BUSINESS TO BUSINESS MARKETING

CASE STUDY Pfizer Inc. Animal Health Products (B) Industry Downturns and Marketing Strategy

Submitted to Prof. Satish Irde

Submitted by Richa Mittal Roll No - 81

Kirloskar Institute of Advanced Management Studies Harihar, Karnataka 2011-2013

Brief Background
Gail Oss, a Territory Manager of Pfizer Inc., Animal Health Group in westernMontana and south-eastern Idaho. She sold high quality animal health products, often times at a premium price. She is also responsible to visit and communicate with the ranchers in her territory. The NAFTA agreement with Canada and Mexico had hit the local rancher particularly hard. That makes rancher no choice but to lower their price. Some other reasons for the decline are switching to alternative meat product, Changes in customer lifestyles, Health/nutrition issues. Ranchers were actively seeking ways to cut costs. One way in which ranchers could cut costs was either scrimp on animal health products or to switch to a lower cost alternative and some ranchers wants to give up. Gail Oss worried not only about her company but most especially to her livelihood

Ques. 1 Evaluate the trends affecting the cattle ranching industry. Answer- The trends affecting the cattle ranching industry are:

1. Health consciousnessConsumers are becoming more health conscious and avoiding the food which involves cholesterol, having fat content and risk of foodborne diseases. 2. Switch to alternative meat productsConsumers are switching to chicken and meat products. 3. Demand for standard quality branded productsAnother change that took place in the poultry and pork industry is need to develop branded products that consumers could recognize and rely on for quality and convenience. 4. Alternatives- Chicken, Pig- the pork and poultry industries had done a better job of marketing their products. The number of new poultry products introduced to the market increased 13% from the prior year. 5. Import - Due to the influx of beef cattle in to the US market from Canada , Mexico and other countries had declined the prices of beef in the US market.

Ques.2 To what degree is a high quality/ Premium price position a strength or a liability during an industry downturn? What are the various ways Pfizer could handle this situation? Answer: Charging premium price for a product during an industry downturn is a liability. Pfizer could handle this situation by harvesting the business and investing in other categories with more demand.

Ques.3 Evaluate the various dimensions of Pfizers Marketing strategy; Market segmentation and Positioning; Product/Price; Distribution; Trade advertising and Trade promotion; Personal selling, Public relation and Sponsorship. What makes sense and what does not? Why or why not? Answer : Market segmentation- Pfizers market is segmented on the basis of herd size. It has segregated in to three 3 kindsa) Hobbyist b) Tradionalist c) Business. It makes sense since they come to know which segment to concentrate on based on their needs. Example- Hobbyist have below 100 cattle, while business has more than more than 500 cattle so logically it tell us that the quantity of product required by business will be more than Hobbyist. PositioningPfizer positioned its products as high quality products. There seems to be a kind of a dilemma that the company is facing when it comes to targeting. The target of the company is not clear i.e. whether they are targeting the Hobbyist or the Business customers. Product/PriceThe product portfolio includes: Vaccines Rotavirus Dewormers etc These were innovative products made of latest use of technology. Pricing wise they were of premium category. The supply chain-downstream didnt give high margins to the ranchers. The competition was forcing to reduce price in such a situation the customer was being forced to shift to other company. Distribution-

The distribution strategy of product Territory managers contacted ranchers but, didnt sell product directly to them. Buying could happen from 3 sourcesVeterinarian, Distributor & Dealer. The percentage of product flowing through vets, distributors or dealers varied significantly by region. This distribution was not suitable as the company was not directly involved in selling to the customer. So, large scale buyers had problems. Trade Advertising and Trade PromotionAds In cattle industry publications- Beef Magazine & Bovine Veterinarian. One ad showed more vet are satisfied with Pfizers Dectomax Pour on Another ad calf health prog boosts price by $21 more per head. Trade promotion: volume rebate program, Price Promotion, Coupon system in which vets were given disc coupon to be given to clients. These could be exchanged at distribution centres for discount. Vet was given credit for suggesting the companys product. Personal sellingCompany didnt involve directly in personal selling to ranchers. Sales representatives visited ranchers to inform about new and existing products. They sold to distributors, vets etc. Distributors were involved in selling of multiple brands and often sold competitive brands. Public relation and Sponsorship: Sponsorship: Territory manager given an annual budget to- fund to be spent on sponsorship- industry activity- seminar on herd health, stock shows, 4-H, Sponsoring Meetings & Conferences for Montanas stock growers association. Public Relation: Technical support while working with vet to suggest proper medication in relation to the problem seen through diagnosis.

Ques4 Would Pfizer benefit from a relationship marketing focus? How would their marketing strategy need to be modified to take such a focus? Answer4: Yes it would. Although they maintain good relationship with ranchers they are unable to make money from same. Changes can be made to distribution channeloffer material to ranchers.

Ques5 when an industry is in decline, to what extent should a supplier be involved in ensuring its customers livelihoods?

Answer 5: The industry is in decline so the Ranchers who are Pfizers primary customer will be affected by such decline and the customers income defines the suppliers income. Since, Pfizer is present in other categories also like cattle, poultry , swine and dairy industry If the industry is in decline then it comes in the cash cow side of bcg matrix. In such scenario we must harvest the category and invest in others. Present stock should be cleared by offering the same at lower prices.