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February 2022 marks my completing 47 years of working in Pharma Industry. Allah be praised. I am still working. The first half of my working career was spent in Multinational companies, and the latter half in the Local Pharma, making me well-versed with both innovators and generics markets. I also had the opportunity to work in business as well as operations.
My journey of near half century is also the journey of Pharma Industry in Pakistan. Great changes have occurred in this time and a lot could be written about it. In my blogs, which were started about four and a half years ago, I have covered several topics rel ated to Pakistan Pharma Industry. This multi-part series shall do and review the SWOT – Strengths, Weaknesses, Opportunities, Threats – of the industry as a whole.
Stakeholders 4 – Marketers …… continued
Presently, marketing and marketers may be categorized in three groups for better understanding.
First group – is of the inhouse marketing teams. Marketing departments are usually headed by a senior, seasoned person. He is responsible for strategizing for growth of business, brand building, image building, sales, market share, and revenue. Marketing people have lot of ideas which they float in the market; some work and some do not. In-house marketing function has seen a lot of progress. When I started, there was no marketing function even in MNCs. The promotional folders came from the parent office and were simply reprinted here. Strategies also came from parent office and were implemented here. The business-related function was Sales, the companies employed sales teams. The hierarchy was also simple; few first line managers, and a national manager. Gradually, the marketing activity evolved. Business education became available and was recognized. Product Managers’ positions became part of the head office, who were still following the parent office strategies earnestly, but developed some promotional materials locally. The parent offices released their tight hold over time and allowed greater freedom to local corporates. It was recognized that the local corporates should work as per local requirements, though within the ambit of the larger framework provided by the parent office. The MNCs are still doing it.
Local Pharma did not have any marketing activity for much longer, they did not have the means and expertise. When trained people from MNCs joined Local Pharma, they introduced the marketing concepts and practices. They had the additional advantage that there was no binding framework or policy coming from parent office. It would be appropriate to say that Pharmaceutical Marketing truly blossomed in this environment. The marketers did as many experiments as they could imagine and most of these succeeded. In terms of Grand Business Strategy, it remained the same for long. Few companies can be considered as having changed the course of Marketing Strategy in a significant manner. Probably naming some of these may hurt the feelings of others, so I would avoid it.
Second Group – is that of Contract Marketers. These people served Pharma Industry for several years and opted to get into their own business. They do not have their own manufacturing facilities, and therefore, are dependent on some manufacturer for supply of medicines. Their way of working is almost similar to the first group, but they live with the limitation of third-party manufacturing. Their dilemma is that good manufacturing companies refuse to give products, and they have to go to second, third tier manufacturers. This class of manufacturers have their own challenges. They may have recurring financial, quality and supply issues which may hurt the marketers standing in the market or his business.
Their business model is simple: Get products from few manufacturers, and work like a regular Pharma company. Their business covers the whole country or at least major part of it in the beginning, and they have plans to build business all over the country. Unfortunately, the failure rate among this group is very high. The main causes are the absence of entrepreneurial traits, limited resources, and behaving like they work for some other organization, not their own. Many of the failed businesses were started by very seasoned and successful senior Pharma executives. They made offices, hired people at good packages, facilitated by giving transports, and made themselves so heavy that they drowned in their own weight. Few stories of success either involved younger, less senior managers, or someone who ran business like a business, not company.
Third Group – is that of franchisers. This class started emerged in the late 1990s and expanded in the 2000s. A franchiser is typically a young, junior manager cadre person, who decides to work for himself. He would get 5-6 products from a small company, or a Master Franchiser, for a small, designated area. He would typically work with 20-25 customers. His model would be simple: he would offer certain services and get a certain amount of business in return. The deals are small but satisfying for both parties.
Franchisers have impacted the Pharma selling in several subtle ways. They have eroded the business and growth of bigger companies at the base. They have helped small companies survive. They have identified a market which was not explored before. They have enticed customers at a level which even the customer did not realize before. They have made customer service so personal; the organizations cannot beat that. They have also developed market for such products which otherwise might not have seen the light of the day.
To be Continued……
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