The Internal and External Environment of Allergan Botox - Case Study Example

? SWOT Analysis of Allergan Botox Marketing Mix Strategy - Canadian Market for Fiscal Year 06/12/11 Table of Contents Requirements 3 Botox 3 Allergan 4 Strengths 4 Weaknesses 5 Opportunities 6 Threats 6 Marketing Mix Strategy – Year 2010 7 Sources Cited 7 Requirements Conduct a SWOT analysis on the internal and external environments relevant to Allergan pertaining to their Botox product. Once you have completed the SWOT assessment, develop a marketing mix strategy for Botox for the Canadian market for fiscal year 2010. Botox The introduction of Botox into the cosmetic surgery or dermatology market has led to the creation of a multi-billion dollar sales industry for Allergan as the manufacturer of the product. Botox is derived from the botulin poison and used to paralyze the nerves and thus movement in certain parts of the face, particularly around the eyes, forehead, mouth, and nose, creating an appearance that is free of the age associated wrinkles. This treatment is considered a luxury purchase in Canada and worldwide, though is reasonably priced at around $2000 for a 3-6 month treatment on average. Because of this, the proposed marketing plan will address the ways to increase sales primarily in the luxury market, while also recognizing that Botox may become useful in the treatment of other diseases, such as migraines, chronic pain disorders, or nerve issues. Allergan states that Botox has “has virtually changed the face of medical aesthetics” and the widest application of this pharmaceutical is in cosmetic related procedures that are non-surgical and relatively quick for the patient to receive. (Allergen, 2011) Nevertheless, there may be competitors or legislative decisions that adversely affect the Botox market, such as taxation in the United States that would target Botox treatments and other types of cosmetic surgery with a type of luxury tax. As this is not expected to pass in Canada in the foreseeable future, the wider issue would be the assumption of medical coverage for Botox treatments popularly. There is increasing use of Botox in Canadian hospitals covered under national healthcare plans that include the use of Botox as a treatment for migraines, but there is little coverage under these plans for cosmetic procedures. Because of this, Allergan should pursue a sales and marketing plan for Botox in Canada that targets the medical uses of the drug to the hospital and private practitioner community while providing additional literature on the cosmetic use of Botox to all practicing cosmetic surgeons in the country. The next section will examine the existing corporate strategy of Allergan to see how it can be supplemented or improved for Canada. Allergan It is clear that Allergan CEO David Pyott’s plan for Botox has been widely successful, and the company is already pursuing a dual marketing plan of providing the background information on the medical uses of Botox to doctors in hospitals and private practice in Canada, while building log term relationships with cosmetic surgeons and dermatologists who specialize in the procedure. The advertising of Botox in the professional class is largely established through word of mouth and the becoming of “Botox” a publicly recognized term, like “aspirin”. This success in building the brand identity can be considered the highest accomplishment of Allergan’s existing marketing campaign, and this brand identity will fuel future organic growth in Canada. Strengths The strengths of the Botox product is its cosmetic use, though increasingly the medical significance of Botox in migraine and nerve pain instances points to a large and growing market share. Because there are few existent competitors for this product, and because it gives professionals an advantage in an appearance oriented career such as acting, modeling, publicity, etc., the procedure itself can often be justified as a business related cost or investment. This aspect is also related to the inevitable fact of old age and the need of society to worship the youthful aspects of beauty over the signs of age. As such, Botox markets directly to primal human nature and vanity, promising something that cannot be achieved practically, which is the avoidance of the signs of aging, but providing some alleviation of the physical symptoms as they appear in facial wrinkles. Like liposuction, cosmetic surgery, breast implants, make-up products, deodorants, soaps, and perfumes, there is a large market in Canada and internationally for personal appearance products. If Botox is truly successful in providing a relief from the symptoms of aging as they effect beauty, as studies and personal response suggest that it is, then the major strength of Botox is that it is a repeatable treatment that is related to fundamental human fears of aging and loss of beauty in a primarily appearance and youth oriented popular culture. Weaknesses The weakness of Botox is in any possible side effects that may occur as part of its use and as recognized. As with any pharmaceutical product initiated into a mass market, there could be allergic reactions in a minority of instances that are distinct from mainstream acceptance of the drug. With these side effects or adverse symptoms comes the inevitable risk of legal action or collective law suits from those claiming damage from Botox treatment. While there has been no widespread reporting of adverse reactions to a primarily cosmetic treatment, there additionally may not have been adequate long term studies on the repeated use of the treatment, as it is still relatively new on the market. Opportunities The medical use of Botox in migraine treatment and nerve related pain in the Canadian hospital treatment context is one of the largest opportunities for continued growth in Botox sales for Allergan. Along with this would be a wider adoption of cosmetic treatment among the population, as could be expected in an economic boom period where there is more excess income or quick profits from stocks and real estate that lead to more luxury treatments and cosmetic procedures across the larger society. Threats The threats to Botox and Allergan’s market share is essentially found in government legislation, medical related illnesses or adverse reactions appearing from Botox use publicly, and the arising of competitive products from other pharmaceutical companies. The introduction and approval of Dysport, Xeomin, and other drugs acting similar to Botox could promote a price war in the cosmetic sector and lead to more reasonably effective medical treatments operating on the same principles and pathways as Botox. These competitors and other knock-off, duplicates, and generic products will be the continual threat of eroding Allergan’s margins and sales until the patent for Botox itself finally expires. Marketing Mix Strategy – Year 2010 As there may be hundreds of thousands of chronic migraine suffers who could benefit from Botox, and even more patients seeking treatment for nerve related pain, Botox could become more widely used in the hospital environment as a multi-use drug suited for many applications. Nevertheless, the cosmetic treatments should continue to be the predominant driver of sales and as such should be promoted specifically. The magazine advertisement campaign of Allergan has been successful in making it a brand name product recognized worldwide and also sought out in many cultures related to beauty treatments. Because of this, the cross-marketing of Botox treatment facilities and specialists with beauty treatment parlours, make-up stores and specialists, hair studios, and the like would be recommended. The make-up, hair style, and perfume industry should provide cross-over marketing demand of the most specific and concentrated sector of demand for these types of cosmetic procedures in Canada. The other way to enter this market efficiently is through women’s magazines and fashion literature. As Botox has reached word of mouth exposure and brand name recognition, the Canada ads should be very practical in assisting people to get connected with the treatment facility locally. Sources Cited Allergan, Inc. (2011). BOTOX® Cosmetic (onabotulinumtoxinA). Allergan, Web. Retrieved from http://www.allergan.com/products/medical_aesthetics/botox_cosmetic.htm Kotler, Armstrong, & Cunningham (2005). Principles of Marketing, 6th Can. Ed, Pearson Education, Canada. Read More