STRETEGY MARKETING AUDIT

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DUNDEE BUSINESS SCHOOL

SESSION 2010-2011

MARKETING MANAGEMENT

Submitted To:

Prof. Gary Mulholland (Module Tutor)

Dundee Business School

MK1102A: Marketing Management

Submitted By:

Sameer Chaturvedi

Student Id: 0900552

MBA (Biotechnology)

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Table of Contents:

Executive Summary……………………………………………………….3

Environmental Aspects……………………………………………………5Demographics….………………………………………………………….5 Culture……….….…………………………………………………………5 Markets…………….………………………………………………………7 Market Trends.........................…………………………………….………7 Market Needs .......................……………………………………………..8

SWOT Analysis…………………………………………………………8

Strengths………………………………………………………………10 Weaknesses……………………… …………………………………...10 Opportunities…………………….. …………………………………...10 Threats………………………………………………………………….11

Marketing Mix…………………………………………………………….12

Product Strategies………………………………………………………….13Price Strategies….………………………………………………… ………13 Distribution/Strategies……..………………………………………………14

Key objectives in 1 and 5 years……………………………………………14

Conclusion………………………………………………………………….15

References…………………………………………………………………16

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EXECUTIVE SUMMARY:

The Indian pharmaceutical market continues to have an increasing number of firms

trying to join the health care sector in the Indian sub continent. Alkem Laboratories

limited is aware of the competition since its inception in 1974. It has managed to

evolve as a major player in developing drugs for acute chronic and therapeutic

segments. Alkem is always striving hard to maintain its operational performance

and maintain its priorities as a leader in the formulation segments of Indian

pharmaceutical industry. The company’s focus on brand building, drug quality,

Pharmaceuticals trials and customer service is consistent with the market. Alkem

keeps its products mix in coherence with the forecast of the Indian Pharmaceutical

market.

In 1974, the company was founded by India’s respected entrepreneurs sri

Samprada singh. A devoted team of scientists and doctors were committed to

carry the Indian pharmaceutical self dependency to new heights and character. The

company was started with a low investment but with great efforts and enthusiasm

which had propelled the company to become a leading domestic pharma major in

the last three and a half decade. The company since its inception has targeted all

the small chemists and the big pharmacy stores. The medical marketing

representatives have honestly contributed to maintain consistency and awareness

and supply of company’s products and its presence in the market. All the medical

shops were soon carrying Alkem products whether in big cities or the small cities

of the country.

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The company needs to review its products on a continuous basis, particularly in the

new therapeutic segments of the pharmacological sciences to increase sales. The

current product line is improved through world class manufacturing facilities. The

portfolio of the Alkem products includes wide spectrum of he therapeutic drugs

which includes NSAIDS, Gynecology drugs, CNS and CVS products, a wide range

in Oncology and Antibacterial range. Alkem’s products are approved by world

regulatory authorities including USFDA, UKMHRA, ANVISA BRAZIL, MCC

South Africa and TGA Australia.

(http://alkemlabs.com/alkem/alkem-lab-aboutus/alkem-profile.aspx - 18k)

The products and drugs of Alkem are viewed form a value point of view rather

than price point of view. However, the prices of Alkem’s products are always

consistent with the market. The decision of the last year’s price review and

increase has not affected the prices to an extent which will disturb the demand of

the company’s products. New marketing schemes in the rural geographical sectors

of the country would result in expansion of the strength of Alkem sales along with

building brands in the medium size cities. If Alkem tries to take advantage of the

growing economy it must concentrate in promotion of its very best brands by

making those products recognized in the interior areas of the country.

In order to compete in the cut throat competitive pharmaceutical sector and to keep

competitors form entering the pharma market, the directors of the company have

suggested using the non traditional ways to market the products in the country. The

third world and the developing countries preset a huge market of pharmaceutical

sector. A much serious and consistent effort will be needed if Alkem wants to

catch a share in the over seas pharma market.

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Environmental aspects:

Demographics:

Indian economy has been growing with a rate of about 9% during the last five

year plan of the government. As more and more people are migrating to cities form

villages and other rural areas in the country the pharmaceutical market demand is

increasing with a constant rate. Alkem is going beyond traditional methods in this

respect, Alkem are committed to align is drug discovery focus keeping in mind the

needs and the diseases affecting the population and its demographics. The product

packaging and pricing is also done keeping in mind the psychographics and life

styles of the customers. The drugs of Alkem has targeted all the classes of the

population , The antibacterial , Gastroenterology products , CNS, and CVS

products encompasses the dosage range from infants to children between 10 to 16

years of age and from young age to older years.

Culture:

In today’s competitive business environment Alkem’s ultimate goal is to

provide best products with best price in its respective markets. Alkem’s culture of

communication with in the organization, both internal and external with

effectiveness has played a vital role in its success. Alkem’s this effective culture

has helped the company to achieve the synergy to generate sales in the

international markets.

A main component of Alkem’s culture is strong focus on Pharmaceutical market

behavior. The product and its implementation are done seriously. The corporate

social responsibility report addresses the main concerns and issued regarding the

market segments in the country. The company addresses include investing in the

research and development, investing in new marketing practices, building strong

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communication culture between the doctors and hospitals and the company’s

representatives. There is always a focus on communication between junior

employees and senior management. This results in production improvement and

employee engagement.

Location of all clearing and forwarding agents in all the states and districts of the

country has been carefully selected and the aim is kept in mind to target the

specific markets where the population was earning at the middle class level to

lower middle class level. This is why Alkem has been successful in the terms of

non conventional approach of marketing in various locations around the country.

This approach has led Alkem pharma to be ranked as 5th company in the Indian

pharmaceutical industry. The main guidance word for Alkem is “To make a

positive difference to the lives of the people across the globe…” They have

focused on pricing and convenience for the medical practitioners. The company

has always tried to make sure that the company’s products in its all the divisions

remains the prime choice of the retailers and the customers. It is not surprising that

most of the government hospitals and private practitioners and the small health

care centers in the villages now prefer the Alkem drugs for prescription to their

patients.

Markets:

Alkem is now quickly getting recognized in the international market and its

flagship brand Taxim (Cefotaxime) is proud to be included among the top four

successful brands in the pharmaceutical market in India. Alkem has been awarded

as the best company in brand management in may 2006. Alkem is continuously

striving to expand its operations in the international market. An office of Alkem is

registered in Kenya, 25 brands of Alkem is currently registered in Kenya. The top

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brands of Alkem there include Clavam and Trinerve. Many Franco Phonic

countries like Mauritius, Malawi, Lesotho, Ethiopia, Uganda, Zambia, Congo,

Ghana, Senegal and Cameroon are consuming Alkem’s leading brands. In Nigeria

Alkem is registered as Alkem Nigeria limited. Sri Lanka has products of Alkem

with the name of Taxim-O, Triump and Zocef. Alkem has more than 125 brands

registered in Russia, Kyrgyzstan, Tajikistan, Azerbaijan and Turkmenistan.

(www. expresspharmaonline.com)

Market trends

The Indian pharmaceutical market is one of the largest pharma markets in India.

The company manages to snatch a turnover of $220 million. The products of

Alkem are exported to markets internationally which covers 40 countries

encompassing the regulated European markets as well. A dedicated team of

researchers has enabled Alkem to enter the global health food market

(Ref: foodnavigator-usa.com)

But despite the competitive position of the market for Alkem has not let the

company to get among the first top three companies of India. However Alkem’s

Taxim is the third largest brand in domestic market with sale of Rupees 103

million behind Pfizer’s “corex cough syrup” and “voveron” a pain killer by

Novartis India. Alkem’s both older products and new introductions have

contributed to 10 to 12 % respectively to the value growth. According to the head

of domestic business Vinod dua, Alkem growth was mainly contributed by anti-

infective TAXIM , Taximo Clavam and Gemcal drugs. The Indian pharmaceutical

market is expected to experience constant positive growth into coming future,

Alkem is set to fetch the opportunities and to achieve significant growth rate in the

year 2011.

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Market needs:

The primary goal of Alkem is to continue to add new molecules on its product

portfolio through its dedicated workforce. The company has adapted a research and

consumer based marketing strategy which helped in expansion in the target areas

of various demographics. The company has divided the country into targeted

regions with Mumbai Delhi, kolkata, Chennai, Hyderabad and Bangalore as the

Hub cities. Various marketing and sales professionals have been appointed in the

hub cities with junior management of medical representatives to serve the markets

under each hub. Zonal managers, Territory managers, Area managers direct the

market development of each region and implant the Alkem products in the new

markets.

SWOT Analysis:

Alkem laboratories ltd. has evolved as a leader in the formation segment in the

pharma central sector of India market. The company has recorded an increase in

revenue profit which has raised its position to fifth from seventh in year 2010. The

company faces the threat of reduction in margins due to increased research

&development cost.

Strengths:

International presence

A disciplined & research based & marketing focused working culture.

Leader in formulation segment of Indian pharmaceutical industry.

World class manufacturing facilities approved by regulatory authorities

including USFDA, UK MHRA, ANVISA, Brazil.

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Exports to 40 countries.

Weaknesses:

Reliance on the results of research & out comes of clinical trails.

Reliance a regulatory authorities.

Lower revenues & income per employee.

Market entry of many competitors.

Rising research &development cost s.

Opportunities:

Growth in global pharmaceutical sector.

New producer in anti-bacterial, Pain Management, Cardio Vascular drugs,

anti Diabetic drugs, Neuropsychiatry Drugs, Gastro Intestinal drugs &

Anticancer Drugs.

culture of taking advantage of opportunities

Increasing Generic sector business.

Threats:

Highly fragmented markets.

Volatile nature of the pharmaceutical market.

Rising research and development costs

Competition intensity

Market entry of many competitors

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Strength-

International presence:

Alkem has managed to print its foot steps in 40 countries of the world. The

company exports to major markets including Australia, Newzeland and in the

Indian subcontinent. East Europe, East Asia, Middle East and South East Asia.

The company has stronghold on Cephalosporins in exports and its flagships

brands like Taxm Taxim O , Clavam and Alcipro. Alkem has commenced

businesses in UK and Europe’s regulated markets.

Weaknesses:

It is well understood that pharmaceutical and drug discovery business involves

a huge amount of money to invest in research and the government and financial

planning of Indian government unfortunately do not spent that much on

research and development.

Moreover the company has not yet been able to properly enter the US pharma

market. The company has not yet been able to reap the opportunities in the

biotechnology sector despite pharma and biotech being a similar area of

research and drug development.

(Ref: www.espicom.com.)

Opportunities:

Growth in the Pharmaceutical markets:

The huge population if India which is more than one billion comprises of a middle

class which is growing at a fast pace. This middle class is now able to access high

quality health care services. The pharmaceutical market is now experiencing a

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double digit growth and this trend is believed to continue in future. Yet the share

of Indian pharmaceutical is less than 2% of the worlds total and this fact poses a

real opportunity in terms of growth in the world market given the world class

manufacturing facilities, acceptance and approval for the products of Alkem

throughout the developed nations of the world.

The disposable income of the middle class is growing and government is also

spending more in child health care and immunization programs. Diabetics are a

serious problem for the population of India. It is expressed that there will be about

70 million diabetic patients in India by 2025 (ref: (www.espicom.com).

In terms of production around 8% of the world pharma products is done in India; A

major growth is expected in diabetic and theruptic segments in the cancer drugs

and vaccines all these possibilities present a great opportunity for development of

Alkem in the future.

Threats:

New products:

The highly competitive nature of Indian pharmaceutical market is because of many

domestically produced generic medicines. And also because of geographically vast

area and where majority of the population is rural and poor. Barriers also include

political and economic conditions weather nature and thinking of population which

may adversely affects the business of the company.

Rising research and developments costs and Lack of product patent

protection and inadequate profit base:

The government of India spends money in research on pharma setout that is not

enough to match the requirement by main developing countries. The Research &

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Development costs are all time high at present which hinders the performance of

the company. Also the continued increase in the prices of Raw materials and basic

chemical could arrest the company’s margins. New drug development process tales

7 to 10 years and $ 350 to 500 million internationally. And this process is also

depending upon the type of diseases being attacked. Private initiative is also very

less to invest in R &D in the pharma sector.

However,The expenditure of research and development will be for lower in India

than in developed countries because Indian scientists can be hired at much lower

salaries than the foreign scientists. And the huge population can also present easier

clinical trial facilities fro diseases prevalent in developing countries.

Marketing Mix:

Alkem pharmaceutical marketing involves the products development and

determination and its establishment. The distributing channels, the pricing

considerations and the product promotion strategy are used The company’s

products are sold under the following focused business units, these units are,

Main, Ulticare , Bergen, Mediva, Pentacare, Cytomed and Futura, along with

institutional sales , derma, Alkem health foods and Alkem Pharma,

These divisions include drugs and products ranging from anti infectives to

gastroenterology, NSAIDS, anti protozoal, anti malarial, anti osteoporosis, Pain

management, cardiovascular, Anti Diabetics, anti psychotics, oncology, HIV

therapy and IVF.

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Product strategy:

The company’s product strategy involves generation of new products and the

enhancements of the existing products. The evolution of the parent molecule, its

perfection and patenting in the international level.

The company also keeps its focus on promotion and retention of old and reliable

products along with the current existing ones. With Taxim as its main propelling

product Alkem strives to develop and introduce new drugs in various therapeutic

segments for its customers.

For example the following new products of Bergen Division are demonstrated to

doctors by medical representatives all over India.1. Gemcal. 2. Zocef, 3. Enzoflam.

Nodimox. Nuloc. Solufer, Gemfos, Enzocort, Gemcerin.

Pricing strategy:

Alkem’s pricing strategy is largely based on competition especially because of

many small and domestic pharmaceutical firms are emerging in the country and

around the world. This poses great challenges for pricing in the commercial

market. Recently Alkem has developed low cost sweeteners which can be a game

changer in the market. Alkem plans to price its sweetener 40 times less than market

leader Zydus cadila “ sugar free”(ref: economictimes.indiatimes.com)

Alkem tries to price it products in a lower level than the similar products in the

market and then aggressively promotes its product through its 5000 field force to

chemists and health centers. The price of the products in the drugs and such as anti

infective diabetics, HIV, cancer and dermatology medicines is lower in comparison

to the competitive products of other companies.

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Distribution strategy:

Alkem has one of the largest distribution networks setups in India this strategy of

logistics cover every state and district of India, 20 depots and C and F agents and

5500 stockiests are used for this logistics set up (ref:alkemlabs.com). 40% of the

retail market is covered by Alkem’s present distribution strategy. Alkem’s logistics

covers the entire geography of the country. Further the Marketing representatives

provide the drugs to every chemist stores in the nook and corner of the country

from where it reaches the general public.

Key objectives of Alkem in 1 and 5 year:

To get among the first three pharmaceutical companies of India in the next five years

To identify and patent new Pharmaceutical molecules and to add these new products in companies product portfolio

To maintain its position as a national leader in the formulation segment.

Alkem aims to come among top three pharma companies of India by 2012 the

company is not only looking at domestic business, Its global dream is to be a

world’s major company and the company is trying to achieve its aim by pursuing a

series of parternerships and collaborations within the next five years. It has plans

for diversification expansion and gaining more market share in the health care

segment. An investment of rupees 50 crore has been done by Alkem on sucralose

facility in the Mandava village in the state of gujrat.

The financial target is set high on Rs. 2000 crore for year 2011, about this Mr.

samprada singh the founder of the company at the age of 79 is confident.

(www.expresspharmaonline.com)

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Conclusion:

Alkem’s secret of success lies behind its positive attitude towards big challenges.

The company’s story epitomizes the old English adage “From tiny acorns grow

mighty oaks”. The marketing strategy of Alkem has been consistently effective

this is reflected in its sales which have exceeded expectations in the past. The

SWOT analysis and Industry research of Alkem’s marketing strategy and strategic

decisions have been accurate. Alkem is targeting the global market primarily in the

Europe and Americas. Alkem is striving to keep the prices attractive without any

affect on demand at the same time improving its distribution channels. Alkem’s

corporate mission statement “ ..We strive for making a positive difference to the

lives across the globe..” and its strategic planning seems to be in line.

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References:

1. http://www.alkemlabs.com/ - 13k

2. http://alkemlabs.com/alkem/alkem-lab-infrastructure/alkem-di... - 13k -

3. http://www.foodnavigator-usa.com/smartlead/view/207828/4/Alk... - 38k

4. http://investing.businessweek.com/research/stocks/snapshot/s... - 66k

5. http://www.expresspharmaonline.com/20060930/management03.shtml - 25k

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6. http://www.tradeindia.com/Seller-2474386-ALKEM-LABORATORIES-...

- 61k

7. http://www.biospectrumasia.com/content/040809IND10202.asp - 63k -

8. Kotler, Philip, Marketing Management: A south Asian Perspective,(13th

edition, Prentice Hall of India) 2009.

9. Saxena, Rajan, Marketing Management, Third edition, Tata McGraw Hill

publication, 2008.

10. Mercer, David, Marketing Strategy The challenge of external environment (

sage Publications, 1998).

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