Australian Pharmaceutical Market Audit and Analysis Report

This report presents a comprehensive analysis of the Australian pharmaceutical market, focusing on the industry's growth, environmental factors, and marketing strategies. It includes a detailed market audit, examining the macro and micro environments, and analyzing factors such as demographics, economics, technology, and regulations. The report also features an interview-based audit of a pharmacy, exploring its operations, customer interactions, and sales performance. It concludes with recommendations for enhancing market strategies and improving business outcomes for pharmaceutical companies. The report covers various aspects of the pharmaceutical industry, from market dynamics to specific pharmacy operations, providing valuable insights into the sector's challenges and opportunities.

Marketing and Management
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Table of Contents
Introduction......................................................................................................................................1
PART-1 Pharmaceutical Market Audit............................................................................................1
Part 2: Market Analysis...................................................................................................................2
Marketing Macro-Environment.......................................................................................................3
Micro Environment..........................................................................................................................4
Task 3: Audit....................................................................................................................................5
Q1 How is this Pharmacy described from the options given below?.........................................5
Q2 what is the method of working of this Pharmacy?................................................................5
Q3 How is the pharmacy location described from the following given options? It is in…........5
Q4 what is the working hour of this pharmacy?.........................................................................6
Q5 On which time does this Pharmacy open?............................................................................6
Q6 What is the total floor space size of this pharmacy?.............................................................6
Q7 How is the pharmacy floor space distributed what is the proportion which is given to
them?...........................................................................................................................................6
Q8 How many customers interaction has been done within the pharmacy when customers
visits them to purchase medicines from them?...........................................................................6
Q9 Estimate of proportion of customers served for the purpose of in a month?........................6
Q10 what is the annual turnover of the pharmacy in the year 2018-19 from the following?.....6
Q11 what is the sales figure of private prescriptions from this pharmacy in 2018-19 financial
year. Please give your feedback on the private prescriptions sales and their value?..................6
Q12 which of the following government PSB support pharmacy service does your
pharmacy received in the financial year 2018-19?.....................................................................6
Task 4: Recommendation................................................................................................................9
CONCLUSION..............................................................................................................................10
References......................................................................................................................................12
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Introduction
Pharmaceuticals are the knowledge supported, technology intensive and a industry that
helps in promoting the societies health care. These industries helps in building medical research
and commercialise the resources that are available in the environment. In Australia the pharma
industry comprises of bio medical and bio technological firms which helps in building and
expanding the pharma market in the country. The company taken for the purpose of the study of
the report is Australian Pharmaceutical Industries which was founded in the year 1910 and has a
business in wholesale distribution, manufacturing and retailing of the pharma products. It has its
headquarters in New South Wales, Australia. This report will help in understanding the market of
the pharma companies and the what the environmental factors that are affecting them. Also the
analysis of marketing mix would be done so as to improve the current market level.
PART-1 Pharmaceutical Market Audit
Pharmaceutical industry one of the fastest growing industry in Australia with exports of
around $3.9 billion in the year 2012-13. This sector is one of the leading contributors which has
helped in increasing the manufactured exports figure of Australia at a good rate. It has been seen
in the Australian market that the growth of the industry is dependent upon the pharma drugs,
increasing cognizance of the need for early detection of chronic disease. It has been analysed that
despite being small population country the consumption of medicines is relatively high. The
sales of pharma products in the Australian market helped the country to be ranked as 12th largest
consumer market. The government has also developed a scheme known as pharmaceutical
benefits scheme for all the eligible patients which helps the companies in increasing their market
revenue (Desbordes, 2012). As the industry is not distilled, so there involves a number of
opportunities that will help the pharma companies to expand their business in the country. The
retail pharmacist plays a primary role of distribution of the medicines. Traditionally the
pharmacies have changed over time significantly so that the distribution can be made in easier
way. The supply in the pharma market in Australia are dominated by global companies. As there
is entry of the multinational companies it has resulted in increase in market competitions for the
local suppliers. They are facing a huge amount as they lack funds, which is the strength of those
multinational companies. Despite high turnover and huge amount of opportunities available to
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the companies they are still very fragmented as the customers are not satisfied with the pricing
techniques and the profitability that the companies offer to their customers. The companies
should focus on customer relationship management process so as to promote their brand in the
market. They should primarily focus on marketing, sales and services which they can provide to
their customers. Companies should focus on developing the medicines that does not have side
effect on the body of the person who are taking it. They should develop the products using best
quality of raw materials.
Australian industry of pharma is the largest supplier of Pharmaceutical benefits scheme
by market share which gives the companies to capture the opportunity of gaining maximum
market share. For companies it is beneficial as the dispensing fees is set by the government and
is adjusted on first date of July every year (Gayle and Goodrich, 2014). This helps in increasing
the sales figure for the general pharmacist which in turn make grows turnover of the pharma
companies. As cost of medicine is below the general patients payment cost. So it become easier
for the patients to purchase the medicines. As government prescribes the price of the medicines
in PBS, but the total cost remains uncapped because of which overall cost of the medicines
increases as every day new drugs are added. Different strategies has been made by the
government so that PBS remains affordable for the citizens of the country while providing way
to affordable necessary medicines and helping pharmaceutical industry to grow. Due to this
various stakeholders are affected which includes:
 Consumers
 Dispensers
 Wholesalers
 Pharma industry
Part 2: Market Analysis
Pharmaceutical industry produces, create and market pharmaceutical drugs for their use
as medicines to be delivered for the patients so that it can help in curing them from the symptom.
These industries deal in generic or brand medical services and medications. Patenting,
experimentation, safety and selling of drugs are the subject that is governed by law and
regulations as concerned. Analysing the market for pharmaceutical companies comes across to
the area of demand and it defines it with the help of three important roles of physicians who
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prescribes, patients who consumes and organisations who covers the cost of these finished
products (Grabara, 2013).
Marketing Macro-Environment
Macro environment of these industry acts both on the demand and supplies of the
products in the market. The main work of macro environment is to set a framework of suitable
conditions and common influences deciding all the feature of action in which the market acts.
 Demographic Environment– it is known as the science of population. The demographic
parameters have shown the increasing importance of pharmacy and medicine in
providing a good quality of human life. Pharmaceutical companies reflects huge interests
in the demographic trends. Because, as these trends changes there will be a changing
factor in the demand of the company's product.
 Economic Environment- This is defined by the fluctuations in revenues and in the
structure of expenditure. Whereas, there is a relationship between economic environment
and pharmaceutical companies and it is also represented as fact of life (Wang, and et. al.,
2013). The economic condition is outlined by the time period in the business cycle of an
economy with the effect of rising prices and unemployment rates, accessibility of
resources, purchasing power of the consumer and price of capital.
 Technological Environment- Technological advancement is not fully about the aesthetics.
It includes a vital role in the rising the utilisation of products in a effective way. They are
expected to deliver new products which are more efficient and result oriented to help in
the struggle for life. With technology involvement pharmaceutical industries focuses on
to provide with high service level, extending the drug availability with lowering the price
of the medication. The technological structure of research and development in
pharmaceutical industries requires well developed institutions and laboratories for
research. With a great advancement in technological environment it is possible to test the
actions of various substances at a same period of time.
 Legal and Political Environment- This makes a direct impact on all marketing mix tools.
By, its provisions and prohibitions the governance determines great number of decisions
concerned in the market (Wiedmann and Hennigs, 2012). Like, designing, labelling,
packaging, distribution, advertising, and promotion of goods and services. Legal and
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political regulations are subject of common debate in political life of the country because
health care and availability to medication are sensitive issues related to the society.
 Natural Environment- In these industries marketers are not excused from paying a
thought to sustainable development, featured with concerns troubling all industries and
humanity as a whole (Jamil, 2013). It consist of lack of raw materials, growth in the
energy prices, increasing pollution in environment and affecting the legal regulations
which are already strictly increasing in environmental standards. The relation between
pharmaceutical industry and natural environment results in a complex affect on supply as
well as on demand of the product.
 Social and cultural environment- The behaviour what an individual conducts within a
society is acquired from the process of socialization. Culture is the collective process of
behaviours, values and preferences. Socio-cultural environment in the context of
marketing leads a special attention on the fact that membership of certain groups
determines the way the way in which people look others, organisations, society and
nature.
Micro Environment
Micro environment involves the factors of which help in availability of resources and
many ways that will impact persons and businesses.
 Customers- Any industry cannot successfully operate in the market without attracting a
targeted customer base.
 Employees- workers are the most crucial part for any industry. They are the ones who
produce, sell the products in the market. Availability of a great bunch of employees is a
vital to the success of a company.
 Suppliers- making arrangements for goods used in production process and distributing
finished products to the customers is important as well.
 Competitors- Large number of competitors in a industry signifies huge amount of
demand in the market of products and services. But, also results in diminishing in profit
share.
 Investors- They play a very important role by funding the company at times. They
usually share the operating risk with the company and often helps with expertise also.
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Task 3: Audit
Interview conducted of a medical shop owner.
Pharmacy name: MEDISUPPORT PHARMACY
Tag line: Providing medical aids to the people on time.
This interview is based on a successful business pharmacy shop nearby which has huge
sales turnover and maximum customer satisfaction (Jamil, 2013). The interview conducted
includes the questionnaire with certain choice of answers that are developed so that owner can
choose them with their preference.
Owner of the shop was very kind person and was helping me in answering the questions
that were asked to him. He was clear with the objective and was motivating businessman.
The questionnaire here includes the following:
Q1 How is this Pharmacy described from the options given below?
 Independent community pharmacy that is not affiliated with any group
 Independent community pharmacy that is affiliated with a buying group
 Community pharmacy that is affiliated with banner group
 Discount or warehouse style pharmacy
 Friendly society
Ans: The firm is independent community pharmacy that is not affiliated with any group.
Q2 what is the method of working of this Pharmacy?
 Owner operated
 Manager operated
Ans: Owner operated
Q3 How is the pharmacy location described from the following given options?
 Hospital pharmacy
 Isolated (1-4 shops together)
 Medical centre
 Non-regional shopping centre
 Neighbourhood shopping centre
 Regional shopping centre
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 Strip shopping centre
Ans: It is located in the Medical centre
Q4 what is the working hour of this pharmacy?
Ans: Enter in number of hours up to maximum of 168, round to nearest hour.
Q5 On which time does this Pharmacy open?
 Early mornings (i.e. prior to 9am on any day of the week)
 Late nights (i.e. closes after 7pm more than once a week)
 On Saturdays
 On Sundays
 Public Holidays
Ans: The pharmacy is opened in Early mornings.
Q6 What is the total floor space size of this pharmacy?
Ans: Owner replied that the size of the pharmacy is 25m square.
Q7 How is the pharmacy floor space distributed what is the proportion which is given to them?
 Dispensing prescription medicines
 OTC medicines and therapeutic goods
 Other retail
 Private consulting rooms or spaces
 Any other purpose (storage, office, etc.)
Ans: It is Dispensing prescription medicines
Q8 How many customers interaction has been done within the pharmacy when customers visits
them to purchase medicines from them?
Ans: Customer numbers in 2017-18 was around 80k
Q9 Estimate of proportion of customers served for the purpose of in a month?
 Prescription medicines only- 25000 customers
 Prescription medicine and retail/OTC sales- 1500 customers
 Retail/OTC sales only- 4000 customers
Q10 what is the annual turnover of the pharmacy in the year 2018-19 from the following?
 Total Sales (including dispensary, OTC and retail)- 20Mn
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 All other sources (including revenue from incentives, remuneration and fees
received for services)-8Mn
Q11 what is the sales figure of private prescriptions from this pharmacy in 2018-19 financial
year. Please give your feedback on the private prescriptions sales and their value?
 Sales from private prescriptions (total number)- 10Mn
 Value of all private prescriptions- 60,000 in number
Q12 which of the following government PSB support pharmacy service does your pharmacy
received in the financial year 2018-19?
 Dose Administration Aids
 Clinical interventions
 Staged supply
 Home Medicines Review
 Meds check
 Diabetes meds check
 Residential Medication Management Review
 QUM
 Did not receive remuneration for any of these in 2015-16
 Don’t know
Ans: The pharmacy received staged supply.
Swot of pharmaceutical industry
The SWOT analysis of the pharmaceutical industry is given as under:
Strengths Weaknesses
 Pharmaceutical industry is the most
trustful part of market in Australia
 It has a strong wholesale and retail
network which makes its
sustainability and growth in the
marketplace.
 The dependency on accountants make
controversies. Which affects negatively
on the brand image of industry
 Industry will lose the focus if they
expand their business in different
segments such as personal care, body
building products etc.
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Opportunities Threats
 The awareness about healthcare
products are increasing rapidly which
will become an opportunities for new
players.
 If the pricing scheme of well being
products will remains same it will
create a trouble for the industry.
Pharmaceutical industry is the largest growing sector of Australian country which is
based on research and development of product. The industry is mainly involved in making
generic products and marketing them in suitable manner. For providing products in effective
manner industry have to conduct marketing mix which is given as under:
4P's of pharmaceutical industry
Product- It is related with the offerings of a firm. Industry offers a huge variety of
products in the nation which includes more than 1500 products in therapeutic and high dosage
formats. The industry also provide services such as plant engineering, consulting of medicines,
legislation on the medicines etc. it is the first industry in the world who founded vaccine for
swine flu and gardasil vaccine for human papilloma virus. The innovations and inventions of
industry makes profitability of whole nation (Morgan,2012). With the help of it, the nation has
get recognition from various developed countries such as U.S, France, Russia etc. For make new
innovations Industry have to increase their investment for R&D department which can possible
through taking help of W.H.O
Price - Pharmaceutical industry always concentrate on making a reasonable pricing
industry in the nation for meeting with the requirements of local people. The research and
development team helps in cutting unessential cost from the products so that they can deliver the
products in low prices. As there are three main competitors in Australian country so they have to
make coordination with them due to which they will deliver well being products in low prices to
the lower and middle level income groups. The industry has mainly focuses on pricing policies
so that the local people with having middle or lower income level can easily buy the generic
medicines at low level.
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Place- It is defined as a physical presence of an organisation or where the organisation
provide its offerings to their customers. The pharmaceutical industry has a good market presence
and provide healthcare products in whole nation. The industry is exporting their generic
medicines in various country such as New Zealand, England etc. due to which the nation gets
economic growth in the world. This industry has adopted bio technological systems which will
make good image of Australian country in upcoming time.
Promotion- it is linked with promoting tools which are adopted by the firm for
increasing the sale of product. Industry have a good market presence but they have to organise
some promotional programmes such as health campaign, blood donation camp etc. so that they
can increase the awareness about the healthcare products in the local people of the nation. With
the help of these, company will easily increase their revenue and sales figure (Shaw,2016).
Industry have to take supports from the giant players of pharmaceutical market and know the
needs of customers due to which, they will able in promoting their new innovative products in
effective manner.
Financial analysis of the Pharmaceutical industry
According to financials of the industry 2017 , net profit was 54.2 million dollar which
was upto 5% from the last financial year. The net cash reserve of the industry was 7.2 million
dollar and the dividends of the business was 17%. According to chairman of API (Australian
pharmaceutical industry) they said 2017 was very challenging year in this year they invented
vaccine for swine flu and glaccine virus. Which was the largest achievement in the
pharmaceutical industry. They have increases the investment on R&D department from 5 million
dollar to 7 million dollar. The turn over of the 2017 was 57.4 billion dollar. The expenditure of
the industry was increases from 23 million dollar to 37 million dollar which was around 14
million dollar. The export of the generic medicines has been increases from 3.89 billion dollar to
8.89 billion dollar. As per the financial report of the industry the market share of Pfizer was 9%,
Sandoz with 4%, API with 13%,sigma with 11% and Symbion with 14% and remaining 49%
was held by the other pharmaceutical companies. Industry has made a legislation with the
support of the president of Australian country of fair pricing in the pharmaceutical industry due
to which the lower and middle income level group will easily purchase the necessary generic
medicines from the retailers and wholesalers at low prices. In future time, Industry can move
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their business in making beauty and cosmetic products which will provide more profitability to
the firm.
Task 4: Recommendation
The recommendation that is developed from the analysis of pharmaceutical industry is
that, in the country there is a better scope for companies to expand their market share. As the
government has developed various schemes which helps in increasing the health of people in the
country. The PBS scheme of government helps in achieving the targeted sales by the retailers as
citizens gets cheap and quality medicines which help in recovering in a faster rate.
From the interview taken of a retail pharmacist it has been seen that companies like API,
Cipla, GSK are the major players that have maximum market share in the country. In the country
the number of retail outlets are very few as compared to the patients due to which there is a
opportunity to maximise the sales. Different companies in the market give the retailers the
maximum profit to promote their brands over others (Shen, Wang, Lo and Shum, 2012). People
in the country are literate about their health due to which they are able to maximise the sales
figure. In the country online marketing tool has been developed that helps the customers to order
the medicines while sitting in the home. This helps them to achieve the target of maximising
control of health care issues which arise in the people of the country.
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Illustration 1: Pharmaceutical Industry Turnover in Australia

CONCLUSION
It has been concluded from the above report that there are various factors who influences
internally and externally to an industry. For this, a proper SWOT analysis and pestle analysis is
most appropriate method. With the help of it, industry will able in know the goodwill and growth
of the product in marketplace. For making sustainability and success of the product, the
marketing mix is an effective tool through which they can know the quality and market presence
of their product and services. With the help of these methods, industry can decide their future
innovations and introduce new products according to the demands of customers.
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References
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Jamil, G.L., (2013). Approaching Market Intelligence concept through a case analysis:
Continuous knowledge for marketing strategic management and its complementarity to
competitive intelligence. Procedia Technology. 9 pp.463-472.
Jamil, G.L., (2013). Approaching Market Intelligence concept through a case analysis:
Continuous knowledge for marketing strategic management and its complementarity to
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Morgan, N., (2012). Time for ‘mindful’destination management and marketing. Journal of
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Shaw, S., (2016). Airline marketing and management. Routledge.
Shen, B., Wang, Y., Lo, C.K. and Shum, M., (2012). The impact of ethical fashion on consumer
purchase behavior. Journal of Fashion Marketing and Management: An International
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Wang, D., Li, X.R. and Li, Y., (2013). China's “smart tourism destination” initiative: A taste of
the service-dominant logic. Journal of Destination Marketing & Management. 2(2).
pp.59-61.
Wiedmann, K.P. and Hennigs, N. eds., (2012). Luxury marketing: A challenge for theory and
practice. Springer Science & Business Media.
Xiao, H., (2013). Dynamics of China tourism and challenges for destination marketing and
management. Journal of destination marketing & management. 2(1). pp.1-3.
Online
Pharmaceutical Industry Turnover in Australia, 2018. Available through
<https://archive.industry.gov.au/industry/IndustrySectors/PharmaceuticalsandHealthTec
hnologies/Pharmaceuticals/Pages/PharmaceuticalsIndustryDataCard.aspx>
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