Pfizer Inc.

Animal Health Products; Market segmentation & Industry Change

By: Goutam Dey Md Kalim Ahmed Pritha Chakraborty Shashwat Chandra Suryaneel Hazra Sudip Mahato

Story to tell!!
US

has one of the highest beef consumption in the world but the beef producers are facing issues. With regard to those issues Pfizer Inc, a cattle health product producing company is facing issues thats need to be resolved. Pfizers pride is its sophisticated research & development over the period of time.

Tit-bits to be known
Pfizer

has a 15year old segmentation model for the cattle users, the end users of the product. The beef quality is the main criterion of concern for Pfizer with respect to Taste Quality & yield. The competitors in the market are pork & chicken.

Contd
Segment Number of cattle <100 100-499 500+ Number of operations 808000 69000 5900 % of National Cattle Inventory 50 36 14 Hobbyist Traditionalist Business Segment Hobbyist

Segment Characteristics Age:50 years Experience:26years College Degree:15% Age:51 years Experience:30 years College Degree:26% Age:53years Experience:33 years College Degree:22%

Traditionalist

Business

Problems faced:
Growing

health conscious mass Lean meat in demand Branded beef non availability Producers ignorant to health of the beef: causes attached to such behavior shown Lead for ignorance is cost to revenue miss-match The value for health is not given when sold

Research approach: Segmentation evaluation

The

industry is dynamic: the segmentation is static for 15 years. The hobbyist are the majority chunk(50%) the cattle numbers are limited, the operational size of the concern people are also huge to be monitored properly. The cattle producer relationship is most for business followed by

Contd
The

segmentation is such noted that the educational level & work experience are contradicting to the 50% inventory hold for each group to be looked upon. The basis is such that the target customers are diffused among the group with no proper group to be targeted for end association.

Contd
Educational

level leverage: understanding of the need of vaccination & other health related products for cattle, flexibility to drug improvement Experience: works on intuition & knowledge gathered over the years, rigid to changing drug association & need for improvement, traditional ways are the priority rather than a check on growth of formalization.

No best way

Further slides talk of few means by which the segmentation can be done with its own pros & cons which are discussed here within
NOTE: the case has qualitative data with limited quantitative data thus the suggestion does not have accurate quantitative analysis for support

Method 1:
On
Segment Old Mediocre New

basis of Experience:
Experience 33+ 30-32 26-29 Percentage Inventory 14% 36% 50% College qualified % 22 26 15

Pros & Cons

Pros: The

segment gives the target customer to be the mediocre group where the segment is manageable with the lot size, & flexibility to change with the educational level. The segment gives a vivid idea of the enforcement that is needed in each group with the level of persuasion to be made. The segment do give a demarcated group to work with various need &

Cons
The

group variation with the experience level is very narrow. The group have a diffused customers with large lot size. The transition of the members to various group is high thus not suitable for long term(though the system is dynamic a certain level of stability in segmentation is needed.)

Method 2:
On

basis of the veterinarian visits: 2 marked different group one who approaches the vets for health check up & one who do not associate with vet for health issues. 2 major group with 2 major variant is association & 2 different strategy needed for

Pros:
No

diffusion is made in identifying the target customers. The end users are persuaded on basis of their understanding of the necessity to health products. The veterinarian once associated a more authentication to prove the products is gained. Persuasion strategy can be developed on basis of the mind set of the group.

Cons:
2

groups to associate such a huge market is a tough issue to handle. No association to specific customer within the group cannot be made as the group is homogenous with respect to attitude towards drugs. One problem the input to output cost for producers (driving cause for disassociation to drugs) is not effectively met from companys side.

Method 3:
On basis of the packers: 5 groups to be made:
Packer1 Packer2 Packer 3 Packer 4 Others

80%

of the total market is being controlled by the 4 packers; thus each packer has a large database & customer association which can be worked upon to pull in drugs in the market as the packers are the price setter.

Pros:
The

cause for drugs disassociation among producer is the input & output cost & the fact that the health cattle are not given their valid worth. Thus the segmentation would give in a way to bring in the pull by influencing the end buyers to bring in health cattle in the business with proper worth. Indirect way of influencing the producers to buy drugs. The price decider association with drug usage would lead to the ultimate purchase as the need of the market.

Cons
The

process needs a fresh outlook to the system as the target customer is completely changed with association to packers being the influencer. A varied strategy to ask the packers for life cycled monitored & vaccinated healthy cow needs cost for the company, & persuasion to raise the price for the cattle.

Generalized approach to industry changes

NOTE: the point might be valid for one group & not for the other.

Capitalization on changes in cattle industry:

The

major influencer: veterinarian; packers Method 2 associates the issue to segment out the influence of vet to have varied approach to deal with each group. Method 3 associated the issue of the input & output cash flow in the business which is the driving cause of disassociation to drugs.

Contd
The

industry is changing in reference to branding & health conscious issues thus the association of drugs for more standard & uniform product is needed. The driving factors once being identified has been cashed in each method to relate to the changes in the industry.

Implication of industry changes on Pfizer:

The

customer drive to buy product is changing from asset to liability. Thus the driving force being different the push & pull strategy implemented by Pfizer needs to change with time with the driving factors in mind. The segmentation that held true 15years back has been an unmanageable & diffused way of generating lead for marketing of

Research Segment
Hobbyist Number of Interviews Size of Herd <100 100-250 251-500 501-1000 >1000 3 3 Traditionalist Business 6 3

2 4

2 1 1

% of time spent with cattle <80% 81-90% 91-99% 100%

2 1 1 5

Research Findings
Hobbyist 2 traditionalist 9 Business 4

The

information suggest the disproportionate association of the various segment in qualitative data review. The cross of the number of operation to the inventory hold in the system is not being efficiently acknowledged in the research. The research has qualitative data but the case is to generate the revenue & proportionate appreciation of the segments which is not being met. The focus is the traditionalist which is not having the major chunk.

Marketing Strategy
Objective: Create

pull in the market for the producer to standardize the ranching process. Branding of beef in the market. Awareness of drug utility among ranchers for better growth.

Pull Strategy
Packers

being promoted for brand with the usage of standardized products. Branding being done in association with the packers individual product line for standardized beef. (motivation to ask for vaccinated cattle) On shop sampling of the product done so as to give the 1st hand result for realization of the standardized product. Co-branding with packers & veterinarian can help in mass

Branding Strategy
Awareness

campaign among the end customer for beef improvement on Fat content check More process meat products availability in the market with value addition being promoted on air & other media so as to compete with chicken & pork products. The corporate branding of the 4 packers to be made for the 3rd type of segmentation so as help create pull via branding.

Path for

The strategies would help to create the demand for standard product line among consumer which would relate to Pfizer growth.

Thank You