The Pharmaceutical Industry

I'm intending to write done my recent throughts on the pharmaceutical industry. Until I have the time though, so interesting articles and books:
The Truth About the Drug Companies

NYTimes: Where has all the Prilosec gone?

NYTimes: Do New Drugs Always Have to Cost So Much?

Coca Cola and BOP Strategies

Coke recently successfully implemented what might be considered a base of the pyramid strategy. Traditionally Coke has sold the exact same product it sells everywhere else in the world at the exact same price in China. Often that meant that Coke's products were more expensive then the average person's dinner in a non-coastal chinese city. "Fruit Pulp Orange" represents an interesting departure.

To quote from the economist:

Orange Gold; Softdrinks in Asia.

Coca Cola strikes it rich in Asia with a new drink

A DRINKS company must be able to depend on a powerful brand; but it also needs to come up with sought-after novelties. The odds against such a thing are staggering. Every year thousands of new drinks are created; a few go on the market; none may survive. The selection in many vending machines has barely changed, if it has changed at all, in a generation. So the success of Coca Cola's new orange-juice drink, developed in China, is a rare triumph.

In most parts of the world Coke's sales are driven by the famous fizz, with richer countries, where calories are all too abundant, leaning increasingly towards Diet Coke, developed in 1982, and poorer countries leaning towards the original sugary stuff dating back to the 19th century. The southern belt of China, which is rich by local standards, but not by global ones, conforms to this model. Not so China's poorer interior, where the dark colour of colas is associated with the dark tea traditionally used to mask the sediment in the local water. Here consumers prefer the clear, citrus-flavoured Sprite, developed in 1961.

After much consumer and product research at a new laboratory in Shanghai, Coke came up with a drink that combines the ingredients of plain old orange juice—including some juice and real pulp, accounting for about one-fifth of the liquid—with calcium, vitamins and lots of water. The diluted drink costs about $0.30 for a 500ml container, or about a quarter as much as pure orange juice. Following a small test-marketing project in 2003, "fruit pulp orange" has steadily been rolled out across China and has recently become available throughout the country.

The results have been staggering, particularly in poor regions, where the usual orange juice sold by Coca Cola's Minute Maid subsidiary would be unaffordable. The new drink quickly became the most popular or second-most popular juice in every region of the country.

As a result, Coca-Cola's overall volume of sales in China surpassed those in Japan in 2006, making it the company's fourth-largest market, behind Brazil, Mexico and America. Following orange-pulp's success in China, Coke launched it in Thailand in 2005, where it has been a huge hit, and on February 19th the company began rolling out the new drink in India, too. This enthusiastic welcome is in sharp contrast to Coca Cola's fate in developed markets: single-digit growth in Europe and none at all in America. For mass-market drinks firms, the opportunities, such as they are, lie in the developing world.

Pepsis' Tava and online brand advertising

The NYTimes just published an article about the advertising campaign for Tava, a new caffeine-free fruit flavored beverage from Pepsi. Generally attempts to create general market brand awareness happen offline not online. Though Tava is being targetted specifically at men and women ages 35 to 49, this campaign is definitely a departure from that pattern given that it will employee primarily online marketing tools.

To quote from the article:

“There used to be an assumption this target was not online,” said Frank Cooper, vice president for flavored carbonated soft drinks at Pepsi-Cola North America in Purchase, N.Y. “But there’s a group in that category that’s ‘reborn digital.’ They’ve lived through the change and learned to adapt to it.”

“This consumer spends significant time online, although what they do may differ from the younger consumer,” Mr. Cooper said. “They’re not I.M.-ing their friends; they’re looking at e-mail or looking up information about travel, music, food.”

To help Tava reach the right audience, Mr. Cooper turned to agencies like Tribal DDB Worldwide, the interactive unit of DDB Worldwide, part of the Omnicom Group; TracyLocke, an Omnicom shop that specializes in tasks like promotions aimed at shoppers; Element 79, an Omnicom advertising agency; and Grow Marketing, which creates what it calls “brand experiences” that are meant to generate favorable consumer recommendations (a k a positive word of mouth).

“The heart of it is creating more of an emotional connection with consumers by tapping into their natural inclination to tell other people about their experiences,” said Cassie Hughes, strategic director at Grow in San Francisco, which also works for marketers like J. Crew, Levi Strauss and Visa.

For Tava, “the strategy was going in to talk to the right few who could fuel the many,” she added.

In addition to providing samples to employees of companies like Apple, Bliss Spa, Google and MTV, Pepsi-Cola is giving away Tava at events like the Sundance Film Festival and to customers of businesses like Frank’s Chop Shop, a barbershop on the Lower East Side of Manhattan. It will also offer the beverage to arts lovers at plays, concerts and festivals, and to celebrities at locations like the set of the TV soap opera “General Hospital.”

According to Ms. Hughes and Mr. Cooper, the campaign is zeroing in on eight major markets where consumers seem to appreciate soft drinks that contain vitamins and bear new-age flavor names like Brazilian Samba, Mediterranean Fiesta and Tahitian Tamure. They are Boston, Chicago, Denver, Los Angeles, Miami, New York, Seattle and Raleigh, N.C.

The online aspects of the campaign extend beyond local markets. The Web sites on which the Tava banner ads are to appear include AOL, chow.com, CitySearch, dailycandy.com, discovery.com, Evite, MSN, oprah.com, People and weather.com.