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A REPORT ON

Sales and Distribution of an International Firm

Submitted By
Harshesh Chopra
Akshay Mohta
Punit Sethia
Sarth

A report submitted in partial fulfillment of

The requirements of
BBA Program of
Auro University of Hospitality and Management
To
Prof. Dr. Rohit Singh
On
5/12/2015

TABLE OF CONTENTS

Sr. No.

Title

Page No

Acknowledgement

(i)

Overview

Industry and rationale for entry

STP

Marketing mix

Building sales strategy

Defining competitive strategy

Sales Distribution channel

Managing distribution channel

10

Conclusions

10

11

References

11

ACKNOWLEDGMENT
Quality is not a result of accident. It requires severe determination, discipline and the will
to learn continuously.
To create a work of quality a student requires high motivation and needs to be inspired
from various sources.
This report on sales and distribution has been complied by us as a part of the curriculum
of Bachelors Degree in Business Administration
A special word of Thanks to the module leader Dr. Rohit Singh for giving this
opportunity to do a research oriented project and his guidance throughout the same
thereby enhancing the learning experience.

Overview
HC bio pharma is a multinational company headquartered at boston USA. Good health is vital to
all and finding sustainable solutions for it is what we do. HC is committed to use all global
resources and improve the quality of life for all beings. Our product portfolio includes several
vaccines for humans and animals, anti infective, anti allergies and alternative medicine care. We
are leading manufacturers of some of the leading medicines in progressive and chronic diseases
like Alzheimers and viral infections like chicken guniya and ebola etc.
We att HC understand that our employees are a key part of our governance and together we work
towards delivering the products efficiently. As global leaders in this segment we realize our
responsibility to reach other developing countries with our innovation and technology. Our r&d
department focuses on vaccines against cervical and prostate cancer and pneumococcal diseases in
teenagers and adults.
Our alternative medicine department focuses on using medication made of herbs researched in
china and japan to treat mental ailments of chronic depression and psychosomatic pain.
Strategic Intent
Focus on vaccination in rural india
Focus on vaccination of street animals for the well being of animals.
Provide low cost vaccines and reach as many people as they can
Use the manufacturing unit to reach more Asian markets

Sales and Distribution Management 1

Introduction to Industry and Rationale for entry

The Indian pharmaceutical market is estimated to grow by 20% by the year of 2020,
making it in the top 3 markets in the world. Due to low costs production India has a
competitive edge in the market.
India's biotechnology industry comprising bio-pharmaceuticals, bio-services, bioagriculture, bio-industry and bioinformatics is expected grow at an average growth rate of
around 30 per cent a year and reach US$ 100 billion by 2025. Biopharma, comprising
vaccines, therapeutics and diagnostics, is the largest sub-sector contributing nearly 62 per
cent of the total revenues at Rs 12,600 crore (US$ 1.90 billion).
The Union Cabinet has given its nod for the amendment of the existing FDI policy in the
pharmaceutical sector in order to allow FDI up to 100 per cent under the automatic route
for manufacturing of medical devices subject to certain conditions.
The drugs and pharmaceuticals sector attracted cumulative foreign direct investment (FDI)
inflows worth US$ 13.34 billion between April 2000 and June 2015, according to data
released by the Department of Industrial Policy and Promotion (DIPP). Because of several
such facts it proves to be rational to enter the Indian market at this time.
The Government of India unveiled 'Pharma Vision 2020' aimed at making India a global
leader in end-to-end drug manufacture. Approval time for new facilities has been reduced
to boost investments. Further, the government introduced mechanisms such as the Drug
Price Control Order and the National Pharmaceutical Pricing Authority to deal with the
issue of affordability and availability of medicines. Telangana has proposed to set up India's largest integrated pharmaceutical city spread over
11,000 acres near Hyderabad, complete with effluent treatment plants and a township for
employees, in a bid to attract investment of Rs 30,000 crore (US$ 4.52 billion) in phases.
Hyderabad, which is known as the bulk drug capital of India, accounts for nearly a fifth of
India's exports of drugs, which stood at Rs 95,000 crore (US$ 14.3 billion) in 2014-15.
As a big company its in parent company, HC realizes the need to reach out to many
developing countries . they want to target the generic drug segment and also vaccines, anti
infective and animal and pets healthcare.

STP of HC pharma
Segment the main target of HC is to enter the Indian vaccine market for humans and animals .
also people who have less faith in allopath. With higher disposable income and rising awareness
people understand the importance of vaccines. Our segment will be vaccines, anti TB medication
anti infective and alternative medicines .
Target
We target aware individual especially parents who ned vacination for thei babies, teenagers who
need antri cervical and anti prostate vaccines. We also target hospitals , private clinics medical
stores and retailers.

Auro University

Positioning- we enter the market and position ourselves as towards healtheir future . we project
our brand to be the best provider of medicines and vaccines . the pricing is lower than compared to
our competitiors but also standard. The nprice of vaccination is same . what is different is our
approach to reach the people in need but who cant afford. Forevery 100 vaccines a doctor
prescribes, we give 5 free which can be given to those who need it. Hence we come with a
solution of the socual problem . our alternative medicine campaign its all in the power of the
mind also is unique in its design which will collaborate with clinics and hospitals for workshops
.

Marketing mix
Product/service - our products are
Anti tb
Anti infectives
Anti allergies
Vaccines for animals
Vaccines for human
Medication for progressive and chronic ailments like alzheimers.
Service include the therapies given to cure psychlogically caused diseases. Like stress and
depression.
Packaging contains all the chemicals and content present in the drug with the appropriate amount
of measure in gms. It also has the advice dosage. Some of our vaccines come with a note of side
effects likely to be experienced to make the consumer aware.
Pricing
Most of our products have a fixed pricing . the anti allergies come as cheap as 20 Rs for 10 tablets
and vaccinations may cost upto 2000 rs. The pricing is designed to be cost based pricing hence
efforts are made to work at full efficiency and reduce costs as much as possible. There is
differentiating price strategy for anti allergies as there are several type of sub products based on
dosage and for different age groups.
Place the manufacturing unit will come up in Aurangabad .
the government offer incentives to them,
Locational advantage: an hour away from Mumbai by air,
Also, disciplined labour work force is available,
Dry weather and also good water quality is available in abundance which attracts pharma,
The c&f agents and distributors will be present in various states .
Promotion this is the most important part of the mix. The products have their presence on e
commerce websites and NRIs are aware about this brand as it is most commonly used in abroad.
So we will tie up with clinics, hospitals. The MR or sales reps will use the mode of direct selling
to the doctors and medical stores. For the service we will tie up with art of living centers and some
spa centers to promote this type of medication.

Sales and Distribution Management 3

Building sales strategy

A sales strategy very typically is defined as the plan to position a companys product or brand and
gain competitive edge. But now a days its a vital combination of product , relationship and
service. Building an effective sales strategy requires proper assessment of market potential,
competitor strategy, defining organization structure and a plan to turn ideas into action. Before all
this comes making of a plan which includes vision mission statements, goals and objectives.
Vision statement- Hc healthcare wants to become a leading supplier of high quality low cost
vaccines for both humans and pets around the world.
Mission statement- our mission is to keep in mind the core value of humanity and with that do
good and progress towards sustainable development.
The aim of HC is to deliver products of value across various countries around the world, simplify
the business model and be effective at grass roots level.
Entering Indian market may not be easy as large pharma companies have eye on the emerging
market . India is already a large exporter of generic medicines around the world. We want to aim
the vaccine segment. For this various steps of research was conducted.

STEP 1 ASSESSING THE OPPORTUNITY

This step is a pre requisite to enter any market or begin new operations. This follows a
systematic algorithm that gives yes and no answers after analyzing various factors in the
business environment. It answers several key answers like is there an opportunity ? can we
compete in it and if yes will we win and if yes is it worth winning ?
As mentioned before the opportunity is tremendous. According to mckinsey report the
income in the indian demographic is going to rise and also is the demand for high quality
health care products. By 2025 india will be a 55 million USD market in pharmaceuticals.
It is too big a market to ignore.
Global markets are in midst of major discontinuities. growth in developed markets eill
slow down and emerging markets will become very important countries like India russia
china and brazil are top 5 markets every pharma company wants to enter.
India ranks third in terms of volume of drugs manufactures. The growth is driven by rising
incomes accompanied by enhanced medical factors, rise in the treatment of chronic
diseases, greater health insurance coverage, launching patented products and new market
creation in existing spaces.
The central question is IS IT WORTH TO INVEST IN INDIA? THE ANSWER IS YES.
Analysis shows that metro and tier 1 cities will make significant contribution to growth the
hospital segment will increase share and influence markets.
Most importantly the acceptability towards modern medicine and newer therapies is
increasing due to greater propensity towards self medication and literacy about vaccines.
People understand the need to be vaccinated.
CULTURAL COMPABILITY- this plays a major role in a country like India where
people are very rooted to their culture and still believe in home remedies as a cure for
many ailments. Thus benefits HC as we have a division of alternative medicine and
allopath .
Auro University

STEP 2 DEFINING THE COMPETITIVE STRATEGY

Many companies are devising the indian strategy their own way. While ranbaxy,
wockhardt and sun pharma are looking at exports and global markets for generic drugs,
priamal is partnering up with global innovator companies and cipla and lupin are going the
mergers and acquisition way.
What india needs and what HC can give them is a country specific policy and sales
channel that understands the various segments geography and demographics.
We would advice HC to use a FRAGMENT APPROACH TO build sales strategy. Like
red bull and Pepsi both are beverages but red bull branded itself as an energy drink and
hence eliminated the competition from the beverage industry. Similarly, HC in India will
focus on Vaccines and alternate medicine.
Being a foreign multinational expanding into india, we can be sure that they are in a
competition position in the market. What HC needs to do is divide and conquer the
existing market. Create demand in the subset of existing market. NOVENTUM used this
strategy to penetrate European markets and it has led to a long term growth.
It is an offensive strategy where you are attacking new customers. !
STEP 3 SALES FORCE STRUCTURE
For a company to begin new operations in a country it is very important to define the
organizational structure and put people in charge of various departments.
The management levels are executive , director, manager and staff. There is vertical
structure which is important initially to have a more controlled way of functioning
ORGANIZATION STRUCTURE AT LOCAL LEVEL

regional lead

branch
manager

territoray sale
executive

area manager

DSR

USR

Sales and Distribution Management 5

Incentive based system

Every company gives monetary incentives to its employees that help the or motivate them
to achieve sales target. At HC there are different types and levels of incentives one can
claim.
At HC incentives are based on various kind of targets
H1- based on number of parties billed for one product . example anti allergy was sold by
agents to 10 distributors so Rs. 300 will be paid as incentives.
H2 if all the 3 types ( anti tb ,infective and allergies) are sold to 5 distributors then 500
will be paid
H3 this is based on number of parties irrespective of the product. Like 10 parties are
billed in total then 400 will be paid as incentives.
Value target- this depemnds on sales targets of a given month and are paybale to USR s. it
is a certain percentage (usually .5%) of total sales .
Incentives are also given to fixed paid employees given in table below-

Incentives are given to private doctors and hospitals . these are mostly in kind. For instance
for 5lak worth prescription in a quarter/half yearly, 2 day stay at marriot hotels of their
choice is free and more on similar lines.

Auro University

Distributors margin

Distribution Channel

Sales and Distribution Management 7

this is for retail distribution. Vaccines can be delivered directly at hospitals-

Managing distribution channelsIt adoption IT adoption in healthcare has grown drastically. Pharmaceutical companies have
realized the need for integrated solutions in SCM to keep inventories at optimum levels,to improve
distribution, to provide for liquidation of stock, and to streamline interconnectivity
between manufacturing facilities, warehouses, and CFAs in different states. The use of software
like SAP and SAS, apart from other customized software, is increasing. However, the adoption of
technologies such as radio-frequency identification (RFID) has been slow.

Auro University

sourcehttps://www.indiaoppi.com/sites/default/files/PDF%20files/OPPI_EY%20Report%20%20Unlocking%20the%20potential%20of%20the%20pharma%20distribution%20channel.pdf

Sales and Distribution Management 9

ConclusionsAccording to research reports, large number of indian population living in rural areas has no to
little access to vaccination and other common medicines. HC enters India with the rationale of
using this opportunity to tap the untapped rural market. The trend of consumer awareness is at an
all time high and people weather in the cities or in villages want understand the importance of
vaccination. On the other hand people in tier 1 cities also understand the importance of
vaccinating their pets and many people also complaint if street animals are not vaccinated or
appear to have some diseases as these act as carrier of many pathogens. Municipalities in many
cities have undertaken this operation for vaccinating stray animals. Being a developing country
there is always a scare of diseases like chicken guniya TB and other viral or protozoan spread
infections. Thus the demand for such is high in the country. The other side is the service sector
which is based on alternative therapies practiced in the west and some eastern Asian countries.
This model suits the indian subcontinent because even India has roots in curing bodily pain with
the help of its herbs and other processes like yoga. Alternative medicine is a science in its own
with various methodologies to cure diseases. The sales force structure and distribution channels
are designed in a way to work at efficiency and penetrate deep inside the markets.

10

Auro University

References
2015. .
[ONLINE]
Available
at:http://www.bioplanassociates.com/publications/articles/BPIBioPlanDISTRIBIndiaTodayOct08.
pdf. [Accessed 04 December 2015].
GSK to set up new plant in Nashik | Business Standard News. 2015. GSK to set up new plant in
Nashik | Business Standard News. [ONLINE] Available at: http://www.businessstandard.com/article/companies/gsk-to-set-up-new-plant-in-nashik-108100800049_1.html.
[Accessed 04 December 2015].

Doing Business in India | Entry India. 2015. Doing Business in India | Entry India. [ONLINE]
Available at: http://entryindia.com/. [Accessed 04 December 2015].
Mckinsey and company report on pharma sector.
https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ved=0ahUKEwjOr7vz73JAhXLHY4KHfbWAOYQFgg4MAQ&url=https%3A%2F%2F2.gy-118.workers.dev/%3A443%2Fhttp%2Fwww.mckinsey.com%2F~%
2Fmedia%2Fmckinsey%2520offices%2Findia%2Fpdfs%2Findia_pharma_2020_propelling_acces
s_and_acceptance.as&usg=AFQjCNFfHpmTs8dkEkLXWiaQHDAbZjpK3

Sales and Distribution Management 11