This model is ideal. It should be always taken in the mind in order to make the right decisions about creating and implementing the marketing strategy of herbal chest packs in Russia.
After detailed analysis we can determine the target audience. The main groups of our focusing are Russian families especially with children and elderly people. And also people who’d like to prevent becoming ill by using preventive measures. We can add that target audience is quite wide, so this fact should be also taken into account when developing the marketing strategy of herb packs.
One of the reasons why we decided to penetrate Russian market was the fact that Herbal Chest Packs would be truly innovative product for the market. Thus, we face no direct competition for the reason that none of the companies produce the same or similar product. Nevertheless, there exists fierce competition from substitute products such as mustard packs (“gorchishnik”), and pepper plasters. So, if we consider them to be main competitors of Herbal Chest Packs , then due to the Porter’s 5 forces model the competitive force will be quite high. The core reason for that is people’s habits to use old-fashioned medical products, which they trust. Although those mustard packs and pepper plasters cause pain and make the process of treatment insufferable, Russian people got used them and strongly believe in their effectiveness. That is why, the competitive force is high, there must strong marketing measures to be taken in order to change people’s habits and to assure them that our product is a way more effective.
External Market was analyzed on the basis of the PESTEL framework, which focuses on political, economic, socio-cultural, technological, environmental and legal factors; in terms of every factor main points were defined.
Russian Healthcare industry is under the strict government control. This implies not only specific production conditions or certain range of products that can be produced by any organization, but price control as well. Government wants the medicine to be affordable; that is why the price pressure exists.
As long as there are no direct competitors, there is a high possibility that the production of the herbal chest pack will be supervised by the federal antimonopoly service. This is not a serious obstacle, but may be an issue the company should be concerned about.
The taxes in the healthcare industry are high and they tend to increase. Drug stores are under tax pressure as well and it is very likely that they will increase prices on the pharmaceuticals in the nearest future[6], so that the herbal chest pack won’t be as affordable as the company wants it to be.
As mentioned before, government is very interested in the development of the pharmaceutical industry. They want to introduce a lot of innovative products on the market[7]. In this way, the government will be interested in the herbal chest pack. And this, in turn, means that this product could be promoted in governmentally related organizations, for example public hospitals and polyclinic centers. This Long-Term Strategy is still under development and new aspects of influence may appear in the future.
The average income of the household is growing (according to the rosstat statistics); the impact of this factor is unclear. The fact, that the income is growing, hardly can be assessed as a favorable one, because the herbal chest pack’s main advantage is the affordability in terms of price. However, the growing income may become a reason for a change in the buying habits and buying behavior.
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