Managers often rely on situational analysis in order to better understand a company’s customers, capabilities, and its environment. This is important in understanding Pharmacia and Upjohn, Inc.’s decision to change the distribution of their product. This is also essential to understanding the application of goals set in place by the ensuing marketing plan. Generally, this analysis is an integral part of the marketing plan, as it defines the company’s positioning in the market. External Analysis
In understanding Pharmacia and Upjohn, Inc.’s positioning, one must first consider the external facets that influence it. For instance, a well-designed product that is effective, inexpensive to produce, and touted by a major brand leader, carries a very limited potential for profitability if in fact there is no market in which to sell the product. For that reason, it is critical to first evaluate the market itself. Size (Current and Potential Revenue)
In terms of market size, the Rogaine product team can rest easy knowing that there is no shortage of people who are affected by the very misfortune that Rogaine remedies. Specifically, this product works to reverse Male Pattern Balding (MPB). Prior to rebranding Rogaine from a prescription only drug to an Over The Counter (OTC) treatment, revenues in the United States alone exceeded $700 million (between 1988 and 1995). It is estimated that there are 38 million men in the United State who suffer from MPB, who also fit the consumer demographics detailed later in this analysis. Though, this product is not only for men. There are roughly 20 million women in the United States that struggle with thinning hair, and in turn spend an estimated $300 million every year to remedy it. Of course, there are limitations to this vast market imposed by the product itself, in the way of its cost, availability, and practicality. One critical note, however, is that there is little promise...
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