Marketing in Pharma Industry
Transcript of Marketing in Pharma Industry
STRETEGY MARKETING AUDIT
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DUNDEE BUSINESS SCHOOL
SESSION 2010-2011
MARKETING MANAGEMENT
Submitted To:
Prof. Gary Mulholland (Module Tutor)
Dundee Business School
MK1102A: Marketing Management
Submitted By:
Sameer Chaturvedi
Student Id: 0900552
MBA (Biotechnology)
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Table of Contents:
Executive Summary……………………………………………………….3
Environmental Aspects……………………………………………………5Demographics….………………………………………………………….5 Culture……….….…………………………………………………………5 Markets…………….………………………………………………………7 Market Trends.........................…………………………………….………7 Market Needs .......................……………………………………………..8
SWOT Analysis…………………………………………………………8
Strengths………………………………………………………………10 Weaknesses……………………… …………………………………...10 Opportunities…………………….. …………………………………...10 Threats………………………………………………………………….11
Marketing Mix…………………………………………………………….12
Product Strategies………………………………………………………….13Price Strategies….………………………………………………… ………13 Distribution/Strategies……..………………………………………………14
Key objectives in 1 and 5 years……………………………………………14
Conclusion………………………………………………………………….15
References…………………………………………………………………16
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EXECUTIVE SUMMARY:
The Indian pharmaceutical market continues to have an increasing number of firms
trying to join the health care sector in the Indian sub continent. Alkem Laboratories
limited is aware of the competition since its inception in 1974. It has managed to
evolve as a major player in developing drugs for acute chronic and therapeutic
segments. Alkem is always striving hard to maintain its operational performance
and maintain its priorities as a leader in the formulation segments of Indian
pharmaceutical industry. The company’s focus on brand building, drug quality,
Pharmaceuticals trials and customer service is consistent with the market. Alkem
keeps its products mix in coherence with the forecast of the Indian Pharmaceutical
market.
In 1974, the company was founded by India’s respected entrepreneurs sri
Samprada singh. A devoted team of scientists and doctors were committed to
carry the Indian pharmaceutical self dependency to new heights and character. The
company was started with a low investment but with great efforts and enthusiasm
which had propelled the company to become a leading domestic pharma major in
the last three and a half decade. The company since its inception has targeted all
the small chemists and the big pharmacy stores. The medical marketing
representatives have honestly contributed to maintain consistency and awareness
and supply of company’s products and its presence in the market. All the medical
shops were soon carrying Alkem products whether in big cities or the small cities
of the country.
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The company needs to review its products on a continuous basis, particularly in the
new therapeutic segments of the pharmacological sciences to increase sales. The
current product line is improved through world class manufacturing facilities. The
portfolio of the Alkem products includes wide spectrum of he therapeutic drugs
which includes NSAIDS, Gynecology drugs, CNS and CVS products, a wide range
in Oncology and Antibacterial range. Alkem’s products are approved by world
regulatory authorities including USFDA, UKMHRA, ANVISA BRAZIL, MCC
South Africa and TGA Australia.
(http://alkemlabs.com/alkem/alkem-lab-aboutus/alkem-profile.aspx - 18k)
The products and drugs of Alkem are viewed form a value point of view rather
than price point of view. However, the prices of Alkem’s products are always
consistent with the market. The decision of the last year’s price review and
increase has not affected the prices to an extent which will disturb the demand of
the company’s products. New marketing schemes in the rural geographical sectors
of the country would result in expansion of the strength of Alkem sales along with
building brands in the medium size cities. If Alkem tries to take advantage of the
growing economy it must concentrate in promotion of its very best brands by
making those products recognized in the interior areas of the country.
In order to compete in the cut throat competitive pharmaceutical sector and to keep
competitors form entering the pharma market, the directors of the company have
suggested using the non traditional ways to market the products in the country. The
third world and the developing countries preset a huge market of pharmaceutical
sector. A much serious and consistent effort will be needed if Alkem wants to
catch a share in the over seas pharma market.
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Environmental aspects:
Demographics:
Indian economy has been growing with a rate of about 9% during the last five
year plan of the government. As more and more people are migrating to cities form
villages and other rural areas in the country the pharmaceutical market demand is
increasing with a constant rate. Alkem is going beyond traditional methods in this
respect, Alkem are committed to align is drug discovery focus keeping in mind the
needs and the diseases affecting the population and its demographics. The product
packaging and pricing is also done keeping in mind the psychographics and life
styles of the customers. The drugs of Alkem has targeted all the classes of the
population , The antibacterial , Gastroenterology products , CNS, and CVS
products encompasses the dosage range from infants to children between 10 to 16
years of age and from young age to older years.
Culture:
In today’s competitive business environment Alkem’s ultimate goal is to
provide best products with best price in its respective markets. Alkem’s culture of
communication with in the organization, both internal and external with
effectiveness has played a vital role in its success. Alkem’s this effective culture
has helped the company to achieve the synergy to generate sales in the
international markets.
A main component of Alkem’s culture is strong focus on Pharmaceutical market
behavior. The product and its implementation are done seriously. The corporate
social responsibility report addresses the main concerns and issued regarding the
market segments in the country. The company addresses include investing in the
research and development, investing in new marketing practices, building strong
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communication culture between the doctors and hospitals and the company’s
representatives. There is always a focus on communication between junior
employees and senior management. This results in production improvement and
employee engagement.
Location of all clearing and forwarding agents in all the states and districts of the
country has been carefully selected and the aim is kept in mind to target the
specific markets where the population was earning at the middle class level to
lower middle class level. This is why Alkem has been successful in the terms of
non conventional approach of marketing in various locations around the country.
This approach has led Alkem pharma to be ranked as 5th company in the Indian
pharmaceutical industry. The main guidance word for Alkem is “To make a
positive difference to the lives of the people across the globe…” They have
focused on pricing and convenience for the medical practitioners. The company
has always tried to make sure that the company’s products in its all the divisions
remains the prime choice of the retailers and the customers. It is not surprising that
most of the government hospitals and private practitioners and the small health
care centers in the villages now prefer the Alkem drugs for prescription to their
patients.
Markets:
Alkem is now quickly getting recognized in the international market and its
flagship brand Taxim (Cefotaxime) is proud to be included among the top four
successful brands in the pharmaceutical market in India. Alkem has been awarded
as the best company in brand management in may 2006. Alkem is continuously
striving to expand its operations in the international market. An office of Alkem is
registered in Kenya, 25 brands of Alkem is currently registered in Kenya. The top
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brands of Alkem there include Clavam and Trinerve. Many Franco Phonic
countries like Mauritius, Malawi, Lesotho, Ethiopia, Uganda, Zambia, Congo,
Ghana, Senegal and Cameroon are consuming Alkem’s leading brands. In Nigeria
Alkem is registered as Alkem Nigeria limited. Sri Lanka has products of Alkem
with the name of Taxim-O, Triump and Zocef. Alkem has more than 125 brands
registered in Russia, Kyrgyzstan, Tajikistan, Azerbaijan and Turkmenistan.
(www. expresspharmaonline.com)
Market trends
The Indian pharmaceutical market is one of the largest pharma markets in India.
The company manages to snatch a turnover of $220 million. The products of
Alkem are exported to markets internationally which covers 40 countries
encompassing the regulated European markets as well. A dedicated team of
researchers has enabled Alkem to enter the global health food market
(Ref: foodnavigator-usa.com)
But despite the competitive position of the market for Alkem has not let the
company to get among the first top three companies of India. However Alkem’s
Taxim is the third largest brand in domestic market with sale of Rupees 103
million behind Pfizer’s “corex cough syrup” and “voveron” a pain killer by
Novartis India. Alkem’s both older products and new introductions have
contributed to 10 to 12 % respectively to the value growth. According to the head
of domestic business Vinod dua, Alkem growth was mainly contributed by anti-
infective TAXIM , Taximo Clavam and Gemcal drugs. The Indian pharmaceutical
market is expected to experience constant positive growth into coming future,
Alkem is set to fetch the opportunities and to achieve significant growth rate in the
year 2011.
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Market needs:
The primary goal of Alkem is to continue to add new molecules on its product
portfolio through its dedicated workforce. The company has adapted a research and
consumer based marketing strategy which helped in expansion in the target areas
of various demographics. The company has divided the country into targeted
regions with Mumbai Delhi, kolkata, Chennai, Hyderabad and Bangalore as the
Hub cities. Various marketing and sales professionals have been appointed in the
hub cities with junior management of medical representatives to serve the markets
under each hub. Zonal managers, Territory managers, Area managers direct the
market development of each region and implant the Alkem products in the new
markets.
SWOT Analysis:
Alkem laboratories ltd. has evolved as a leader in the formation segment in the
pharma central sector of India market. The company has recorded an increase in
revenue profit which has raised its position to fifth from seventh in year 2010. The
company faces the threat of reduction in margins due to increased research
&development cost.
Strengths:
International presence
A disciplined & research based & marketing focused working culture.
Leader in formulation segment of Indian pharmaceutical industry.
World class manufacturing facilities approved by regulatory authorities
including USFDA, UK MHRA, ANVISA, Brazil.
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Exports to 40 countries.
Weaknesses:
Reliance on the results of research & out comes of clinical trails.
Reliance a regulatory authorities.
Lower revenues & income per employee.
Market entry of many competitors.
Rising research &development cost s.
Opportunities:
Growth in global pharmaceutical sector.
New producer in anti-bacterial, Pain Management, Cardio Vascular drugs,
anti Diabetic drugs, Neuropsychiatry Drugs, Gastro Intestinal drugs &
Anticancer Drugs.
culture of taking advantage of opportunities
Increasing Generic sector business.
Threats:
Highly fragmented markets.
Volatile nature of the pharmaceutical market.
Rising research and development costs
Competition intensity
Market entry of many competitors
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Strength-
International presence:
Alkem has managed to print its foot steps in 40 countries of the world. The
company exports to major markets including Australia, Newzeland and in the
Indian subcontinent. East Europe, East Asia, Middle East and South East Asia.
The company has stronghold on Cephalosporins in exports and its flagships
brands like Taxm Taxim O , Clavam and Alcipro. Alkem has commenced
businesses in UK and Europe’s regulated markets.
Weaknesses:
It is well understood that pharmaceutical and drug discovery business involves
a huge amount of money to invest in research and the government and financial
planning of Indian government unfortunately do not spent that much on
research and development.
Moreover the company has not yet been able to properly enter the US pharma
market. The company has not yet been able to reap the opportunities in the
biotechnology sector despite pharma and biotech being a similar area of
research and drug development.
(Ref: www.espicom.com.)
Opportunities:
Growth in the Pharmaceutical markets:
The huge population if India which is more than one billion comprises of a middle
class which is growing at a fast pace. This middle class is now able to access high
quality health care services. The pharmaceutical market is now experiencing a
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double digit growth and this trend is believed to continue in future. Yet the share
of Indian pharmaceutical is less than 2% of the worlds total and this fact poses a
real opportunity in terms of growth in the world market given the world class
manufacturing facilities, acceptance and approval for the products of Alkem
throughout the developed nations of the world.
The disposable income of the middle class is growing and government is also
spending more in child health care and immunization programs. Diabetics are a
serious problem for the population of India. It is expressed that there will be about
70 million diabetic patients in India by 2025 (ref: (www.espicom.com).
In terms of production around 8% of the world pharma products is done in India; A
major growth is expected in diabetic and theruptic segments in the cancer drugs
and vaccines all these possibilities present a great opportunity for development of
Alkem in the future.
Threats:
New products:
The highly competitive nature of Indian pharmaceutical market is because of many
domestically produced generic medicines. And also because of geographically vast
area and where majority of the population is rural and poor. Barriers also include
political and economic conditions weather nature and thinking of population which
may adversely affects the business of the company.
Rising research and developments costs and Lack of product patent
protection and inadequate profit base:
The government of India spends money in research on pharma setout that is not
enough to match the requirement by main developing countries. The Research &
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Development costs are all time high at present which hinders the performance of
the company. Also the continued increase in the prices of Raw materials and basic
chemical could arrest the company’s margins. New drug development process tales
7 to 10 years and $ 350 to 500 million internationally. And this process is also
depending upon the type of diseases being attacked. Private initiative is also very
less to invest in R &D in the pharma sector.
However,The expenditure of research and development will be for lower in India
than in developed countries because Indian scientists can be hired at much lower
salaries than the foreign scientists. And the huge population can also present easier
clinical trial facilities fro diseases prevalent in developing countries.
Marketing Mix:
Alkem pharmaceutical marketing involves the products development and
determination and its establishment. The distributing channels, the pricing
considerations and the product promotion strategy are used The company’s
products are sold under the following focused business units, these units are,
Main, Ulticare , Bergen, Mediva, Pentacare, Cytomed and Futura, along with
institutional sales , derma, Alkem health foods and Alkem Pharma,
These divisions include drugs and products ranging from anti infectives to
gastroenterology, NSAIDS, anti protozoal, anti malarial, anti osteoporosis, Pain
management, cardiovascular, Anti Diabetics, anti psychotics, oncology, HIV
therapy and IVF.
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Product strategy:
The company’s product strategy involves generation of new products and the
enhancements of the existing products. The evolution of the parent molecule, its
perfection and patenting in the international level.
The company also keeps its focus on promotion and retention of old and reliable
products along with the current existing ones. With Taxim as its main propelling
product Alkem strives to develop and introduce new drugs in various therapeutic
segments for its customers.
For example the following new products of Bergen Division are demonstrated to
doctors by medical representatives all over India.1. Gemcal. 2. Zocef, 3. Enzoflam.
Nodimox. Nuloc. Solufer, Gemfos, Enzocort, Gemcerin.
Pricing strategy:
Alkem’s pricing strategy is largely based on competition especially because of
many small and domestic pharmaceutical firms are emerging in the country and
around the world. This poses great challenges for pricing in the commercial
market. Recently Alkem has developed low cost sweeteners which can be a game
changer in the market. Alkem plans to price its sweetener 40 times less than market
leader Zydus cadila “ sugar free”(ref: economictimes.indiatimes.com)
Alkem tries to price it products in a lower level than the similar products in the
market and then aggressively promotes its product through its 5000 field force to
chemists and health centers. The price of the products in the drugs and such as anti
infective diabetics, HIV, cancer and dermatology medicines is lower in comparison
to the competitive products of other companies.
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Distribution strategy:
Alkem has one of the largest distribution networks setups in India this strategy of
logistics cover every state and district of India, 20 depots and C and F agents and
5500 stockiests are used for this logistics set up (ref:alkemlabs.com). 40% of the
retail market is covered by Alkem’s present distribution strategy. Alkem’s logistics
covers the entire geography of the country. Further the Marketing representatives
provide the drugs to every chemist stores in the nook and corner of the country
from where it reaches the general public.
Key objectives of Alkem in 1 and 5 year:
To get among the first three pharmaceutical companies of India in the next five years
To identify and patent new Pharmaceutical molecules and to add these new products in companies product portfolio
To maintain its position as a national leader in the formulation segment.
Alkem aims to come among top three pharma companies of India by 2012 the
company is not only looking at domestic business, Its global dream is to be a
world’s major company and the company is trying to achieve its aim by pursuing a
series of parternerships and collaborations within the next five years. It has plans
for diversification expansion and gaining more market share in the health care
segment. An investment of rupees 50 crore has been done by Alkem on sucralose
facility in the Mandava village in the state of gujrat.
The financial target is set high on Rs. 2000 crore for year 2011, about this Mr.
samprada singh the founder of the company at the age of 79 is confident.
(www.expresspharmaonline.com)
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Conclusion:
Alkem’s secret of success lies behind its positive attitude towards big challenges.
The company’s story epitomizes the old English adage “From tiny acorns grow
mighty oaks”. The marketing strategy of Alkem has been consistently effective
this is reflected in its sales which have exceeded expectations in the past. The
SWOT analysis and Industry research of Alkem’s marketing strategy and strategic
decisions have been accurate. Alkem is targeting the global market primarily in the
Europe and Americas. Alkem is striving to keep the prices attractive without any
affect on demand at the same time improving its distribution channels. Alkem’s
corporate mission statement “ ..We strive for making a positive difference to the
lives across the globe..” and its strategic planning seems to be in line.
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References:
1. http://www.alkemlabs.com/ - 13k
2. http://alkemlabs.com/alkem/alkem-lab-infrastructure/alkem-di... - 13k -
3. http://www.foodnavigator-usa.com/smartlead/view/207828/4/Alk... - 38k
4. http://investing.businessweek.com/research/stocks/snapshot/s... - 66k
5. http://www.expresspharmaonline.com/20060930/management03.shtml - 25k
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6. http://www.tradeindia.com/Seller-2474386-ALKEM-LABORATORIES-...
- 61k
7. http://www.biospectrumasia.com/content/040809IND10202.asp - 63k -
8. Kotler, Philip, Marketing Management: A south Asian Perspective,(13th
edition, Prentice Hall of India) 2009.
9. Saxena, Rajan, Marketing Management, Third edition, Tata McGraw Hill
publication, 2008.
10. Mercer, David, Marketing Strategy The challenge of external environment (
sage Publications, 1998).
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