Pharmaceutical Industry: Business and Environment

Pharmaceutical industry is one of the fast growing industries in the world influenced by technological changes and innovations. In this industry, technological developments and changing market environments are externally based, whereas research and development, and modifications of products, packages, marketing channels, and advertising campaigns, are internally based. Pharmaceutical industry relies on efficient technology which influences research and development and costs of the end products.

In this industry, technological change creates new products and new solutions. Such developments accelerate progress in such areas as testing and controls, all of which will have great economic impact. Also, technology and innovations help pharmaceutical companies to deal with the pollution problems and focus on the maintenance and improvement of environments and the quality of life. The need to dispose of waste and sewage, to reduce auto and plane emissions, to control the contamination of food, and to cleanse air and water presents untapped market opportunities. In this decade, billions of dollars will be spent for products and services designed to meet our ecological needs. Every year, pharmaceutical companies invest heavily in technology and innovation. Technological forces generated problem-solving inventions, and help companies to meet new regulations, standards and monitoring.

Technological dimension helps pharmaceutical companies anticipate the firm’s future requirements along an orderly, continuous, systematic, and sequential basis; marketing planning avoids crisis decisions and concentrates on integrated programs of action. Technological and innovative solution can be seen as a rational way of translating experience, research information, and thought into marketing action. It is a pragmatic, organized procedure for analyzing situations and meeting the future. Based on information about ends and means to determine various causal relationships, trends, and patterns of behavior, it is concerned with the selection of alternative strategies.

In essence, purposeful research, experience, judgment, and decision making (all of which are directed toward guiding the corporate system and bringing it growth, survival, and adjustment) form the fabric of the marketing planning process. “Costs of setting up a pharmaceutical plant are very large. The complexity of the chemical processes and the technology that must be installed mean that minimum capital investment is of the order of hundreds of millions” (Campbell & Craig 2005, p. 443). Technological dimension is a dynamic factor which requires constant changes and improvements. It can be seen as an integrated, intelligent, rational process for guiding business change. Product strategy is both a component and a determinant of the marketing mix. For it has a great influence on the other elements of the marketing mix: advertising, personal selling, channels of distribution, physical distribution, and pricing. No marketing decision is properly made without an appraisal of technological changes and innovations.

Spatial scales and analysis show that technology influences market and competitive position of the company. Inability of a pharmaceutical company to introduce innovative solutions and respond to change can be regarded as a threat to its market position; lack of investment in R&D can be seen as a weakness of a company. In contrast, the assessment of market opportunity emphasizes that business ventures begin with study of the technology, that the future of the business rather than its present or past is the most significant dimension, and that every company must commit itself to change and innovation. Continuous assessment stresses that management does not focus on products or processes that it now possesses. One of the major characteristics of the adoption of the marketing philosophy is that plans and programs replace haphazard marketing methods. Innovative solutions and technology are always regarded as strengths of pharmaceutical industry (Campbell & Craig 2005).

Technological dimension is closely connected and influenced by economic, political and social dimensions. On the one hand, customers demand new products and improved quality, low prices and effective treatment, while the government introduces new laws and regulations aimed to protect natural environment and consumers. In order to meet these challenges, pharmaceutical companies have to adopt new technology as a core of business and market operations. For instance, IT solutions fasten all operations and improve communication processes and production. “Broadly speaking, operational technology borrows heavily from the areas and types of IT” (Campbell & Craig 2005, p. 256).

Technological dimension is very important for pharmaceutical companies because it provides a support system for an innovation by informing, cultivating, and distributing new items to market segments. To become successful innovations, new products must be based on the familiar. They must not tax the adjustment capabilities of consumers. Innovations succeed where the consumer can adapt with ease. It is not merely individualism or the willingness to accept something new that supports innovation; conformity plays a large part. Acceptance of an innovation is closely related to both managerial activities and acquisition of a hospitable attitude of mind on the part of management and customers. Innovations leading to new products stem from the ability to perceive and connect elements in a different manner. They are based on degrees of mental ability, creativity, existing knowledge, and the need for new approaches emerging out of the environment. Customers want new products; they desire change (Campbell & Craig 2005). Although cultures differ as to their rate of acceptance of change, innovation is a means of satisfying the customer’s basic needs. It appears that firms have a greater opportunity to take defensive action against other new products than to create totally new ones.


Campbell, D & Craig, T 2005, Organizations and the Business Environment (2nd Ed.). Butterworth-Heinemann Ltd.

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