Professional Documents
Culture Documents
Chapter 1
1.0 Introduction
work, which aims at analyzing and evaluating how the new Chinese Healthcare Reform
wake of globalization. In seeking to explore what, Beijing Novartis Pharma Ltd. can do
innovatively to maximize the benefits of this new system and how the relevant marketing
At the beginning of this proposal, I will try to rationalize the topic, clarify the objectives
and design the research problems. Followed by a series of marketing strategies literature
This research will combine exploratory, descriptive and explanatory studies. The
objective of using three studies is to describe the current marketing environment from the
new medical reform and how it impacts on the marketing strategies of Beijing Novartis
Pharma Ltd. In this research, I will use quantitative investigations to collect the
secondary data from the marketing database, the company’s website and other relevant
archives. Also I plan to employ qualitative investigations to get primary data through
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semi-structured interviews and observation. Therefore, a design of how to interpret these
data and the limitation of studies will also be presented in this proposal.
After having gone through the different steps in the research process and research design
of both quantitative and qualitative studies, I will attempt to clarify the goal of this
research. The goal is to provide the facts and direction to Novartis and they need this to
make informed and effective marketing decisions to achieve better business excellence.
As Uma Sekaran pointed out “A grasp of research methods will enable managers to
1992).
The aims of this research is to identify efficient and effective marketing strategies from
the impact of globalization and the new healthcare reform on Novartis, and to ensure
sustained profit growth of their marketing project. The objectives will be achieved
through the literature survey of relevant marketing strategies, analyzing the marketing
Nicholas Walliman said that one of the first tasks, therefore, on the way to decide on the
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knowledge or an unrequited need within the chosen subject (Your Research Project,
1) What is the objective and principles of the new healthcare reform in the wake of
globalization?
4) How can Novartis capitalize on the reform and maximize their presence in China?
5) What effective strategies could be recommended for Novartis to match the new
opportunity?
companies in China are actively pursuing aggressive marketing strategies to face the
variable and turbulent marketing environment that will have an impact on their marketing
decisions. As Philip Kotler said international marketers encounter dozens, even hundreds,
2004).
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Chapter 2
The 1990s marked the first decade in which companies around the world started to think
globally. Time and distance are shrinking rapidly with the advent of faster
Getting accepted to become a member of World Trade Organization (WTO) in Dec 2001,
China has open their doors to the world and the foreign investors view China as a great
potential for international trade. However, understanding public policy in China for
international trade especially for multinationals is not a simple matter. As Philip Kotler
pointed out marketing decisions are strongly affected by development in the political
also identified four political-legal factors that should be considered in deciding whether
to do business in a given country, and one of them is government bureaucracy. The host
government runs an efficient system or reform and this will directly influence the
Beijing Novartis Pharma Ltd is a Swiss Pharmaceuticals Company that has set up a joint
venture in China in the 1980s. Novartis has its target products to sell in China and also
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Mike Meldrum pointed out “A major concern for any producing organization is how it
can best make its products be available to the market place (Key Marketing Concepts,
1995). In China, there are no private physicians, almost no private hospitals and clinics.
The majority consumption of an ethical medicine is from state owned hospitals. Every
hospital has its own pharmacy. According to the government reimbursement policy,
only the ethical medicine prescribed by hospital doctors and bought in hospital
pharmacies can be reimbursed. So that it is critical for any ethical medicine to get into the
hospital list. Hospital is the battle of competition. The traditional sales practice of
Chinese local pharmaceutical company is to sell its products to distributors without its
own hospital sales team. They do less academic and professional promotion. Every
organization needs to audit the environment(s) in which it operates, and for this they will
In 1998 the State Council formulated the new healthcare policy for employees working in
cities and towns, and thus kicked off the reform to the medical insurance mechanism. The
objective of the reform is to provide a remedy to the existing ailing medical insurance
The reform will impact mainly five aspects of the pharmaceutical companies: Financial,
Supply Chain, End user, Reimbursement and Marketing. The reform is to aim at reducing
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medical expenses, particularly drug fee. The state will impose price limit to drugs.
Novartis will be forced to cut prices for some existing products which are their biggest
revenue generators especially the sales of bottom line products. Also, the price reduction
incurred by the reform will bring huge pressure on the financial control of Novartis.
Elizabeth Barnes said that without doubt, a financial objective will be a key objective and
this will influence the type of pricing strategies used. (Barnes, 2007).
Kotler also said marketers need to know the laws affecting price and make sure their
pricing policies are defensible. Soon the impact will be felt by other players in the supply
chain. Every member of the supply chain will be under tremendous pressure in terms of
stock management, account receivable and cost management, etc. to protect the
The level at which the price of a product is set has to be a careful balance between the
cost of production and the price that wholesalers, retailers and consumers are prepared to
pay (Barnes, 2007). Price will become a sensitive issue after the implementation of the
new healthcare reform. Competition among wholesales and retailers will be intensified.
Their profit margin will fall significantly and this will lead to consolidation in
distribution. This trend will lead to the rise of powerful super-wholesalers, which will
have bigger national coverage, deeper penetration into retailers and better services. Also,
the trend of wholesales consolidation, hospital alliances and retail chain store operation
will result in a smaller voice of Novatis in the supply chain. The end user -patients also
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will be motivated to control their medical expenses, and will have higher awareness of
In reimbursement aspect, due to this reform, each province or municipality will only
develop one catalog. There won't be city-specific catalog any longer. The good part about
efforts. However, the barrier of entry will be higher. Competition among pharmaceutical
companies will be increased, and winning the support of government officials and the
recognition of the review committee will be more critical than ever. Therefore, product
entry into the catalogs is the key to the survival and future growth of pharmaceutical
companies. The biggest involvement in a foreign market comes through direct investment
firm develops a deeper relationship with government, customers, local suppliers, and
distributors, allowing it to better adapt its products to the local market. Finally, the firm
keeps full control over the investment and therefore can develop manufacturing and
marketing policies that serve its long-term international objectives. (Kotler, 2009). Due to
this reform, the marketing strategy of Novartis has to be changed to adapt to the new
circumstances the best policy is to keep still, to merge into the background. (Barnes,
2007).
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Chapter 3
3.0 Methodology
Bryman and Burgess, 1994, Charpter 5 for a discussion of linking qualitative and
quantitative data analysis). This research will combine quantitative and qualitative
approach to investigate the marketing strategy adopted by Beijing Novartis Pharma Ltd.
Enquiries can be classified in terms of their purpose as well as by the research strategy
used. The classification most often used is the three folds, exploratory, descriptive and
explanatory. In the same way as you may employ more than one strategy in your research
project, so you may have more than one purpose. (Saunders et al., 1997) In this research,
Research is only concerned with “what is” and, sometimes, “what might be”. “What is”
portray an accurate profile of persons, events or situations. I will use this approach to
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collect data and describe the current pharmaceutical marketing situation before and after
the Chinese Healthcare reform, and the extent to which factors might impact upon the
The objective of this research is to explore what existing theories and concepts might be
used or adapted and to discover whether or not a problem exists. In this research, I will
explore in depth to see if Novartis has any problems in their marketing strategies post
reform period and how they can innovatively capitalize on this new reform.
Semi-structured and in-depth interviews: I will use interviews to explore topics and
post reform. In an exploratory study, in-depth interviews can be very helpful to “find out
what is happening [and] to seek new insights” (Robson, 1993:42). Interviews will be
including the vice-president, marketing and sales director and some sales representatives.
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work, outdoors or while traveling. The other reason of choosing interviews is that I found
managers are more likely to express and discuss topics relevant to their own current work
al., 1997). In this research, I will use personally administered questionnaires to collect all
the completed responses from the marketing and sales department within a short period
of time, possibly 3-5 months. Through the questionnaire I hope to collect information on
how Novartis will fare from the new healthcare reform and plans adopted. It is hoped that
this kind of information collected will not be specific with detailed coding but rather
Secondary data are indispensable for much of organizational research (Flick, 1998, p255)
Secondary data include both quantitative and qualitative data and can be used in both
computers around. Some of the resources may be of use either for your literature
review or as secondary data. (Saunders, 1997, p56). I can find much useful
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information from Novartis’ homepage and also can get quantitative data such as
current marketing situation and to know what they have done since the new
reform formulated.
data to support their operations, such as copies of letters, minutes of meetings and
other business related documents. All these are very wealthy data for reading and
• Books, newspapers and journals: I will read some books and journals relevant to
because I need get some information about The New Healthcare Reform. These
books and journals will help me to collect the background and supportive data and
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3.3 Data Analysis
Little sense can be made of a huge collection of data; therefore an essential part of
research is the analysis of the data. This data must be carried out in relation to the
research problem. (Walliman, 2001). Because research is not a linear process, the only
way to help us to judge the type of and amount of data is to decide on the methods which
we will use to analyze them to obtain a feel for the data, establish reliability and to
The features of quantitative data are: based meanings derived from numbers; collection
results in numerical and standardized data; analysis conducted through the use of
diagrams and statistics (Robson, 1993). In searching through a secondary data source, the
authors would have analyzed and interpret findings. As I still need to collect quantitative
raw data, I need to consider the type, format of the data that will be undertaken with care
to avoid misinterpretation.
• From China government and industrial journals and reports for marketing
• From the company archives for marketing, sales and financial records in the last 3
years, I will analyze the marketing quantification, market share and growth,
• From the company’s website to find the data for the last 3 years about the
quantitative objective of the company, then compare the data to get the result on
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which aspects of marketing situation had become better or worse after the New
Healthcare Reform.
All these data will be collected and analyzed based on relevant corporate strategies and
marketing strategies. Attentions will also be paid on the reliability, validity and the
Qualitative data are based on meanings expressed through words. It results in the
the use of conceptualization. (Saunders, 1997). In this research, I plan to get some
To find the primary data from semi-structured interviews of different levels of staffs in
the marketing department and to ask them which aspects of the new reform they do not
like and why. What (if anything) they might have been done to prevent the problem from
arising after reform? Then, I will classify the data into meaningful categories. The
expressed through my research questions and objectives. The categories, which I devise,
will be part of a coherent set so that they provide me with a well-structured, analytical
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To find the primary data from case study such as successful and failed emergent strategy
formed of similar situations in other organization. Uma Sekaran stated that case studies
are also qualitative in nature and are useful in applying solutions to current problems
I will also use information from company archives as secondary data and analyze the
changing nature of Novartis’ marketing strategy. After data have been collected through
the above-mentioned ways, and through sources, I will edit first. Then, the blank analysis,
if any, will be handled and noted. Moreover, I also plan to study some relevant business
theories and apply them to certain conditions, and to achieve a good research result from
Therefore, the dependent variable is the variable of primary interest to the researcher. The
researcher’s goal is to understand and describe the dependent variable, or explain its
variability, or predict it. Through the analysis of the dependent variable, it is possible to
find answers or solutions to the problem. (Uma Sekaran, 2000). Here again, she also said
an independent variable is one that influences the dependent variable in either a positive
or a negative way. So, I will use a systematic explanatory and exploratory research and
focus on those dependent variables. The relationships of the variables will be designed in
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3.4 Limitations of the Study
Feasibility and practicability need to be taken into account when formulating research
questions and these questions also have to be feasible in terms of time and resources
available for the research. In conducting face-to-face interviews, there are geographical
always respondents who might feel uncomfortable about their responses in a face-to-face
3.5 Conclusion
As Uma Sekaran pointed out business research can be described as systematic and
organized effort to investigate a specific problem encountered in the work setting, that
strategy development after a new reform in the target company-Beijing Novartis Pharma
Ltd, and to illuminate the marketing circumstance through Chinese New Healthcare
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The researcher has identified the research aim and objectives with well designed research
strategies and operational system management area is described. The researcher plans to
Also, as defined and decided by the process of this research, both quantitative and
qualitative research methodology and related data collection and analysis are designed
and presented. Finally, limitations of study are also addressed after structure and outline
of the research. The researcher will adopt a more critical and effective research after
conclusion, this proposal aims to investigate the marketing strategy adopted by Beijing
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References
2. Bai, Jianfeng (2001): “What is the cause of “kan bing nan” (too difficult to see a
doctor)” (in Chinese), People Daily, March 27, 2001, No.10.
3. Bai, Jianfeng (2008): “Building new healthcare chain – pilot project of healthcare
community by People’s Hospital of Beijing University”, People Daily, October 19,
2008, No.1.
5. Chen, Z., Liu, X., and H., Wang (2008): “Service price marketization: the unfinished
road of healthcare system reform in China” (in Chinese), Management World, No. 8,
52-58.
11. Mark Saunders, Philip Lewis, Adrian Thornhill, (2009), “Research Methods for
Business”, 4th Edition. Prentice Hall.
14. Philip Kotler & Fernando Trias de Bes, (2009),“Lateral Marketing: New
Technigues for Finding Breakthorough Ideas”, John Wiley & Sons, Inc.
15. Philip Kotler & Gary Armstrong, (1997) "Marketing", Fourth Edition, An
Introduction.
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16. Robson, C. (1993), “Real World Research: A resource for social scientists and
practitioner researchers”. Oxford: Blackwell.
18. Wang, Hufeng (2009): “A dilemma of Chinese healthcare reform: How to re-define
government roles?”, China Economic Review, No.20, 598-604.
19. Yang, G. and Y., Liu (2008): “Economic analysis of new healthcare institutional
reform” (in Chinese), Economic Theory and Management, No.3, 26-29.
20. Yip, W. and W., Hsiao (2009): “China’s health care reform: A tentative assessment”,
China Economic Review, No.20, 613-619.
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