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Entering a new market is a challenge that requires thorough analysis. The given situation portrays the emergence of the new segments in the pharmaceutical, personal care, and nutritional industries – cosmeceuticals, nutricosmetics, and nutraceuticals. These sectors are rapidly growing, and there is a geographical dominance observed with China and Japan, accounting for 90% of the global nutricosmetics markets, and the USA dominating the nutraceutical segment at approximately 45%. These sectors started expanding in Australia. That is why it is vital to analyze the trends in these industries in the case of entering the market.
The available survey covers eight questions that provide the most necessary information that should be analyzed before entering the market. If thoroughly assessed, it will help to understand the current situation in these segments in Australia and what segments are underdeveloped. What is special about this study is that it includes a question that is of extreme importance while conducting any analysis – the accuracy of data (Statistical Services Centre 19).
Because every respondent provided the confidence rating, the insight specialist can choose to focus on the answers with the highest rating because they will be the most accurate. The coverage of the survey is enough to decide which segment to enter, as it provides the information about income, product type, age band, and monthly spending on products of every segment in all states of Australia. The fact that the data is provided for every state is also useful because it will help minimize the risk of making errors while estimating the segments as it provides strata of the survey (Chromy and Abeyasekera 390).
Analytic Solution 1
The first solution is to analyze the level of segment development in the states. It will be achieved by assessing the popularity of every product type in every state. The motivation for this solution is that before entering a new market, it is necessary to conduct its analysis (Stark and Stewart par. 4). Finding out the demand for each product type is the first and foremost step in the estimation. Moreover, it is necessary for defining the entry points (“How to Enter a New Market?” par. 2), as it will help determine what segment is least developed but is characterized by the highest rates of demand.
Analytic Solution 2
The second solution centers on the end consumer, as the individual is the one who decides the fate of the business (Varma par. 4). It is another step in analyzing the market that will help in determining its size with special attention to the percentage of customers in every segment and their monthly spending on the products of the chosen industry (Horn, Lovallo and Viguerie par. 14).
Conclusion – Recommendations
Based on the findings of the survey, the first recommendation is to enter the nutraceuticals market. The motivation for this recommendation is that most customers give preference to the products of this industry because there is a stable demand in all states with the exception of Queensland (See Figure 1).
The consumer analysis shows that entering this market is beneficial because customers are willing to spend money on these products. Even though their spendings are higher on the products of other segments, it is better to enter the segment with fewer competitors than in the developed one (See Figure 2).
The overall recommendation is to create a joint venture (Stark and Stewart par. 8) because it is an effective way to minimize the risks of failure and share the responsibility. Furthermore, it is another strategy for finding additional funds that are necessary when entering a new market.
Chromy, James R. and Savitri Abeyasekera. “Statistical Analysis of Survey Data.” Household Surveys in Developing and Transition Countries. Statistical Division of the United Nations. New York, New York: United Nations, 2005. 389-419. Print.
Horn, John T., Dan P. Lovallo and S. Patrick Viguerie. Beating the Odds in Market Entry. 2005. Web.
How to Enter a New Market? 2014. Web.
Stark, Carl and Bill Stewart. 5 Step Primer to Entering New Markets. 2013. Web.
Statistical Services Centre. Approaches to the Analysis of Survey Data, Reading, United Kingdom: The University of Reading, 2001. Print.
Varma, Samit. 3 Tips for Entering a New Market. 2015. Web.