Anytime an organization wishes to expand business globally and enter an international market, there are going to be new challenges, and selling in Italy is no exception, and, is in fact particularly overwhelming. At present, there are more than 7,500 U.S. companies actively doing business in Italy with roughly 850 of them physically operating there. Decision-makers in these companies and those who are thinking about taking business into Italy will find a number of practices that differ from how business is done in America (U.S. Department of State, 2000). For example, “the United States remains largely unregulated when it comes to pharmaceutical pricing; however, France and Italy have direct price controls on pharmaceuticals, allowing their citizens access to cheaper prescription drugs” (Gannon, Sheng, and Ismail, 2006).
In March of 2007, Pfizer, one of the leading prescription drug wholesalers announced its direct distribution system in Europe. Upon implementation, the company’s products would no longer be available from a range of wholesalers, but only through Pfizer directly. This drastic change may prove bad for other wholesalers in the region, but potentially good for drug stores and similar retailers (“Pfizer Breaks the Mold,” 2007).
Organizations who intend on satisfying the needs of customers in Italy in the retail industry are required to make large investments into advancing techniques, media promotion, research, and equipment. “The industry’s average return on investment is approximately 13 percent” (U.S. Department of State, 2000). Most countries in Europe, especially Italy, have become more interested in big-box stores and distribution chains as opposed to traditional street vendors and “mom and pop” shops.
Marketing products in Italy can be achieved through a number of existing channels, which vary based upon the type of product being offered, the targeted customer, and promotional activity (U.S. Department of State, 2000). As mentioned, prescription drugs are defined as a basic need in the Italian market; thus, the government has imposed a “price ceiling” that is lower than that which is offered throughout the market. Consequently, the price of the pharmaceuticals is artificially lowered to the point where customers who were once unable to afford them could now do so, causing an increased demand for the product (Gannon et al, 2006).
References
- Gannon, N., Sheng, K., & Ismail, D. (2006). Price controls on U.S. pharmaceuticals. The Heinz School Review. 3(2).
- “Pfizer Breaks the Mold.” (2007, Aug 9). Pharmaceutical distribution in Europe: Pfizer breaks the mold. Retrieved August 23, 2007, from MarketResearch.com Web site: http://www.marketresearch.com/product/display.asp?productid=1539977&xs=r&SID=61365471-392691516-349152227
- U.S. Department of State. (2000). FY 2001 country commercial guide: Italy (12-14, IV. Marketing U.S. Products and Services). Rome: U.S. Embassy Rome.
