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IndianPharmaceutical Market
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Dimensions of the Pharmaceutical Market
Demographic: geographical & shared socio-economic traits
Generic: generic equivalents present in a number of
formulations eg. Erythromycin
Therapeutic Group: aimed at relieving, treating and curingthe same symptoms of diseases
eg. Anti-diabetic therapeutic group
Competitive: extent of competition in terms of numbers,
their MS & growth rate
Timing: introduce at the right time, preferably become the
prime movers (Torrent: 1983-88 grew at avg.182%
moved from Rk 81 to Rk 36 & in 1992 Rk 13)
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Segments of the Pharmaceutical Market
Consumer Market: prescription market
Institutional Market: large hospitals & medical colleges
Industrial Market: bulk drugs used in formulations
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Criteria for Effective Segmentation
Measurability: number of members, growing or de-growing
Accessibility: must be reachable in a cost effective manner
Desirability: must be large enough to service profitably
Homogeneity:ensure Fit between the Need profile of
the segment and the Satisfaction qualities or
attributes of the product
Vulnerability: must not be excessively vulnerable to competition
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Four ways of Segmentation
Demographic factors: age, sex, income, education, stage infamily cycle
Usage rate: based on usage/consumption pattern
Perceived product benefits: unearth not-so-apparent benefits
Psychographic: motive behind the purchase
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Segmentation through Transaction
Two Major Potential Target Groups
Patients Doctors(Customers or influencers)(Consumers or end users)
Similar illness: Diabetic, Asthmatic
Stage of illness: Acute, Chronic
Age group: pediatric, Geriatric
Sex: Male, Female
Age group: Young, Middle aged, Elderly
Specialty: Card, Diab, Neuro, Gynec
Area: Urban, Rural, Hosp, Nrsg. Homes
Type: Rxing, Dispensing
Usage: Heavy, Medium, Past, Non-user
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Benefit of Segmentation Strategy
Helps in focusing promotional effort to
maximize profits cost-effectively
Helps in creating a strong positive product-imageTo offset competition
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Key Questions while Segmenting
1. On what basis?
Demographic, Geographic, Age group, Sex, Income levels,Therapeutic group, Severity of disease, Product benefits,
Usage rate, Place of treatment, Specialty
2. What are the needs of patients?
3. What are the needs of customers?
4. Relationship between patients & customers
5. Is the segment attractive enough?
6. What is the trend like?
7. Are there any unsatisfied needs in the segment whichthe product can satisfy?
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Market Dimension
The size of the geographical market
State-wise % contribution to all India & Rate of changeIn terms of; Volume, Value & Rx generated
The size by therapeutic group
Therapeutic group-wise contribution to the total marketRegion-wise contribution
In terms of; Volume, Value, Rate of change & Rxs
The size by demographics of both;
Patients: number treated, Age, Income, Sex, Location etc
Doctors: number, age, specialty, location, type of practice
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Market Dimension
The size of prescription market
No. of Rxtions written for the therapeutic category
The size of competition
Number operating in the segment, Regional shares of the
total market, Resources, Strengths & Weakness, BenefitPackages offered by major competitors
The size by volume
Dealer network according to volume of purchase
The size of the institutional market by
Nature, Frequency, Volume, Location, Key people, Criteria
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Served Market Concept
Is the state-of-the-art of defining market segments andunderstanding market structures-Bruce Henderson (BCG)
Helps to create a perceptible competitive advantage for
growth and survival
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Served Market Concept
Define the total market by size (volume & value), growth
rate, customer types and competitors
Define in terms of customer needs and how your product
can satisfy those needs
Define your competitors served market in terms of their
respective customer needs and the competitive advantage
of their products in satisfying those needs
Find ways of creating perceptible differentiation and turnit into a distinct competitive advantage
Communicate with all your might and drive home
the advantage
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Served Market Concept
Gelusil v/s Digene(Differentiated thro antiflatulent)
Pfizer & BE in 70s: PAS, Isoniazid, Thiacetazone & combination
Lupin in 80s emerged: ethambutol, PZA, RIF
Sarabhai in 76: narrow spectrum antibiotics & oral penicillinsRanbaxy emerged: broad spectrum semi-synthetic antibiotics
BE Ltd v/s SII v/s Hoechst: competing in Immunologicals
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Served Market Opportunity Analysis
1. Strengths of your product in your served market as well as
in your competitors served market as opposed to their product
2. Analysis of any possible gaps in customer needs and whether
the gaps can be exploited profitably
4. Any possible weaknesses existing in your product offerings ascompared to changing customer needs and the ways in which
your competitors are responding
5. Quantitative analysis of the new product in terms of; demand,
profitability, the edge it would give the companys current
product-mix, the impact it would have on the existing product-
mix
6. Detailed analysis of competitors response to this new segment
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Market Opportunity Analysis
Step-1
Analyze your existing market
What is your directly competing market?
Step-2
Build on your strength
Have you realized all probable opportunities in existing markets?Do SWOT Analysis of your products in all your existing markets
Are there any unmet needs in your existing markets not fulfilled
by you and your competitors?
Are there any major sub-segments where you do not have anyproduct?
What are the strengths & weakness of your products as
compared to the competitors-is there need for product devpmt?
What are the opportunities & threats in your markets?
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Market Opportunity Analysis
Step-3
Explore new market opportunities
List fast growing, largest, less entrenched markets, and
prioritizethem in order of importance & attractiveness. Also,
analyze how congruent is the market identified/shortlisted.
Step-4
Evaluate new opportunities in new segments
Is the market large enough and growing rapidly?
What is the intensity of competition?How does your firm compare with them?
What is the attribute of your product planned for introduction?
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What Strategic Options?
1. Concentrated Marketing
Segmenting the market by customer specialty
Advantages
Niche for the company &products
Provides competitive advantage
Helps better customer services
Focuses the resources &optimizes the result
Disadvantages
Close monitoring requiredFailure can be devastating
Segment may not be viable
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What Strategic Options?
2. Differentiated Marketing
Marketing to many segments each with differentiated
marketing-mix
Advantages
Minimizes vulnerability factor
Makes the firm more flexible
Cost is spread out
Disadvantages
Lacks focus
Cannot achieve dominance
Diminishing profits
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Positioning: Definition
Is the battle for space in the consumers mind
Is less what we do to the product and more what we do to
the consumers perception of the product
The positioning of a brand is its perception among targetcustomers
Is the art of selecting, out of a number of unique selling
propositions, the one which will get you maximum sales
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Positioning: Definition
1. The positioning of a brand is the perception it brings aboutIn the mind of a target consumer
2. This perception reflects the essence of the brand in terms
of its functional and non-functional benefits in the judgement
of that consumer
3. It is relative to the perception, held by that consumer, of
competing brands, all of which can be represented as points
or positions in his/her perceptual space and together, makeup a product class
Thus, positioning creates a unique, credible, sustainable and
valued place in consumers minds for the brand
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Positioning: Four Components
1. Product class or the structure of the market in which thebrand will compete
2. Consumer segmentation
3. Consumer perception of our brand in relation to competitors,which leads to perceptual mapping
4. The benefits offered by the brand. These benefits may also
be expressed as attributes or dimensions along which brandsare fitted to represent consumer judgement
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Positioning:Types
1.Who Am I?
Positioning by Parentage/Corporate Identity
Positioning by Brand Endorsement
2.What Am I?
Category Related Positioning
Benefit Related PositioningPositioning by Usage Occasion & Time
Price-Quality Positioning
3.For Whom Am I?
Demographic Fit
Behavioral Fit
Satisfaction Fit
Psychographic Fit
The Consumer as a Whole Person
4.Why Me?
Positioning by Unique Attribute
Positioning by Competitor
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Positioning Types Explained
1.Who Am I?
Positioning by Parentage/Corporate Identity
Sony, Tata, HLL, Bajaj, BPL, GSK, Ranbaxy, Unichem
Positioning by Brand EndorsementCadbury, Ponds, Charminar, Taxim-O
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2.What Am I?
Category Related
Milkmaid, Maruti Van, Sugar Free, Alprazolam, Ranitidine
Benefit RelatedComplan, Pepsodent, Close-Up, Liril, Cardace, Disogel
Usage Occasion & Time
Prestige Cooker, Vicks, Burnol, Dettol,Listril, Zentel
Price-Quality
Akai, Aiwa, Peter England, Nirma
Positioning Types Explained
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3.For Whom Am I?
Demographic FitColgate Kids, Cartoon Network, MTV
Behavioral Fit
Lays, Gelusil, Coke
Satisfaction Fit
Wills, McDowells No.1, Foster Beer
Psychographic Fit
Pepsi, Arrow Shirts, Pulsar
The Consumer as a Whole Person
Saffola Wife, J&J Mom, Surf Housewife
Positioning Types Explained
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4. Why Me?
Positioning by Unique Attribute
Dove Soap, Centre Shock, Amron Batteries
Positioning by CompetitorCaptain Cook Salt v/s Tata Salt, Time Pass v/s Pan Masala
Savlon v/s Detol, Avis v/s Hertz, Rin Detergent v/s others
Positioning Types Explained
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Over 8000 Companies, Over 6500 Products
Doctor meets on an average 10+ Medical Representatives
exposing 5-8 products
Daily exposure of 50+ to 80+ products
Therefore products are ranked in doctors mind
based on perception
With the coming down of product differentiation/
product uniqueness, finding slot in customers mind
is becoming extremely difficult
Positioning In Pharma
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1. The type of conditions for which the product will be Rxed
2. The type of patient for whom the product will be considered
suitable
3. The products with which the product will compete closely(Direct & Indirect Competition)
Positioning and selection of target market (consumer segment)
are inseparable. A brand must be positioned to appeal to a
target audience and likewise a target audience too will respond
to a brand that occupies the position preferred by it.
Positioning In Pharma: 3 Primary Tasks
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Uniqueness or perceived uniqueness is a products onlyprotection against commodity status. Therefore marketers
should create a perceivable uniqueness i.e., differential
advantage.
A differential advantage should satisfy 3 fundamental criteria;
1. It should differentiate the product from all other others
in the product class
2. It is important or can be made to seem important to thetarget audience
3. It should be sustainable over time against competition
Positioning In Pharma: Sustainable
Differential Advantage
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GriseofulvinGris-OD (American Remedies) v/s Grisovin & Dermonorm
(IDPL & Glaxo) in anti-fungal market: micronization & OD v/s
QID
Ranitidine
Zantac (Glaxo) v/s Losec (Astra): preemptive campaign to push
Losec to Reserve Drug status, and also market development
strategy by expanding usage in non-ulcer dyspepsias,
gastritis
Positioning In Pharma
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What position do we already own in the customers mind?
What position do we want to own?
What is the Gap like?
Which companies must be out performed to establish that
position?
Does the company have sufficient resources to take thatposition?
Does the company have the conviction & perseverance?
Key Questions before Positioning
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1. You cannot appeal to everyoneA product that tries to appeal to everyone winds up appealing
to no one.
Eg. Fefol (SKB) & Livogen (Allenburys) v/s others for
Anaemia in Pregnancy
Betnelan (Glaxo) in bronchial asthma
Ground Rules for Positioning
G f
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2. You cannot beat the brand leaders head-on
pH4 Biological Evans in Antacid Market (Sodium-free)
3. You can reposition your brand
Incidal (Bayer) v/s Avil & Foristal (Hoechst & Ciba Geigy)
in anti-histamine market: Alert & Daytime Anti-histamine
Tylenol v/s Aspirin
Do not mimic another products theme just because ithappens to be a similar product or falls into the same
product category
eg. Ridake (Burroughs Wellcome) hyper-critical campaign
against Aspirinresistance leading to withdrawal of product
Ground Rules for Positioning
G d R l f P iti i
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Repositioning of Septran against Tetracycline
Rs. 40 Mio in 1973 to Rs. 750 Mio in 1992 even when other
Sulpha drugs de-grew
4. Aim to occupy Top-7 Rungs in the customers mind
Unless this happens, there is no chance your brand will
survive.Because in any product category the few top-brands, usually
5-7 brands, account for over 90% of the market share.
If you have a truly new product, tell the customer what the
product is not, rather than what it is. Because, the mind has
no room for what is new and different unless it is related to
the old and matches with prior knowledge.
Eg. Na Free antacid, Pain-free injection, Non-narcotic cough
Syrup for children, Non-staining topical ointment etc.
Ground Rules for Positioning
G d R l f P iti i
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5. Establish Credibility
Claiming your product is different is not going to create a
unique & distinct position. Only when the difference isperceived by the customers, will the product gain acceptance.
Ground Rules for Positioning
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Thank You