Promotional Strategies in Pharmaceutical Industry - A strategic

Comprehension

Prashant Kalshetty*, Sudarshan S.Savanoor**, Dr.Neha Sharma***

*HOD-BBA & BBM (IB), ICCS
**Asst.Prof, BBA & BBM (IB), ICCS
***Research Guide

Abstract:-
In the eon of intense competition & capricious markets and remarkable potentiality of
Pharmaceutical Sector in Indian Scenario this is one of avenues, wherein each key organizational
group tries to get into, grow due to which the present companies are trying survive and at the
same time willing enhance their profitability. Hence, the above entitled research is carried out in
Pune (i.e. Specific area in Pune) wherein this article tries to throw a focus on various
distinguished product promotion strategies being adopted in Pharmaceutical Industry to enhance
their performance of sales of its products and to have an edge over to the other industries in the
days to come. This article strives to focus on Pharma Companies strategies considering the
notions of Four Pillars as Medical Representatives, Medical Practitioners (GPs,CPs),Field
Managers and Chemists.

On having gone through this article one wound come to know about Pharma sector performance,
different strategies of Pharma companies and would be able to understand which strategy would
to be suitable to have better grip in market considering the competition.

Key Words: Medical Practitioners (GPs-CPs), DPCAI, Intrinsic Motivational Factors, LBL

Introduction:-

The pharmaceutical industry has been playing a vital role through developing, producing, and marketing
drugs or pharmaceuticals licensed for use as medications. Pharmaceutical companies are entitled to deal
in generic and/or brand medications and medical devices. They are subject to a variety of laws and
regulations regarding the patenting, testing and ensuring safety and efficacy and marketing of drugs. The
pharmaceutical industry in India is the world’s largest in terms of volume and stands 14the in terms of
value. Ministry of Chemicals and Fertilizers reveals that the total turnover of India’s pharmaceutical
industry between 2008 and September 2009 was US$21.04 billion. While the domestic market was

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worth of US$12.26 billion. Sale of all types of medicines in the countr has reaches around US$19.22
billion till 2012.

The number of Indian pharma companies is comparatively low. Indian pharma industr is mainly
operated as well as controlled b dominant foreign companies having subsidiaries in India due to
availability of cheap labor in India at lowest cost. In Indian Scenario about 295 companies are in
organized sectorwhich contribute near about 90% of Indian Pharm market and over 20,000 registered
drug manufacturers contre to rest 10% to the Indian market. Th total siz of Indian Pharma Market
is about Rupees 50,000 crores wherein mor than 35,000 crores in domestic sales and rest 15,000 crores
in export. Most companies operating in India, even the multinationals, emplo Indians almost
exclusively from the lowest rank to high level management. Homegrown pharmaceuticals, like many
other businesses in India, are often a mix of public and private enterprise. Although many of these
companies are publicly owned, leadership passes from father to son and the founding family holds a
majority share.

As the objective of the stud primarily concentrting on

1. To study the promotional strategies of Pharmaceutical products.

2. To know response of Medical Practitioners upon strategies adopted by pharmaceutical
companies.
3. To find out the desired way of promotion for chemists and medical representatives of
pharmaceutical drus.

The pharmaceutical industry is the world’s largest industry due to worldwide revenues of approximatel
US$2.8 trillion. Pharma industry has seen major changes in the recent years that place new demands on
payers, providers and manufacturers. Customers now demand the same choice and convenience from
pharma industr that they find in other segment.
Indian Pharmaceutical Industry is poised for high consistent growth over the next few years, driven b a
multitude of factors. To Indian Companies like Ranbax, DRL CIPLA and Dabur have alrad
established their presence. The pharmaceutical industry is a knowledge driven industr and is heavil
dependent on Research and Development for new products and growth. However, basic research
(discovering new molecules) is a time consuming and expensive process and is thus, dominated b large
global multinationals. Indian companies have onlrecentl enter ed the area. Th Indian pharmceutical

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several phases, largely in accordance with government policies. Commencing with repackaging and
preparation of formulations from imported bulk drugs, the Indian industry has moved on to become a net
foreign exchange earner, and has been able to underline its presence in the global pharmaceutical arena
as one of the top 35 drug producers worldwide. Currently, there are more than 2,400 registered
pharmaceutical producers in India. There are 24,000 licensed pharmaceutical companies. Of the 465
bulk drugs used in India, approximately 425 are manufactured here. India has more drug-manufacturing
facilities that have been approved by the U.S. Food and Drug Administration than any country other than
the US. Indian generics companies supply 84% of the AIDS drugs that Doctors without Borders uses to
treat 60,000 patients in more than 30 countries.

Pharma Marketing Process Perspective

While many pharmaceutical companies have successfully deployed a plethora of strategies to target the
various customer types, recent business and customer trends are creating new challenges and
opportunities for increasing profitability. In the pharmaceutical and healthcare industries, a complex web
of decision-makers determines the nature of the transaction (prescription) for which direct customer of
pharma industry (doctor) is responsible . Essentially, the end-user (patient) consumes a product and pays
the cost .
Use of medical representatives for marketing products to physicians and to exert some influence over
others in the hierarchy of decision makers has been a time-tested tradition. Typically, sales force expense
comprises an estimated 15 percent to 20 percent of annual product revenues, the largest line item on the
balance sheet. Despite this other expense, the industry is still plagued with some very serious strategic
and operational level issues.

From organizational perspective the most prominent performance related issues are enlisted below:
1) Increased competition and shortened window of opportunity.
2) Low level of customer knowledge (Doctors, Retailers, Wholesalers).
3) Poor customer acquisition, development and retention strategies.
4) Varying customer perception.
5) The number and the quality of medical representatives
6) Very high territory development costs.
7) High training and re-training costs of sales personnel.
8) Very high attrition rate of the sales personnel.
9) Busy doctors giving less time for sales calls.
10) Poor territory knowledge in terms of business value at medical representative level .
11) Unclear value of prescription from each doctor in the list of each sales person.
12) Unknown value of revenue from each retailer in the territory
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13) Virtually no mechanism of sales forecasting from field sales level, leading to huge deviations 14)
Absence of analysis on the amount of time invested on profitable and not-so profitable customers and
lack of time-share planning towards developing customer base for future markets.
15) Manual and cumbersome administrative systems and processes designed which don't facilitate
optimal efficiency levels in sales teams.

Business Strategy
What’s the secret behind these successes? For one, the company operates in niche formulations (chronic)
segments such as psychiatry, cardiovascular, gastroentology and neurology. While most of the top Indian
companies have focused on antibiotics and anti–infectives (acute), Sun Pharma focused on therapeutic
areas such as depression, hypertension and cancer. The company has introduced the entire range of
products and has gained leadership position in each of these areas. Being a specialty company insulates
Sun Pharma from the industry growth. The first quarter results for FY02 explain this to some extent.
While the industry was affected to a large extent by a slowdown in the domestic formulations market,
Sun Pharma logged a growth of 26% in revenues. Over the years Sun has also used the strategy of
acquisitions and mergers to grow quickly. It acquired Knoll Pharma’s bulk drug facility, Gujarat Lyka
Organics, 51.5% in M. J. Pharma, merged TamilNadu Dadha Pharma & Milmet Labs and acquired
Natco’s brands. Post Merger with TamilNadu Dadha Pharma the company gained presence in
gynecology and oncology segments.One of the constants of pharmaceutical company strategy over the
past decade has beenincreasing scale. Only by growing larger are companies able to afford the
considerable costs of drug development and distribution

Research Methodology:-

This article is prepared with the help survey method and data collection sources are as
1) Primary and 2) secondary data. As this research is based on descriptive type of research of Purposive
sample type since the research is carried out with prior knowledge of the population. Then the selection
is being done on the basis of the proportion of the population. Sample size of research was of 54
respondents as categorized into four groups:
a) Doctors - 20, b) Chemists - 12, c) Medical Representatives - 10 and d) Field Managers - 12.
b)

Data Analysis:
The survey is carried through self administered questionnaire having the combination of Open-End,
Close-End, Dichotomous, Multiple Choice, Ranking, Rating and Likert Scale Method. The questionnaire

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is administered for the Doctors, Chemists, Medical Representatives and Field Managers. Based on this
the data is analyzed as.

a) DataAnalysisfromMedicalPractitioner’s
- Perspective:
As per the survey 55% of Doctors recommend Generic Medicines with a view of Anti-side effect and
Economy of Medicine for patients. Doctors moderately believe that Medical Representatives are the
source of guarantee for promotion of drugs and they are well qualified in detailing the brand. Apart
from above two doctors strongly believe that the promotion of Pharma brands depend on 1) Drug
Combination, 2) Brand Name and 3) Their Own Experience in Profession. Even in addition to the
above doctors stress upon the companies IMC (Integrated marketing Communication) with importance
of drug and motivation through MR’s Marketing Skills.
Along with Medical Representatives as one of the Promotional Techniques, the below said are the
additional factors of Promoting the pharmaceutical brands as with doctor’s
response:
Not
Category considerable Considerable Average important Most important
Brand name 0 2 2 9 11
Producer Background 0 4 8 10 0
Drug combination 0 0 4 4 16
IMC 4 1 9 10
Producer marketing
technique 0 7 11 6 0
Your experience in
profession 0 0 7 9 8

Responses obtained from Doctors about Integrated Marketing Communication applied by Medical
Representatives for promoting their drugs
Explanation about the importance of the drugs 8
Promoting the name of the pharmaceutical industry 5
Presentations & gifts for promotion 1
Giving weight age to the brand of their company 1
Analyzing your patients & recommending the drugs 3

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 b) Data Analysis from Medical representative’
s Perspective:-
As per survey 60 % of MRs Say that major contributor of promotion of brands depends on Drug
Related to his practice and Presentation along with Communication, Detailing and Drug
Knowledge. Out of Survey it is found that the Doctors do take risk in prescribing new medicines
(brands). Even while promoting the brands the contribution from the company side if of more with field
work, and laboratory visits. In survey it is found that companies are offering benefits like Salary
increment based on performances, others monetary benefits to MRs which leads to intrinsic
motivational factor to the MRs to promote Pharma brands more aggressively.

C) Data Analysis from Field Managers Perspective:-

As MR is one the key components in Promotional Strategies of Pharma Marketing, he one who
contributes a lot in promotion of Pharma brands. Based on this philosophy, hence managers expect
that MR should be well qualified and should have speaking skills and marketing techniques as
well and accordingly managers suggests that MR should be well trained in training session as far as
drug and product knowledge is concerned. From survey it is found that the fair way of promoting
brand to a doctor is 1) Gifts and 2) Schemes 3) Conferences, Seminars, Promoting doctors to
study, Improving Distribution Channel and MRs Rapport with doctors out of his personal
relations even. (As per manager’s opinion).

Responses Obtained from the Managers for the promotion of Pharmaceutical Brands
Gifts 6
Schemes 4
Seminar and so on 2
Packages 0

C) Data Analysis from Chemists Perspective:-

As per survey 80% of the Chemists keep branded drugs in their shelves, brand name is prime factor
which fascinates patients to buy the drugs followed by price and packing respectively. Doctors
recommend that chemical combination and effectiveness of drug is the prime promotional factor
for prescription (as per the opinion of chemists)

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 The Response Obtained from the Chemists for promotional strategies from the point view of
Patients
Packing 2
Price 4
Brand
name 6

The Response Obtained from the Chemists for promotional strategies from the Doctors
perspective
Factors 1 2 3 4 5 6
Chemical
combinations 7 5 0 0 0 0
Price factors 0 0 0 5 7 0
Dosages 0 0 3 4 5 0
Effectiveness of drugs 5 7 0 0 0 0
Brand names 0 0 0 12 0
Patients condition
health 0 0 9 3 0 0

The above referred Analysis is summed up in Tabular Form as:

Sr.No Respondents of Survey Perspectives for Promotional Strategies
1 Doctors Drug Combination & IMC
2 Medicals Representatives Drug related to Doctors practice and Intrinsic Motivational
factors
3 Field Mangers Offering and MR's Rapport with Doctor
4 Chemist Brand Name, Price and Packing Patients Point of View and
Combination and effectiveness of Drug Doctors Perspectives

Conclusion:-
Glancing at the today’s scenario most of the Pharma companies are adopting the very aggressive
promotional strategies to grab the maximum share from the market by keeping the philosophy in mind
that “ONE MARKET AND MANY PLAYERS, AND SURVIVAL OF THE FITTEST”, Hence, an
attitude of an Industry has become that by hook or crook one has to be in market irrespective of whether
its existing player or new entrants, everyone wants to be in market with enhancing profitability and

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sustainability and to achieve this today’s Pharma Companies using the aggressive Promotional
Strategies.
As in present case most of the pharma companies are adopting various promotional strategies in
response with respondents as in form of Medical Representatives i.e. sales force team, IMC,
promotional activities to doctors for prescription generation and chemist promotional activities for honor
of prescriptions. Well equipped and qualified Medical Representatives as promotional tool being utilized
for presentation, sound drug knowledge, marketing skills and promotional skills through training.
Majority of the medical practitioner’s response for promotional strategies adopted by companies is on
drug combination and Integrated Marketing Communication as well as their inclination is more on
effectiveness of drug and anti-side effects of drug in fairly proportioned manner. From the managers
point of view promotional activities is on offerings and schemes to doctors and well trained MR which
leads to fair prescription generation. The promotional strategies adopted for chemists are as discount
offers and margins, gift items and schemes on honoring the prescription.

Suggestions:-
The Suggestions are based on the inference drawn from the analysis and structured questionnaire to the
respondent’s response.
Companies should pay more attention towards combination of drug (reduces pill burden) and anti-side
effects of drug (tolerability of a drug to the patient) in well proportion for better prescription support
from doctors.
Adoption of IMC (In reference with presentation, drug knowledge, patients convenience and drug
combination and other promotional inputs) should be more aggressive so that brand recollection in the
minds of doctor becomes easier.
The span of training program of MR should be increased to 3 months so he will be well equipped with
product knowledge and marketing techniques. At same time companies should consider that benefits like
Salary increment based on performances, others monetary benefits to MRs which leads to intrinsic
motivational factor to the MRs to promote Pharma brands more aggressively.
All the time rather opting the options of offering to the doctors, companies should emphasize more on
Soft Skills training to the MR and Managers, giving more Scientific stuffs to doctors (through LBL i.e.
Leave Behind Literature strategies, Seminars, CMEs i.e. Continuous Medical Programs , Camps) and
fair discount offers to chemists (as per the norms of Drug Pricing Control Authority of India),
promotional inputs, seasonal offers and so on, in turn which may fetch fair sales to industry and the
interest of patients will also be safeguarded.
Strategies should be promoted in such way that:

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The promotion of brand promotion of profitability promotion of patient’s health promotion of
medical practitioners’ confidence promotion of sound and prosperous Pharma Industry

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References:-
Electronic Media:-
1) pharmaceuticals.gov.in/‎
Department of Pharmaceuticals. What's New (updated on 16/05/2013). Drugs (Prices Control)
Order, 2013 · Pharmaceutical Advisory Forum ·
2) www.iitk.ac.in/infocell/announce/convention/papers/Changing%20Playfi...‎
Saurabh Kumar Saxena ... This article will present the changing marketing strategies ... This
research paper will also give an insight about shift in supply chain ...

3) Doctor's expectations from pharmaceutical products (medicine)

www.abhinavjournal.com/images/Commerce_&_Management/.../2.pdf‎

This paper is intended to give insight on the same. Keywords: Pharmaceutical Marketing, Doctors ..... A
review of marketing strategies work by different pharmaceutical companies downloaded at http://www.
iitk.ac.in /infocell/ announce/ convention/ papers/Changing%20Playfield-06-Saurabh
%20Kumar%20Saxena.pdf. 13.

Print Media:-
1) Abelson Taylor hired Lynnette, Hunter and Kate Wbrobey – Mulliez and Sheila Ambrose,
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Marketing Pharmaceutical products in the Twenty-First century: An analysis of the
Continued viability of traditional principles of Law in the age of direct-to consumer
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