10. Indoco Remedies Ltd.

Size: px

Start display at page:

Download "10. Indoco Remedies Ltd."

Cory Christina White
5 years ago
Views:

1 10. Indoco Remedies Ltd. INTRODUCTION: Indoco Remedies Ltd. is an Indian company having international presence and involved in Research & Development, manufacturing, marketing and distribution of pharmaceuticals products. Indoco has a good domestic presence and has strategically aligned itself for a giant leap to be a global player. Indoco has a broad product portfolio covering a wide range of therapeutic segments and has super specialty - cardiology, diabetology and life style segments HISTORICAL PERSPECTIVE: In 1945, a Goan entrepreneur Mr. Govind Ramnath Kare, who was in the business of wholesale and retail trade of pharmaceuticals, started a firm and named it as Indo-Continental Trading Company. The principal business of this firm was to import pharmaceutical formulations from Europe and distribute them in the Western India. However in 1947, after India became independent, the new government, in its bid to encourage indigenous manufacturing of medicines, banned import of several formulations. Mr. G.R. Kare, instead of being discouraged, decided to venture into manufacturing of pharmaceuticals. Accordingly, on 23rd August 1947, a week after India's independence, a new company was founded with the intent to manufacture and sell pharmaceutical formulations. Thus, Indo Continental Trading Company became Indoco Remedies Limited MANUFACTURING: The company has state-of-the-art manufacturing facilities, which are of the highest international standards, and this has primarily contributed to Indoco's success with formulations in the European Market. 178

2 The manufacturing operations were started in a small house in Thane near Mumbai. However in this early period, the company suffered a severe set-back. After the Indian independence, the Portuguese Government in Goa sealed the border between Goa and India and Mr. Kare was unable to travel to Mumbai very often. In 1963, two years after Goa's independence, Mr. Suresh Kare, son of Mr. G.R. Kare, came to Mumbai and took over as the Managing Director of the then sick unit. Under the stewardship of Mr. Suresh Kare, Indoco never looked back. From a meager turnover of Rs. 1 million and the total employee strength of around 50 in 1969, the company has grown by leaps and bounds. Indoco, now, has an estimated turnover of Rs billion for the year and is over 1,750 employees strong RESEARCH & DEVELOPMENT: The company has its Research and Development (R&D) centre in Pune. Over period of five year; the company has done several research activities like developing novel Drugs for Anti cold,paediatric Asthma, Diabetes segment, etc. During the study period it was found that the company has not given to priority to its R&D activities PRODUCT: Some of the major brandsof the company include Cyclopam, Cital, Carmicide, Febrex Plus, Vepan, Sensodent-K, Tuspel Plus, Sensoform, Cloben G and ATM. The success of these brands is a result of integrated efforts of marketing sales team which works towards developing and retaining the customers by providing regular customer care and services. This has helped Indoco s field force to develop a relationship with the general practitioners, pediatricians, dentists and consulting physicians. 179

3 Indoco has now, set its sight on up- coming lifestyle segments of Cardiology and Diabetology and has succeeded in creating brands like Glychek (Anti-Diabetic) and MCBM 69 (Nerve Nourisher). The company has launched Atherochek (statin and vitamin combination) to cater to the need of Indian cardiac patients. In the pharmaceutical business, brand building is a definite advantage since it is not an ability which can be acquired overnight. The company believes that this ability will result into further growth of the products as the new products in the pipeline for Indoco MARKETING OF OPERATION: Marketing means marketing of quality products of the company to doctors in particulars and to the public through chemists, in general. The company is marketing its products in general segment such as antibiotics, anticold, antispodemis,expectorant,etc;segments. The company is promoting its product with aggressive marketing strategies, which can be observed from Table Table 6.39 : Sales Performance of Indoco Remedies Ltd. in Maharashtra during the year to (Amount in Rupees Crores.) Year Company s total sales Exports Total Sales in India Total Sale in (MS) Index of Sales in Maharashtra (MS) Variable Base (%) Fixed Base (%) Total Avg (Source: Annual Reports from to ) Table 6.39 indicates that the company has started its export activity in the year The company s average export were worth Rs.3 180

4 crores in as against Rs. 14 crores in This works to be 466 % over its base year. If we compare the export to the total sales it show that the company s average total sales was Rs. 126 crores as against the average exports reported Rs. 3 crorers,which works out to be 2.38 % contribution over its sales.it proves that the company has less concentration on exports it has great potential for further increase. In Table 6.39 one would notice that the sales in Maharashtra have increased from Rs.22 corers in to Rs.42 crores in , which works out to be % over the base year. It is observed in the above table that during the study period of , average sales of the formulations in Maharashtra was Rs. 31 crores as against the all India s annual average sales Rs. 123 crores.this shows that Maharashtra state has been contributing 25 % to the annual average sales during the study period.. The increase in sales was largely due to improved product mix, low prices of fast moving products and effective marketing efforts of the company. During the year , Indico introduced 6 new products that have helped it to increase its sales. However, the sales have remained almost constant during and due to less concentration on micro interiors, reduction in physician samples of the running products such as Febrexplus, Tuspel, Cital, etc. Over the past three years, it has reduced its dependence on some of the old brands and moved towards becoming self-reliant by launching several new brands such as in cardiology & diabetology segment by creating brand like, glychek (anti-diabetic), MCBM69 (nerve nourisher) & Atherochek (stanin vitamin combination) to cater the need of the Indian cardiac patient. 181

5 The company is growing rapidly since 1994, resulting from certain product growth, The company s major objective is to recapture the market of new products PRICE: During the study period,the researcher has analyzed price structure of sample units & its competitors for the comparative study purpose. For this purpose the leading Durg Today monthly medical practitioners ready reckoner was used for comparison of the selected units products over its competitors. The comparative prices of the Indocos products over its competitors that can be observed from Table Table: 6.40:Comparative prices of Indoco Remedies Ltd.over its competitors for the year (Amount in Rupees Crores) Composition Packing Indoco Remedies Product Price Competitors Product/C ompany Price Price difference over the Indoco (Rs) Price difference over the Indoco Less (-) / More (+) % Cyclobid(NIPL) Cyclopa Antispasmodics 10 T Dicomin(Novamed) m DS-Spas(Meditech) Expectorant 100 ml Tuspil Zeet Exp.(Alembic) Skin Clotrimazole 15 gm Cloben-G Skin Gamma Benzene 100 ml Scabex Enzyme 100 ml Carmicid Simeliv (FrankoIndian) Nasocareplus Febrex Anti Pyretic 60 ml (Glenmark) plus Mycoderm-C(FDC) Mycoderm(PIL) Scabanca-C ( Klar Sehen) Scabine(Stadmed) Scarab(Aristo) Degplex(Rallies) Bonnison(Himalaya) Kolq(Blu Cross) (Source: CIMS/MIMS ) Table 6.40 shows that the product price of Indoco s remedies are very economical as compared to its competitors. In Antispasmodic segment the Indoco s brand Cyclopam 10 tab is costing Rs whereas for 182

6 the same strength competitor NIPL Cyclobid costs Rs.16.00, Novamad Dicomin costs Rs and Medich s DSspas costs Rs It clearly shows that Indoco s brand Cyclopam is economical by 17% and 2 %, respectively. In expectorant segment, the company s Tuspil 100 ml bottle costing Rs.25.10, whereas, Zestexp of Alembic is selling the same product for Rs which works out to be 43% costlier than Tuspil 100 ml bottle. Low price strategy can be observed from Table 6.40.For skin disease products such as Cloven-G & Scabex, In enzym segments Carmicid is also very economical over its competitors whereas in antipyretic segments, Febrexplus is contributing a major share in overall company s products mix JURISDICTION OF MARKET: The marketing team comprises of over 1,150 Medical Representatives out of over 50 medical represenative are working in Maharashtra state & backed by a Product Management and Medical Services Team. A well spread out strategically located network of 21 Sales Depots reach out to every nook and corner of India and cater to 1,400 Stockist and over 50,000 retailers. More than 2,10,000 Doctors are on the company's database.they receive a constant update on products through a trained field force. Cyclopam, Febrex Plus and Vepan feature in the list of the top 250 most prescribed pharmaceutical brands in India. 183

7 PROMOTION: Promotion is the most important element in marketing mix. It actually denotes communication process about product to customers. It influences the customers to buy the product. In pharma selling, there are 4 ways of promotion: personal selling, advertising, sales promotion and publicity. Table 6.41:Indoco Remedies Marketing and Selling expenses as against the total Sales during the year to (Amount in Rupees Crores) Year Company s total sales Mkt & Selling Exp Mkt & Selling Exp.(%) Total Avg (Source: Annual reports from to ) Table 6.41 reveals that for effective marketing of ite products the company has spent on promotional activities of marketing and selling expenses Rs.5 crores in the year The company s marketing and selling expenses was Rs.16 crores in the year Average marketing and selling expenses were Rs. 11 crores against the average total sales Rs.126 crores of the company. The above table reveals that the company has spent on marketing and selling expenses an average 8.5% of its total sales which includes exhibition, demonstration, sample distribution and advertising accordingly. The company has adopted suitable measures as per the customers needs. Hence, the 184

8 sale has increased. It is observed that personal selling is the best for the industrial product and for high price consumer products. The company has spent remarkably a good amount on its advertising and selling which has helped the company to increase the sales of some products without prescription over the counter. From Table 6.41 one can observer that the company s average total sales was reported during the study period Rs.126 crores as against the average total sales Rs. 11 crores. This works out to be 8.73 % to sales. It clearly shows that the company should strengthen its marketing and selling activities in Maharashtra aggressively FINDINGS : Company is concentrating mostly on general practitioners and pediatric segments such as Tuspil and Carmicid. As a result of this, the company has increased its overall sales the company and could not concentrate on the ENT & Gynacelogical segments. This has resulted in the company s other products not capturing the market. As per a survey of the ORG Marg, doctors among pediatric & GP segments have shown first preference. Table 6.41 shows that company has spent 8.5% on marketing and selling which includes exhibition, demonstration, sample distribution, advertising.marketing and selling expenses ratio should be increased by 4 % annually over its total sales. As per a survey of the ORG Marg, the MNCs and Indian professional companies are spending on marketing and selling 13% of their total sales which includes exhibition, demonstration, sample distribution, advertising. Table 6.41 reveals that the company s marketing and selling expense is very low as compared to the pharma industry s average. 185

9 The company has launched two divisions Spade & Radius. Raidus to focus on chronic diseases with thrust on the diabetic and cardiovascular segments SUGGESTIONS: It is suggested that the company should expand its customer base by rectifying different segments other than general practitioner and pediatricians. The company should increase its marketing & selling budget by 4% for promotional activities such as advertising, print media, exhibition, and demonstration and sample distribution. This will help the company to increase its sales and it will bring some stability. The current focus requires introduction of new products and expansion of the existing headquarters. At the same time, the company should increase the human resources for marketing personnel such as medical representative & managers. The company should expand its base of Research and Development Centers. The company should introduce new products in anti cancer and anti-tb segments.this will help to value addition of the company s image. 186

PHARMACEUTICALS EXPORT PROMOTION COUNCIL (Set up by Ministry of Commerce, Govt. of India)

PHARMACEUTICALS EXPORT PROMOTION COUNCIL (Set up by Ministry of Commerce, Govt. of India) COPY Date : 23-02-2010 News / Story reproduced with thanks:- Stockmarkest.com Indian pharmaceutical industry has