Friday, September 26, 2008

Yogi nation, bhogi nation, and the middle path

I got the above images from here (Swami Ramdev), here (Vijay Mallya), and here (Indra Nooyi).


As every healthcare marketer knows, the consumption of healthcare products and services depends on lifestyle. In fact, the avowed goal of marketers is to influence the lifestyle based on marketed products and services. Thus, trend mapping is a key element of strategy creation. Marketers normally peg marketing strategies, promotional approaches, and tactics to the broader market trends. There are three discernible trends in Indian society: they can be called YOGI NATION, BHOGI NATION, AND THE MIDDLE PATH.

Yogi nation: The poster 'boy' or icon of the Yogi nation trend is Baba Ramdev. He has revolutionized healthcare - both preventive and therapeutic healthcare, through pranayama and Yoga based techniques. What is unique about the evangelical marketing of his brand of healthcare is EVIDENCE BASED APPROACHES. Swami Ramdev talks purposefully on including pranayama and Yoga as a part of one's daily regimen. He collaborates with and exhorts allopaths and other healthcare practitioners to include Yoga & pranayama as a part of the therapeutic approach. His strategy is to promote traditional healthcare systems like Ayurveda too. His brand of healthcare and lifestyle has a very large following particularly among the middle class urbanites, and people living in semi rural and rural places. His franchise is predominantly in India and the Indian diaspora. However, in rural South India where Hindi speaking is not prevalent, his influence is not that strong. The reason is, Baba Ramdev speaks mainly in Hindi. He is now attempting to put forth his programs in vernacular TV channels too, other than the main Hindi channel Aastha. However, what is important from the marketers point of view is that, BABA RAMDEV REPRESENTS A TREND IN INDIAN SOCIETY AND THE INDIAN DIASPORA TO GO BACK TO ONE'S TRADITIONAL HEALING ROUTES, PREVENTIVE HEALTHCARE, AND USE OF DIETARY SUPPLEMENTS. Hence, we see advertisements for various health foods, healthcare products, and other products based on Ayurveda on Aastha. He is also openly critical of the tactics used by MNCs to market their soft drinks and the pharmaceutical products based on Western Medicine (or allopathy). However, since many Indian allopaths and those of Indian origin residing abroad have starting accepting pranayama and Yoga with an open mind and even collaborating with Baba Ramdev to implement to willing patients in their practice, Baba Ramdev seems to softening his stand vis-a-vis allopathic marketing. Baba Ramdev reiterates his commitment to make Indian society and the world as a whole 'NIROG' ie., disease free, through lifestyle changes: ie., based on Pranayama, Yoga, Ayurveda, vegetarianism, abstinence from tobacco and alcohol consumption, and living a balanced life.

Bhogi nation: In Hindi, Sanskrit, and other vernacular languages, Bhoga means luxuries, comforts and material enjoyments. Vijay Mallya represents the successful business man who has made tons of cash through providing alcohol beverages - an important item of 'bhoga'. Vijay Mallya who has a honorary doctorate and likes to be called Dr. Vijay Mallya, owns India's largest beer brand - Kingfisher. By this same brand name he runs India's only five-star airline - Kingfisher airlines (which unfortunately is loss making). Vijay Mallya's passion is style and brand building. He does it through using fashion, beautiful models, formula car racing, and other premium image building icons for his alcohol beverage brands. Vijay Mallya's intent is to command premium for his products by creating aspirational values in the brand.

Wherever there is 'bhoga' and an encouragement to a Bohemian culture, illness and disease go hand-in-hand. Excessive consumption of alcohol beverages leads to hepato-gastrointestinal disease, kidney and cardiovascular disease, cancer, and alcoholism. Here lies the great pharmaceutical opportunity. People belonging to the bhoga concept are more susceptible to increased frequency and intensity of various diseases. No wonder, as per ORG IMS Aug 2008 report, for the month of Aug 2008, Liv 52 is India's third largest brand. And it is interesting to note that Corex, which unfortunately has a lot of addiction market (the bhoga concept again) is India's largest pharmaceutical brand with nearly Rs. 160 crores annual sales value.

The MIDDLE PATH: The bulk of the Indian population probably cannot wallow in the bhoga concept. Nor will they fully live by the Yogi concept. These Indians will continue to have the occasional beer, soft drinks, and eat 'junk food' on and off. They will like to consume 'fun-for-you foods' now and then. However, they are hooked on to the healthcare bandwagon. It is based on this aspect that Indra Nooyi - the dynamic and risk taking lady of Pepsi - has launched three categories of products: 'fun-for-you', 'good-for-you', and 'better-for-you'. This is pragmatic and sagacious thinking where in she attempts to combine her products with the evidently robust healthcare trend in society. Thereby two birds are shot with one stone: a) image building and better market acceptance in the stormy Indian market, and (b) market expansion. Nevertheless, there is a strong element of risk-taking in promoting on the health platform. Sceptics will certainly comment: SHE IS DIVERTING RESOURCES FROM THE MARKETING SPEND ON CASH COWS LIKE SOFT DRINKS TO 'WANNABES'. And it is possible that financially it may backfire in terms of decreased profits. So perhaps keeping the fingers crossed, the top management team at Pepsi are looking to increasing market share and profits through this diversion strategy. And mind you, intelligent Indra announced this product strategy in India, where all her top global managers had assembled in Delhi. As such, given the conundrum that soft drinks are in the Indian market, Pepsi has taken the logical route out to increase their market share. But this approach of positioning the products from Pepsico on the health and fun platform requires courage and vision. Indra Nooyi has demonstrated this.

So the great Indian healthcare and the pharmaceutical market in particular, rolls on ... other pharmaceutical players are in the meantime betting big on biotech, with Biocon even announcing continued research on the oral insulin concept. So let us see how the patterns in the Indian healthcare and pharmaceutical scenario unfold.

Thanks for reading this blogpost, please do read all others by scrolling down, and clicking on OLDER POSTS wherever required. Thnks once again. OBITUARY: BANGALORE HAS LOST ONE OF THE STALWARTS OF THE PHARMACEUTICAL PROFESSION: MR. GHEVARCHAND SURANA, FOUNDER OF MICRO LABS, RECENTLY PASSED AWAY. WE PRAY THAT HIS SOUL MAY REST IN PEACE.

Sunday, September 21, 2008

Santa Claus comes calling!

America falling, India calling!

America is at an interesting phase in its economy, particularly in its election year! As such, America is a high consumption economy, now in a crisis. Wherever, there is high consumption there is high credit availability. It is a thumb rule. The current status reflects that the Americans are spending more than they are earning. They are takin' credit, spending, consuming, the production system pumps in more products and services, more credit lines are opened up, and the Americans spend more! This vicious cycle goes on and on. So you raise more money and credit, and unique financial products are created to help consume more... finally, the cycle goes bust...AIG, Lehmann and other infallible institutions collapse on the weight of debt. AMERICA FALLING!!

In fact, Chidanand Rajghatta, who writes cutely, says that AIG episode is akin to nationalization of banks - which had happened in our country in the late 1970s.

So what do marketers do? Rush to the emerging economies. And it is easier today as it is a globalized economy. So marketers will engage prospects and customers in the marketplace of rapidly emerging economies like India.

India calling!

It is rush hour, comparatively, in India. The Indian Pharma market (as per Market Intelligence report of ORG IMS, June 2008), is one of the top 3 growing countries, the global rank is 15th, and the growth in the past year is CAGR of 15%. By June 2008, the Indian Pharma market is Rs. 32776 crores with a value growth of 14%. As per this report from ORG IMS, the Indian pharmaceutical market has 400 organized pharmaceutical companies, some 47,000 packs are promoted to more than 5 lakh doctors, who generate nearly 100 crore prescriptions that are honored at more than 5 lakh chemists.

The contract manufacturing market scene is hot. As per KPMG, the Indian contract manufacturing market is expected to touch 2.46 billion USD by 2010, with a CAGR of 41.7% from 869 million USD in 2007. The next level of this market is when along with conventional dosage forms, injectables and biologics will enter this activity.

A Mckinsey study says that the Indian healthcare market is expected to grow 190 billion USD in the next two decades. As per this report, India has now, about 5 lakh doctors, 7.3 lakh nurses, but the country requires an additional 6.71 lakh docotrs and 18.7 lakh nurses.

Business India, Sep 21, 2008 issue on page no. 36 says that the new buzz words in the Indian pharmaceutical industry are dietary supplements, functional foods, vitamins and herbal products. The market, world over for these products is estimated to be approx. 120 billion USD, and in India it was Rs. 1900 crores at the end of 2007 (as per a FICCI background paper). An industry expert has noted in the report, that the global market in this segment has gone from 60 billion USD to 120 billion USD in the past five years. Large beverage companies and even Merck (with its focus on Emblica and aamla) are betting big on this market. The nutraceutical or natural product hype is on in India, Japan, China, Taiwan, and USA.

The New Medical Representative a book by James Pancras
says in the foreword of his book: India has about 120000 pharmaceutical representatives. The no. of retail chemists is estimated to be about 5 lakh. (Apollo pharmacy chain feels that the highly fragmented pharmaceutical retail market has about six lakh pharmacies). The no. of pharmaceutical manufacturers is estimated to be 20000 to 25000. And the no. of brand formulations being promoted to doctors, is estimated to be 70000. This book in chapter nine reiterates that even the biggest companies may be able to contact about 150000 potential prescribers. The universe of potential allopathic prescribers may be about 5 lakh (chapter 13). Only about 25% of the billion plus population are said to access allopathic medicines. Regarding doctors, in Chapter 2, estimates are there are some 1125000 doctors licensed to practice. The allopathic doctors are estimated to be around 450000. This is classic book and one-of-its-kind on the Indian pharmaceutical industry, it is published by Masterman (


Every one likes Santa Claus! The pharmaceutical industry has its own Santa Claus!

The Santa Claus of the pharma industry is the medical representative! This charming and smiling guy or gal, walks smart, and talks smarter. Doctors love to have good and charming MRs around. These MRs smile a lot, unlike the patients they encounter. The MRs give a lot positive strokes. They provide and reiterate important information. They prime doctors on latest medical and therapy issues. They are a great break from the hectic surgical and clinical practice.

But the MR is not just about talking smart and charming the docs. He carries a cute leather bag. It is a bag of goodies. Samples, prescription pads, and other small and cute gifts come out of the bag. The MR is also an important contact point for the doctors to access the vaster marketing budgets of pharma companies. The doctor through the MR can strike sponsorships, CMEs, conference sponsorships, and personalized gifts from the pharma company. And all with a smile.

In India, today the MR is like a concierge service too. The MR very often handles the problems of doctors and provides tangible and intangible services. Its like the doctor then says Thank you Santa Claus!

Consider the following real-life examples:

The MR enters the clinic and finds the fan not working. The MR after taking the doctor's permission organizes the repair, very often sponsored by the company.

Another recollection is that of a doctor who arrives at the Bangalore railway station at about 11.00 pm from an interior place, and finds the autorickshaw drivers very irritating, and its getting difficult to go to the new Bangalore International Airport for an onward journey to Calcutta. The doctor immediately calls up a known MR. The MR is the knight in shining armor. The MR assures the doctor not to worry and stay put in a nearby cafe. Using his speaking skills and contacts with a taxi driver the MR ensures that a taxi comes to the doctor and safely drops the doctor to the airport. All this is done thanks to the mobile phone revolution in India!

Smart MRs provide busy and rich doctors with financial tips: best mutual funds, shares and other financial instruments to invest on. In fact, some companies now provide sponsorship to mutual funds too.

The lady doctors? Oh, they just like smart MRs. The MRs are smart, look good, smell great, they provide excellent courtesies, and make the lady doctor feel like a queen. They provide top notch and thoughtful gifts, like handbags, cosmetics, and even jewelery. And in times of need, there is help round the corner through company services like CMEs, arrangements for travel and stay during conferences - the MR arranges it all, with a smile.

And at the end of all this, what does the MR want? Just a few prescriptions. COME WHAT MAY, let the pharma marketers cook up various avenues of pharma communication: courier marketing, web based marketing and what not... the MR will just continue to be there. The GOOD MR WILL ALWAYS PROVIDE THE HUMAN FACE OF THE PHARMA COMPANY HE REPRESENTS. In an era of hollow relationships, the charming MR will always be there for the doctors, with a smile, with his charm, a great presence, and never ever wearing a frown, even if the MR's wife is hospitalized, or his child in suffering, or his monthly salary cheque has not come from the company or if his manager has harassed him (for not reaching the sales quota) or if the incentive ie., commission amount has not reached him, or if the MR has traveled arduously to an interior in a stinking bus - still he will be fresh, smiling, charming and smart in the clinic, to represent his company to the target doctor. LONG LIVE THE MR!

THIS IS THE REASON WHY MR. JOHN MACK IN THE SEP 2008 ISSUE OF PHARMA MARKETING NEWS SAYS:FRIENDLY PHARMA SALES REPS EARN MORE BUCKS WITH FEWER SALES CALLS. Alvin Toffler the famous futurologist has in fact said, that the futuristic trend in business will be HI TECH - HI TOUCH. So MRs will engage target doctors with smart gadgets like multimedia mobile phones, tablet PCs, and laptops. The pharma marketer will use web 2.0, web 3.0 and other tech tools to engage the doctor too. Still the MR will be there because HE IS THE SANTA CLAUS, THE PHARMA SANTA CLAUS!!

Thnks for reading this blogpost, click on older posts wherever required, and please do read all other blogposts. The above image is from HERE.

Sunday, September 14, 2008

Publicity - the emerging 'P'

The explosion of media (including new media) in the modern age is creating new and urgent importance for laying emphasis on 'publicity' - the P factor - in the promotional mix in pharmaceutical and healthcare communication strategies. Traditionally, pharmaceutical marketing has not laid high importance on publicity. The marketing communication efforts concentrate on doctors, and chemists. With doctors having complete control over patient behavior, influencing prescribing and recommending behavior of doctors has always been given prima donna importance by pharma companies. While this will continue to have the #1 priority in pharmaceutical communication efforts, the factor of PUBLICITY will now have to be addressed more keenly and delicately. This is mainly due to the explosive growth of media, its connectivity to the masses, and ability to influence patient or prospect behavior.
Publicity and Wyeth's pneumococcal vaccine

The startling effect of publicity on marketing efforts was felt recently when Wyeth's pneucomoccal vaccine made waves in national newspapers for the wrong reasons. On 8th Sept., 2008, front page news in the leading daily of India (The Times of India - which incidentally is one of the largest media brands in the world) questioned whether this vaccine was relevant to India. The report in The Times of India, is excellent where points being emphasized include that the vaccine does not decrease clinical pneumonia, the cost of vaccine just does not justify, and that WHO itself talks of its side effects... CLICK HERE PLEASE. In India, IAP (Indian Academy of Pediatrics) has two classifications for vaccines - those that need to be given compulsorily like DTP, Hepatitis B, BCG etc., and another class of vaccines that the patient has to discuss with the doctor and administer to the child (this class of vaccines are popularly called optional vaccines). Wyeth has been working hard to put the PCV (pneumococal conjugate vaccine) from optional vaccines category to compulsory vaccines. The media reports suggest that the PCV (pneumoccal conjugate vaccine), a patented product from Wyeth (hence, having monopoly market in India) does not justify the expense, is not very effective in 'clinical pneumonia', and can even increase incidence of asthma. The media sources cite WHO reports in support. FROM A MARKETING POINT-OF-VIEW, THIS IS NOTHING LESS THAN A PUBLICITY DISASTER. Drug Action Forum - Karnataka has asserted that the pneumococcal vaccine should be withdrawn from WHO immunization programs. DAF - KARNATAKA has written an open letter to WHO questioning the usage of the vaccine on a broad front. THIS IS ABSOLUTE UNINTENDED 'DEMARKETING' OF THE PNEUMOCOCCAL VACCINE FROM WYETH. From an economic point of view for the company, these media publicity happenings are a serious blow. The spill over effect will naturally be felt on other products of Wyeth as it represents a loss of goodwill. This media publicity related WYETH'S CASE OF PCV holds a great lesson for pharma marketers.

A second boat was rocked slightly by the media

Media reports on the promotion of letrozole to treat infertility by Sun Pharmaceuticals, recently created ripples. However, what is striking about this case of media activism (?) is that MIMS has questioned the wisdom of DCGI (Drugs Controller of India) in permitting Sun Pharmaceuticals to legally market the drug for infertility management. MIMS questions the preclinical and clinical procedures followed for permitting letrozole promotion in infertility. This is perhaps a case of splitting hairs. Scientific debate can always be encouraged and the room for improvement in case of clinical studies is always big. However, there is nothing hard core to point out in the case of letrozole that the safety and efficacy factors of a medicine's use has compromised patient well being. Moreover, in India, off-label use of drugs based on the prescriber's wisdom and experience is a common phenomenon.

The lesson from the above case studies

The important lessons to be drawn from the above recent happenings is that PUBLICITY is now emerging as an important element of the promotional mix in pharmaceutical marketing. Traditionally, pharma marketing has concentrated on personal selling, advertising, and packaging in its communication strategy. Perhaps, only The Himalaya Drug Company (a leading herbal and Ayurvedic manufacturer and marketer) has laid emphasis on PUBLICITY or PUBLIC RELATIONS as an important element of the promotional mix. This company has done admirably well on the PR front whenever Ayurveda has been rocked by the now familiar and frequent news of heavy metal toxicity in formulations or other issues. However, on the whole, Indian pharma companies ought to change their mindset to include the publicity dimension in the marketing promotional mix to avoid any unsavoury news and uninvited DEMARKETING of products. For example, many Indian pharma and healthcare companies do not have a MEDIA KIT, (an information packet about a business or product), which is the basic element of good publicity. That is a good place to begin with!
Thanks for reading this blogpost, please scroll down, to read all other blogposts, please click on OLDER POSTS, wherever required.

Saturday, September 6, 2008

Pharma retail market characteristics


In society there are three main types of organizations: GOs (ie., governmental organizations), NGOs (non governmental organizations) and business enterprises. With the integration of the global economy marching ahead, and free market economies becoming all important, business enterprises are gaining in importance as societal organs. In a mixed economy, Govts., or governmental organizations are important entities supplying products and services to the society. In free market economies, private and public listed business enterprises are very important entities supplying products and services to the market. The key word to all business enterprises here is the MARKET. Understanding the market: its composition and characteristics, is vital for marketers.


Chemist retail bonus offers and pharma brand substitution

The Indian Pharma Market is controlled mainly by prescribers and to a large extent by the chemist retailers too. This is a special characteristic of the Indian Pharma market. A medical representative's job dosen't end with generating prescriptions. It entails managing the chemist retailers too. After all, the retailers should honor the prescriptions - if the prescription gets substituted with a competitor brand, the MR's efforts are in vain. Substitution of prescriptions is a peculiar phenomenon of the subcontinent. There is no guarantee that the brand prescribed is the brand dispensed. There can be understandings between the prescriber and the chemist as to the brand that needs to be dispensed. If a doctor has gained favors from a pharma firm or if the chemist has informed the doctor that a particular brand is available with very high 'bonus offers' ie., certain percentage of goods will be given free on purchase of the brand, for eg., for Brand X buy 10 bottles then get 2 bottles free, buy one box of a particular sildenafil citrate brand and get two or three boxes of that sildenafil citrate brand free; then that brand-on-the-scheme will 'run more on the chemist counter'. This approach is called offering retail schemes or retail bonus offers. There are newsletters mailed to chemists that advertise the bonus offers. Why is this done? Well, mere offering the retail scheme dosen't guarantee that the stockist (or wholesale distributor) will part with the scheme to the retailer. The wholesaler may part the scheme selectively, and get to enjoy the free goods himself. The goods are not marked as free, they come along with the MRP. So the stockist can bill these goods to the retailers too. Thus, to ensure that the retailer gets to know of the scheme, mailers and newsletters to retailers inform the details of the scheme, and the retailer can demand the scheme goods from the stockist sales boy. Pharma companies too prepare special leave behind literatures on scheme details that are distributed by the MR to the retailers. The obvious tendency of the chemist retailer is to dispense that brand on which he earns more, through the freebie goods. This is the pharma brand substitution characteristic of the Indian pharma market. Particularly in semi urban and rural areas, the 'retail offers' work magic in increasing the sales. In the case of dispensing doctors or doctors who have 'attached chemists', bonus offers work the magic in increasing the sales.

The retailer can also can get samples from MRs in lieu of 'official schemes' or in addition to the special retail offers, and these samples can be sold off to the unsuspecting or ignorant patient. This is called in local parlance 'chemist adjustment'. This approach of chemist and doctor adjustment with samples also helps the MR get POB (personal order booking) for his brands.

Briefly there was a season for generic-generics. This means generics that are unbranded. Normally, generics as such, are unbranded, however, in India, most generic medicines are branded. Generic-generics, there was a lot of hoopla about this concept a few years back, which has died down now, are not promoted to doctors. They are sold to retailers at low cost and on scheme too. However, these generic-generics have a high MRP. So the realization or mark-up for the chemist is very high - as high as 200% or even more! So the retailer dispenses these generic-generics and earns more from them. The patient is reassured about the content of the generic-generic and the quality if the patient inquires about the apparent substitution. However, the hoopla has died down after the Govt., took certain steps to suffocate this market. Nevertheless, today, a small generic-generic market continues to operate.

Retailer controlled sales

In USA, there are over-the-counter drugs (that which the patients asks for and buys legally), behind-the-counter drugs (where the pharmacist is authorized to dispense certain drugs, without any prescription from the patient; as such there is a talk that this category of drugs will be created shortly), and the prescription only drugs - they are dispensed on prescriptions only. In India, every thing is virtually over-the-counter and behind-the-counter. Thus, retailers in certain areas - where patients are not very educated, or in lower economic areas - the retailer gets to control the pharma market to a very large extent. Hence, in metros and urban areas, where retailers do not dominate the pharma business as much, MNCs get to dominate the market. In non urban areas, retail control on pharma business is very high.

Retailers also dispense several drugs over-the-counter to patients directly for the management of routine types of infections and illnesses, and also certain other products. Particularly in the case of sex rejuvenators and sexual health related products like ayurvedic sex rejuvenators, sildenafil citrate, and mifepristone (which is a huge OTX or over-the-counter plus prescription market; some of the top Indian pharma brands like Unwanted and MT Pill are mifepristone brands. This market is growing rapidly.) - the retailer is the 'sale generator'. Most often than not, the patient goes directly to the pharmacist to get the medicine. The pharmacist educates the patient on how to use the medication. Thus, retail offers are very high in this segment.

These are examples of market characteristics that are not textbookish. You go out in to the field and get to learn of them. Earlier, ORG the key market research organization for the pharma market, used to print 'blue books' of the market data, which used to have a compilation on the official bonus offers on various brands.

An important fall out of this retail bonus offers phenomenon is that competition between pharma companies gets fierce at the retail counters but the patient does not get any thing in return unless the retailer on his own, due to inter-chemist competition, offers discounts. This is one reason why chemists including chains like Medplus offer flat 10% discount to the patient.

Why are pharma retailers so powerful in India?

This has to do with a bit of history of medical profession in India. In the days of yore, doctors were responsible for diagnosis and dispensing of the medicines. In fact, among doctors who practice Ayurveda, the traditional form of medicine, most of the doctors are dispensers. This is in fact a subcontinental practice, as can be seen in Sri Lanka too, where dispensing doctors is a common phenomenon. Pharmacists to dispense only is a Western phenomenon, and has taken roots in India only after independence. Hence, today, the patient expects that pharmacists too dispense medicines on their own just as they do not mind doctors dispensing the medicines. Hence, addressing the characteristics, needs, and wants of pharmacists in a judicious way is inevitable to operate in Pharma India. THIS NATIVE INTELLIGENCE IS RESPONSIBLE FOR THE RAPID GROWTH OF COMPANIES LIKE MANKIND.

Thanks for reading this blogpost, please do read other blogposts, by scrolling down and clicking on OLDER POSTS, wherever required.