Robamae R.

Baja October 2 2019

BSA 4 Mgt 4

Case Analysis

HEALTH PLUS

I. Introduction

Nutraceuticals are products isolated from foods that are generally sold in medicinal
forms. They are defined as any food (or part thereof) which provides health benefits –
including prevention and treatment of disease – in addition to the basic nutritional value
found in foodstuff. The nutraceuticals industry is usually described under different
names, such as health supplement industry or food supplement industry. Products that
can be included under nutraceuticals are over-the-counter (OTC) drugs, sport nutrition
products, vitamins and dietary supplements, weight management products and herbal
traditional products. The top two pharmaceutical companies in terms of market share
for vitamins and dietary supplement are United Laboratories, Inc. and Pfizer
Philippines, Inc. Together; they had some 43% of the market for vitamins and dietary
supplements. Aside from these two giants, there are at least 30 other pharmaceutical
companies involve in the Philippines market as well. The nutraceutical industries
operate as a part of the pharmaceutical industry despite being non-prescription
products. Not only do they share pharmaceutical company origin, but they also share
pharmacies as their most popular distribution points.

II. Background of the study

Health plus is one of the company in the Philippines who produces nutraceutical
products. They had been a multi brand retailer. The company also introduced dietary
supplement that bore the Health Plus brand. Like their other products, dietary
supplement were manufactured in US. However they were packaged in bulk and sent to
the Philippines where they were packaged by a manufacturing partner. The cost savings
enabled Health Plus to offer the product at a lower price versus their US-branded
product.
As time goes by Health Plus already have 13 stores, all of it where located inside the
malls. 8 out of 13 stores were located in Metro Manila, while the remaining 5 stores
where located at Cebu, Bacolod, Cagayan De Oro City and Davao City.
Each store should have 2 or more staff and being managed by a pharmacist. The
pharmacist is also supported by 1 – 3 consultants. The staff is required to be
knowledgeable, especially with the nutraceutical products to assist customer even
without a licensed pharmacist.
III. Statement of the problem
 In year 2016 Health Plus was once again unable to meet its target sale for the year.
Health Plus was among the first entrants in the nutraceutical market. But despite of the
early presence in the country as well as the company’s expansion over the years, Health
Plus remained a Small Player and was left behind by its competition.
 The store staff are several, consider that each store consist of 2 or more staff and being
managed by a pharmacist. The pharmacist is also supported by 1 – 3 consultants. The
staff is required to be knowledgeable, especially with the nutraceutical products to assist
customer even without a licensed pharmacist.
 The approach of their marketing efforts was mainly informational and promoted a
single product or a set of products that were aimed at specific segments based on age,
gender or health issue.

IV. Alternatives
 Choosing Cost Leadership Strategy
 As they are in declining stage they should have a strategy that would prioritize their
loyal customer.
 They should market their products not in a single manner or for a specific segment to
reduce the cost.

V. Recommendation
The Health Plus was one of the first entrants in the nutraceutical market. However, it
does not mean that they can have an advantage against other competitors. They did not
maximize the First Mover Advantage. In which the firm who introduced the product
first in a wide market can have the advantage. That is why the Health Plus should have
a strategy that would lift them up. As of 2016 they have been to the declining stage. This
stage the industries see their technologies was overtaken by superior alternatives. They
should take action to have a remedy on the declining stage: they should reduce the
variety of product offerings in order to reduce inventory cost; Increase price in order to
maximize profit form the remaining product loyalist; and reduction in distribution
channels in order to concentrate demand to just one or a few channel.
The above stated strategy is also considered as a cost leadership strategy, as it intend to
lower the cost. Moreover, the cost leadership strategy is appropriate for the Health Plus
Company because it can lower their cost and provide them a bigger budget that is
allocated it increasing the sales.