1. MARKETING AND SALES

2. All of the above, plus much more!
What is Marketing…??
Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?
All of the above, plus much more!

3. Marketing
Marketing is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

4. Simple Marketing System
Communication
Industry
(a collection
of sellers)
Market
of Buyers)
Goods/services
Money
Information

5. Selling vs. Marketing Dimension Selling Marketing
Concepts
Integral part of Marketing
Broader concept, includes selling, brand, Mkt research, distribution, promotion, strategy
Objective
Transaction
Exchange, Customer, Demand management
Target
Buyer
Needs/ wants of the customer
Focus
Product
Brand/ service
USP
Price
Value
Strategy
Sales force + promotion
Marketing mix
Period
Short term
Long term
Controls
Sales/Delivery/ Collections
Customer satisfaction, market share
Skills
Selling/ Communication
Analytical
Orientation
People
Team
Begins
When you have a product
Much before & long after a product

6. Difference Between - Sales & Marketing ?
Sales trying to get the customer to want what the company produces
Marketing trying to get the company produce what the customer wants

7. Scope of marketing What can be marketed or sold ?
Goods
Services
Events
Experiences
Personalities
Place
Organizations
Properties
Information
Ideas and concepts
What can be marketed or sold ?
Anything under the sun …………

8. Core Concepts of Marketing
Needs, wants
demands
Products
Utility, Value &
Satisfaction
Markets
Marketing &
Marketers
Exchange, Transaction
Relationships

9. Core Concepts of Marketing
Need – food ( is a must )
Want – Pizza, Burger, French fry's ( translation of a need as per our experience )
Demand – Burger ( translation of a want as per our willingness and ability to buy )
Desire – Have a Burger in a Mac-D

10. Customers Competition Company
In order to understand Marketing let us begin with the Marketing Triangle
Customers
Competition
Company

11. Who is a Customer ?? CUSTOMER IS . . . . .
Anyone who is in the market looking at a product / service for attention, acquisition, use or consumption that satisfies a want or a need

12. Product is
Anything that is offered to the market for attention, acquisition, use or consumption that satisfies a want or a need

13. Market
A Public place where buyers and sellers make transactions, directly or via intermediaries

14. Types of Products
Consumer
Products
Industrial
PRODUCTS
Services

15. Uniqueness of medical products marketing
Customer and consumer are two separate entities
Customer is more aware and informed about the products
Marketing is regulated by various guidelines (example: advertising not allowed for schedule H drugs)
Medical council of india( MCI) governs the inputs provided to medical practitioner (doctor i.e customer for pharma companies)
While Drugs and Magic remedies act governs the content of advertising of the medical products
Direct to consumer marketing is not allowed for on prescription medical products

16. Uniqueness of medical products marketing
Marketing of product and claims has to be backed by clinical evidences for medical products
Evidence based marketing is desirable
For OTC ( over the counter products) marketing can be done by advertising directly to the patient (eg: ranbaxy’s revital)

17. medical products selling process
detailing
Doctors
Pharma company
Sales representative
Product sample
Clinical data
Prescribes Rx
money
Patient
Retail chemist
medicine

18. Distribution

19. The Distribution Function
distribution is about getting the product or service to the customer as conveniently as possible; it deals with access and availability
intermediaries perform many of the distribution functions on behalf of suppliers
merchant intermediaries actually take title to physical products that they distribute
agents do not ever own the products, but they arrange the transfer of title
Distribution happens through various channels

20. Distribution Channel What is a Distribution Channel?
A set of organizations (intermediaries) involved in the process of making a product or service available for use or consumption by the consumer or business user.
Used to move the customer towards the product
Selling through wholesalers and retailers usually is much more efficient and cost effective than direct sales.

21. Distribution Channels
The role of distribution entails:
Arranging for its sale and transfer of title
Promoting the product
Storing the product
Assuming some risk during distribution.
Intermediaries often perform these activities for producer or consumer.
All roads lead to Rome

22. Distribution Channel Functions
Information: gathering and distributing marketing research and intelligence information about the marketing environment.
Promotion: developing and spreading persuasive communications about an offer
Contact: finding and communicating with prospective buyers
Matching: shaping and fitting the offer to the buyer’s needs, including such activities as manufacturing, grading, assembling, and packaging.

23. Number of Channel Levels
Channel Level - Each Layer of Marketing Intermediaries that Perform Some Work in Bringing the Product and its Ownership Closer to the Final Buyer.
Producer
0-level channel
Consumer
1-level channel
Producer
Retailer
Consumer 
Producer
2-level channel
Wholesaler
Retailer
Consumer 
Producer
3-level channel
In Pharma
Wholesaler
Jobber
Retailer
Consumer 

24. All India organization of Chemists & Druggists Association (AIOCD)
Factory
HUB
Branch/C & F Agent
Distributor
Chemist
All India organization of Chemists & Druggists Association (AIOCD)

25. Evaluation of Domestic Pharmaceutical Distribution
1970
National distributors
1980
Own Branches
Early 1990’s
CFAs
Mid 90’s
Hubs, CFAs, Consignment Agent
2000 to2006
Hubs, CFAs
Rs.650 Cr
Rs.2,750- Rs.3,000cr
Rs.8,000-Rs.8,500 cr
Rs.14, ,500cr
Rs 23,500cr
Stockist margins
(4% & 6%)
(6% & 8%)
(8% & 10%)
Retailer margins
(8% & 12%)
(12% & 16%)
(16% & 20%)
Entry of Sub- stockists
Increase in Institutional sales
Entry of government Pharmacy chains (2002 onwards)
Stockists- 18,000
Retailers- 1,25 lakhs
20,700
2 lakhs
23,500
3 lakhs
28,500
4 lakhs
55,000
5 lakhs
Stockists
Chemists
Price Control 8%
16%
Out of Price control
10%
20%
Source: EY research & trade bodies

26. Pharma distribution channel
Pharma company 1
CFA
Distributor ( stockist)
Selected Institutes
(hospitals)
Cental govt or state govt 2
Sub Distributor ( sub stockist)
Retailer ( chemist)
Patient (consumer) 3
3-level channel of distribution

27. Role of carrying and forwarding agent (CFA)
A extended part of pharma company ( single pharma company)
CFA can also be a manufacturer owned warehouse or an independent service provider paid a certain commission per unit handled
They help in the routinization of transactions
adjustment of assortment discrepancy and sorting-breaking down a heterogeneous supply into separate stocks that are relatively homogeneous
ALLOCATION- breaking down a homogeneous supply into smaller slots & ASSORTING-Building assortments that are readily consumable
Accumulation-BRINGING SIMILAR STOCKS from different suppliers
Does not have a fixed margin for doing that but operates on share of revenue on the volumes that it trades ( 1.5 to 2% commission)
Appointed at a state level ( at max 2-3 CFA’s per state)

28. Role of a stockist ( distributor)
Keep stock of multiple pharma companies to distribute it to the retail chemist
They get fix margins for selling the medicines from the pharma companies ( 10% for the product out of price order and 8% for the product within price order)
They are appointed by the pharma company and have to operate to distribute products for a particular region (territory)
Pharma company appoints minimum1 and max 3 distributers for one region)
Order stock at every month end from the respective CFA’S (termed as closing 28th to 31st or 1st week of every month)
Is take a permission from All India Organisation of Chemist and Druggist ( AIOCD)

29. Role of a sub-stockist
They share the stock with stockist to distribute it to the area not covered by the stockist
Shares the margins with the stockist
Act as mediator between stockist and retailer
Have a limited existence in pharma supply chain
For rural and extra urban regions a pharma company appoints a sub-stockist to increase their reach in those areas

30. Role of a retail chemist
Is a point of purchase for the patient
Operates on fixed margins(20% for products not under price order and 16% for products under price order)
Order stock from stockist as and when required and do not have a fixed ordering schedule
Keeps stock of all the companies and sells to the patients at maximum retail price (MRP)
They are registered with state FDA authorities

31. Retail chains

32. Patterns of Distribution
Determines the intensity of the distribution
Intensity decides the service level provided
Types of distribution intensity:
Intensive
Selective
Exclusive

33. Distribution Intensity
Intensive: distribution through every reasonable outlet available – FMCG
Selective: multiple, but not all outlets in the market – pharma, frozen food
Exclusive: may be only one outlet in a market - car dealers

34. Intensive Distribution
Strategy is to make sure that the product is available in as many outlets as possible
Preferred for consumer, pharmaceutical products and automobile spares

35. Selective Distribution
A few select outlets will be permitted to keep the products
Outlets selected in line with the image the company wants to project
Preferred for high value products
Tanishque jewelry
Keeps distribution costs lower

36. Exclusive Distribution
Highly selective choice of outlets – may be even one outlet in an entire market
Could include outlets set up by companies – Titan, Bata
Producer wants a close watch and control on the distribution of his products.

37. THANK YOU -PHARMA STREET