Question

beginning "Merck" about Merck's new strategic direction focusing on a single drug, Keytruda. Based on everything that you have learned -do you agree with that approach?

Answer 1

Merck is following a product-focused strategy for “Keytruda” where they are targeting a niche market segment the customer segment are patients suffering from lung, skin, bladder and other cancers. “Keytruda” targets a broad spectrum of cancer patients and it’s a new type of cancer drug which harnesses a patient’s immune system to fight tumors.

Product Focused marketing strategy:

I agree with their strategic decision to focus on C drug Zepatier, anesthetic Bridion and especially immune-oncology blockbuster “Keytruda”. The US regulator has also granted it a breakthrough therapy designation, which will help to keep it ahead of its competitors in the immune-oncology field. Further, it has shown efficiency in results and shows it prolongs patients survival suffering from cancer.

This will boost their declining sales, increase revenues, and target a niche market segment to improve profits. This strategy will work positively as they already know their target segment and will have a focused marketing strategy to target that segment only. The company can use all its resources to enter and expand for ”Keytruda” only.

The other reasons for this strategy are as follows:

1. A sharp decline in the sale of Merck drug cardiovascular “Vytorin” following a patent expiry leading to increases in revenue by just 1% in 2017.
2. Their biggest earner Januvia also declined 3 % i.e. $5.89 billion because of growing price pressure and competition.
3. Further, they need to maximize their returns from JKeytruda which is covered by patent till 2022.
4. It is also a high-end high-value product and would need a focused approach to maximize sales.

To sum it up Merck is currently depending on focusing its resources and targetting on “Keytruda” customers to maximize and turnaround its declining sales trend. They further need to focus on R&D to develop new products and also have a broader range to continue their leadership in the market.