Title: Pfizer, Inc' Animal Health Products
1Pfizer, Inc. Animal Health Products
- Pat Gross
- Gavin Batchelder
2Introduction to Pfizer
- Founded in 1889 as a chemical company
- Headquartered in New York, NY
- Made up of three major parts-
- Pfizer Animal Health
- Consumer Health Care Group
- US Pharmaceuticals
3Introduction to Pfizer
- Research and Development facilities both in the
U.S. and abroad. - Listed on the New York Stock Exchange, London
Exchange, Euronext, and Swiss Exchange. - Pfizer employs 120,000 individuals worldwide.
4Introduction to Pfizer1999 Revenues
- 89 from Human Pharmaceuticals
- 8 from the animal sector
- 3 from over the counter products including-
- Listerine, Visine, Rolaids, and Sudafed
5Introduction to Pfizer
- Pfizers products include such well know names as
- - Zyrtec
- Celebrex
- Viagra
6Introduction to PfizerMission Statement
- "We will become the worlds most valued company
to patients, customers, colleagues, investors,
business partners, and the communities where we
work and live."
7Introduction to PfizerPfizers Purpose
- "We dedicate ourselves to humanitys quest for
longer, healthier, happier lives, through
innovation in pharmaceutical, consumer and animal
health products."
8Introduction to PfizerPfizer Today
- Pfizer was named by Fortune magazine as the fifth
best wealth creator in America - Pfizer has merged with Warner-Lambert
- They expect revenues to climb by 40 from a wider
and heightened volume and a more favorable
product mix
9Introduction to the case
- This case centers on Pfizers Animal Health
Division. - About their Animal health business Pfizer has
this to say - "Leading the way to better animal health care,
Pfizer Animal Health discovers, develops,
manufactures and sells products that improve the
safety, quality and productivity of the food
supply and help pets live longer, healthier
lives.
10 Introduction to Pfizer Animal Health
- Pfizer Animal Health recently acquired Pharmaci
Animal Health. Pharmaci alone has operations in
the United States, Argentina, Australia, Brazil,
Canada, France, Germany, India, Italy, Japan,
Korea, The Netherlands, New Zealand and Spain.
11Introduction to Pfizer Animal Health
- Pfizer divides consumers into two groups.
- Pet owners, horse owners, and vets
- livestock/beef cattle, dairy cattle, and pork.
12Introduction to Pfizer Animal HealthPfizers
Strengths
- Pfizer has consistently superior product.
- Competitive products typically cant match
Pfizers performance.
13The Environment
- Currently the pharmaceutical industry is strong,
experiencing growth over the last 10 years in
terms of absolute growth and as a percentage of
Gross Domestic Product. - This may be caused by several factors such as
the aging populace, increasing price of
prescriptions, new drugs for previously
untreatable conditions and even inappropriate
prescriptions by doctors
14The Environment
- The government plays a major role in
pharmaceutical industry. - Restricting types of drugs that get government
support - Allowance of cheaper, generic brands
- Arresting counterfeiters
15The Environment
- Animal Health sales fell from 12 in 1998 to 8
in 1999. - The cattle industry feels threatened
because - More meals are being eaten out
- Beef is being passed over due to concerns about
cholesterol, bacteria, and Mad Cow
disease. - New alternatives always coming to market.
16The Industry
- There were times not long ago that drug companies
were merely the size of nations. Now, after a
frenzied two-year period of pharmaceutical
mega-mergers, they are behemoths, which outweigh
entire continents. The combined worth of the
worlds top five drug companies is twice the
combined GNP of all sub-Saharan Africa and their
influence on the rules of world trade is many
times stronger because they can bring their
wealth to bear directly on the levers of western
power." - from The Guardian
17The Industry
- Pfizers competitors include
- Merck
- Glaxo SmithKline
- Novartis
- Bristol Myers Squib
- AstraZeneca
18The Industry
- Research and Development comprise a significant
portion of pharmaceutical cost. - In 1999 Pfizer budgeted more than any competitor
for RD, 5 billion. - Critics charge that companies spend twice as much
on sales and advertising
19The Industry
- Pharmaceutical makers are using new techniques to
sell their products- - Direct advertisements to consumers
- large pre-launch product advertisements
- Incentive programs to sales people
- Increased concentration of sales people
20Marketing
- Pfizers techniques are aggressive and expensive
- The largest advertiser in the Journal of the
American Medical Association - Advertise extensively in Beef Magazine and Bovine
Veterinarian as well as many others - Advertise in direct media, treating
pharmaceuticals like any other household product.
21Marketing Criticisms
- Pfizer is accused of trying to persuade doctors
to replace effective drugs that have been used
for years. - Files have been found that show company
ghost-writers have written medical journal
articles for doctors and offered expensive
vacations or other gifts for the winners
22Other marketing strategies
- Pfizer provides educational programs to educate
people about their products and the benefits - Pfizer sells animal products only to vets and
feed and seed stores based on the fact that
farmers and ranchers perceive vets as their most
trusted contacts
23Other marketing strategies
- Pfizer uses thousands of sales reps to build the
trust of customers, gain their friendship, and
sell their products while offering personal
assistance in problematic areas and setting up
educational programs.
24Other marketing strategies
- Pfizer has gained considerable respect from
consumers by offering superior products and high
quality production techniques. - Pfizer markets direct to consumers, eliminating
most of the middle-men.
25Pfizer SWOT Analysis-Strengths-
- Currently the largest pharmaceutical company in
the industry. - Realizes potential and strength in mergers and
takeovers, and actively pursues those
opportunities. - Strong educational programs.
- Lack of international regulations offer time and
opportunity to validate potential drugs in
foreign countries.
26Pfizer SWOT AnalysisStrengths cont.
- Adequate revenues to pursue aggressive
advertising, marketing programs. - Innovative marketing structure that is usually
followed by other corporate fire and then
followed by example by the other companies.
27Pfizer SWOT AnalysisWeaknesses
- Marketing expenditures exceeding Research and
Development budget have come under scrutiny. Much
of it is publicly funded. - Compensation packages for top executives are
under scrutiny. Public record shows a huge amount
of revenue is channeled to executive bank
accounts. - Accused of R D budgets being inflated by
creative accounting. - Poor public relations regarding maintenance of
high prices bringing drugs beyond the reach of
the potential users.
28Pfizer SWOT AnalysisWeaknesses cont.
- Pfizer has been sited twice for price fixing
conspiracies and is No. 17 on the list of "Top
Corporate Criminals of the 1990s", - Pfizer has recently been accused of stealing
indigenous knowledge. 3rd world countries have
low legal regulations and have natural resource
information that is used and profited by Pfizer. - Pfizer uses animals to test its products, a real
no-no in the animal avocation sector that is
making its way to public avocation in the US and
other countries, as well..
29Pfizer SWOT Analysis Opportunities
- Wealth offers acquisition of smaller companies to
heighten product base. - Global infiltration, with less stringent
regulation offer longer study statistics to
solidify results that offer marketing facts
needed to gain FDA approval. - Opportunity for public funding gained from
historic success.
30Pfizer SWOT Analysis Threats
- Other major competitors merge to form a super
power. - Continuous threat of FDA disapproval of new
products. - Potential litigation from other companies
regarding marketing procedures. - Potential litigation regarding theft of ideas.
- Government regulation and restrictions.
- Failure of target industry, such as the beef
industry in the US.
31The Basic Problem
- The failing market for U.S. beef producers and
the resulting sales decline of Pfizer products
32Options
- Recognize the shifting market and focus on the
emerging markets - Begin reducing expenditures on the declining beef
market, and instead focus on growth markets - Partner with U.S. beef growers to help return
producers to profitability
33Option 1 Recognize the shifting market and
focus on the emerging markets
- Positives-
- Focusing on growth industries may allow Pfizer to
make more effective use of new Research and
Development dollars - Pfizer may sell more product overall by
concentrating marketing and sales efforts in
different markets - Pfizer could begin more aggressive efforts to
market their products in Canada, Mexico, and
Australia using their new acquisition Pharmaci - Acquiring market share in emerging markets will
make it more difficult for competitors to gain a
foothold.
34Option 1 Recognize the shifting market and
focus on the emerging markets
- Negatives-
- Pfizer may not have be as dominant player in
other markets, and may not be able to command a
premium price based on their consistent quality - Low cost producers in Mexico, Canada, and
Australia may not have the capability to pay
Pfizers prices - Competitors may already have secured the dominant
position in other markets requiring an expensive
battle for market share
35Option 2 Begin reducing expenditures on the
declining beef market, and instead focus on
growth markets
- Positives-
- Greater potential sales
- Reduced marketing costs
- Less expenditures on research and development in
a shrinking market
36Option 2 Begin reducing expenditures on the
declining beef market, and instead focus on
growth markets
- Negatives-
- Pfizers position may be weakened, and the market
may enter a growth mode - Pfizer may not have the profit margin or product
selection in other industries - The market may be more competitive in other
segments of the industry
37 Option 3 Partner with U.S. beef
growers to help return producers to
profitability
- Positives
- Pfizer has extensive skill and experience in
marketing and advertisement - Pfizers products are recognized as consistently
high quality - Pfizer is very aggressive in the market and could
help to educate producers - Pfizer has extensive capital
- Pfizer has strong trusting relationships with
ranchers - Currently only four packing houses control access
to the U.S. beef market - Pfizer Certified beef
38Option 3 Partner with U.S. beef growers to help
return producers to profitability
- Negatives
- Pfizer has no experience in marketing of beef or
in meatpacking operations - Ranchers may trust Pfizers pharmaceuticals
because they are recommended by Vets, not because
they trust Pfizer - They may not make any money trying to compete
with the major players
39The Solution
- Option 3
- Pfizer should partner with ranchers to build
their own packing house and market a premium line
of certified beef using their extensive
experience in marketing - Business is about finding a customer need and
meeting that need for profit - The ranchers have a need for a closer connection
to the customer and the skills to market their
products direct to consumers at a premium price -
Pfizer can fill that need
40Pfizer Animal Products