The following article is published in CHRONICLE PHARMABIZ IPC SPECIAL DATED 30 November 2006 on page no. 217.
As per ORG MAT Aug 2006, the vibrant retail pharma industry is valued at Rs. 26,014 crores with a value growth of 16.22%. Today, four companies show an ORG MAT value above Rs. 1000 crores. They are GSK, Cipla, Ranbaxy and Nicholas Piramal. Till recently only GSK was a Rs. 1000 plus crores company (as per ORG chemist retail audit.). Three brands are over Rs. 100 crores ORG MAT value (Aug 2006): Phensedyl, Corex and Voveran. Of course, it is ironic that the #1 and #2 brands are anti cough formulations. The Indian retail pharma market is a very happening place.
Market complexities
The pharma market complexities are mirrored by some interesting statistics. There are an estimated 23000 manufacturing units. The guesstimate is that some 70,000 brands are battling for mindshare, prescription share and retail space. For example, ciprofloxacin has over 100 brands!
In the pharma industry the Medical Representative teams continue to be the main medium for demand creation, availability and stock liquidation. The 2003 estimate was 1,20,000 MRs wooing a pool of estimated 5 lakh doctors (of various qualifications) and around 3 lakh retailers.
There is a geometrical growth in number of local companies who serve a pool of doctors and retailers in a few districts. For example TPRL (Tumkur Pharmaceuticals & Research Laboratories) serves doctors from Tumkur, Kolar and a few other districts of Karnataka. There are many such companies. Many C & Fs and stockists have their own companies with divisions to serve small markets as per their feasibility. A glance through trade oriented tabloids, like MEDICAL DARPAN, shows the mosaic of companies marketing products with different business models – propaganda cum distribution, franchisee marketing and so on.
So we see the Indian pharma market is a highly fragmented complex market situation. Some 250 companies are said to control 60 to 70% of the market. Competition is rife at the retail level, dispensing doctor level, institutional level, specialist level, in prescription markets and in rural areas.
Market skepticism
New product launches in the 1980s and early 1990s, were easier to handle. Doctors would adopt innovations more readily, to deliver better healthcare strategies to their patients. Making the product available was easier. Key retailers would absorb the initial stocks; spreadstocks would account for initial secondary sales from stockists. Bills too would get retired in time by the stockists. Late 1990s and 2000 onwards many companies have had to resort to consignment basis for new products (payments would be obtained after collection of dues from retailers). More importantly, the glitz of a new product launch at the clinical level has faded away. A new product is not exactly greeted by excitement at the doctor level, but with a sense of skepticism, more so thanks to the controversy of Cox 2 inhibitors (the rofecoxib marketing fiasco). To make a new product successful, today, one has to work on the concept for a longer time.
Furthermore, the public and doctor community’s skepticism is increasing the world over on pharmaceutical marketers, even as the market spend on doctors is increasing. The way social marketing programmes and awareness communication programmes on diseases are evolving; the net for product users is being cast wider. Awareness building programmes on conditions like menopause, erectile dysfunction, restless legs syndrome, sleeplessness, tiredness in children, ADD (Attention Deficit Disorder), IBS (Irritable Bowel Syndrome), SAD (Social Anxiety Disorder), loss of BMD (Bone Mineral Density) are expanding business potentials for products. Marketing departments in co-ordination with clinical research departments see emerging markets for conditions like Diabesity (central abdominal obesity in diabetics), Hidden Hunger (subclinical micronutriuent malnutrition), prediabetes and prehypertension. Over zealous marketing in a way has made doctors and the public wary of product promotions, clinical trial results and new product launches.
The above scenario of newly evolving robust challenges calls for something beyond regular training programs – the need is for INTERNAL MARKETING, to gain customers through trust and help balance commercial and social goals.
The changing face of marketing
Change is the way of life. Earlier marketing was about planning and execution of pricing, promotion, and distribution of goods, services and ideas. Marketing was meant to facilitate a ‘sale’ and satisfy individual and organizational goals.
The face of marketing has changed. Today, marketing is not a departmental function; marketing is an organizational function. Marketing is seen as an organizational function involving a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders. In fact, this is the new definition of marketing as released by the American Marketing Association. There is thus a greater accent on customer relationship management, with the marketing department being a facilitative agency.
Internal marketing
Internal marketing is an emerging area that refers to training of employees (particularly front line personnel) on how to manage and deliver a brand, so as to positively impact the acquisition and retention of customers. This concept springs from the fact that marketing is about delivering value and managing customer relationships.
Internal marketing recognizes the fact that people do business with people. Internal marketing helps build differentiation in service. It is all too common for doctors to perceive pharma companies as similar. Quality of pharma products is a qualifier and not a differentiator. Product portfolios of various companies look similar; in innovator companies pipelines are not exciting; so the accent is obviously on managing customer relationships – a key ingredient of it being internal marketing.
In regular training programmes for a new product, one starts with the anatomy, physiology, pharmacology, product profile, detailing, USPs, target markets and other promotional inputs. In internal marketing the starting point is the product positioning, understanding target market profile and learning associated medical and product profile aspects and spending a lot of time on practice of use of communication and other inputs – to get the best bang for the buck. One spends more energy and time on planning the call, extempore detailing, dialogue detailing (with objection handling, role play and proceeding with ‘Yes Momentum’ in the discussion) and visual aid/communication input detailing. This way the MR learns to give a memorable brand experience to the target market and strengthen the doctor’s and chemist’s connect with the brand. The bottom line is to acquire & retain customers, while also expanding customer base.
The pharma business revolves around in-clinic effectiveness and communication to customers. This is enhanced through internal marketing as the company empowers, motivates and guides field personnel to be in close association with real demand creating customers and deliver relevant brand experiences. Thus field personnel spend more time with the real customers’ in-clinic rather than just chasing predetermined sales figures with the stockists and other intermediaries.
A key component of internal marketing is soft skills. This dimension plays a vital role in brand building. Soft skills are essentially people skills -- the non-technical, intangible, personality-specific skills that determine strengths as a leader, listener, negotiator, and conflict mediator. The general soft skills to be developed by an individual include: work conscientiousness, integrity, teamwork, self motivation, self analysis, social grace, etiquette at workplace, business and in society, negotiation skills, attitude, time management, counseling skills, effective presentations, interviewing skills, conflict management, effective meeting skills…. As such soft skills training through internal marketing improves effectiveness of personnel, which in turn strengthens brand building.
The avowed objective of marketing is to create a culture centered on a product(s) or service(s). McDonalds: they market their restaurant as a part of great family life. Coca Cola is also positioned as a festive drink, bringing it into the cultural mainstream. A ‘Madrasi’ wakes up to coffee and ‘THE HINDU’, this newspaper is a part of ‘TamilNadu culture’. Microsoft is trying to usher in a ‘digital home’ cultural revolution starting with the ‘Mediacenter PC’. In fact, giving out prescriptions is the practicing doctor’s culture; and pharma marketers are cashing in on this culture. Internal marketing training helps MRs identify these threads of culture in the market and also help create newer habits, attitudes and cultures; thus creating legendary products. Revital, Liv 52, Party Smart, Metronidazole infusion after surgery, Becosules, Chywanprash, baby massage oils and Dettol are examples of pharma and healthcare products that are cultural icons.
Internal marketing meets the emergent need of pharma companies to ensure mega successes of products by making them icons of ‘prescribing or OTC or OTX’ culture… Internal marketing works to train and motivate employees to serve customers well. Through internal marketing one can facilitate ‘customer centric thinking’ in every one in the organization. Internal marketing when based on ‘think flat’ and ‘lateral thinking’ has all the potential to lend a pharma company the cutting edge; reduce a company’s dependence on ‘commodity play’ and generate high quality revenues.
- Sunil S Chiplunkar M Pharm PGDMM
Manager – Marketing and Training
Juggat Pharma, Bangalore
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