International business export plan

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Introduction

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The medical, health and wellness industry has been one of the fastest-growing industries in recent years. The industry varies from medical services (such as hospitals) to medical technologies (such as CAD teachnologies) to medicine. This growth trend is not exclusive to the United States. Many other countries have turned their focus on the health and wellness industry in hopes to get into the bandwagon. With the saturation of the medical, health and wellness industry, the products to be focused on in this paper are medicines that would improve the condition of Alzheimer’s Disease to be marketed to the ageing society of Japan.

Description of the Product to be Exported

The product to be exported is a medicine that combats Alzheimer’s Disease which is a prevalent illness for the aged. Alzheimer’s Disease is the most “common progressive dementia” that is suffered by the elderly. It happens when neurons in the brains that deal with memory and cognition become dysfunctional and die (Albert, Price, Savonenko, Troncoso, & Wong 2008). The product is a medicine containing chemicals that would combat the forming of amyloid precursor proteins called the ?- and ?-secretase enzymes which is one of the main reasons why Alzheimer’s Disease occurs. The medicine’s formulation is similar but more effective than Aricept, a medicine popular in Japan, however, instead of being ingested, the medicine is to be injected into the bloodstream to have maximum effect.

Characteristics of the Target Market

The Target Market is Japan which has a population of about 127,700,000 and an average life expectancy of 85.99 years. The number of establishments engaged in the medical, health care and wellness industry has recently increased from 298,00 in 2001 to 351,000 in 2006 (Ministry of Internal Affairs and Communications 2008).

GNP Per Capita

The GNP/capita of Japan amounted to $38,410 in 2006 and the average growth rate of it is 0.9% as recorded from 1990-2006 (UNICEF 2006).

Size of the Market and Market Screening

The target market are the aged population (ages 65 and above) which make up 21.5% of the country’s population (Ministry of Internal Affairs and Communications 2008). Japanese elderly who are known to suffer from this disease are about 1.7 million. The market for this medicine, however, is not limited to the aged. Recently, younger people in Japan are recorded to have been suffering from Alzheimer’s Disease. Juvenile dementia sufferers across Japan are recorded to be between 31,000 to 52,000 whose age ranges from 21-56 years old. Japan is also considered to be the world’s second largest market for drug consumption which can account for large sales (Alzheimer’s Association Japan 2008).

These patients, although familiar with the therapeutic robots already employed in Japan, are looking for other ways to speed up their healing and prevent the disease from going into its later stages. Many in Japan are seeking medical attention to detect the disease at its early stages. Considering the fact that many companies in Japan are knowledge-based industries, the deterioration of the brain is not something the society is welcome to.

Exchange Rate Trends

The worth of the dollar as opposed to the yen has had a downward decline since 2006. From an estimated high of about 122 yen to the dollar in 2006, current rates have dropped to about 95 yen this November (Stars21.com 2008). This would affect the price of the medicine making it cheaper than in previous months as the importers pay less than 100 yen per dollar amount of the medicine.

Import Restrictions

There are no import restrictions on medical products in Japan. Importation of chemicals by a Japanese distributor, which are not under the prohibited articles, have to be declared and the corresponding tariff paid for. The declaration will be fulfilled by the distributor in Japan, who is the importer of the product. The product is under this mandate and needs to comply with the Pharmaceutical Affairs Law. The specifications, standards and inspections are as follows:

License for marketing authorization holder and manufacture
Approval for manufacturing and sales
Conformity assessment, etc.
Certification System (Approval Examination System)
(Cabinet Office n.d.)Without compliance to these regulations, the medicine cannot be exported to Japan.

Price Controls

Price controls for the pharmaceutical industry is set in Japan. The move was an effort to curb health costs but it only resulted in patients buying medicine that are inferior in quality. This is only one of the many effects of the price controls where medicines are supposed to meet the price schedule set by the government (Haislmaier 2003). The current exchange rate could prove to be one of the means of cutting costs. With the U.S. dollar valued at less than a hundred yen (Japan’s equivalent of $1), the price of the medicine could be pushed lower.

Government and Public Attitude toward Buying American Products

American products are well accepted in Japan and have experienced significant growth of 10% over the past year. American products are being more widely accepted by the Japanese public because of the youth who are getting very much into Western cultures and attitudes. Many of the youth adopt very Western attitudes and ways of doing things. Current Japanese pop culture is riddled with many Western concepts and ideas (AgExporter 1993).

Size, Number and Financial Strength of Competitors

As already stated, direct and indirect competitors number 351,000 companies in operation. These institutions may not offer drugs that combat Alzheimer’s Disease but the therapies that they use to heal their patients. As of now, the only drugs in existence for Alzheimer’s disease in the world are Namenda, Cognex, Razadyne, Reminyl, Exelon and Aricept. These drugs all work by preventing the chemical that facilitates communication among nerve cells and enables the memory to function. Of the drugs mentioned, only Aricept has been approved by the Japanese government and circulated in the Japanese market (Fisher Center for Alzheimer’s n.d.). With Aricept’s wide acceptance in Japan and it’s dominance in the market, it can be safely assumed that the financial strength and size of this competitor is large.

Socio-cultural Forces

As already stated, the Japanese Society widely accept Western ideologies, cultures that translates into their acceptance of foreign products, specifically Western products. There would be no conflict getting into the Japanese market. Since the product is culturally neutral, and because of the current existence of a similar drug in the market, there would be not cultural backlashes either.

Attitudes and Beliefs

While the Japanese are pioneers in the field of technology, their main approach to curing Alzheimer’s disease are therapeutic robots (Alzheimer’s Association Japan 2008). These robots are used instead of pets which are relatively more difficult to maintain than their mechanical counterparts. While this is the main bastion for combating Alzheimer’s Disease and other forms of dementia, the public acceptance of drugs by the public, due to its society’s modern inclinations, paves the way for the product’s entrance into the market.  The Japanese are a people willing to accept any technological advances that may make their healing speed up and their lives better.

Languages

Because of the language barrier that will be set in this market, Japanese translators and English-speaking Japanese partners are necessary because not many Japanese can understand English and that many ho do understand only a little. They will be able to provide for translations of the product’s written advertisements, pamphlets, labels, and others that would require translation. Japanese partners are necessary to establish relationships between hospitals and the Alzheimer’s Association in Japan. These partnerships would enable the company to boost sales through connections and other possible promotions.

Education

The education level and literacy of Japan is among the highest in the world with most citizens finishing at least high school with a near100% rate and 51.2% of the graduates go to a university or college. The Japanese government’s spending for education as of fiscal year 2005 reached 23.1 trillion yen (Ministry of International Affairs and Communications 2008). This would translate in easier information dissemination and would be beneficial to the promotion of the medicine.

Export Marketing Strategies

Given that there is an inclination among the Japanese to patronize Western products, the first thing that should be taken into consideration is to brand the product as “American.” With the branding, the company must bear in mind that the drug should be competitively priced against Aricept, which is also an international brand.

Secondly, marketing efforts should be focused on institutions and organizations that treat and research on Alzheimer’s Disease locally. Hospitals and organizations such as Alzheimer’s Association Japan, should be targeted for the product to be given exposure. Public relations and tie-ups should be made to ensure that the company is up to date with current trends in the disease and the fight against it.

Promotion Methods

There are two promotion methods that should be employed. The first is geared toward the organizations and personages (such as doctors) that are vehicles in supporting the sales of the medicine. The second are the end users themselves who can decide on their own even if their doctors suggest taking other brands.

Symposiums, seminars, and product launches are a few strategies that the company can use to promote the product and increase brand awareness. Sponsorships on these groups’ events would also be a strategy to help boost the product’s exposure and marketing.

Advertisements should be made in appropriate locations such as drug stores and hospitals, especially doctors’ clinics. Various gift items that are used by the hospitals and doctors such as pens, pads and labels could be used to further this method of promotion. This is a dual promotion strategy that could be targeted towards both the doctors and the end users.

The product’s promise of better results because of the way it is taken in should also be emphasized. The emphasis on this especially in ads and promotions makes the product more appealing even if it has the discomfort of being injected instead of being taken orally as most medicines are traditionally taken.

Conclusion

With the ageing society of Japan and the rise of cases of Alzheimer’s disease, we see that there is indeed a need to go into this market. Seeing that Aricept has market predominance because it is the only drug approved by the Japanese government and circulated within its borders, there is a big potential for the growth of sales for this medicine. Japan, as the second largest consumer of drugs, is a huge market, not only because of the ageing population but because of the growing number of juvenile victims of Alzheimer’s.

It is also ideal to go into Japan’s market because there are no restrictions to the import of drugs. What is only necessary is compliance to the standards set by the government to make sure the drugs are safe and effective. Even if the pharmaceutical prices are restricted, it would still be possible for the medicine to be competitively priced in the market due to the current exchange rates and its downward trend.

In all, Japan would be a good place to export the medicine to.

AgExporter (2003). The word from Japan: stress your product’s “American-ness.” – Jun Nakauchi president of Daiei Inc – Interview [interview transcript]. Retrieved from Bnet Business Network http://findarticles.com/p/articles/mi_m3723/is_/ai_14709751

Albert, M., Price, D. L., Savonenko, A. V., Troncoso, J. C., Wong, P.C. (2008). Encyclopedia of Neuroscience. In Aging of the brain and Alzheimer’s disease. Baltimore: Elsevier.

Alzheimer’s Association Japan (2008) Dementia in Japan. Retrieved from http://www2f.biglobe.ne.jp/~boke/boke2-e.htm

Cabinet Office (n.d.). The Pharmaceutical Affairs Law. Retrieved from http://www5.cao.go.jp/ otodb/english/houseido/hou/lh_02070.html

Fisher Center for Alzheimer’s (n.d.) Alzheimer’s approved drugs. Retrieved from http://www.alzinfo.org/alzheimers-treatment-cognitive.asp

Hailsmaier, E. (1993). Why global budgets and price controls will not curb health costs. Retrieved from http://www.heritage.org/Research/HealthCare/bg929.cfm

Ministry of Internal Affairs and Communications. (2008) Statistical Handbook of Japan. In Population (Chapter 2.) Retrieved November 28, 2008 from http://www.stat.go.jp/ english/data/handbook/c02cont.htm

Ministry of Internal Affairs and Communications. (2008) Statistical Handbook of Japan. In Economy (Chapter 3.) Retrieved November 28, 2008 from http://www.stat.go.jp/ english/data/handbook/c03cont.htm

Ministry of Internal Affairs and Communications. (2008) Statistical Handbook of Japan. In Social security, health care, and public hygiene (Chapter 15.) Retrieved November 28, 2008 from http://www.stat.go.jp/english/data/handbook/c15cont.htm

Ministry of Internal Affairs and Communications. (2008) Statistical Handbook of Japan. In Education and Culture (Chapter 16.) Retrieved November 28, 2008 from http://www.stat.go.jp/english/data/handbook/c16cont.htm

UNICEF (2007). At a glance: Japan. Retrieved from http://www.unicef.org/infobycountry/ japan_statistics.html

Worldstar (2008). EU: Exchange Rate. Retrieved from http://www.stars21.com/freemorn/popup/ dict.html

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