Marketing strategy of Rumack Pharmaceutical

Published Date: 23 Mar 2015

Marketing is an important aspect of any business. Without the application of an effective marketing approach, the products and services of the company will not reach consumer knowledge nor stimulate their interest to purchase them. Through marketing tools and techniques, businesses are able to position their products or goods to the market. Most importantly, this helps them overcome companies manufacturing or offering similar products. As mentioned, on of the objective of this paper is to analyse the given case study of Rumack Pharmaceuticals.

The case study presented was about the marketing strategy of Rumack Pharmaceutical to meet the needs of their requirements and needs. Rumack has been facing various challenges within and outside the company. In this regard, the company attempted to use various strategies especially in their marketing approach. In this case study, the focus is on the marketing approach of the company with regards to its Restolvic products which is regarded as one of Rumack's successful indigestion products.

Marketing Strategy in the Case

Marketing strategy is the fundamental groundwork of marketing plans designed to achieve measurable marketing objectives (Meek and Meek 2003). It is given that a good strategy in marketing encompasses the organization's marketing goals, policies, and action cycle. With this fact, strategy is the foundation of the marketing activity. One of the successful products of Rumack Pharmaceutical is Restolvic. Having been able to recognise the potential of Restolvic in the market, the company has been able to establish a new plant in which they make and pack Restolvic. The Restolvic brand has become of the well recognised brand of Rumack along with some of the Hedanol products, which is a pain killing preparation. In the case study, it can be seen that one of the marketing strategy used by Rumack is in terms of branding. Branding is perhaps the "hottest" of contemporary marketing strategies. Branding involves the building, maintenance, enhancement, and exploitation of brand equity, which has been defined as the "value a brand name adds to a product" (Broniarczyk & Alba, 1994, p. 214). The fundamental concept is that a recognizable brand will more easily attract and retain customers than an unrecognizable one. A strong brand is said to enhance "the value of a product beyond its functional value" (Cobb-Walgren, Ruble, & Donthu, 1995, p. 25), and serve "as a powerful heuristic cue for evaluation and choice decisions" (Park, Jun, & Shocker, 1996, p. 453). That value accrues both to existing products or services and to brand extensions, whereby a strong brand is leveraged to introduce new products. Herein, Rumack has been able to develop a strong brand value for Restolvic to ensure that they will be able to market their pharmaceutical products effectively.

According to Kapferer (1992), the value of brands is "something invisible, intangible and unwritten" (p. 1) and, yet, brands are the "real capital of business" (p. 3). Aaker ( 1991) elaborated on the corporate value of brands by arguing that "for many businesses the brand name and what it represents are its most important asset -- the basis of competitive advantage and of future earnings streams" (p. 14). He justifies this by discussing how the selling price of many firms is much more than ear would justify because of the value of the brand assets.

In addition, another strategy used by the company is the enhancement of their brand image by adding up some other brands likes Hedanol products, It is said that branding is particularly relevant for television because this industry, more than most others, has experienced an enormous amount of marketplace clutter in the last 10 to 20 years due to technological diffusion, deregulation, and globalization.

In addition, developing and managing a brand image is an important part Rumack's marketing program (Roth, 1992). Both advertising practitioners and marketing researchers have long advocated the use of a clearly defined brand image as a basis for market success. Through a well-communicated brand image, Restolvic products or brands enables consumers to identify the needs satisfied by the brand and thereby differentiate the brand from its competitors (McCombs, 2003). As a long-term strategy, a consistent and effective brand image helps build and maintain brand equity. In addition, brand images can provide a foundation for extending existing brands (Park, Milberg and Lawson 1991).

According to Houk (2001), branding is more than advertising; it is a conglomeration of messages, images, and experiences that consumers associate with a product or service. The sum of those items allows the consumer to associate product expectations with a brand image.

Aside from branding and enhancing their branding image, another marketing strategy mentioned in this case is the strategy of product extension or product diversification. Diversification is a strategy attempting to improve long-run profitability by acquiring and managing new business lines in medicines. Consequently, the continuous initiatives of the company in diversification of its revenue resources also open new opportunities to make the business become stronger to outgrow all its rival companies. The marketing strategy included in the case is also related to the notion of new product development. New product development is also important in the marketing approach of Rumack since the basis for long-term competitiveness is the ability to develop continuously new generations of more advanced products. Therefore one of the company's opportunities is to tap into more markets as a result of the innovations being introduced in the pharmaceutical industry. Also, the interaction with their suppliers allows for the pooling of resources and focus of efforts that make for major medical and pharmaceutical breakthroughs. No firm can hope to be among the world best in high-tech manufacturing as well as in public service provision. So the selection mechanism of the market tends to keep these two organisational fields wide apart. Yet, they need to co-operate intimately in order to develop the market (Jonash, 2000). Localised capabilities enabling or even enhancing such co-operation will always make a difference when it comes to first-mover advantages.

Implications for manufacturing

In a world where competition is very stiff especially those on the marketing arena, there is a need to consider the marketer tasks in different situations or even the role of marketing within the organisation. In Rumack Pharmaceuticals marketing is very important since it has been a result of entrepreneurial ventures and technologically influenced mergers. Actually, the Restolvic as well as the Hedanol which is the product of Rumack has provided the tangible outcome of this venture, however the knowledge generated from the product development and technical skills are invaluable assets. Moreover, Rumack Pharmaceutical manufacturing approach is keen to explore the commercial opportunities available from this aspect of the activities.

Critical to selling a service or product is making known its availability, as well as its desirability which is the function of marketing in an organisation, let say in Rumack, No matter how well the product is designed, consumers will not emerge unless there is increasing information in the marketplace of its existence, and how it could positively affect the consumer's day-to-day life. Hence, the implication is that marketers of Rumack must accept responsibility for the consequences of their manufacturing activities and make every effort to ensure that their decisions, recommendations and actions function to identify, serve and satisfy all relevant publics: customers, organisations and society (Baker, 2003).

Apparently, different business organisations not only Rumack Pharmaceuticals must not only recognise the needs and wants of its customers as one of the manufacturing implications but must of all deliver the desired satisfaction effectively and efficiently in a way that will preserves the society's well being. Firms are now more conscious of portraying positive image of them-selves like what Rumack has done. For example, it is no good for a pharmaceutical manufacturer to satisfy its customer's needs but at the same time dump its toxic waste at undesignated area. A desire also means the demand of ever individual. Demand is the want or desire to possess a good or service with the necessary goods, services, or financial instruments necessary to make a legal transaction for those goods or services.

Such marketing approach discussed above has been noted to have manufacturing implications. One of the implications for Rumack's manufacturing is the need for a new plant that would accommodate the marketing strategies and changes within the company. In this regard, the company management has decided to relocate the prescription Restolvic products. In addition, the implication of these strategies with the manufacturing of the company is the enhancement of the manufacturing and production system of the company.

Source of the Problems facing the Company

Although the company has been able to utilise marketing and manufacturing approach to meet their organisational objectives, the Rumack Pharmaceutical management has also faced some problems and issues associated with its marketing approach. One of the notable problems in the case is the inability of the management to anticipate the rapid demand for Restolvic because of its successful and competitive position in the market. Because of the rapid demand for this brand, the company has to decide on closing its plant in California and moved to another plant. Such decision has also cause issues in line with the company capacity. Accordingly, the company has also experienced capacity problems as well as problems in packaging, specifically the costs of the whole packaging process. In this regard, it can be said that the company is in need of strategy that would solve the problems and enable them to continuously succeed in providing Restolvic brands which are highly demanded by the public,

Recommendation for Rumack Pharmaceuticals

Managing the product is a middle level management function that can be used to manage a product life cycle and enables an organization/company to take all the decisions needed during each phase of a product's life cycle from the manufacturing to the purchasing approach. The moment of introduction and of withdrawal of a product is defined by the use of product management by a product manager or decision maker.

To improve a product's success during each of its phase of its life cycle a product manager must understand how the management works. It is important that Rumack Pharmaceutical looks in the marketing management and not only to innovation of products. When responsible for a new program for the product, a manager is required to know about the product, the market, the customers and the competitors, so that he can give directions that will lead to a successful product. The manager must be capable of managing the manufacturing line as well as the marketing of the product. When the manager has no specific authority over those that are involved in a new program of the product such as developments, he needs to gather the resources required for the organisation to meet goals of the said program. The manager needs to know where to look and how to get the necessary expertise for the success of the product. In line with the problems of packaging, the management must be able to ensure that they manufacturing strategy suits to their needs of having an effective packaging process which is inexpensive to prevent costly operations.

Aside from this. the company is also recommended to concentrate on how they would be able to meet the needs of their consumer on time. In this regard, it is recommended that the company must enable their customers to be involved in their manufacturing strategy. Accordingly, consumer involvement determines whether their satisfaction about the product or services is in high condition (Brassington, & Pettitt, 2002). Because of this, the company can easily innovate or change their marketing plan that satisfies consumer needs. In accordance to consumer involvement, there should a research about involvement process by means of researching. Actually, the company/organisation should begin their research by checking the demographics of the region the company plans to target in regard to composition by age, gender, income, occupation, education and other key elements. Marketing plans vary by industry, by size of company and by stage of growth. The form isn't as important as the process of preparing it; it's actually a process that makes the managers think about their revenue goals and what their marketing strategy will be to achieve those goals.

Apparently, different business organisations not only Rumack Pharmaceuticals must not only determine the needs and wants of its customers but must of all deliver the desired satisfaction effectively and efficiently in a way that will preserves the society's well being. Firms are now more conscious of portraying positive image of them-selves.

On the other hand, technology breakthroughs offer new ways to create and meet customer demand. As the company of Rumack Pharmaceuticals evolved, marketing techniques should also be enhanced like the marketing ads. Advertisements through networks including the internet advertisement should be critically enhanced by Rumack Pharmaceuticals Actually, the rise of the Internet, both as a new marketing medium and a ubiquitous communications mechanism has thrust the marketing function into the centre of business. As a marketing medium, the Internet and its associated marketing technologies have made it possible to cost-effectively communicate with smaller and smaller segments of customers (Wensley & Weitz 2002). As a communications mechanism, Internet technologies act as a connective tissue within companies, linking historically disparate marketing, sales and service functions. These days, companies need to move products, services and information faster, as real-time demand requires. This shifts the organisation's focus away from production processes and toward customer processes. Now, companies' ability to thrive depends on capturing appropriate customer data from every point of customer contact, from order entry to fulfilment-including website click streams, e-mail, telephone, fax, call centres, kiosks/stores, resellers and direct sales forces. That customer data must be morphed into valuable information about each customer's role, interests, needs, and ability and willingness to buy. This enables companies to individualise their responses to each customer during each customer interaction - regardless of which customer touch point is used. When marketing innovation is successful, every interaction with a customer or a potential customer becomes a direct or indirect sales opportunity. This begins to erase conventional distinctions among sales, service and marketing. (Carty & Ingari, 2001)

On the other hand, pricing of product within the organisation should also be considered. Baker. M (2003) argued that pricing is a complex process that is important to the success of a certain organisation or company. Price is the amount of money that is charged for a product or service. Actually, Baker, M. (2003) stated that the price of a product has to include a number of variables in addition to just the product cost. It is also necessary to consider company objectives when arriving at a price. It is important for the individuals in charge of this task to understand how to account for these factors when setting a price (Smith, 2000). Prices are an important tool, not only in the firm-firm relations but also between firms and consumers. Monopoly will not usually charge a uniform price. Firms can use different pricing arrangements, methods and techniques in order to increase their profits. The most common types of pricing strategies or methods are based on cost. Cost-based strategies include cost-plus pricing and price floor pricing. Pricing methods that are based on demand require that marketers estimate the elasticity of demand in order to be assured they can sell what they produce. Specific strategies include demand backward pricing, chain-mark-up pricing, and variable pricing. Strategies based on the competition may represent industry wisdom but can be tricky due to the responses of competitive firms (Solomon et al., 2004). Firms that focus on customer needs in developing pricing strategies may consider everyday low price or value pricing strategies. For multiple products, marketers may use price bundling or captive product pricing. For new products, marketers often consider skimming, penetration, and trial pricing strategies.

Thus, marketing is very important to a certain organisation since it attempts to predict its possible future. Basically, marketing helps to provide direction to the business of an organisation. Thus, the success of Rumack Pharmaceuticals depends not only to its capability to innovate products (e.g. Restolvic) but also to its capability to provide quality marketing plans.

The analysis of the marketing and operations of the Rumack Pharmaceuticals can support the implementation of its new strategies as it addresses the problems and disadvantages being presented in the discussion. It also addresses the improvement, enhancement and the continuous implementation of the advantages determined above. The strategies underlying the marketing and operations plan in the company is essential as it allows the company to optimize its plan for customer satisfaction and customer loyalty. In addition, the plans and strategies being proposed tackle the challenge of marketing and operations management to supervise and control marketing complexity, customer, and shareholder expectations and to reconcile the influences of a changing environment in the framework of a set of resource capabilities. The strategies and analysis are also necessary to foster strategic opportunities and to manage the associated changes required to happen in the company. With these strategies and plans, the company can aim to maximize profits and sales to stakeholders by generating a competitive advantage in recognizing, providing, communicating and delivering value to customers, in the process of developing long-term satisfying relationships with them ('Scope of Strategic Marketing' 2003).

Aside from this, the company is also recommended to enhance their promotional strategy as part of their marketing and manufacturing strategy. is an important aspect in marketing the product because the company distributes the information regarding new products, product lines, brand and company. Different forms of promotion are employed by businesses such as advertising, sales promotion, publicity, tradeshows and many more. Through promotion of products, the company is able to identify their target markets, the promotion of the products have a huge impact on the sales and revenues of the products, an ineffective promotion will produce unpleasant results, therefore the promotional strategy of the company can be either its strength or weakness, it also offers doors for opportunities to improve products through customer feedback. In the case of Barbie dolls in order to increase its sales they must employ aggressive advertising since girls are influenced on what they see on television and if the latest products of Barbie are advertised on television the children will most likely ask for their parents to buy the doll.

The main reasons why there is a fall on the sales of the Restolvic and Hedanol brands is the conflict within the company that affects the management of the company. The idea of change is foreign to Rumack Pharmaceuticals when they have made decisions of relocating their manufacturing and packaging approach and the company is too confident on their status on the market. However, in order to dominate the sales, shares, as well as, the hearts of their target market all over the world, the management of Rumack Pharmaceutical must settle the conflict. Being more open to changes won't hurt a business, on the other hand, being too confident will surely cause the fall of sales of a business.

Conclusion

Marketing and operations management is two of the most important concepts responsible in the development and improvement of an organization. These two concepts serve as guides for governing a company's operation and production. Likewise, the Rumack Pharmaceutical uses these concepts to accommodate changes in the company. One of the changes that they should accommodate is its expansion to international markets, which would further improve and establish their reputation in the industry. This paper was able to analyse and evaluate the possible strategies that the company can use in line with the company's marketing strategy. It was also able to provide answers and improvements for some of the disadvantages recognized in the company. All in all, it can be said that successful business lies on the successful implementation of marketing strategy