Competitive strategies adopted by pharmaceutical distribution firms in Kampala. A case of Nakawa division

Abstract

This study aimed to examine the competitive strategies adopted by pharmaceutical firms to distribute and sell their products in Kampala’s Nakawa Division. The study was premised on three objectives; To explore the different competitive strategies adopted by pharmaceutical firms to distribute products in Kampala. To assess how competitive strategies are implemented by pharmaceutical firms to attain competitive advantage, and to examine the relationship between competitive strategies and sales volume of the selected pharmaceutical firms. The study employed exploratory and descriptive research designs. A mixed method approach was used which combined qualitative and quantitative data collection in a single study. A sample of 129 respondents out of a sample of 136 pharmaceutical firms' staff using a survey questionnaire was conducted. On the other hand, qualitative data was collected using an interview guide. This involved in-depth interviews with three CEOs of the pharmaceutical firms to understand the competitive strategies. The collected data were analyzed using the statistical package for social science (SSPS Version 23) for quantitative data and Atlas ti Version 9.2 for qualitative data. The findings from the interviews revealed that; marketing excellence, focus on specific markets, effective distribution channel management, strategic supplier selection, cost management strategy, product and service differentiation and effective sales management are the most used competitive strategies in the pharmaceutical distribution in Kampala’s Nakawa Division. Furthermore, the study also revealed that firms attained competitive strategy through application of various tactics such as use of minimal capital for product sales promotion (mean =3.71, SD=1.08), dealing with wholesalers who had access to a wide range of markets, acquiring lower-cost input materials (mean =4.60, SD = 0.653), selling highly differentiated products (mean 4.53, SD = 0.753), introducing unique selling points (mean =4.40, SD = 0.715). But some also reconsidered earlier designed market strategies after evaluation (mean=4.15, SD=0.866), used customized products (4.61, SD=0.690), emphasized speciality marketing (mean = 3.87, SD = 0.88), and valued strong relationships with their channel partners (mean = 3.57, SD = 0.978). In addition, the study found Differentiation Strategy (B= 0.244, p=0.001), Porter’s Five Forces of Competitive Market Position Analysis (B= 0.268, p=0.001) and Product Quality Perception and Pricing (B= 0.279, p=0.002) to be positive predictors of Sales Volume. The study therefore recommends that pharmaceutical firms ought to establish clear procedures and policies to implement competitive strategies that support their goals and objectives. Additionally, Pharmaceutical distribution firms should provide training and education for staff on competitive strategies and practices that have been adopted since they are frontrunners in implementation.