STRETEGY MARKETING AUDIT

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 Aspects5 Demographics..5 Culture..5 Markets.7 Market Trends..........................7 Market Needs .........................8 SWOT Analysis8 Strengths 10 Weaknesses ...10 Opportunities.. ...10 Threats.11 Marketing Mix.12 Product Strategies.13 Price Strategies. 13 Distribution/Strategies..14 Key objectives in 1 and 5 years14 Conclusion.15 References16

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 companys 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 Indias 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 companys 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.

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. Alkems 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 Alkems products are always consistent with the market. The decision of the last years price review and increase has not affected the prices to an extent which will disturb the demand of the companys 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.

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 todays competitive business environment Alkems ultimate goal is to provide best products with best price in its respective markets. Alkems culture of communication with in the organization, both internal and external with effectiveness has played a vital role in its success. Alkems this effective culture has helped the company to achieve the synergy to generate sales in the international markets. A main component of Alkems 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 companys 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 companys 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

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 Alkems 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 Alkems Taxim is the third largest brand in domestic market with sale of Rupees 103 million behind Pfizers corex cough syrup and voveron a pain killer by Novartis India. Alkems 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 antiinfective 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.

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, markets. Area managers direct the market development of each region and implant the Alkem products in the new

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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StrengthInternational 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 Europes 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 companys 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 companys 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 companys 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:
Alkems 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 Alkems present distribution strategy. Alkems 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 worlds 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:
Alkems secret of success lies behind its positive attitude towards big challenges. The companys 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 Alkems 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. Alkems 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 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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