If to start production in Russia, there is a need to get a license for production. This issue can become even more complicated, because government is interested in protectionism and won’t be satisfied if a foreign company starts production in Russia. Moreover, according to the Long-term strategy of Development (mentioned in the political factors), government wants to increase the market share of local pharmaceuticals on the market. Strategic alliances can be a good decision in this case.
Grid analysis (Pic. 1) is based on the combining two dimensions: marketing mix and PESTEL analysis. Each factor from the environmental analysis has its own impact and its own level of contribution to the parts of the marketing mix. To visualize the analysis, the grid is provided. Further there are explanations for each part of the 4P’s.
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Pic 1. Grid analysis matrix
Importance: Red - very important, Yellow - not that important, Green – not
important at all.
Smiles indicate favorable conditions for the company.
Almost all the factors have a great impact on the product itself. Certainly, the technology of production will stay the same, but governmental policies may demand to make particular changes in the formula (some products are forbidden to use in Russia). Demographics may influence the amount of production. Then, the product should be adapted according to the social habits of people (preferably traditional Russian herbs).
There are two main points that influence the price greatly. They are economic and political factors. Political factors are not really favorable for the company, because the taxes always increase and because the governmental pressure is very big. As for the economic situation, there is one point that is important to mention. The Herbal Chest pack has no direct competitors and the product itself is unique for this market. In terms of ecological factors, the production can be set up in Russia and this gives an opportunity to decrease the production costs, which is very good, that is why, there is a smile on this point.
All the factors have a slight impact on the place of distribution. However, social factors may have influence, because people are used to buy medicals in certain places. This factor may be more important than others in these terms.
There are two main points that influence promotion greatly and what is more, these conditions are favorable. First thing is demographics. It indicates that there is an increase in the number of people suffering from lung diseases, so the promotion can be based on this statistics. Second, ecological factors: cold Russian climate and bad weather give a good base for promotion.
SWOT analysis provides company’s both internal and external analysis, which helps to understand reasonability of entering the new market and to conduct the strategies taking in the account company’s strengths, weaknesses, threats and opportunities.
The first strength of Herbal Chest Packs is that this product is new for the market, which avoids the fact of fierce direct competition and raises product’s attractiveness. Moreover, the product is natural and effective, which increases the possibility of being in demand. Nowadays people really care about side-effects caused by different medicaments (many customers, for example, reject antibiotics), thus, providing customers with naturalness is one of the strongest points of the product. Finally, Herbal Chest Packs have real advantages over competitive products (like mustard packs and pepper plasters), it is pleasant to use the Packs, they provide good sleep and don’t hurt the skin as the competitive products.
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