Beruflich Dokumente
Kultur Dokumente
Prafulla Kumar Das is a Professor-Marketing, Regional College of Management Autonomous, Orissa, India.
1. Introduction
Professor Philip Kotler while explaining the changes taking place in the new economy said, The future is not ahead of us, it has already happened. Unfortunately, it is unequally distributed among companies, industries and nations (Kotler, 2002). Though today, it is fashionable to talk that things in business are changing at a nanosecond pace owing to hyper-competition, disruptive technologies and empowered consumers; the real change is based on digital revolution and management of information. Information has a number of attributes. It can be differentiated, customized and personalized. It can be dispatched to a greater number of people with speed for the users to interact. The information is public and accessible. The time has changed from one man giving information to many people; to many people giving information to many through e-mails, blogs, and sites like YouTube, Orkut, etc. It has completely changed the face of the means of communication being adopted by marketers for competitive advantages. The consumers today are having advantages of increased buying power (for both the partners being in the workforce), greater variety to choose from, greater amount of information about anything, greater case of interacting in placing and receiving orders, ability to compare notes on products and services. On the other side of the fence, companies are able to collect richer and fuller information about markets and customer, speed up internal two way communication, customize product and service offers and have the ability to improve logistics, operations, recruitment and training for substantial cost saving. In this paradoxical situation, Jack Welch, GEs former CEO repeatedly warned his company to change as per the change of time. The companies that fail to monitor their customers and competitors and do not continually improve their value offering are at risk of being eliminated from the market place. It is interesting to note that many companies have not carefully dened their target market or their value proposition. They spend an inordinate amount of time and money to acquire new customers only to lose them, and thereby, fail to satisfy their stakeholders like employees, suppliers, nancers and supply-chain partners. It would be interesting to discuss a new paradigm how a reputed marketer like Artichem found opportunity in a maturing market which most of the competitors either did not nd to be lucrative enough to enter or those who had entered earlier left for not nding it perspective to continue.
Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision making. The author/s may have disguised names; nancial and other recognizable information to protect condentiality.
2. Company prole
Artichem was a large-scale pharmaceutical company in India by volume of sales, both domestic and export earning. The business stood at half a billion dollar (Rs 2252 Cr.) in 2009-2010. Started in a modest way in late 1950s, the company achieved meteoric growth in
DOI 10.1108/20450621111110438
VOL. 1 NO. 1 2011, pp. 1-5, Q Emerald Group Publishing Limited, ISSN 2045-0621
PAGE 1
the domestic market through right selection of products and successful implementation of charted strategies. They achieved such a huge turnover through both organic and inorganic means in domestic and international arena. For inorganic growth, Artichem targeted to acquire sick but potential rms with compatible product range and turned them around. Today, they boast of six USFDA*, three UKMCA** and one WHO certied manufacturing plants. All the ten units were of international standard with GMP***, and ISO****certication. It was having R&D investment of Rs 126 Cr ($2.8 million), which was 7 per cent of their turnover of Rs 1,800 Cr in the year 2008-2009. This was one of the highest R&D investments by a pharmaceutical company operating in India. Its domestic business was one of the highest in the country, and started getting good presence in the therapeutic areas like antibacterial, anti-inammatory, Anti-ulcerant, anti-allergic, anti-TB, etc. to mention a few. The new drug research areas at Artichem included anti-infective, anti- inammatory, respiratory, metabolic diseases, and oncology. Other areas of research were urology and anti-malarial therapies. Presently, the company had four to ve programs including one anti-malaria molecule for which Phase-III clinical trials had commenced in India, Bangladesh and Thailand. (Notes: *USFDA, US Food and Drug Administration; **UKMCA, UK Medicines control agency;*** GMP, good manufacturing practice; ****ISO, International Organization for Standards; 4.$1 Rs 45.00). The company had signed collaborative research programs with Genesys and Prophet. Its NDDS* focus was mainly on the development of NDA**/ANDAs*** of oral controlled-release products and inject-able for the regulated markets. Artichem emerged as an international pharmaceutical company, producing a wide range of quality, affordable generic medicines, trusted by healthcare professionals and patients across geographies. With a constant focus on globalization, Artichem could have a presence in 18 of the top 25 pharmaceutical markets of the world. Thus, the Company had a global footprint in 22 countries, world-class manufacturing facilities in six countries and could serve customers in nearly 80 countries. As a result, many customers, and almost all competitors held Artichem with high esteem. It was more so because of their R&D facility, technology-adoption and employee care. In the year 2004 January, they entered the Omeprazole, a famous acidity treatment, market when arguably better molecules like Lansoprazole, Pantoprazole, Esomeprazole and Rabeprazole were lined up one after another in the same therapeutic segment. Race, their brand of Omeprazole saw: a signicant market size of Rs 160 Cr ($35.56 million) growing almost on par with pharma market growth, less number of big size, big volume competitors like Arvees Ocil (over Rs 49 Cr or $10.89 million) and MTNs Onil (Rs 33 Cr or $7.33 million), and new entrants were not coming. It was also found that some of the poor performing brands were leaving Omeprazole market for greener pastures. Product areas like Pantoprazole and Rabeprazole were growing in galloping speed. Other products like Lansoprazole and Esopmeprazole although were not very fast moving, those were gaining good market size. Race planned to be among top ve Omeprazole brands in India. They introduced tablet form of Omeprazole with a new technology that assured bioavailability and hence high efcacy. Race grew to become a big brand of Rs 13 Cr ($2.89 million) which was among top ve proton pump inhibitor (PPI****) brands in the country (it included lansoprazole, pantoprazole, esomeprazol and rabeprazole). (Notes: *NDDS, novel drug delivery system; **NDA, new drug application; ***ANDA, abbreviated new drug application; ****PPI is a group of drugs being used for treating acidity related problems).
3. Strategy
Indications
B
Acid-peptic disorder, gastritis and peptic ulcer (3/4th of prescriptions of anti-gas preparations was for these indications) (Table I).
Threats New entrants to come with same technology Possibility of being taken as a gimmick if not properly communicated May be challenged by competitors on communication plank (any drug with less than 90 per cent bio-availability is considered spurious)
Though maturing, the market was still growing at healthy rate (as per the company). New technology would offer stability and consistent efcacy. Enforce Artichems entry into a new lifestyle segment.
Creating benet oriented brand differentiation. Swiftly establishing the brand before imitations enter the market.
Quantitative:
B
To rank among the top four Omeprazole brands by December 2008 with a turnover of Rs 12 Cr ($2.22 million).
Conventional Omeprazole preparations were susceptible to excessive heat, light, moisture and humidity. These factors contributed to the poor stability of the product. So, drug availability was less than being claimed.
Race on the other hand was relatively more stable because of its new and slow-release technology. Therefore, it offered right dosage to the patient (as claimed by the company).
3.5 Brand positioning Race The better Omeprazole. 3.6 User and usage positioning (Table III) Table III
Users General physicians and gynecologists Physicians, surgeons and gastro-enterologists Ortho-paedicians
a
Dosage Hyperacidity 10 mg; O.D. gastritis 20 mg; O.D. 20 mg O.D. for eight weeks, and then 10 mg to continue 10 mg per day
Notes: Gastritis, inammation of the stomach; bpeptic ulcer, a sore in the lining of stomach or duodenum
The dissolution of conventional Omeprazole inside the stomach was variable. It implied that variable drug absorption would offer variable efcacy. Whereas, Race had a consistent dissolution inside the stomach. It would ensure a consistent absorption and hence consistent acid control.
Target audience: 25 top prescribers of Ocil and Onil through market audit.
suddenly splashed in his mind, The new marketing ethos will be characterized by shorter time span to appraise, to act and react; products and services with precipitate rises and falls in their lifecycles, turbulence in economies and societies; increasing governmental intervention; blurred marketing product and management demarcations; and better informed buyers facing more highly skilled sellers. All these imply that successful marketer must possess far more knowledge and be in control of more accurate and timely information than in the past. Husain expressed his anxiety with his boss and managing director, Chamanlal Mehta. Mehta suggested him to arrange a brain storming session amongst managers of the marketing department and examine the outcome on scientic marketing lines before going ahead with implementing those suggestions.
5. Questions
1. As a manager of the marketing team what would be your recommendations? Give your opinion based on marketing principles. 2. Would you agree to the policy of GMK for not taking advantage of new products in the ofng? Why and why not? Substantiate your points through management principles.
Wilson, A. (1995), New Directions in Marketing, Excel Books, New Delhi. Kotler, P. (2002), Marketing Management, Prentice-Hall of India Pvt. Ltd, New Delhi. Literatures collected from doctors, medical books and drug companies. Interviewing eld personnel and managers for insight. ORG reports 2004-2005; 2005-2006; 2007-2008; 2008-2009 and 2009-2010.
(Notes: It is a disguised case. Name, date and gure were changed wherever required to maintain secrecy. The case does not point to the success or failure of the strategy. It is for providing an insight to the leaner to develop understanding and application of knowledge on management theories.)