MKT 382 Eskayef-sizer

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Eskayef Bangladesh Limited R I I NTRODUCTION NTRODUCTION RATUL18- RATUL18- NSU NSU We are preparing a Marketing Plan regarding international operations of the imminent pharmaceutical company of Bangladesh – Eskayef Bangladesh Ltd. The report is based on marketing challenges and strategies that Eskayef Bangladesh Ltd. has to adopt in order to meet the requirements of the competitive market to successfully operate their business in the foreign lands. Information for this report is collected maostly from secondary sources. However, information is also collected from primary sources as well. Eskayef Bangladesh Limited, also known as SK+F is a major pharmaceutical company based in Bangladesh. It is part of the Transcom Group of Companies. Eskayef Bangladesh Limited is one of the fastest growing pharmaceutical companies in Bangladesh and is engaged in the manufacture and marketing of a wide range of therapeutic drugs, bulk pellets and animal health and nutrition products. Page 1

Transcript of MKT 382 Eskayef-sizer

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IINTRODUCTIONNTRODUCTIONRATUL1RATUL18-NSU8-NSU

We are preparing a Marketing Plan regarding international operations of the imminent

pharmaceutical company of Bangladesh – Eskayef Bangladesh Ltd. The report is based on

marketing challenges and strategies that Eskayef Bangladesh Ltd. has to adopt in order to

meet the requirements of the competitive market to successfully operate their business in the

foreign lands.

Information for this report is collected maostly from secondary sources. However,

information is also collected from primary sources as well.

Eskayef Bangladesh Limited, also known as SK+F is a major pharmaceutical company

based in Bangladesh. It is part of the Transcom Group of Companies. Eskayef Bangladesh

Limited is one of the fastest growing pharmaceutical companies in Bangladesh and is

engaged in the manufacture and marketing of a wide range of therapeutic drugs, bulk pellets

and animal health and nutrition products.

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EECONOMICCONOMIC C CONDITIONONDITION OFOF BBANGLADESHANGLADESH

In the past decade, Bangladesh enjoyed a positive growth rate in GDP and other macro

economic indicators. As the most densely populated country in the world, Bangladesh is

facing the problems of illiteracy, malnutrition, unavailability of medical facilities etc.

Sustainable economic development is one of the major goals of Bangladesh. Political

turmoil has hampered the expected growth pattern in Bangladesh.

GDP Growth Rate

FY-00 FY-01 FY-02 FY-03 FY-04 FY-05 FY-06

5.9 5.3 4.4 5.3 5.5 6.0 6.5

Table: Growth rate of different macroeconomic indicators

Growth Trend

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As Bangladesh is expected to continue to be a trade-oriented nation in the coming decades,

consequently the experiences of the 1990s will have much relevance from the perspective of

charting the future policy directions of the country. Hence, the analysis of the growth in

external sector is carried out for the period of FY1990-FY2001.

Year Export Remittances ODA FDI Total Import FER

FY1996 3882.42 1217.06 1443.00 16.58 6559.06 6947.00 2039.00FY1997 4418.28 1475.42 1481.23 -62.12 7312.81 7162.00 1719.00FY1998 5161.20 1525.43 1251.38 320.82 8258.83 7524.00 1739.00FY1999 5312.86 1705.74 1536.80 262.61 8818.01 8018.00 1523.00FY2000 5752.20 1949.32 1588.00 228.68 9518.20 8403.00 1602.00FY2001 6467.30 1882.10 1368.80 214.01 9932.21 9362.86 1307.00Total 43095.08 14599.56 16985.21 1261.62 75941.47 68500.86 20373.00Growth Rate

13.58 9.53 -1.90 - 9.07 10.78 -0.49

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Export – Import Ratio

Foreign trade has also experienced changes over time. Export as percentage of import has

increased over time. In FY1980, total export of Bangladesh was 32.46% of the total import.

The ratio of export-import has increased to 39.54% in 1990 and to 69.07% in FY2001.

GDP Projection

In the present GDP estimation exercise three types of growth scenarios have been

developed. First, the “optimistic scenario” is targeting 8% consistent annual growth of the

GDP; Second, the “business as usual” scenario implying steady 6% growth rate of the GDP;

and Finally, the “base case” scenario with 4% growth rate.

Year 4% GDP Growth 6% GDP Growth 8% GDP GrowthFY2005 55328 58582 61961FY2006 57541 62097 66918FY2007 59843 65823 72271FY2008 62237 69772 78053FY2009 64726 73958 84297FY2010 67315 78396 91041

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PPHARMACEUTICALHARMACEUTICAL I INDUSTRYNDUSTRY ININ BBANGLADESHANGLADESH

Pharmaceutical sector is one of the most developed hi tech sector which is contributing in

the country's economy. After the promulgation of Drug Control Ordinance - 1982, the

development of this sector was accelerated. The professional knowledge, thoughts and

innovative ideas of the pharmacists working in this sector are the key factors for this

development. Due to recent development of this sector we are exporting medicines to global

market including European market. This sector is also providing 95% of the total medicine

requirement of the local market. Leading Pharmaceutical Companies are expanding their

business with the aim to expand export market. Recently few new industries have been

established with hi tech equipments and professionals which will enhance the strength of

this sector.

Pharmaceutical Industry has grown in Bangladesh in the last two decades at a considerable

rate. Its healthy growth supports development of auxiliary

industries for producing glass bottles, plastic containers,

aluminum collapsible tubes, aluminum PP caps, infusion

sets, disposable syringes, and corrugated cartons.

Some of these products are also being exported. Printing

and packaging industries and even the advertising agencies

consider pharmaceutical industry as their major clients

and a key driving force for their growth.

The sector consistently creates job opportunities for highly

qualified people. Many established entrepreneurs of today

started with pharmaceutical companies in the country.

Pharmaceutical companies are either directly or indirectly contributing largely towards Page 5

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raising the standard of healthcare through enabling local healthcare personnel to gain access

to newer products and also to latest drug information.

Following the Drug (Control) Ordinance of 1982, some of the local pharmaceutical

companies improved range and quality of their products considerably. The national

companies account for more than 65% of the pharmaceutical business in Bangladesh.

However, among the top 20 companies of Bangladesh 6 are multinationals. Almost all the

life saving imported products and new innovative molecules are channeled into and

marketed in Bangladesh through these companies. Multinational and large national

companies generally follow current good manufacturing practices including rigorous quality

control of their products.

The Drug Act of 1940 and its rules formed the basis of the country's drug legislation. Unani,

ayurvedic, homeopathic and biochemical medicines were exempted from control under the

legislation. The pharmaceutical industry was dominated by the foreign companies at that

time. Even in the allopathic market there were extemporaneous preparations dispensed from

retail pharmacies.

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EESKAYEFSKAYEF B BANGLADESHANGLADESH L L IMITEDIMITED

Eskayef Bangladesh Limited is one of the fastest growing pharmaceutical companies in

Bangladesh and is engaged in the manufacture and marketing of a wide range of therapeutic

drugs, bulk pellets and animal health and nutrition products.

The company's rapid rise since its inception has propelled it to a top ranking position among

the pharmaceutical companies operating in the country. The company is a successor of

Smith Kline & French in Bangladesh, acquired by Transcom in 1990. Eskayef started its

operation with pharmaceutical finished products for the home market. Over time the

company has diversified its operations into bulk products as well as animal health and

nutrition products.

Vision

Eskayef envisions a leading role for itself as a catalyst for improvement of the healthcare

environment.

Mission

The company’s mission is to maintain people’s health and combat disease to enhance the

quality of human life so that people may live longer, healthier and more meaningful lives.

Corporate History

Eskayef Bangladesh Limited, a successor of SmithKline & French in Bangladesh, is one of

the fastest growing pharmaceutical companies in Bangladesh and is engaged in the

manufacture and marketing of a wide range of therapeutic drugs, bulk pellets and animal

health and nutrition products. With annual sales surpassing Taka 2 billions, the company's

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rapid rise since its inception has propelled it to a top ranking position among the

pharmaceutical companies operating in the country today.

Business Information

Eskayef Bangladesh Ltd. started its operation with pharmaceutical finished products for the

home market. Over time it has diversified its operations into bulk products as well as animal

health and nutrition products and exports it to foreign markets.

International Business

Eskayef has entered into the international market with the export of Multivitamin and

Mineral tablets to North Korea in 1998. As a part of massive expansion plan in the

international market, Eskayef has already established its presence in Nepal, Sri Lanka,

Vietnam, Hong Kong, Macau, Somalia, and UAE and is under registration process in 6 more

countries.

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Eskayef at a Glance

Eskayef Bangladesh Limited is amongst the top five pharmaceutical companies in

Bangladesh.

It was incorporated in 1980 as a subsidiary of SmithKline & French, USA and was

acquired by Transcom in 1990 in the wake of merger between SmithKline and

French, USA and Beecham, UK.

The company manufactures high quality pharmaceutical health care products. Its

Quality Assurance practices of WHO recommended standard was certified by both

UNICEF and SB’s international Auditors.

Eskayef Bangladesh Limited currently ahs an annual turnover of USD 39 million.

Approximately 1250 employees are working in this company.

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Production & Products

Eskayef Bangladesh Limited is engaged in the manufacture and marketing of a wide range

of - therapeutic drugs, bulk pellets and animal health and nutrition products.

The manufacturing facilities of Eskayef are fully compiled with current Good

Manufacturing Practice (cGMP). Eskayef offers sophisticated formulation know-how and

facilities for:

Solid doses: Tablets, Coated Tablets (aqueous, organic, and enteric coating),

Capsules and Powder for Suspension/Syrup.

Liquids: Syrups, Suspensions and Solutions.

Semisolids: Gel, Ointment, Cream etc.

Powder for Oral Liquids in sachets.

Bulk Pellets.

Animal Health & Nutrition products.

Yearly production capacity of formulation unit – Normal Hour (8 hour shift)

Tablets 533.7 million tablets

Coated Tablets 322 .0 million tablets

Encapsulation 230.0 million capsules

Liquid Syrup 3.80 million bottles

Dry Suspension 5.00 million bottles

Semi Solid 2,00 million tubes

Powder in Sachets 12.00 million sachets

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Quality Systems

Eskayef management believes in effectiveness of a quality system based on the principle of

continuous improvement, progress and prevention as per WHO recommended guidelines.

The procedure assures consistent high quality, improved safety of the work environment.

Concepts of quality represent a commitment to quality in each and every activity of our

process. We regard the permanent orientation towards a high quality of services as the

prerequisite for assuring an enduring partnership with our customer. Quality means fulfilling

a guaranteed standard of performance, which conform to specifications. It also means

maintaining a high standard in production, delivery services and in after-sales service.

Included in out concept is constant innovation in all areas of work, health and safety

demands in the handling of all materials, installations as well as the welfare of our

employees. Our services are at satisfying the quality demands of our customers. We have

built the Quality Assurance System to satisfy these high standard demands. The system

stipulates the procedure and methods basis of the specifications of international standard.

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10 Basic Facts of GMP Practice

Must have written procedureHave to follow the written procedureHave to document (record) the workHave to validate the workMust design & build proper facilities & equipmentMaintain facilities & equipment in proper stateMust have education, training and experienceHave to maintain a clean environmentMust control the qualityHave to periodically audit for compliance

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Human Resources

The workforce of Eskayef Consists of more than 1250 qualified, trained and skilled

personnel who are drawn form different disciplines that have a bearing on the

pharmaceutical industry. The teams of dedicated professionals include panoply of

pharmacists, medical graduates, microbiologists, biochemists, chemists, engineers and

business management experts. Their competencies, experience and strict adherence to the

work ethics go into the manufacturing and marketing of each of the company’s products.

Eskayef Bangladesh Limited is committed to sustainable development. The objective is to

be a leading corporate citizen, both technologically and economically. The belief is –

achievement of goal is closely linked to the organizations ability to contribute to the benefit

of the people. This policy on corporate citizenship outlines the organizations pledge, and it

is both a strategic business initiative and the right thing to do.

The Eskayef core values are based on the fundamental rights of every individual,

such as the protection of privacy, freedom of opinion, freedom of association, non-

discrimination and the to be heard.

Eskayef believes associates are the key to its success bases its human resources

policies and practices on fairness, openness and mutual respect.

Eskayef wants to be the leader in health, safety and environmental protection of

Eskayef employees, its consumers, its customers and all others affected by its

business activities.

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Eskayef cares about the expectations and concern of its share holders, employees,

customers, and public at large in it social behavior.

Marketing & Sales

Eskayef believes that professional marketing is the hallmark of their commitment to

customers. Eskayef accomplishes marketing objectives through efficient and qualified

cadres of Product Executives, Sales Executives and Market Research Executives.

Development programs are being organized to provide the medical professionals with the

required support. With large number of skilled field forces in its sales team, Eskayef has

reached distant corners of Bangladesh and is providing continuous service to the medical

professionals, chemists and druggists as well as the public general by clinical meetings

scientific seminars, awareness development programs and scientific information.

Sales Growth (Sales in Million)

Year Sales (TK) Sales (USD) Growth

1998 527.59 10.99 37%

1999 466.50 9.72 -12%

2000 639.00 11.85 37%

2001 796.00 14.21 24%

2002 1000.85 17.26 26%

2003 1130.00 18.83 13%

2004 1380.00 23.79 22%

2005 1720.00 25.67 25%

2006 2020.00 28.85 17.44%

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MMARKETINGARKETING P PLANLAN

A marketing plan is a written document that details the necessary actions to achieve one or

more marketing objectives. It can be for a product or service, a brand, or a product line. It

can cover one year (referred to as an annual marketing plan), or cover up to 5 years.

A marketing plan may be part of an overall business plan. Solid marketing strategy is the

foundation of a well-written marketing plan. While a marketing plan contains a list of

actions, a marketing plan without a sound strategic foundation is of little use.

Eskayef Bangladesh Limited also has mission and vision to achieve success in the long run

in the international market. That’s why they started exporting their products in the foreign

market in 1998 and still now they are doing their job very successfully. They actually follow

the Business-to-Business communication strategy. Though they are somewhat introvert as it

is still the early stages of their abroad operation but they have established their foothold to

different countries all over the world. Thus while planning for the product exporting abroad

they thought about different segment to achieve their target sale. Marketing plan for Eskayef

Bangladesh Limited in the international market is comprehended in the following:

Marketing Objectives

The objective is the starting point of the marketing plan. Once environmental analyses (such

as SWOT, Five Forces Analysis, and PEST) and marketing audit have been conducted, their

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results inform objectives. Objectives of Eskayef Bangladesh Limited seek to answer the

question 'Where do we want to go?' The purposes of objectives include:

To enable the company to control its marketing plan.

To help to motivate individuals and teams to reach a common goal.

To provide an agreed, consistent focus for all functions of an organization.

All objectives of Eskayef follow the SMART rule i.e. Specific, Measurable, Achievable,

Realistic, and Timed.

Specific - Precise about what going to achieved

Measurable - Quantify the objectives

Achievable – Not attempting “too much”

Realistic - Having the resources to make the objective happen (men, money,

machines, materials, minutes)

Timed - State the time to achieve the objective

Specific and current objectives of Eskayef Bangladesh Limited for international market:

1. Profitability Objectives - To achieve a 20% return on capital by December 2007.

2. Market Share Objectives - To gain 25% of the foreign markets currently exporting for vitamin and mineral drugs by September 2008.

3. Promotional Objectives - To increase awareness of the dangers of AIDS in African countries from 12% to 25% by June 2008.

To increase trail of pellets from 2% to 5% of the target group by January 2008.

4. Objectives for Survival - To survive the current double-dip recession in Bangladesh and some host countries.

5. Objectives for Growth - To enter the market and increase the size of Latin American operation in 2008.

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6. Objectives for Branding - To make “Vitrum” brand of bottled vitamins the preferred brand of 45-55 year old males and females in the operating countries by June 2008.

Target Market

Currently Eskayef is following the Business-to-Business communication strategy. The target

market will grow alongside the time and reputation in the international market. The target

market is influenced by demographic factors like income and country status but not specific

by Eskayef. The target market consists of businesses based on two specific factors:

i. Any country preferring drugs from Bangladesh due to high quality and

competitive price.

ii. Any company preferring Eskayef’s products.

They are targeting different markets in different countries to sell their drugs and pellets all

over the world. They are currently exporting in some specific international markets like

Hong Kong, Nepal, Bhutan, Vietnam, Macao, Sri Lanka, UAE, Yemen, and Somalia. There

are some other countries where Eskayef is under registration pipeline.

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So, Eskayef is involved in the international market with their products and also seeking

opportunities to enter into the new market.

Company Registered Under Registration Pipeline

Hong Kong Philippines

Nepal Myanmar

Bhutan Pakistan

Vietnam Czech Republic

Macao Tunisia

Sri Lanka Morocco

UAE Algeria

Yemen Ghana

Somalia Uganda

Belize Page

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Guatemala

Costa Rica

Expected Sales

Eskayef has different expectations in terms of sales for their different products being

exported:

Pharmaceuticals Finished Goods: More than 350 million taka.

Bulk Pellets: More than 80 million taka.

Intermediate Products: More than 68 million taka.

(All data provided is an approximate calculation)

Profit Expectations

Eskayef’s expected profit is pretty larger in case of exporting their products. Their

expectation is to achieve a 20% return on capital.

Market Penetration & Coverage

Market penetration is one of the four growth strategies as defined by Ansoff. Market

penetration occurs when a company enters/penetrates a market with current products. The

best way to achieve this is by gaining competitors' customers that is part of their market

share. Other ways include attracting non-users of your product or convincing current clients

to use more of your product/service like by advertising etc.

Eskayef’s growth strategies include:

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Product development (existing markets, new products): Eskayef is always within

the pharmaceutical industry, but frequently markets new products through

innovations.

Market development (new markets, existing products): Lucozade was first

marketed for sick children and then re-branded to target athletes.

Diversification (new markets, new products): Bulk pellets and Vitamins for

Somalia and other African countries.

The penetration that brands and products have can be recorded by companies. In these cases

penetration is given as a percentage of a country’s households who have bought that

particular brand or product at least once within a defined period of time. According to such a

report Eskayef has a good penetration record of success in the international market.

Product Adaptation/Modification

According to Eskayef Bangladesh Limited product is multidimensional and the

sum of all its features determines the bundle of satisfactions received by the

consumer. To identify all the possible ways a product may be adapted to a new

market. It helps to separate its many dimensions into three distinct components,

which is known as the product component model. The product component model

has three main element those are very important for a product that is to be adapted

in different markets.

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Support Services Component

Deliveries Spare Parts

Repair & Maintenance Installation

Warranty Instruction

Legal Other related

Services

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The three most important components are:

1. Core component

2. Packaging component

3. Support service component

Core Component

The core components consist of the physical products –platform that contains the essential

technology –and all its design and functional features. On the platform product variations

are added or deleted to satisfy local differences. Major adjustment in the platform aspect of

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Core Component

Product platformDesign featuresFunctional featuresLegal

Packaging Component

Trademark Quality Brand Name Package Price Styling Legal

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the core component may be costly because a change in the platform can affect product

processes and thus required additional capital investment.

However, alterations in design, functional features, flavors, color, and other aspects can be

made to adapt the product to cultural variations. In Eskayef Bangladesh, there is one core

standard that they maintain in different markets while exporting. Reason for that is

formulation of the products abides by the scientific and legal issues. The core component is

always the same.

Packaging Component

The packaging component includes style features, packaging, labeling, trademark, quality,

price and all other aspects of a products package.

Packaging is important, as the product needs to be safely delivered without any difficulty to

the customer. For example, Asians especially Korean and Japanese customers are very

sensitive about the package of the product. If the package has any damage of any kind, they

will not accept the product. Moreover, as Eskayef is in pharmaceutical business, the

products must be safe and reliable. Therefore, to deliver the product safely, Eskayef uses

individual small boxes to pack the pharmaceutical products at first. Next all these boxes are

filled in a carton and cartons will be stacked in a palate. Then it will be moved into

container.

Labeling is imperative when it comes to sending it to a different country. Some countries

like English Language labeling other expect both English and their native language labeling.

Others like the products to have labels only in the local language. Pictures of the product or

something related to it have different reactions at different places. The countries that

Eskayef is sending its products like the labels to be printed in English language. However

the way of taking the medicine and the ingredients are sometimes written in the country

specific language where they are actually exporting their products.Page

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Price, written on the product or tagged on the product, is unacceptable in many counties.

Eskayef does not use any price tag on its products when it is exporting to other nations.

Quality for Eskayef does not depend on the market demand, but depend on their value of

corporate citizenship. When people expect quality product, the manufacturer should always

provide it. A company should consider this factor, while entering international market as the

other competitors who can always overtake at any turn! Eskayef has a very good reputation

for innovating and marketing quality products in competitive price. It is exporting very high

quality pharmaceuticals abroad.

Trademark is one area where Eskayef is really always careful and generous to use. They

use their company logo as their trademark that is SK+F in their packages of products.

Brand names like Vitrum or Losectil is really becoming popular in many countries but

these kinds of brands can be promoted more vastly and create image and awareness for

using the product into the consumer’s mind.

Packaging must also follow the Legal issues because there are different and specific rules

and regulations vary from country to country and those must be maintained in order to do

business into the countries.

Support Services Component

The support service component includes repair and maintenance, instruction, installation,

warranty, deliveries, and the availability of the spare parts. These components are some

practices that are les favorable and usual for any pharmaceutical company to practice. For

example, Eskayef has nothing to do with repair and maintenance or installation or

availability of spare parts. Rather, they have to make the products available and must meet

the host country’s deadline. Page

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In case of instruction, in every package of a product and in the label there is instruction

about how to use it and other necessary steps one must follow before consuming it safely

and soundly. Eskayef maintains that with massive sincerity.

There is no warranty of the products but the manufacturing and expiring date is mentioned

in the label that is must to have for any pharmaceutical products.

Promotion Mix

There are four main aspects of the Promotional Mix. These consist of:

Advertising - Any paid form of non-personal presentation and promotion of ideas, goods, or

services by an identified sponsor.

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Examples: Print ads, radio, television, billboard, direct mail, brochures and catalogs, signs,

in-store displays, posters, motion pictures, Web pages, banner ads, and emails.

Sales promotion- Incentives designed to stimulate the purchase or sale of a product, usually

in the short term.

Examples: Coupons, sweepstakes, contests, product samples, rebates, tie-ins, self-liquidating

premiums, trade shows, trade-ins, and exhibitions.

Personal selling - A process of helping and persuading one or more prospects to purchase a

good or service or to act on any idea through the use of an oral presentation.

Examples: Sales presentations, sales meetings, sales training and incentive programs for

intermediary salespeople, samples, and telemarketing. Can be face-to-face or via telephone.

Public relations & Others - Non-paid non-personal stimulation of demand for a product,

service, or business unit by planting significant news about it or a favorable presentation of

it in the media.

Examples: Newspaper and magazine articles/reports, TV and radio presentations, charitable

contributions, speeches, issue advertising, and seminars.

Advertising

Eskayef is not much involved with advertising because they are mainly doing B2B

communication. Moreover, the product is not that much relevant with advertising, rather

Eskayef puts more emphasize on relationship building by trust and commitment. Of all the

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elements of the marketing mix, decisions involving advertising are those most often affected

by cultural differences among country markets.

Consumers respond in terms of their culture, its style, feelings, value systems, attitudes,

beliefs, and perceptions. Because advertising’s function is to interpret or translate the

qualities of products and services in terms of consumer needs, wants, desire and aspirations,

the emotional appeals, symbols, persuasive approaches, and other characteristics of an

advertisement must coincide with cultural norms if the ad is to be effective.

But the concepts of international marketing are essentially the same wherever used. Though

advertisement is an important factor for promoting the product Eskayef hardly follow any

promotional strategy. They only give brochures, calendar and leaflet to the selected buyers.

They sometime sponsor awareness programs such as AIDS or Childcare and nutrition in

some countries.

Objectives: Their main objective is to vend more. They have a huge demand for their

product and it is continuously growing due to their good reputation in the market. They

depend on word-of-mouth a lot and it is till now has been the key to success for this

company. Moreover, in the recent time, the demand of their products were higher than they

could manage to supply and so they continuously increased the factory facilities and

currently they are operating two manufacturing plants in Bangladesh to expand more.

Message: Developing messages almost always represent the most daunting task for

international marketing managers. The message may be received by the intended audience

but not understood because of different cultural interpretations, or the message may reach

the intended audience and be understood but have no effect because the market did not

correctly assess the needs and wants or the thinking process of the target market. There are

several processes through which they reach the message to their customer. Those are:

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An information source: an international marketing execute with a product message to

communicate.

Encoding: the message from the source converted into effective symbolism for

transmission to a receiver.

A message channel: Our sales force that conveys the encoded message to the

intended receiver.

Decoding: the interpretation by the receiver of the symbolism transmitted from the

information source.

Receiver: consumer action by those who receive the message and are the target for

the thought transmitted.

Feedback: information about the effectiveness of the message that flows from the

receiver (the intended target) back to the information source for evaluation of the

effectiveness of the process.

Noise: uncontrollable and unpredictable influences such as competitive activities and

confusion that detract from the process and affect any or all of the other processes.

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Encoding Message channel

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Media mix contains the various media used to bring awareness about the product to the

targeted customers. In international market Eskayef has only word of mouth and once in a

while newspaper ad in few countries.

Cost: Eskayef do not spend that much for the advertising purpose. For that reason they do

not spend more than 2.5 %– 3.0% on advertising their product.

Sales Promotion

Eskayef does not involve themselves into any kind of sales promotion activities.

Personal Selling

Eskayef does not sale through personal selling. They appoint their own dealer in different

countries to sell their products.

Distribution

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Message

translated into

appropriate

meaning.

Marketer with a product.

Competitive activities, other salespeople, confusion etc

Evaluation of communication process and measure of action by receiver

Advertising media and/or personal sales force

Encoding message interpreted into meaningAction by

consumer responding to decoded message.

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Distribution is one of the four aspects of marketing. A distributor is the middleman between

the manufacturer and retailer. After a product is manufactured it is typically shipped and

usually sold to a distributor. The distributor then sells the product to retailers or customers.

In every country and in every market, urban or rural, rich or poor, all consumer or industrial

products eventually go through a distribution process.

The distribution process includes the physical handling and distribution of goods, the

passage of ownership and most important from the standpoint of marketing strategy- the

buying and selling negotiations between products and middlemen and between middlemen

and customer. Eskayef Bangladesh Limited sells their product through their distributors in

different countries who are actually acting as the middlemen. If the distributors agree with

the terms and conditions of Eskayef only then they export their product to the destination

port otherwise not. Before the distribution process they negotiate with the distributor.

If the negotiation is satisfactory and all the legal and environmental supports are going to be

provided by the distributor the deal progresses. Before distribution negotiation is a very

crucial stage where most of the dealings made are wrong or most of them do not end to a

solution. But in this case Eskayef is doing quite reasonable job by negotiating and selecting

distribution members cautiously and vigilantly.

Port Selection

Origin Port

Chittagong is the origin port for exporting through ocean carriers. Eskayef usually does not

do any exporting through air carrier. That is why there is no origin port for air but if needed

it is the international airport at the capital Dhaka is used. And finally, they export by roads

too. In that case the origin port is the main factory of manufacturing.

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Destination port

There are several destination ports for Eskayef. In case of by road exporting, the destination

ports are India (Petrapol), Nepal, Bhutan etc. Again for ocean carrier export, some of the

destination ports are Port of Hong Kong, Gebel Ali port at UAE, Nagapattinam port in Sri

Lanka, Dung Quat, Chan Mayan and Danag port in Vietnam etc.

Mode Selection

There are different modes for exporting goods. They are railroad, air carrier, ocean carrier

and motor carrier. Eskayef doesn’t use all four of these modes but two of them. They are

motor carrier and ocean carrier.

Motor carriers: They export basically by road with the help of motor carriers to those

countries, which they have excess to go by roads. Eskayef mostly exports in SAARC

countries and we have road communication with some of them. In this case Eskayef uses

motor carrier for exporting in those countries. For example, Nepal, Bhutan etc and soon they

will start to do it in Pakistan. It cost them about $500.

Ocean carriers: They export by the ocean carriers but that is very expensive which is

amount to $1000 per container. Other than SAARC countries, exporting takes place through

ocean carriers. The main disadvantage of ocean carrier is, it is very costly. But there are no

other ways to export the medicines.

Air carriers: Not used to carry by the plane because it is very expensive but sometimes

when UN takes Aid from Eskayef for the nations, they export it by air.

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Rail carriers: They do not export their products by rail carrier because we do not have any

railroad connection with the cities that the export most.

Packing

Marking and labeling regulations

While less stringent than drug regulations, important regulations do exist, including the Fair

Packaging and Labeling Act that requires an ingredient declaration on drug products sold to

consumers. Regulations require product ingredients to be listed in descending order,

classified by quantity. These regulations apply only to retail products intended for home use.

Non-retail samples and products used only by pharmacists in pharmacy and spas must state

the distributor; include relevant warning statements, and list product quantities.

There also are differences in registration, good manufacturing practice (GMP) requirements,

and labeling requirements for drugs. It is mandatory that manufacturers of drugs register

their facilities and products with the FDA. According to the countries need they actually

mark and label the product. For example:

Hong Kong: They have to mark on the packet two main things: (1) country of origin

and (2) weight. These mark ups must be in local language.

Middle East: They have to mark only the country of origin.

Containerization: The products are packed in small or big cartons. These are wooden crates

and then loaded into the container.

Costs: The packaging cost is approximately 4% - 5% of the total cost of exporting.

Documentation required

Bill of Lading: Bill of lading is the most important document required for establishing legal

ownership and facilitating financial transaction. It serves the following purposes.

As a contract for shipment between the carrier and the shipper

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As a receipt from the carrier for shipment

As a certificate of ownership or title to the good

If Eskayef agrees with all the terms and conditions of the buyer, the importer sends the LC

through a particular bank suggested by the exporter. When they get the LC they started to

produce batteries. When exporter shipped the product, the ship will give the exporter a

document, which is known as bill of lading. They submit it to the bank. Before the product

reaches the destination, the exporters get all their payment through the bank.

Dock receipt: The ship gives it to the seller when the product is shipped on the board.

Commercial invoice: Every international transaction requires a commercial invoice that is a

bill or statement for the goods sold. The document often serves several purposes. Some

country requires a copy for customs clearance, and it is one of the financial documents that

are required in international commercial payment.

Pro forma invoice: It has to be given before the business started. Some documents are

provided in the appendix.

Shipper’s export declaration: The ship management will give it to the importer after

reaching to the country.

Statement of origin: The Dhaka Chamber of Commerce gives it to the seller as the identity

of the manufacturing country, which is then submitted to the bank chosen by both the party.

Special documentation: There are several parts under special document. After compiling

these documents they are given to the bank. On the basis of these documents the bank gives

money that is paid by the buyer to Eskayef Bangladesh Limited.

Additional Information

Invoice: It contains the type of product, amount of product, value of the product etc.

Packing list: Packing list is another important documentation for Eskayef. This

documentation contains description of the product that is the brand names of the

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product, total number of cartons, quantity per carton, quantity in PCS, net weight and

gross weight.

Certificate of origin: Some countries require certificate of origin obtained from the

countries consulate and returned with two to eight copies in the language of the

country , along with copies of other required documents (e.g. import license,

commercial invoice and/or bill of lading) before certification is granted. Preparation

of the document should be handled with extreme care because fines are levied for

any error uncovered. In most countries, the fine is shared with whoever finds the

error, so few go undetected. In the case of Eskayef, certificate of origin is provided

from Dhaka Chamber of Commerce and Industries as the identity of the

manufacturing country which is then submitted to the bank chosen by both the party.

Bill of lading: If they agree with all the terms and condition the importer send the

LC through a particular bank suggested by the exporter. When they get the LC they

started to produce batteries. When I shipped the product the ship will give me a

document, which is known as bill of lading. They submit it to the bank. Before the

product reaches the destination they get all their payment through the bank.

EXP (export form): Bangladesh Bank issues it. It contains the complete export

information. It has to be submitted after the import.

Insurance Claim

Eskayef as an exporter does not have any insurance. Generally importer does the insurance

of the product. They do it on a warehouse-to-warehouse basis. In case of any accident or

loss importer claim the insurance money.

Freight Forwarder

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While exporting from Bangladesh manufacturers directly found out the shipping line and

export the product. Whenever they do not know the port of the country where they are

exporting they can take the help of the freight forwarder. In that case they have to pay a

charge to the freight forwarded because they are playing as middle men into the business.

Eskayef does not have to go for a freight forwarder – they directly go with the shipping line.

Channels of Distribution

Eskayef mainly sells through distributors. From distributors, the products go to whole

sellers. Whole sellers sell to local dealers. Eskayef has less control on distribution in

case of exporting goods. Everything is handled by the importer. Mark up for retailers

varies from country to country.

Normally 10-15% margin remains for the retailers. Retailers do most of the transaction

on cash. Sometimes they do credit transaction in case of institutional selling where they

can rely on the buyer. In this case they sell at a large scale. Whole sellers are those who

buy a large scale of goods from the distributor. Mark up for the whole sellers is 5%-

10%.

Import/Export agents:

There are no such of them for Eskayef. But they do have commissioning agent in Hong

Kong, Sri Lanka, Vietnam and in UAE. They helped them to find distributors at that

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Distributor

Whole Seller

Dealer Retailer

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particular country and the agent at Sri Lanka gets an annual 1.85% commission on the

total sales. For the UAE agent this figure is 6.5%.

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Price Determination

Price decisions are viewed two ways, pricing as an active instrument of accomplishing

marketing objectives, or pricing as a static element in a business decision.

Active Instrument: If prices are viewed as an active instrument, the company uses price to

achieve a specific objective, whether a targeted return on profit, a targeted market share or

some other specific goal.

Static Element: The company that follows the second approach, pricing as a static element,

probably exports only excess inventory, places a low priority on foreign business, and views

its export sale as passive contribution to sales volume.

So it is obvious that Eskayef follows the first objective because it export product abroad to

achieve a higher return or profit.

Setting the right price for a product can be the key to success or failure. A product’s price

must the quality and value the customer perceives in the product. Of all the tasks facing the

international marketer, determining what price to charge is one of the most difficult. It is

further complicated when the company sells its product to customers in different country

markets. Whether exporting or managing overseas operations, the manager’s responsibility

is to set and control the actual price of the products in different markets in which different

sets of variables are found: different tariffs, cost, costs, attitudes, competition, currency,

fluctuations and methods of price quotation.

Cost of the shipment of goods: Price is something that customer wants to pay. There are

two approaches that Eskayef follow but basically they use Back calculation to determine the

price.

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Eskayef do the back calculation like that way:

Transportation cost: Exporting also incurs increased transportation costs when moving

goods from one country to another. If Eskayef exports the batteries over water, there are

additional costs but when they transport product by road it cost them half then when they

transport product by ship.

Handling cost: There are no handling expenses in Eskayef.

Insurance costs: Eskayef Bangladesh Limited does not provide any insurance cost while

exporting its products. It is the importer’s duty to insure their product before the products

are shipped on board or export by road.

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BACK CALCULATION

Price

Deduct (-) Dealer’s & distributor’s

margin

Duty fee

Delivery cost

Transportation

C & F Charge

Deduct (-) Ship Freight

FOB Price Deduct (-) Cost Margin of Eskayef

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Wholesale and retail markups and discounts: Markups vary country to country in

Eskayef. Markup can be 10-25%. It varies due to various products and brands, market

demand, government taxation and rules and regulations. Discount does not exit there.

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Terms of Sales

Terms of sales differs somewhat in international marketing from those used in the USA. In

U.S. domestic trade, it is customary to ship FOB (free on board, meaning that the price is

establish at the door of the factory), freight collect, prepaid, or COD (cash, or collect on

delivery). International trade terms often sound similar to those used in domestic business

but generally have different meanings. International terms indicate how buyer and seller

divide risks and obligations and therefore, the costs of specific kinds of international trade

transactions. When quoting prices, it is important to make them meaningful. The most

commonly used international trade terms include the following.

CIF (cost, insurance, freight): Overseas port of import. A CIF quote is more meaningful to

the overseas buyer because it includes the cost of goods sold, insurance, and all

transportation, and miscellaneous charges to the named place of debarkation. Eskayef does

not follow CIF.

C&F (cost and freight): Overseas port. The price includes cost of goods and transportation

cost to the named place of debarkation. The cost of insurance is borne by the buyer. For

example Eskayef gives the freight charge of $5000 to the US port when shipping $50000

worth of goods to USA. The importer bears the insurance and the exporter appoints the

shipping line.

FOB (free on board): at a named inland point at the named port of expropriation or at the

named vessel and port of export. The price includes the cost of the goods and delivery of the

place named.

Ex (named port of origin): The price quoted covers cost only at the point of origin All other

charges are the buyer’s concern.

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Methods of Payment

The way a company deals with its payments is significant as to whether the revenues are

coming in smoothly or not. Although there are various ways to receive payments, the

company of our concern uses some of them. This are-

Cash in Advance- In some exclusive orders for customized pellets Eskayef usually takes

50% money in advance or full money in advance. However everything depends on

negotiation.

Open account- Sometimes it becomes easier to deal with business with foreign companies,

if they have an open account with the exporter. The fear of not providing with full cash on

time is reduced tremendously with this, as importer can have deposit of money with the

exporter. It can deposit money in the account and keep it for a time being so that when in

need it can use it to pay the exporter. Eskayef has this facility for its customers.

This also is a plus point for Eskayef, as the money is already in Bangladesh and needs not to

go through foreign exchange. There is less risk involved even if the value of Dollar gets

changed adversely as less money will be exposed to the changed exchange rate.

Consignment sales- it is very risky to go for consignment sales and so Eskayef does not

want to do it. But sometimes, for the sake of operation in abroad they have to agree on it

through negotiations. However it does have sales contracts with buyers, whom it knows very

well. Sales contracts are actually legal papers for the deal between the buyer and seller.

Trust increases between the two parties because if this and so a long term relationship can

come to existence. And that is why Eskayef sometimes allow this kind of trade.

Sight, time, or date drafts: Eskayef does not follow these terms. The organization has no

plan for following this method in near future.

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Letter of credit (L/C): This document is issued by the buyer’s bank, which promises to

pay the seller a specific amount when the bank has received certain documents stipulated in

the letter of credit by a specified time prior to opening a letter of credit, a buyer of Eskayef

request a pro forma invoice. This the exporter formal quotation containing a description of

the merchandise, price, delivery time, proposed method of shipment, ports of exit and entry,

and terms of sale. So, it is more than a quotation. Generally, the bank will use it when

opening a letter of credit.

Proforma Financial Statements & Budget

Pro forma is consisted with product quality, value, terms and condition. It is very essential

for a company to prepare pro forma financial statements and budgets which helps to

accomplish ultimate profit. Eskayef prepare the financial statements at the end of each

month. They can understand to look at the company’s current turnover, sales revenue and

gross margin. According to that result, they take corrective actions.

Marketing budget: Marketing is an economy’s arbitrator between productive capacity and

consumer demand. Although marketing may be considered a passive function, it is

instrumental in laying the groundwork for effective distribution. An efficient distribution

and cannel system and all the attendant middlemen match production capacity and resources

with consumer needs, wants and purchasing power.

For example, if Eskayef spends 50 Million taka in its selling expense (transportation, C& f,

mailing, distribution, endorsement, gift etc) then its advertising/ promotional expense can be

30 Million take and distribution expense can be 5 Million taka.

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Resource Requirements

Finances

Eskayef Bangladesh Limited currently has sales of 2020.00 Million Taka at an annual

growth rate of 17.44%. It is a solvent company. They have enough money to run the

business smoothly.

Personnel Eskayef have efficient and delegated personnel. The workforce of Eskayef Consists of more

than 1250 qualified, trained and skilled personnel who are drawn form different disciplines

that have a bearing on the pharmaceutical industry. For that they can achieve the goal.

Production Capacity

Yearly production capacity of formulation unit – Normal Hour (8 hour shift) for Eskayef

Bangladesh Limited:

Eskayef Bangladesh Limited now possesses two manufacturing plants in Dhaka,

Bangladesh with the true vision of offering improved world-class health products. One

plant is at Mirpur and another one is at Tongi. The total factory space of Eskayef is

250,000 square feet.

Tablets 533.7 million tablets

Coated Tablets 322 .0 million tablets

Encapsulation 230.0 million capsules

Liquid Syrup 3.80 million bottles

Dry Suspension 5.00 million bottles

Semi Solid 2,00 million tubes

Powder in Sachets 12.00 million sachets

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RRECOMMENDATIONSECOMMENDATIONS

Eskayef is a very successful company in the Asian region. But they can improve more by

concentrating on some other issues.

Bangladesh is going to have railroads between Bangladesh and Burma in near future. We

recommend Eskayef to start exporting through rail carriers at that time.

Eskayef should open their own office in each of the countries they export their product. If

they had the office in those countries, they could have more control on their distribution

channels and reduce some cost. Now the distributor has more control on the distribution

channels.

Eskayef is one of those conservative companies who do not spend much on promotion.

Their present market penetration policy is ok but if they spend more on the promotion, they

could expend more worldwide. So we recommend them to emphasize more on promotional

activities.

Eskayef management should motivate their employees with proper compensation system

and achieve continuous improvement over time in each and every sense respecting its true

culture and vision.

Moreover, the people should be regularly trained and developed to attain the global need.

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Last but not the least, Eskayef along with its operation in Bangladesh should grow more

globally that would help the country to earn more foreign currency simultaneously to

accomplish the vision into a true one.

CCONCLUSIONONCLUSION

Eskayef while exporting their products in abroad they not only design to plan, price,

promote but also they direct the flow of the company’s goods and services to consumer or

users in more than one nation for a profit. They are currently exporting their products to 8

countries and in the registration pipeline of 11 more countries. They hope that they would

realize the registration by the next year.

Eskayef has the potential to grow more in the international market. If it follows the right

way, the company can move towards greater heights globally with its products.

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RREFERENCEEFERENCE

www.skfbd.com

http://en.wikipedia.org/wiki/Distribution

Company Profile of Eskayef Bangladesh Limited

International Marketing

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