Executive Summary

Mayaderm is a multi-purpose herbal cream with a sound research

backing. The sales for Mayaderm have been stagnant since 2008
and the net margin has only declined over time. The product has
great potential and no direct market competitor. However, it lacks a
robust distribution network and a sound marketing support. In order
for Mayaderm to be a commercial success, it needs to focus on
effective distribution in the short term and effective marketing in the
long term.

Situation analysis
Mayaderm is a technologically sound product. It has great research backing. The
product was primarily created to cure difficult cases of ulcer. However, over time new
uses of the ointment in treating bedsores, fissures, major and minor burns, among
other skin ailments, were identified. Hence, Mayaderm was promoted to be a multipurpose herbal cream with unique properties.
The target customer segment for Mayaderm is people suffering from skin ailments for
which prevailing treatment is ineffective and those who would use skin creams for
minor ailments in their household.
Initially, Mayaderm was priced at Rs 70 for a 25-gram tube. The initial distribution
infrastructure involved 23 distributors and a stockist. 15 medical representatives and 2
area managers were recruited to promote the product in Gujarat. This distribution
network seemed adequate considering the fact that Mayaderm was not promoted
nationally yet. However, for reasons unknown, all the medical representatives
resigned from the company and the consequent sales of the product depended on
word-of-mouth publicity based on past effectiveness and goodwill built by Dr. Shah
within the medical fraternity. The distribution of the product was consequently
assigned to a single established stockist of pharmaceutical products in Gujarat. This
highlights the problem of an ineffective distribution network for Mayaderm.
In terms of competition, herbal and chemical formulations for treating general skin
disorders by established pharmaceutical companies like G D Pharmaceuticals and
Vicco Laboratories Limited are probable competitors. Companies like Paras
Pharmaceuticals limited that focus on unique skin conditions can also be considered a
competition. However, considering the unique properties of Mayaderm and its
effectiveness on varied skin ailments, there is not a direct competing product in the
market.

Non-exclusive marketing rights of Mayaderm were offered to Atra Pharmaceuticals.

The price of Mayaderm was increased from Rs. 70 to Rs. 120 per tube and launched
nationally. However, the price increase did not take a toll the sales. But, there was an
eventual decline in the sales of Mayaderm because of the absence of representatives
who could ensure that the retailers kept the product in stock. Again, the sales of
Mayaderm were directly affected due to the absence of a sound distribution network.
Dr. Shahs efforts in convincing leading pharmaceutical companies in Ahmedabad to
explore their interest in buying the technology and launching the product under their
own name also went in vain. It signifies that Mayaderm needs to evolve as a brand in
order to gain recognition and commercial success.
The sales of Mayaderm remained stagnant between April 2008 and March 2014 with
a total of 1,01,830 tubes being sold. The expenditures including the costs of
promotion, distribution, and production increased and the net margin on Mayaderm
declined. The market was large enough to support Mayaderm, but the product lacked
an effective marketing support. The need for sound marketing strategies is evident
here.

Problem statement
Mayaderm should get at least 30 percent net margin after meeting all costs.