Bayer AG Marketing Plan

Bayer AG Marketing Plan

The Vitamin of the Future

8/11/2010

Keri Kochenour

Executive Summary

Bayer AG is a primarily involved with pharmaceutical products and chemicals. Bayer AG has acknowledged and understands that today’s world is becoming ever more hectic. Because of today’s fast pace, Bayer AG has created a new vitamin that only has to be taken once every month instead of daily. The pill will not be substantially larger than current vitamins on the market. Many varieties of our current vitamin line, One A Day, will be offered in One A Month form.

Because the One A Day line has been especially popular in North America, the One A Month variety will be launched there first. For this new product, Bayer AG will target health-conscious Americans that are on the go. The product will be available large discount department stores including Wal-Mart and K-Mart. This product will be more expensive than normal vitamins, but because you only need twelve vitamins for an entire year, the cost will balance out.

Bayer AG

Bayer AG is a global enterprise with core competencies in the fields of health care, nutrition and high-tech materials (Bayer AG). Bayer has partitioned itself into three main categories; HealthCare, MaterialScience, and CropScience (Bayer AG). Many products of the Bayer company are not household items, but those that are used for crop protection and non-agricultural pest control. The bioscience segment's major products include Nunhems, Arize, InVigor, and FiberMax (Datamonitor). Another area of Bayer not familiar with the average consumer is their research with polyurethanes and polycarbonates. Its customers include the automotive and construction industries, the electrical/electronics sector, and manufacturers of sports and leisure articles, packaging, and medical equipment (Datamonitor).

Most consumers are familiar with Bayer’s HealthCare products that include Bayer Aspirin, Aleve, and One A Day vitamins. Surprisingly enough, Bayer was established in 1863 by Friedrich Bayer and Johann Friedrich Weskott as a dyeworks group (Datamonitor). The group grew steadily over the next half century before merging with BASF, Hoechst, and other German chemical companies, in 1925. Throughout the 1960s, the group developed more dyes and plastics and established factories worldwide (Datamonitor). Then, in 1994, Bayer purchased Sterling Winthrop's over the counter drug business from SmithKline Beecham, a maker of prescription medicines (Datamonitor). Since, the group has continued to buy companies in order to grow. Primary competitors include, but are not limited to Bristol-Myers Squibb, Johnson & Johnson and Pfizer (“Bayer AG: Full Overview.”).

The company’s vision and mission statement includes their future focus, innovation and growth in the areas of healthcare, nutrition and high-tech materials. The slogan “Bayer: Science For A Better Life,” summarizes the idea of their determination to come up with innovations to benefit humankind (Bayer AG).

I chose this company because I often use One A Day vitamins, along with their newer product One A Day Vitacrave Sour Gummies. I believe because of their growth over the years and commitment to innovation, Bayer AG will continue to be a successful company in the future.

Bayer AG: Strengths and Weaknesses

Bayer AG recorded an operating profit of $4,192.3 million in fiscal year 2009 (Datamonitor). One strength of Bayer is that it generates revenues through five business segments: pharmaceuticals (33.6% of the total revenues, before reconciliation, in FY2009), material science (24.1%), consumer health (17.7%), crop protection (17.4%), and environmental science and bioscience (3.5%) (Datamonitor). Because this company is so diverse, it has a better chance for profit. Bayer is also among the top competitors in the healthcare market.

The company has also been expanding in foreign markets such as China. Recently, the company has released numerous over-the-counter drugs and is working towards a relationship with Biotin, a Polish insulin company, for sales of insulin in China (Esmerk). The value of the Chinese insulin market is expected to grow 25-30% on an annual basis (Esmerk).

Another strength of Bayer is its wide geographic spread. Though headquartered out of Leverkusen, Germany, it operates in Asia Pacific, Europe, North America, Latin America, Africa, and Middle East (Datamonitor). The company employs about 108,400 people (Datamonitor). As previously mentioned, Bayer has recently been working to expand into more foreign markets and offer more drugs to those it already has a presence in.

As many other top companies are doing, Bayer has begun to go green and use energy-efficient designs when constructing offices and laboratories. In May 2010, Bayer opened a new green conference center at its United States headquarters in Robinson, Pennsylvania that included spray foam insulation, energy-efficient lighting and window components, and environmentally-friendly coatings used on the wood deck (Gannon). This is just one of the many green facilities they have opened in the last year. This adds not only value to the company but also increases their social standing. Consumers today want a company considerate of the environment and Bayer has made strides to be a socially responsible company.

The company’s weaknesses come from low profit margins with some of its industries. Research and development costs can be high when working with innovative technologies, especially if they end up not being as desired.

The largest weakness of the company comes from lawsuits. Bayer can be the target of lawsuits stemming from medical complications as well as agricultural products. In late 2009, two farmers sued Bayer for $2 million when an experimental breed of rice cross-bred with their crops (Whittington, and Harris A9).

I believe that the company has done a good job thus far to become an innovative researcher while also thinking of the environment. I understand the company suffers from some weaknesses, but it is impossible to foresee all side effects that come along with new medicines or agricultural products.

Bayer AG: Opportunities, Threats, & Marketing Objectives

The current trend in many countries is to be healthier (Datamonitor). This has led to many changes, not the least of which being an interest in vitamins. When considering all the specialty markets within vitamins alone, it is easy to see how Bayer has millions of products that are appealing to the average consumer.

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