Actavis and Allergan: A New Prescription Drug to Eliminate AIDS/HIV Virus

Introduction

Nobody would deny the fact that marketing is an integral element of any successful business. This discipline addresses the main issues regarding sales, advertising, branding, and delivery of a company’s products. Sometimes, marketing becomes a pivotal component of the business as it makes a significant impact on a company’s performance. A peculiar example can be provided by Actavis, the company that performs in pharmaceutical industry. Recently, the company acquired another firm named Allergan. These two firms worked on the research and development of a new prescription drug that would eliminate AIDS/HIV virus. The situation about the further presentation, distribution, and sales of the new prescription drug is quite specific. Therefore, applying of the basic concepts is a reasonable decision in this situation. Regarding that, the following paper gives an account on the marketing perspective of a new prescription drug presented by Actavis and Allergan.

1. What Are the Key Distinctive Competencies that Actavis Has with Their New Drug and Are They Likely to Become Sustainable Competitive Advantages Once the Drug Reaches the Market?

To begin with, one should admit that Actavis’ new drug is a strong competition to any other drug as long as the company factually presents an innovative product. In other words, Actavis is likely to obtain all advantages of a pioneering company. To be more exact, it will dictate its rules regarding the trend on such type of product. That includes segmentation and targeting, pricing, and value. The latter factor, however, is semi-dependent on the firm’s success. Still, these advantages seem to become sustainable if the quality of a new drug renders a desired value. The innovative process of a new drug took a considerable period of time so that the competitors of Actavis would not be able to acquire a similar type of product so quickly.

2. Who Would You Identify as Your Key Competitors, if Any, with Regards to This Specific New Drug?

Abbot Laboratories should be regarded as the primary competitor of the company as this corporation has managed to develop a HIV blood-screening test earlier than Actavis. Therefore, this firm obtains a sufficient experience in innovation of products. This means that Abbot will acquire a new drug faster than the other competitors. It is also worth saying that Abbot Laboratories keeps increasing its total revenues while its assets have relatively decreased. With reference to its operating income, one can assume that this enterprise plans to launch an innovative project as it stops striving for its horizontal growth. This aspect is an obvious advantage for Actavis since its market as well as corporate size is wider, which allows meeting the same objectives distinctly faster. Still, Abbot Laboratories optimizes its resources for making a huge step regarding some innovative product.

3. Develop a Suggested Basis for Segmenting the Entire Prescription Drug Market That Actavis Competes in, which Includes All Possible Prescription Drugs Offered to the End Users by All Competitors

Since a variety of diseases and disorders as well as their possibility to occur to a certain age or gender is quite wide, it would be reasonable to segment the entire market in accordance with their extents of specification and frequency of use (Perri & Rollins, 2014). In such a way, the first segment can be comprised of prescription drugs that are required for diseases with high infecting potential. This group should include products required for an immediate treatment of a patient. The second group has to be comprised of products prescribed to specific cases of treatment in terms of therapy course after heart attacks, prevention therapies, and so on. The third group should include prescription drugs of comparatively rare use for especially serious cases.

4. Estimate the Unit Market Potential for the United States for the AIDS/HIV Market in Terms of the Number of Estimated Prospects for the Next Five Years

The recent estimates of the U.S. citizens living with HIV reaches a number of approximately 1,800,000 persons. The lower estimates predict that number of infected U.S. citizens will decrease to approximate number of 1,200,000 persons. Such a tendency can be described as a fast decrease of new cases of HIV since 1994, which means that a new product by Actavis will be an additional booster of elimination AIDS/HIV on the national level as well as worldwide (“Global Statistics”, 2014).

5. By Entering the Aids/HIV Market for the First Time with the New Prescription Drug, which Is Included in the Category of Antiretroviral Drugs, what Type of Corporate Growth Strategy Is Actavis Following?

As long as Actavis enters the market with a new product, it is becoming increasingly apparent that vertical innovative product growth can be observed. The corporation did not extend its existing product lines or update the already existing products. Instead, a result of a long research will be presented. It is a distinct strategic advantage, as the entirely new type of prescription drug will be introduced on the domestic market upon the recent acquisition of Allergan. The company will be pioneering while the product obtains high value since its effects are predicted to be 95% successful. It is a reasonable strategy as vertical growth is more feasible after certain achievements regarding horizontal one because a larger enterprise has more capacities to perform innovative tasks.

6. Which of Porter’s Four Possible Competitive Strategies Do You Recommend Actavis Use when Introducing This New Specialty Pharmaceutical Drug?

Focus competitive strategy is the most appropriate one among the rest of competitive strategies by Porter. It can be explained by the fact that a new prescription drug is particularly oriented at elimination of AIDs/HIV, which is a relatively rare disease in comparison with the other infections and diseases. Therefore, focusing on the quality and maximally convenient delivery of the product, Actavis will benefit more instead of attempting saving costs. That strategy will be ineffective, as a recently designed product requires substantial costs that cannot be saved immediately without reduction of the product’s quality. It is obvious that any deviation of quality cannot be accepted regarding this product as it implies a direct connection to a customer’s life. For the same reason, product differentiation should not be utilized as a new product is expected to be innovative and unique to the entire market.

7. Clearly Define the Specific Target Market to Be Pursued with This New Drug in the United States Based on Your Overall Segmentation Scheme Defined in Q3?

AIDS/HIV is a well-known disease, but it occurs less frequently than other diseases and disorders. Every single case is recorded, and Actavis has to focus on the segment of the third group of products. In addition, AIDS/HIV is a serious and difficult to treat disease; therefore, specific attention to it is well-justified. Thus, the enterprise needs to render a maximum of effectiveness and accessibility to its target segment as long as availability and quality of the new product are responsible for saving the patients’ lives.

8. What Are the Key Needs and Wants of Your Recommended Target Market in Q7?

As it has been already mentioned, the key needs of the given target market are to receive access to the new prescription drug as soon as possible because the patients’ further life will depend on that product. Accessibility should be regarded as a factor that includes not only a widespread availability, but also a reasonable and affordable price. One may argue that it is hardly possible regarding the fact that the product has been recently developed and any cost savings will mean loss of quality. It is certainly true, but Actavis should calculate a maximally balanced price even though it will receive fewer revenues. The product will be sold at any price as long as a matter of a further life is the soundest reason to purchase the product. On the contrary, such an approach contradicts corporate values of Actavis that has always delivered affordable and guaranteed quality of its products all over the world (Katsanis, 2015).

9. Considering the Five Patterns of Target Market Selection, which One Most Appropriately Reflects the Pattern Followed by Actavis as a Company?

As the new product is quite specific, it would be appropriate to enter the market in accordance with Single Segment Concentration pattern. This choice can be explained by the fact that target audience of the product has relatively specific needs. To be more exact, customers who do not have AIDS/HIV will not need this product at all since it produces an effect of elimination of the HIV virus only. In addition, Actavis will need to focus on a constant improvement of the product’s quality and accessibility. Addressing the needs of the related target segment will result in high returns on investment even though the company will have to leverage the price on the new product (Smith, 2014).

10. Develop a Positioning Concept or Statement for the New Drug for Your Proposed Target Market

The new prescription drug has to be positioned as the first, unique, and an up-to-date method of elimination AIDS/HIV. The new product should be perceived as a revolution in the entire industry as it is the first potentially successful way of curing AIDS/HIV to the extent of the full recovery of a patient. Apart from that, branding statement needs to deliver a message that this product should be relied on (Perri & Rollins, 2014). There is no doubt that the positioning concept is supposed to address the patients’ expectations fully, as their lives will depend upon the effectiveness of this drug. It is also possible to place some emphasis on the relatively low price. This aspect is recommended for presentation at the angle of common accessibility so that every single citizen with AIDS/HIV is able to afford the new way of treatment.

11. What Type of Collaborative Strategic Relationship Did Actavis Have with Allergan when They First Worked on R&D Together Beginning 4 Years Ago to Develop This New Drug?

Actavis and Allergan had a partnership type of collaborative strategic relationship. It can be explained by the fact that they were particularly focused on the achievement of a common goal. The goal was to design a new prescription drug for the elimination of AIDS/HIV virus. At the same time, both companies strived for their own objectives. Both of them attempted to improve their vertical corporate size but on different markets. Actavis was directly tied to the United States domestic market while Allergan needed to gain more market value within Ireland and the United Kingdom. Later, strategic partnership changed its form as Actavis acquired Allergan. Such a relationship will align strategic needs of both companies, and the final goal will be easily achieved.

12. Using The Booz, Allen & Hamilton Classification of New Product Strategic Alternatives, how would You Classify the Introduction of the New Drug?

It is obvious that the new prescription anti-AIDS/HIV drug belongs to a group of new-to-the-world products. This is the first product in its category so it creates an entirely new market and establishes a new product line. The product has been announced to be completely innovative, and a choice of any other product strategic alternative cannot be accepted. Thus, it is supposed to be introduced as a revolutionary breakthrough for the entire industry. What is more, such an innovation will attract attention of the entire civilized world, as AIDS/HIV is known to be one of the most dangerous diseases, and it is nearly impossible to cure. Therefore, the product that will address the problem of AIDS/HIV has to be presented as a unique way of medication for this disease.

13. Do You Think This New Drug Is a New Product Category or an Additional Entry into an Existing Product Category?

It is certainly true that the new product creates an entirely new product category as long as its effects are unique. The rest of the AIDS/HIV-related drugs were oriented at prevention of the virus development and they just postponed death of the AIDS-infected individuals. The new prescription drug eliminates the virus itself so its effects are quite different. The drug is similar to the already existing products, but produced effects make this product become a trend creator. It is possible to forecast that this drug will create the entire diversified product line that will include specific characteristics for different ages, genders, and so on. Overall, it should be admitted that this product is likely to establish the entire trend within the domestic market and entire industry.

14. Is Actavis Pursuing a Pioneer or Follower Market Entry Strategy?

As it has been already mentioned, Actavis plans to obtain a pioneering strategy regarding the entry of the domestic market. It is a rather obvious decision as the firm has developed an entirely new product that is expected to become a breakthrough product category within the entire industry. If Actavis pursues a follower strategy, it will not introduce such type of product as long as none of the similar drugs exists before the research of the corporation. To the greatest extent, the company has only one strategy to choose in this case as follower market entry is completely impossible. In addition, it is worth saying that Actavis acquired Allergan in order to optimize resources of both companies for the creation of the new product so that a follower strategy was avoided. One may argue that Actavis would become a leader without acquisition of Allergan, but one should say that there was a chance to lose a competitive advantage as some other product might have emerged.

15. Recommend a Brand Name for This New Drug

‘Kill HIV’ is suggested as a brand name since it reflects the primary effect of the new prescription drug and contains a slogan that motivates a potential customer to purchase the product. The brand name may seem to be quite unusual for the AIDS/HIV pharmaceutical industry, but such a revolutionary product hast to be branded with some strong name in order to outline its abilities to the public (Katsanis, 2015). What is more, the slogan should sound positive and confident so that potential purchasers could feel more optimistic about their treatment. The brand name alludes to a well-known movie Kill Bill, so pun in the brand name makes it easy to memorize as such word expression is relatively known for every single U.S. citizen. Apart from that, the entire slogan may sound like ‘Kill HIV as your ill is already killed’ so that a pan in the word bill will mean that the product is affordable for everyone.

16. Based upon Your Brand Name Recommendation in Q15, what Type of Brand Identity Strategy Are You Following?

It is obvious that individual name for the brand identity has been chosen. The name is based on the unique combination of words, conveying a message that this product is particularly oriented at elimination of the HIV virus. It also creates a new product line, so the further expansion of the products will be initiated under this brand name. Such choice is quite reasonable from the perspective of advertising since the brand name is motivating, easy to remember, and it presupposes an appropriate slogan. Likewise, it would preserve Actavis from damaging its corporate image. If the brand fails, it will not be associated with the entire corporation that owns the brand (Smith, 2014).

17. What Type of Brand Leveraging Strategy Is Actavis Following with the Introduction of the New Drug if They Use Your Proposed Brand Name in 15?

Actavis would have to follow a vertical strategy of brand leveraging as long as it plans to extend its product line regarding specification of age, gender, and other factors so that the products were the same but with different target segmentation (Perri & Rollins, 2014). In addition to that, price reduction in accordance with certain factors and addition/exclusion of some effects should be included as well. In such a way, the entire diversification will revolve around one product that will be modified according to a specific target segment and requirements for cost-saving strategy. For instance, such products as ‘Kill HIV female’ or ‘Kill HIV Kids’ may be developed.

18. Define Your Channels of Distribution Strategy by Developing a Channel Map for Sales of Your New Drug in the United States

The map above describes the distribution channel for the new prescription drug. It becomes abundantly clear that such type of products does not require a developed channel of distribution. First, it can be explained by a legal requirement for a doctor’s prescription so this drug cannot be purchased without a related documental approval. That is why only hospital pharmacy stores should be supplied as other stores may sell the product without prescription, which will lead to opening of the entire shadow market and internal smuggling. One should note that the new product does not need a wide distribution because of its specific use and limited number of potential customers, while its supply chain is supposed to be sufficiently developed as the products have to be delivered on time and on a regular basis.

19. Based upon Your Channel Map, Will You Be Using Direct or Indirect Channel Strategies or Both?

Direct channel strategy will be used as the entire channel presupposes only two directions: healthcare organizations and hospital pharmacy stores. It is worth saying that some healthcare organizations will be enabled to order the new product in terms of the on-demand distribution. In other words, these healthcare companies will order the product only when some patient is diagnosed with AIDS/HIV. That will save costs on logistics so that Actavis is able to deliver the product without involvement of the third party (Katsanis, 2015). Again, it is pivotal to place the emphasis on the fact that this is a prescription drug, and that is why its trade and distribution are comparatively limited. Therefore, the enterprise does not need additional assistance regarding distribution since it is not cost-effective.