South Africa grows share of global nuclear medicine market - Marketing Assignment

Internal Code: MAS5471

Marketing Assignment:

Scenario:  The global nuclear medicine market, which includes radioisotopes and medical equipment, was valued at over US$11-billion in 2016, and is now projected to reach nearly US$20-billion by 2021. Nuclear medicine uses tiny amounts of radioactive isotopes (radioisotopes), mostly for medical imaging to view the structure and function of organs, bone, tissue or systems in the human body. Imaging obtained from nuclear medicine often allows disease to be identified at a much earlier stage, while therapeutic applications of medical radioisotopes allow for targeted, non-invasive treatment. South Africa currently has the largest body of nuclear medicine practitioners and nuclear medicine centres in sub-Saharan Africa, including nuclear medicine departments at 12 tertiary state hospitals. Globally, demand for nuclear medicine is being driven by increases in the incidence of cancers and cardiovascular disease, and by the growing number of new applications for medical radioisotopes including the study of neurological and psychiatric diseases. Medical radioisotopes are used in a number of branches of medicine including oncology, cardiology, neurology, and endocrinology specifically thyroid conditions. Underpinning this market is one key medical radioisotope: molybdenum-99 (Mo-99). The daughter product of Mo-99, technetium-99m (Tc-99m), is used in over 40 million nuclear medicine procedures every year. There are currently fewer than five sites in the world capable of producing commercial volumes of Mo-99. Pelindaba-based South African company NTP Radioisotopes, a subsidiary of Necsa, is one of these; and currently, with global partnership agreements, supplies between a quarter and a third of the entire global demand of Mo-99. The group’s role has become even more significant with the 2016 exit of the Canadian NRU reactor from production.  NTP has been one of the top three global producers of Mo-99 for some time, and posted group revenues of over R1,2-billion for the 2015/16 financial year – almost R1-billion of which came from the sale of medical radioisotopes and radiopharmaceuticals. The state-owned company expects to exceed this figure for 2016/17. “We have managed to grow our market share for Mo-99 through continued investment in our production, and by working with our partners to cover the supply gap,” explains Precious Hawadi, NTP Group Executive: Finance. The group has a market footprint covering 50 countries around the world, and is also a significant earner of foreign exchange for South Africa. NTP Group MD Tina Eboka explains that the group’s success has been built on “excelling in manufacturing, processing and moving an extremely time-sensitive radiochemical to our customers around the world. What NTP does is, it provides the foundational material for a global, multi-billion dollar nuclear medicine industry. And there are only a few companies in the world that can do what we do. Without South Africa’s contribution to nuclear medicine, the whole health system could not function.” NTP is also one of only a few vertically integrated medical radioisotope manufacturers in the world, and plays an even more unique role in South African manufacturing where it acts as both primary producer and beneficiator of its product. NTP’s advanced manufacturing capabilities and pioneering technology have even been exported to other countries. South Africa’s proprietary process for the use of low-enriched uranium in the production of Mo-99 has been licensed to the Australian Nuclear Science and Technology Organisation (ANSTO), which is also one of NTP’s key partners. Questions: 1) You have recently been appointed as the Senior Manager International Marketing at NTP. Select an Afro-Franc country to grow the nuclear medicine market. Justify your selection. 2) Describe, with reason, what you would consider to be the most important considerations for NTP in selecting a negotiation team. 3) Describe the kinds of problems that NTP may encounter during business negotiations. Consider the fact that South Africa is viewed as having adopted a Western style of negotiation. 4) Fully discuss how the causes and solutions to parallel imports can affect the price of the MO-99. 5) You have established that satellite television is available in the country you have selected. Suggest how NTP can use digital satellite television to deal effectively with the different languages, cultures and legal systems between South Africa (host country) and the Afro- Franc country you selected.