Adoption of new pharmaceutical products by wholesalers in Kenya

Abstract

The importance of new product adoption has been widely proclaimed by managers and academics and the pace of product adoption-related research has increased dramatically, reflecting the importance of the area to many industries, including the pharmaceutical industry. The study was guided by the following specific objectives: to determine the factors influencing new product adoption by pharmaceutical wholesalers in Kenya; to establish the barriers to new product adoption by pharmaceutical wholesalers in Kenya; and to determine strategies adopted by pharmaceutical wholesalers to influence effectiveness of new product adoption in Kenya. A descriptive survey design was used to undertake the study. The population of interest in this study was all the pharmaceutical wholesalers based in Nairobi and its environs whose number stood at 30 as of December 31st 2009. There was one respondent from each of the outlets. A census was undertaken since all pharmaceutical wholesalers solely involved in wholesale business are located in Nairobi and its environs and have branches in other major towns in Kenya. A semi-structured questionnaire was used to collect primary data from the respondents. The questionnaire was pre-tested on six randomly selected respondents to enhance effectiveness and hence data validity before being administered. Data pertaining to the profile of respondents was analyzed by employing content analysis. In order to meet the three objectives of the study, data was analyzed by employing descriptive statistics. Computation of frequencies in tables, charts and bar graphs were used in data presentation. In addition, standard deviations and mean scores were used to present information pertaining to

the study objectives. The information was presented and discussed as per the objectives and research questions of the study. The findings of the study show that the key factors influencing new product adoption by pharmaceutical wholesalers in Kenya include: potential opportunities in the relevant product class; price of the product/brand compared to competitors’ offerings; gross profit margin and contribution margin of the product; potential profitability compared to others in the product class; potential of the product to maximize profits; prior experience with the product vendor in the market; organizational profit and sales objectives; and availability of the product to maximize profits. In view of the findings, the study recommendations include: the wholesale outlets should consider enhancing buyer and supplier relationships in order to sustain a competitive edge over other players in the industry; technology, information sharing and process integration should be embraced to enable lowering of costs; and focus on fulfillment; customer management; forecasting and planning; and procurement.