Download Marketing and sales

MARKETING AND SALES
What is Marketing…??
• Selling?
• Advertising?
• Promotions?
• Making products available in stores?
• Maintaining inventories?
All of the above, plus much more!
2
Marketing
Marketing is the art and science of choosing target
markets and getting, keeping, and growing customers
through creating, communicating, delivering, and
superior customer value.
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Simple Marketing System
Communication
Goods/services
Industry
Market
(a collection
of sellers)
(a collection
of Buyers)
Money
Information
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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
Usp- unique selling proposition (the focus attribute)
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
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Scope of marketing
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Goods
Services
Events
Experiences
Personalities
Place
Organizations
Properties
Information
Ideas and concepts
What can be marketed or sold ?
Anything under the sun …………
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Core Concepts of Marketing
Needs, wants
demands
Markets
Products
Marketing &
Marketers
Utility, Value &
Satisfaction
Exchange, Transaction
Relationships
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Core Concepts of Marketing
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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
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In order to understand Marketing let us begin with the
Marketing Triangle
Customers
Company
Competition
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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
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Product is . . . . .
Anything that is offered to the market for
attention, acquisition, use or consumption that
satisfies a want or a need
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Market
A Public place where buyers and sellers make transactions,
directly or via intermediaries
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Types of Products
PRODUCTS
Consumer
Products
Services
Industrial
Products
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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
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)
medical products selling process
products
Pharma
company
detailing
Sales
representative
Product sample
Doctors
Clinical data
Prescribes
Rx
money
Retail
chemist
Patient
medicine
Distribution
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
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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.
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
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.
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.
0-level channel
Producer
Consumer
1-level channel
Producer
Retailer

Consumer
Retailer

Consumer
Retailer

Consumer
2-level channel
Producer
 Wholesaler
3-level channel
Producer
 Wholesaler 
In Pharma
Jobber

Factory
Branch/C & F Agent
HUB
Distributor
Chemist
All India organization of Chemists & Druggists Association (AIOCD)
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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.14,000- 14,500cr
Rs 23,500cr
(8% & 10%)
(8% & 10%)
(16% & 20%)
(16% & 20%)
Increase in Institutional
sales
Entry of
government
Pharmacy chains
(2002 onwards)
28,500
4 lakhs
55,000
5 lakhs
Stockist margins
(4% & 6%)
(6% & 8%)
(8% & 10%)
Retailer margins
(8% & 12%)
(12% & 16%)
(16% & 20%)
Entry of Sub- stockists
Stockists- 18,000
Retailers- 1,25 lakhs
20,700
2 lakhs
23,500
3 lakhs
Stockists
Chemists
Price Control
8%
16%
Out of Price control
10%
20%
Source: EY research & trade bodies
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Pharma distribution channel
Pharma company
Cental govt or
state govt
1
CFA
2
Distributor ( stockist)
Selected Institutes
(hospitals)
Sub Distributor ( sub
stockist)
3
Retailer ( chemist)
3-level channel of distribution
Patient
(consumer)
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)
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)
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
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
Retail chains
Patterns of Distribution
• Determines the intensity of the distribution
• Intensity decides the service level provided
• Types of distribution intensity:
• Intensive
• Selective
• Exclusive
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
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
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
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.
Great Words on Marketing
1.
“The purpose of a company is ‘to create a customer…The only profit
center is the customer.’”
2.
“A business has two—and only two—basic functions: marketing and
innovation. Marketing and innovation produce results: all the rest
are costs.”
3.
“The aim of marketing is to make selling unnecessary.”
4.
“While great devices are invented in the Laboratory, great products
are invented in the Marketing department.”
5.
“Marketing is too important to be left to the marketing department.”
THANK YOU
-PHARMA STREET