Friday, October 29, 2010

Growth addiction

Above graph from here.

Growth will continue to be a desirable and indeed a necessary business objective.
- Peter Drucker

Peter Drucker, described as the Aristotle of management science, has elucidated a lot on growth. He has reiterated that able and competent management results in growth. Hence, the innate emphasis in all pharma (and nonpharma) companies on growth.

Driven by competence, the Indian pharma industry is growing!

As per MAT June 2010 IMS figures, the pharma industry is showing 20% growth (MAT value of Rs. 43823 crores). Established brands are registering good growth. Vaccine market is zooming. Antidiabetic drug market is the leading growth market segment. The June 2007 MAT value was Rs. 28841 crores and in June 2010 the MAT value of the pharmaceutical (retail) market is Rs. 43823 crores!

Managing growth is a challenge to businesses

Growth is a great motivator for employees and owners! A growing business offers hope of a better and improved future. Stagnation is killing and creates cesspools. Hence, companies and people do (or should) plan for growth and work for growth.

Growth in pharma does not come only by covering more doctors, increasing doctor call frequency, pumping in more samples, gifts and sponsorships ... there are other points that are a necessity in managing growth:

a) Process development
b) Knowledge management
c) People practices

To understand how indisciplined growth can lead to disastrous results to society, Govt., owners, employees, and to the business as a whole ... look at SATYAM COMPUTERS! OR look at the iron ore mining industry of Bellary district (Karnataka). In both these cases, growth lacked a value framework for the organization and industry, respectively. Growth has come with a whole load of problems. There was also no value actualization at Satyam or in the mining industry.

This is why Infosys emphasizes POWERED BY INTELLECT, DRIVEN BY VALUES. At Wipro too, the six values are given a lot of emphasis. MindTree too has a value framework and emotional infrastructure in place to carry on growth.

Growth without a value framework, company culture, people practices, process development and KM (knowledge management) will lead to corruption or breakdown and other problems. Very often growth is associated only with money management, improved marketing penetration and throughput, inventory management, and physical infrastructure (like production facilities, technology etc). However, such a growth has its susceptibilities or weaknesses and can lead to several problems. Managing growth means a lot more.

Knowledge management (KM) refers to strategies and practices of organizations to access, create, identify, document and share insights and experiences. It is a very sophisticated, subtle and powerful science. The ability of KM to produce change and match employee thinking to the market thinking is very potent.

The time is ripe now in Indian pharma industry to take a leaf out from Indian IT industry to learn about managing growth comprehensively, even as IT, is today, celebrating Thnks for reading this blogpost, and we warmly WELCOME PRESIDENT OBAMA AND FAMILY TO INDIA, a bit in advance!! Please scroll down and read all other posts, click on older posts, do kindly recommend this blog to your acquaintances.

Sunday, October 17, 2010

Crisis management: USP of Indians

SPECTACULAR! This year's Commonwealth Games, Delhi 2010 were truly spectacular and very satisfying to athletes and viewers. This year's games' were mired in controversy. One wondered whether they would take off, at all!! Anyway, all's well that ends well!!

So what is the take home message from the 19th Commonwealth Games, New Delhi, 2010? The message is that we INDIANS ARE PAST MASTERS AND (PRESENT AND FUTURE) MASTERS OF crisis management!!

When things look hopeless, you will find that Indians have an inborn quality of doing necessary jugaad or street smart innovativeness and salvage the situation. Jugaad includes frugal engineering but not necessarily strictly so. When Citibank was in a deep mess and required a messiah to salvage the situation, it was Vikram Pandit who took the bull by the horns!

India is in a permanent state of chaos. First time visitors to India are stunned by the dust, heat and general muddle. In fact, they wonder how India ticks, being in a permanent state of chaos!!?! For us, Indians, management of challenging chaotic situations, is, of course, all in a day's work!! We Indians are deeply tolerant, hence, we can take in all the chaos very equanimously!

Incredible India! Incredible health situation of India

We call this chaotic situation as unity in diversity! This diverse and chaotic environment gives us a special quality to do jugaad and try and come out of the tight situation.

Consider the mess that the disease situation of India is:

a) India has the largest TB cases in the world (23% of world's TB patients)
b) 86% of the world's diphtheria patients are in India
c) 54% of the world's leprosy patients
are here in India
d) 55% of the world's malaria patients are in India

India is the well known 'capital of diabetes of the world'!

Polio (42% of world's patients are in India), tetanus and pertusis are also prevalent significantly in India. This is as per World Health Statistics 2010 released by WHO.

But this deplorable health situation seems almost implausible after seeing the fantastic opening and closing ceremonies of Commonwealth Games, 2010 at New Delhi! But the above health situation is true and represents a great continuing opportunity for pharma marketers to try and improve the health situation.

Managing crises is a second nature for us. We are sure we will be kaamyaab in bringing a turnaround in the health situation of India. For that firstly, we have to agree that there is a crisis. That is difficult for us Indians!! However, until we agree there is a crisis we will not act! Once we know that a crisis is on us, we will put the act together, that is how we Indians behave! Otherwise ... chalta hai!!

Today the fact is that India is booming. Economic liberalization has created an economic resurgence. Yet, it was not a proactive liberalization policy that was brought in! We were shamed, way back in 1991, when IMF (Indian Monetary Fund) bailed out a bankrupt India. This forced the Govt. of India to liberalize and galvanize the Indian economy. This caused growth of Indian economy.

We should hit a crisis - only then do we wake up! That is why we Indians are great at crisis management - the evidence is the Commonwealth Games, 2010!!

Crisis means an unpredictable event has occurred and it needs to be managed. Today, we are sitting on a major silent health crisis. Private entities and Govt. bodies need to take on the challenge facing India before it becomes recognized as a crisis issue. It is a silent crisis today, but when international organizations start coming in to India, in a major way to save the health situation of India, we will only be collaborators with these entities. Global healthcare NGOs are seeing a big opportunity in India. Will we Indians require international attention and guidance to improve our healthcare situation or can we do it ourselves?

Thanks for reading this blogpost, please scroll down and read all other blogposts, click on older posts as and when required. Please feel free to recommend this blog to your friends.

Sunday, October 10, 2010

Communication mix in pharma marketing

Above image from here.

One interesting observation of people who take a fresh view of pharma marketing or when a new person looks in to pharma marketing, he observes that the communication mix is heavily tipped in favor of PERSONAL SELLING.

The next important element of the communication mix, particularly in India is SALES PROMOTION (providing cash discounts or bonus offers), to retailers and stockists (not to patients). Nevertheless, there are some interesting new parts of communication that are gaining traction like mobile based messaging, and POP (point-of-purchase) promotional activities. Pharma companies are definitely seeing the importance of various other communication systems hitherto not emphasized in pharma marketing.

The traditional view of pharmaceutical communication is providing an emphasis on the following elements:

1) Personal selling: this element of the communication mix gets the maximum focus in pharma marketing, MRs are appointed who are trained to provide the personal selling function.

2) Sales promotion: mind you, the focus of sales promotional offers unlike FMCG marketing is solely the retailer (and to some extent the stockist ie., wholeseller), almost never the patient!!

3) Advertising: is a useful input of the communication mix in pharmaceutical marketing. Pharmed established its new concept products in the 1990s ie., glucosamine based products solely through slick print advertisements in medical journals. Advts. continue to be important for providing information and provoking prescription flow.

4) Direct marketing: was employed by Cipla (it is being done to some extent by them even now), when they had some problems in personal selling function. In fact, the mailers and inputs provided through direct marketing was so impressive, doctors would wait for the material to arrive through mail or courier.

IF PERSONAL SELLING IS A PROBLEM DUE TO TERRITORY DISTURBANCE OR LACK OF MRs OR LACK OF WORKING BY MRs OR UNIONISM OR LACK OF QUALITY COMMUNICATION BY MRs, then direct marketing is an important approach to supplement or substitute personal selling and keep the marketing game on! Some marketing is always better than bad or no marketing!!

Direct marketing is an interesting approach. Firstly, it is not a foot-in-the-door type of approach. It respects the target person's privacy. It gives a freedom to the doctor to go through the mailed material at his leisure.

Often management personnel think that mailers received by doctors go to the waste paper basket directly without them being opened. This is not wholly true. It depends on the corporate image of the sender. For instance, when the then Glaxo and Cipla would send mailers doctors would value them - content in the mailer makes the difference.

When the content is plainly uninteresting then it is obvious doctors will loath mailers. Direct marketing mailers are not a failure approach, but the content being inferior makes the mailer approach a failure.

To put the above point in right perspective, imagine a slothful and unimpressive MR, will he be encouraged by the doctor? Just because the quality of the MR is poor, can we conclude that personal selling function based on MR is not useful in product promotion?

On the product promotional horizon, the personal selling function is getting challenging, MRs are not committed as before, quality MRs are difficult to get, the no. of MRs is getting a tad too crowded in the market ... so which way out?

Already, people are putting their money on sales promotion. But that is not going to be enough. Still more options of the product promotional mix need to be used to ensure best returns for the marketing buck. These options include targeted direct marketing, POP promotion, advertising, trade stall promotion ...

The Indian healthcare market

The Indian healthcare market including pharmaceutical market is looking up. 18% growth is assured. There is a lot of scope for market penetration. The need for pharma products and healthcare services is growing day by day. The Indian pharma retail market of about Rs. 45000 crores is growing at 18%! The media labels it 'steroid growth'. This pot of honey is attracting many entrepreneurs.

The usual approach to the pharma communication mix will out date the marketing game of pharma companies. With the personal selling function getting hotter in the Indian pharma market, it is inevitable that all other elements of product promotional mix will gain in importance.

Optimizing the marketing funds

If you have Rs. 10/- how will you distribute it among the elements of the pharma communication mix? This will be the real challenge ahead in pharma marketing. Marketing money allotments will only increase with competition become fiercer. How to optimize, how to expand communication activities? How to transform pharma marketing communication activity? There are a lot of interesting challenges ahead! Will making visual aids, literatures, allotting samples, gifts (big and small), providing schemes or bonus offers to retailers (of which much is gobbled by wholesellers, ie., the retail offers may not percolate down completely), alone suffice? Grappling with these questions is essential to pharma companies to survive and grow profitably in the future market!

Thnks for reading the blogpost on communication mix and how it may evolve in the future in Indian pharma market! Please scroll down to read all other blogposts (click on older posts as and when required), do recommend this blog to your friends.

Sunday, October 3, 2010

Mind, a craving organ

Above image from here.

The intangible is often taken for granted! I recollect a conversation with a leading paediatrician of Bangalore sometime back. In addition to paediatric practice, he offered customised books or journals for pharmaceutical companies, who then would provide the same to doctors, as a service. Once when we were involved in a transaction, I requested him to provide the articles in CD form, the printing would then be taken care of by the pharma company. However, he insisted on providing the final printed journal. The reason was simple, he said:"Sunil, in India, the intangible intellectual property does not have value!! Business people give maximum value only to tangible things! So intangible contributions are most often discounted or taken for granted. So it is better I supply the final book product"!! How right!! The intangible is particularly in the Indian context almost always discounted or taken for granted ... just like the mind - an intangible organ.

Mind, a craving organ

The mind is defined as originating from the brain. The most important attribute of this intangible organ is that it is a craving organ. There are several cravings in this organ that direct the human behaviour. These types of cravings include: recognition, wealth seeking, working for higher stature in life, security, rich foods, nutritious foods, entertainment, frequent sex, alcohol consumption or thrill seeking.

Recently, I came across a very interesting medical event. A gentleman was afflicted with uncontrolled diabetes. Finally, he had gangrene of the foot. The doctor seeing the condition advised immediate amputation, if this was not done, the prognosis was bad - the patient would die in a month's time. The patient haughtily refused surgical treatment, went in for Ayurveda and other alternative treatments, that provided mixed results. Unfortunately, he passed away yesterday.

On deeper analysis, it is evident his mind directed him not to seek surgical treatment, for whatever reasons. He had this craving to avoid surgical treatment and seek alternative nonsurgical treatment. This craving did him in. That is the power of cravings!!

So the bottom line is that cravings (in the mind) direct human behaviour and they create different experiences for him/her.

Making a choice

Cravings are inevitable attributes of the mind. Some mind researchers classify only the higher mental functions like reasoning and memory as attributes of the mind. Nevertheless, cravings are a part and parcel of mind.

With one's mind we can exercise our imagination and create a smörgåsbord of cravings, these can range from plain to exotic. The ability to choose a particular craving requires the function of will, intelligence and knowledge.


Marketers depend on these cravings!

If the patient does not have a craving to get better, if the doctor does not have a craving to heal his patients, where will we pharma marketers go?!

Delivering competitive value that satisfies the cravings is very important

Take for example, the success of electrolyte energy drinks in Tetra Pak concept, in India. The craving in the patient was that paediatric and other patients need to get in electrolytes, safe water, energy, and the patient should enjoy the experience. Tetra Pak technology provided aseptic technology that made the product ultra safe. The fruit juice base enhanced palatability and ensured patient delight. When the patient was delighted so was the doctor!! This superior value was the best competitive offering in the market - for offering fluids to weak and dehydated patients. Hence, the above product concept has succeeded.

Making superior value offerings is always fraught with risks. Innovations to enhance value can be risky prepositions. If they click, there is a bonanza for the pharma marketer. If it bombs, there is a big loss.

Recently, Crocin suspension innovated. They have for the first time launched a child resistant cap for the bottle. But those who have used it will know, what a pathetic innovation it is. If a patient buys it, he will never buy Crocin suspension again! Opening the cap is not easy, and it gets locked so firmly that it is not possible to reopen the bottle!

Hence, innovation to improve value offerings is always risky that can hurt if it backfires in the market!

The electronic industry is always in a race to offer better and improved value offerings. After the LCD TV, came the HDTV and now the rage is 3 D TV! Value offering is the sum of all brand experiences of a customer. If the value offering is superior to competitor brands, then the customer will be satisfied or delighted.

In pharma marketing, delighting the doctor is the key, rather than delighting the patient!

Traditionally, pharma marketing is always about making service offerings to doctors who prescribe the brand. The content of the value offering to doctors includes regular calls by MRs and field personnel, positive strokes and praises by field personnel, clinical reports, trial summaries, samples to try on the patient (because seeing is believing), and freebies (small gifts, large gifts, and sponsorships) to delight the doctor. More delighted the doctor, more the prescription flow in favor of the brand, and more the sales of the pharma brand.

The other entity is the pharmacist or chemist, who needs to be plied with retail offers to delight him. Or the chances of brand substitution is greater. Hence, the chemist should also be kept happy.

With patient empowerment improving slowly, there are small changes where patient may demand for a particular brand. However, patient consciousness (patient is the one who actually pays for the pharma product) on pharma products is still very low. Product performance should delight the patient to ensure doctor is confident on the pharma product.

Competitive value offerings ensure that cravings in the market, change constantly. Accordingly, pharma marketers should reinvent value offerings to ensure customers are delighted in an ever dynamic market place. There was a time where doctors had very low cravings from pharma marketers. They only wanted regular calls and some samples and a small gift every now and then. Today, competitive value offerings from pharma marketers has created a lot of new cravings in doctor customers. These need to be understood and accordingly serviced!

Cravings are a part of life since the mind is life! A craving-free mind is a philosophical target reached by very few. Marketers, markets and products/services are always in demand, because cravings are ever growing and changing. Cravings make markets!

Hope this blogpost has satisfied your present craving for a nice read! Feel free to talk about my blog with your acquaintances and scroll down (click on older posts, as and when required) to read all other posts.