of which have already been introduced in some international markets. II-Areas to Consider Based on the data provided by the Wood MacKenzie Animal Health Market Review, Pfizer scored high over its competitors in terms of RD to sales ratio, as well as its Position on Quality versus Price. A score of 5 on this means that Pfizer focuses on Quality only and not so much on the price. Another area to consider is Pfizers score on Price Support of Distribution Channels to which Pfizer scored the lowest among its competitors. This means that Pfizer has low emphasis on Special Promotional Incentive Funds and other price related trade promotions. III-Problem 1. NAFTA agreement with Canada and Mexico hit local ranchers particularly hard which would affect the price of cattle as beef from these 2 countries offers lower prices compared to locals. As feedlot operators buys calves in a price less than the cost of raising those calves, this pressures the ranchers to cut costs and a way to do that is to reduce spending on animal health care products such as vaccines and antibiotics, or to switch to a lower-cost alternative. With that, sales of Pfizer Animal Health products are threatened. 2. Though Pfizer offers some trade promotions to vets and distributors including volume rebate programs and price promotions on certain products, its competitors oftentimes gave much more significant discounts and SPIFs to distributors. This results to switching of Pfizers product to competitors product every time a rancher would go to the distributor and buy one despite the vets recommendation to buy Pfizer products.

IV- Alternative Courses of Action 1. Establish a marketing campaign and information drive to Pfizers customers regarding the possible effects/impact of cost cutting on animal health in relation to overall productivity and profit. a. Given the situation, I would suggest for the marketing team to come up with an information drive which includes data that reflects

the impact to ranchers income if they will costs cut on animal health. This includes buying generic medicines instead of Pfizer. It is much comprehendible if the data would talk on the profit and loss aspect like if youll not buy Pfizer products, the risk is losing your cattle to sickness which is more losing compared to buying Pfizers products with the assurance of healthy cattle though lesser profit. A scheme like this would do. Though it takes time, effort and money but its worth all these. 2. Strengthen customer relations. a. In challenging times like this, I would suggest to strengthen more customer-supplier relationship. If you already built a relationship with your customers, this means that they already trust you on many things. It is much easier to persuade/convince your clients to believe in you when you implement ACA No. 1. Relationship indeed has an impact. When a buyer and the salesman have established a strong relationship, it is much easier to communicate and discuss problems that would lead to opportunities for Pfizer to once again prove its customer relation and customer focus drive. 3. Increase emphasis on Special Promotional Incentive Funds and other price related trade promotions for the Distributors. a. The case shows an incident wherein despite the doctors recommendation to buy Pfizer brands; the last person in the chain of command is the distributor. No matter how many recommendations a doctor would give to the ranchers, but the distributor would still push the competitors product then it makes the marketing strategy non sense. It is I think wise to increase emphasis on SPIF. V-Recommendation I would recommend all the ACAs. These are all important for Pfizer Animal Health in facing the external challenges that threatens its business. I would also further recommend that Pfizer should also give more time on its market segment base on the # of cattle. The higher the no. of cattle, much time, effort and courses of action which I suggested should be implemented.