Repositioning

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Research, intro."We're not going to pull a Pfizer"CEO of Merck

The healthcare group has chosen a fairly straight forward choice, but with a bit of research we found a series of interesting and important opportunities for not only this company and it's new acquisition but also how it will differentiate in a market facing a few new challenges. With an industry prone to mergers and acquisitions, changing

competitors and brand strategies, lawsuits, and international relations nightmares, brand

position and strategy will be key to success and stability over the long haul.

Merck, who has recently acquired Schering-Plough for $41 billion, is facing a series of new challenges and changes as an industry leader in pharmaceuticals. With their acquisition of Schering-Plough's businesses, including animal healthcare and medical devices, a series of new competitors have been introduced, which may ultimately require strategic shifts and changes in their brand to compete in these new sectors. With this new

merger, Merck is also expected to cut 15% of it's work force, which will cause a major rift from within the company's long standing policy with employees as foundations of leadership.

In our reading, Built to Last, we saw specific examples of Merck's policy of leadership

and stewardship in the industry and it will be interesting to see how their current brand

strategy follows or changes these lasting tenants. We also feel Merck is a brand built on a series of strong ideals that have lasted for over a century. It's our goal to see how these unique industry differentiations have changed, evolved and adapted over the years… in

essence, it's an oldie but a goodie.

Not only did the above challenges arise that are specific to Merck, but there are two

industry wide challenges that might provide a launching pad for new directions in

Merck's brand strategy.

With the increasing likely hood that the industry leader, Pfizer, who just acquired Wyeth,

could be purchased and divided, there's a series of new competitors on the horizon for the smaller-sized Merck. Also, with the growth of generic drugs taking hold in the market, having an industry unique brand position could be a point of growth and differentiation

amongst competitors.

With these challenges ahead, we've chosen Merck Pharmaceuticals.

The profile:· History:

 1668

Merck & Co. traces its origins to Friedrich Jacob Merck who purchased a drug store in

Darmstadt, Germany in 1668 and also to Emanuel Merck, who took over the store several generations later, in 1816. Emanuel and his successors gradually built up a chemical-pharmaceutical factory that produced a multitude of chemicals. 1851

Dr. Ernst Christian Friedrich Schering beings developing and selling pharmaceutical products in Berlin. Three years later the company opened it’s first production facility. 1891

George Merck established his roots in the United States and set up Merck & Co. in NY as the US arm of the family partnership. 1899

The first Merck Manual is published as a guide to physicians and pharmacists. Today the Merck Manual is published in 17 languages. 1917

Merck & Co. was confiscated in 1917 during World War I and set up as an independent company in the United States. 1933

Merck dedicates its first research laboratories in Rahway, NJ. 1944

A collaboration between researches at Merck and Rutgers University leads to the discovery of streptomycin. Also in 1944, Merck succeeds in the complex synthesis of cortisone. 1953

Merck & Co., Inc. merges with Philadelphia-based Sharp & Dohme. 1955

Eleven years later, a team of Schering scientists successfully transform cortisone into

prednisone considered one of the most significant medical advances of the mid-twentieth

century. 

The Schering-Plough Foundation is established. 1957

Merck establishes the Merck Company Foundation 1963

Merck introduces the first measles vaccine and, four years later, a mumps vaccine, which

Dr. Maurice Hilleman developed from throat cultures from his daughter Jeryl Lynn. 1965

Merck acquired Charles E. Frosst Ltd. of Montreal (founded 1899) and created Merck-

Frosst Canada Inc. as its Canadian subsidiary and pharmaceutical research facility.  1971

Schering Corporation Merges with Plough, Inc., to create Schering-Plough Corp.

Schering-Plough later merges with Netherlands-based Organon Biosciences, in 2007. 1994

50th anniversary of Coppertone in 1957; the company later worked to help launch the UV

index, a U.S. guideline letting consumers know when it is most important to use sunscreen.  2002 

Merck and Schering-Plough establish joint ventures in the United States to develop and

market new prescription medicines in the cholesterol management and respiratory areas.  2007

The company's share price reached a five-year high of $60.77. However, the share price of Merck since trended down, reaching an intraday low of $20.05 per share on

March 9, 2009.  2008

On May 20, 2008, Merck was found liable for using deceptive marketing tactics to

promote Vioxx and 30 states will split the $58 million settlement. The amount is the largest multi-state settlement against a pharmaceutical company. 

2009, NovemberMerck announced that it would merge with competitor Schering-Plough in a US$41

billion deal.[4][5][6][7] The purchase was a "reverse merger" in which Schering-Plough

would be renamed Merck and continue as the surviving public corporation. The new

company would be operated under the trade name Merck in the United States and Canada and elsewhere under the trade name MSD. 2009

Combine to create the world’s second-largest pharmaceutical company by market share. 2010

Merck announced its 2010 first quarter financial results. The company reported, among

other things, that its financial results were affected both by the merger with Schering-

Plough and tax charges related to the recently enacted health reform legislation. The slide is most likely caused by the declining productivity and increasing cost of pharmaceutical development. 2011

Inline with an effort to save as much as $4.6 billion per year, Merck & Co. plans to cut an

additional 12,000 to 13,000 employees or 14 percent of current Merck's total workforce of 91,000 employees by the year 2015.[8]

1891

Merck & Co. opens its doors in the U.S.1899

First Merck manual published for physicians and pharmacists (Today Merck manual is published in 17 languages)1933

First research laboratories in Rahway, NJ1944

Discovery of streptomycin and synthesis of cortisone.1953

Merck acquires Sharp & Dohme1957

Establishment of the Merck Foundation Company2009

Merck and Schering Plough merge to create the second largest pharmaceutical company

by market share

· Leadership:

Is one of the largest pharmaceutical companies in the world. The Merck headquarters is located in Whitehouse Station, New Jersey. The company was established in 1891 as the United States subsidiary of the German company now known as Merck KGaA.

In common with many other German assets in the United States, Merck & Co. was confiscated in 1917 during World War I and then set up as an independent company.

Currently, it is one of the seven largest pharmaceutical companies in the world both by

market capitalization and revenue.

Merck & Co. or MSD describes itself as a "a global research-driven pharmaceutical company. Merck discovers, develops, manufactures and markets a broad range of innovative products to improve human and animal health, directly and through its joint ventures."

Merck publishes The Merck Manuals, a series of medical reference books. These include the Merck Manual of Diagnosis and Therapy, the world's best-selling medical textbook,

and the Merck Index, a collection of information about chemical compounds.

· Competitors:GlaxoSmithKline:NovartisRocheBristol-Myers SquibbPficerAstraZeneca

· Issues and opportunities driving significant changeMerck buying Shering Plough in 2009.

In 2010, Merck also buys Millipore Corporation.

Merck Positioned to Drive Growth Through Innovative Portfolio, Pipeline and Strategy

for Growth in Emerging Markets

Broader Portfolio, Robust Late-Stage Pipeline and Expanded Geographic Presence Position Merck for Leadership

Emerging Markets Expected to Account for More Than 25 Percent of Merck's Pharmaceutical and Vaccine Revenue by 2013

Merck and Simcere Sign Agreement to Establish Pioneering China Joint Venture

China is one of the most critical markets for Merck's growth strategy. Following the completion of the global merger between Merck and Schering-Plough in 2009, Michel Vounatsos became the president of MSD in China. MSD China reports directly to the Merck headquarter in the United States.

· Audiencesphysicians,

· Company/Industry messages and attributes:Merck has always been true to its core values and purpose:■ Honesty and integrity■ Corporate social responsibility■ Science-based innovation■ Excellence in all aspects of the company■ Profits from work that benefit humanity

It has been a leading pharmaceutical company throughout more than a century because it never focused on making drugs and medicine just for profit, “we are in business of preserving and improving human life. All of our actions must be measured by our success in achieving this goal”. –Merck & Company, Internal Management Guide from 1989.

· Key brandsVaccinesPrescription productsConsumer productsAnimal health

Now is when we develop the core of our presentation

Intro:Past: quiet, powerful, creator

Present: close minded, overweight, ordinary

THE NEW MERCKOur Vision-We make a difference in the lives of people globally through our innovative medicines, vaccines, and consumer health and animal products. We aspire to be the best healthcare company in the world and are dedicated to providing leading innovations and solutions for tomorrow.

Our Mission-To provide innovative, distinctive products and services that save and improve lives and

satisfy customer needs, to be recognized as a great place to work, and to provide investors with a superior rate of return.

What We Stand For-Excellence in science and healthcare innovation, with an emphasis on addressing unmet medical needs.-Focus on patients and anticipating customers’ needs.-Commitment to expand access to our medicines and vaccines, and to improve global health.

Strengths/ weaknesses:Current situation in the sector: what we have read on the papers

Merck Positioned to Drive Growth Through Innovative Portfolio, Pipeline and Strategy

for Growth in Emerging Markets

Broader Portfolio, Robust Late-Stage Pipeline and Expanded Geographic Presence Position Merck for Leadership

Emerging Markets Expected to Account for More Than 25 Percent of Merck's Pharmaceutical and Vaccine Revenue by 2013

Arena: Where do we want to compete?

Prescriptions

Audience: who are we talking to?Physicians

Choice: what drives choice?• Regarding loyalty, early experiences in the costumer’s life were of the utmost importance. It depended on how teachers taught and physicians were trained.

• Research and development organization: reputation. In the previous years, everything

was invented at Merck laboratories, it wasn’t co marketing.

• Now they are struggling to prove innovation.

• Leadership position in HPV med: Gardasil. Strong brand in oncology.

• If people know Merck, are all the products good? Bad? What’s the bias?• Distributing drugs to the third world is one of the reasons that makes physicians choose this brand over the others. Loyalty.

Product positioning:Physical characteristics: what is it made of?Functional characteristics: how it performs?Emotional connections: how it makes users feel?Emotional projection: what it says about the user?

3 main ideas: outspoken:

visionary:

scientist:

Approach + people = the way we do things.• How do they inform physicians? Showing clinical data on ipadThrough opinion leadersDigital platforms

PAST: Quiet, Powerful, CreatorPRESENT: Close-minded, Overweight, OrdinaryFUTURE: Outspoken, Visionary, Scientific

MERCK: Repositioning

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