B.PHARM.

4TH YEAR

PHARMACEUTICAL MARKETING

QUESTION BANK FOR SECOND SESSIONAL EXAMINATION

Various sales promotion methods and their advantages and

disadvantages

1) What is sales promotion

Sales promotion is one of the four aspects of promotional mix. (The other three parts of the
promotional mix are advertising, personal selling, and publicity/public relations.) Media and non-
media marketing communication are employed for a pre-determined, limited time to increase
consumer demand, stimulate market demand or improve product availability.

Examples include: contests, point of purchase displays, rebate (marketing), free travel, such as free
flights.

Sales promotions can be directed at the customer, sales staff, or distribution channel members
(such as retailers). Sales promotions targeted at the consumer are called consumer sales
promotions. Sales promotions targeted at retailers and wholesale are called trade sales promotions.
Some sale promotions, particularly ones with unusual methods, are considered gimmick by many.

Sales promotion includes several communications activities that attempt to provide added value or
incentives to consumers, wholesalers, retailers, or other organizational customers to stimulate
immediate sales. These efforts can attempt to stimulate product interest, trial, or purchase.
Examples of devices used in sales promotion include coupons, samples, premiums, point-of-
purchase (POP) displays, contests, rebates, and sweepstakes.

Sales Promotion in Pharma Industry:

Sales promotion in Pharmaceutical industry is directed towards, retailers/chemists/pharmacies,

stockists, or even to consumers / patients in case of OTC brands.

Sales promotion is employed to liquidate non-moving stock, near expiry stock or to pre-pone the
sales, introduction of new brands to existing customers or stock clearing sale.

We will discuss various sales promotion strategies in this chapter.

1) Need of Sales Promotion in Pharma Industry

Pharmaceuticals have a perishable life, i.e. each pharma brand or drug is with an expiry date. As per
the demand of the brands the companies manufacture the brands at requisite quantities. However,
due to competition pressure & in order to garner maximum market share, the companies over
forecasts the quantities to be sold. This results in the excess inventories at all stocking points such as
chemists, stockists, C&F agents & that of company go-downs. Since the products are with expiry
date, the company cannot afford to keep the stock for indefinite period at these stocking points.

Since the demand of the product is directly proportional to the generation of prescriptions by the
doctors which is result of the efforts taken by the MedReps in the field, additional support is given
by the marketing department by running certain sales promotions at retailer / stockist levels.
However these sales promotions would in real sense can help the stock move in the trade channel &
get the company go-downs & C&F agents free of the stocks. Many times these are employed to
achieve the sales target which is the need of the hour for sales divisions.

2) Various Types of Sales Promotion in Pharma Marketing (Ethical

promotion)
Sales promotions are mainly given at 3 levels in Pharma Industry in ethical promotion.

a) Chemist level
b) Stockist Level
c) Sales Team level

Medical Representatives incentive schemes based on volume of sales are also a part of Sales
Promotion activity

a) Chemist level: Generally given to enhance easy availability, liquidate near expiry stocks or in
order to enhance the stocks level at chemists in the preparation of the major doctor campaign
or very rarely at the launch of new brand. But chemist level sales promotion schemes are always
given to liquidate Stockist level inventories.
i) Easy Availability: Some companies would give 2 strips of any new brand free with the
existing brands order, just to ensure the brand is available at all leading chemists. Many
times chemists show hesitation to make the product available on the grounds that let the
doctor prescribe the medicine first. This is because, after placing the order from stockist &
on supply from stockist, the chemist is liable to pay to stockist with in 7-qo days time. But if
the prescription of the brand does not come, owing to new launch, the chemist may not be
 able to pay to stockists. Hence giving 2 strips free with any other brands, ensures that the
brand is available across the city.
ii) Liquidate near expiry brands: If the stockists have the stocks of 6 months expiry, it is best to
give it on scheme (sales promotion scheme) like 10+1 free i. e. on purchase of 10 strips of a
brand, 1 strip is free. This can be 9+1, 18+2, 27+3 depending upon the demand at particular
chemists. While giving such schemes, the size of intact carton is considered to ensure, you
may not have to break the carton to give the free stock. Usually the intact boxes are given,
the prices are adjusted in the invoice so that, the price of 9 is charged to the chemist,
whereas the free strip is shown as free & it is not charged.
iii) Major Doctor Campaign: The Pharma Company can plan a major campaign at specific core
doctors & can give schemes to the chemists. Ideally the schemes cannot be given to specific
chemists, as their association would object to it. So they announce it to all, however, the
actual follow up is done to only few select chemists where the doctor campaign is planned.

b) Stockist Level: Stockist level sales promotion schemes are generally given to enhance the
primary sales figures. Majority of the pharma companies consider the Primary sales as the
criteria to evaluate the performance of the sales teams & the divisions. Therefore to enable the
stockists to purchase major quantum, sales promotion schemes are given. These are generally
given at shipper size levels. Like 1 shipper (of say 20 cartons of 10X10 strips) free with 9 shippers
of the same brand.

Sometimes, the companies can give the brands in other categories such as FMCG say Pepsodent
Toothpaste along with pharmaceuticals, billed to the stockists to be supplied to chemists as the
chemists can sell these products at their counter whereas the prescription brands are sold on
prescription.

As discussed earlier, the stockist level schemes will not enable the tertiary sales at chemist level
or at doctor level prescriptions. However, the sales team would be under pressure to liquidate
the stocks in the next month by working hard on the field. If the sales team does not take
commensurate efforts to liquidate the stocks, the stockists sends back the stock or does not pay
on time. This leads to increased out-standings / account receivables.

Some companies who are very aggressive in the market say Ranbaxy have always used this
method to influence the market share. Now let me explain this. Market share is based on the
product sold from the market shelves. If a company fills the market shelves to a extent that does
not leave any breathing space for the stockist / chemist to buy other companies brands,
obviously ensure that only their brand is sold on priority. Thus they can dominate the market
shares, if this happens in majority of the stockists & chemists in the country.
 c) Sales Team level: If at all you want to give a genuine sales promotion scheme, you should give it
to sales team. These are the people who are responsible for generating prescription from the
doctors. The scheme in this case is usually referred to as Incentive Scheme. Even though the
incentive schemes is a sales promotion scheme, but its cost is considered under either sales
promotion head or marketing head at the discretion of the company.

The sales team level incentive scheme is given at primary (CFA to stockist) or secondary
(stockists to chemist) sales level. Secondary is better, however, the tertiary (chemist to patients
sales also referred as Chemist off take) level is the best way to give incentive schemes for sales
team. This is the direct reflection of the prescriptions generation by the sales team. But it is
difficult to monitor. Generally primary & secondary sales are monitored by companies; however,
the tertiary sales monitoring is still not manageable at all India level.

3) Various Types of Sales Promotion in Pharma Marketing (OTC

promotion)
Sales promotions are mainly given at 4 levels in Pharma Industry in OTC promotion.

d) Chemist level
e) Stockist Level
f) Sales Team level
g) End Consumer level

Most of the points in OTC sales promotion of pharmaceuticals remain same as that of ethical promotion
at chemist, stockists and sales team level. However, an important component of end consumer or
patient level sales promotion schemes is given in the OTC sales promotion.

Consumer level schemes are generally some freebees given along with the brands. E.g. Calcium Sandoz
would give a toy free with the bottle of 100 tablets. Or a stainless steel spoon free with Spert Kid protein
powder.

These schemes need to be advertised enough or promoted through the below the line (store level)
promotion to make consumers aware about the schemes. Pharma industry is not yet seen giving 1+1
free scheme on their products directly to consumers as that of FMCG companies. However, some
pharma companies give such 1+1 free schemes in very competition driven markets.
4) Advantages of Sales Promotion in Pharma Marketing
a) Early liquidation of the stocks
Sales promotion helps the companies to liquidate the non moving items on priority.
b) Liquidation of near expiry stocks
Near expiry products can be easily sold & consumed by end consumers. So without losing on the
sales value, one can sale the product. If they are not sold, they come back as returned sales
goods which registers negative sales for the sales team.
c) Influence to increase the market share
As discussed earlier, increased sales with dominance at the trade channel, would eventually lead
to increased market share, as the competition will not be able to sell their product to that
extent.
d) Breaking the monotony of stagnant sales
Consistently stagnant sales can be converted into a steep rise in the sales by giving occasional
sales promotion scheme. This also gives chance to trade partners to earn more margins due to
flurry of free goods. However, one should never forget that this is mere pre-ponement of the
sales, if the commensurate increase in prescriptions by sales team is not worked upon.
e) Steep rise in Primary Sales
For companies to achieve the dominant market position, they need the steep rise in the primary
sales. These eventually increase the company performance & quarter results which at company
level are shared with share holders. This also influences the share prices of the companies.
Hence sales promotion schemes are also cherished by top management.
f) Achievement of sales target in less time
Generally the pharma companies have their calendar year from April to March in India, Multi-
National Companies have Jan-Dec calendar. The major season of pharma selling is Jun-July-
August-September. If any company or division or any zone or any territory is not on target till
the end of this season, it becomes prudent decision to give a sales promotion scheme to ensure
they achieve their yearend targets.
However, this results in the pre-ponement of next quarter sales. Therefore in the subsequent
year, first 3 months goes little slack due to excess stocks being present in the trade channels.

5) Disadvantages of Sales Promotion in Pharma Marketing

a) Loss of focus of sales team from real prescription generation
Frequent sales promotion schemes, takes away focus of sales team from prescription
generation. This makes the sale less healthy. This may result in the increased inventory coupled
with less demand. This eventually results in the choked pipelines & increased accounts
receivables.
b) Short term solution to achieve results
 Sales promotion scheme should never be considered for long term, as this erodes the margins of
the pharma companies. So only short term usage of the sales promotion schemes is okay.
c) Trade channel gets habituated to receive the sales promotion schemes
Many times your sales team may get pressurized by the trade channel to give such sales
promotion schemes on continuous basis. This erodes the profitability.
d) Trade channel may ask for more aggressive schemes in future to give the same result
Sales promotion schemes have this peculiar disadvantage that the same scheme may not
necessarily enthuse the trade channel again & again. So pharma companies need to give further
discounts & thereby erode their margins every year.
e) If the scheme is not given properly with condition of non-returnable basis, the unsold stocks
may come back.
Another very important aspect, marketing & distribution need to keep in mind is that the stocks
supplied on scheme, should have some marking on it & condition specified as Non-returnable
in the invoice. As in pharmaceutical selling, as per the agreement with AIOCD (All India Chemist
& Druggist Association) the pharma company is compelled to take back the expired, damaged
goods & need to give credit for the same. So if the above precautions are not taken by
marketing & distribution departments, the stockist / chemist will take the benefit of the sales
promotion scheme & if the goods are not sold in the market, they can return the goods with
expiry & get the rebate too. Thus company would lose on the margins at the time of giving the
scheme & transportation (both sides) & taxes on the sales invoices & would also have to digest
the negative sales when the stocks are returned.
f) Misuse of schemes by your own sales team can lead to false sales which eventually erodes
the ethics
Sales team may have some culprits who can take undue advantages if the management team is
not alert to prevent such incidences. On many occasions, some sales men can get the retail
orders invoiced from stockists (this reflects as the healthy secondary sales), but may not supply
it to any chemists. They can keep the stocks at their homes or any other place or even at stockist
place, if the stockist is also involved hand-n-gloves with the MRS / Managers. Very frequent
sales promotion schemes exhausts the marketing & sales team-especially supervisors while
proper monitoring of the sales promotion schemes. This makes the conditions favorable for the
culprits to misuse the schemes. When diagnosed, the company loses many things which include
people, time, opportunity to build brands & get credited with negative sales.

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Medical representatives and their role

1) Brief note on Medical Representative & their pivotal role in Pharma

Selling.
Medical Representative or MR, the popular name by which they are refereed by one & every one is
the very pivotal & significant part in the pharma selling. Pharma selling is mainly dependent on the
personal selling; hence, a company representative is required to visit the doctors on regular basis.
Prescribing medicines is very sensitive matter when it comes to taking care of ailing patients, so
doctors traditionally depends on person who comes to discuss about the product & make the
product available in the nearby retail stores. This is followed not only in India but overseas too.

Two decades back, Cipla had laid off their entire field force due to some technical reason. That time,
they depended on the courier marketing, a new concept launched by Cipla. Doctors supported Cipla
products during this time due to quality of products & the services rendered by Cipla earlier.
However, increasing competition from other companies & doctor being habituated to prescribe
more quantities of the brand they are visited by MRs of the company, Cipla was forced to appoint
the new field force for pharma promotion.

Medical Representatives thus has been proven to be the pivotal entity in Pharma Selling.

Medical Representative usually need to visit doctors, retailers, stockists & occasionally C&F agents
on regular intervals. MRs needs to visit minimum 10-12 doctors per day & promote the company
brands, discuss important highlights of the brand, introduce new products to the doctor. While he
promotes to the doctors in a given area as per the company advice / strategy, they also need to visit
the nearby chemists to make the product available & keep visiting to check at any given time the
product is adequately stocked so that the prescription of the doctor does not get bounced. Once a
week, MR is supposed to visit the stockiest(s) to see the overall picture of the sales. At stockists
place, they can get a data on the supply of the brands to various chemists in the particular areas in
the town /city. From the number of chemists purchasing the brands on regular frequency, they can
get idea of the doctors who are prescribing their brands. They get idea on which are the doctors
whom they can contact & persuade to prescribe their brands.

Occasional or once in a month visit to C&F agent will give them idea of the total sales of the territory
or entire state. Mostly the pharma sales team gather on the sales closing day (last day of the month
or a day decided by the company to close sales for that month).

Work of Medical Representative does not get over till the payment from the trade channel is
collected by the company. Any pending payment which is called as Account Receivables (AR) is
considered lacunae in the working of the MRs. It is not healthy to have long ARs.
 MRs are also incentivized on the volume of the sales generated by them & the usual cycle followed
for these incentive schemes is a quarter (three months say Jan-Feb-Mar or Jul-Aug-Sep). For all
practical purposes, MRs or whichever the designation companies may give them, would be
considered as labor class. They are protected under the labor laws. Based on these legal protection,
the all India Medical Representatives are united under auspices of FMRAI (Federation of Medical &
Sales Representatives Association of India)

Even though MedReps are considered to be very important entity in the pharmaceutical industry as
prime bread earner, they are usually looked down upon by many in the pharma industry & society in
general. Because of this many new generation youth considers it not worthy to join as MedRep for
any Pharma company.

However, it is time & again proved that the ones who joins the Pharma Industry as MedReps &
continue to do this job minimum for 2 years before they move up the ladder, grow eventually to
become CEO or managing directors of the Pharma company. Many of the founders of the Indian
Pharma majors have started their careers long ago as medical representatives.

2) Significance of Medical Representative in Pharma Marketing

Medical Representative or MR, the popular name by which they are refereed by one & every one is
the very pivotal & significant part in the pharma selling. Pharma selling is mainly dependent on the
personal selling; hence, a company representative is required to visit the doctors on regular basis.

Significance of the MedReps can be elaborated based for following points:

a) Regular Personal Visits to doctors is must to get him prescribe the Pharma brand
b) Company cannot reach out to all doctors from its head office
c) Courier / tele marketing etc methods are of little importance alone, but can be useful, coupled
with MRss visits
d) Apart from handling 200-300 doctors, MRs needs to cover 100 odd chemists
e) Collection of payments from stockists
f) In all front MR represent the Pharma company be it Dr /Chemist / Stockist/ C&F agent
g) In absence of MR (especially vacant territory), his manager can work for some time till he
appoints new MR, however he cannot continue as he wont be able to do the job of the MR to
the same extent to the same depth.
3) Place of MRS in Organization structure of Pharma Company

4) Roles & Responsibilities of MRS

a) Visit minimum 12 Customers (Doctors / Dieticians) daily.

b) Visit minimum 6 Chemists / Retailers / Hospital Pharmacies daily.
c) Visit Stockists at least once in a week.
d) Visit CFA at least once in a month if CFA is in your HQ Town.
e) Promote Companys brands to the customers using the promotional materials /
samples / gift articles / scientific literatures/ References as provided by the
Product Management Team or Marketing.
f) Ensure adequate availability of our products at minimum 60% of chemist outlets
in your HQ by collecting regular Retail Order Booking from Chemists.
g) Acquire thorough knowledge about scientific aspect of the product, marketing
strategies, packaging, and pricing details of our brands & that of competition
brands.
h) Verbatim (word-by-word) Detailing Ability as per instructions given by
marketing.
i) Achieve 100% Sales as per Targets set by the divisional head / Zonal head.
j) Punch regular Daily Work Reports (CCIR) on the Company Website once in three days/
or send a daily report by email/ post.
5) Future Scope of MRs in Pharma Organization
6) Daily routine work of a MR
MedRep is supposed to work in the field for average 25 days, which includes all Saturdays. In these 25
days, they are supposed to cover 200-300 doctors depending on the territory coverage & availability of
doctors, range of products company may have & the strategy of the company. Some of the doctors they
are supposed to meet once a month, some twice a month. For some core doctors, they are supposed to
meet three times a month. Total doctor calls to be made by the MedRep are generally 300-350. Thus
average doctor calls to be made by each MedRep per day come to 10-12.

Daily call average is very important criteria considered for evaluation of the MedReps performance. This
is because, the healthy call average would mean, the MedRep is meeting the right number of doctors at
correct frequency, which increases the probability of generating more & more prescriptions from more
number of doctors. This ultimately increases sales of the company with increase in market share of the
Pharma Company.

Along with doctors, the MedRep is supposed to visit the retail chemists / hospital pharmacies where the
doctors prescriptions are supposed to honor. They are supposed to cover average 5 chemists per day.
Overall each MedRep would cover total 100 core chemists in his territory. The important aspects
checked by MedRep at chemist counter involves checking the prescription status of the neighboring
doctors for their own company brands & that of competition brands, checking stock availability o f their
brands, any other market news such as any schemes given by any company, any new product
introduced in the market so on so forth.

Once in a week, MedRep is supposed to meet Stockists & once or twice a month they are supposed to
visit C& agent.

7) Monthly Sales Closing & its significance

8) Good Habits of MR
9) Bad Habits of some MRs
10) Why I should join a Pharma Company as MR / Management
Trainee-Sales
Retailer and their importance
1. Chemist /Druggist / Pharmacist Definition
2. Types of retailers in Pharma Industry
3. How the retailer in Pharmaceuticals is different from other retailers say grocery store
4. Significance of Chemist in Pharmaceutical Marketing
5. Credit Period given to Pharma Retailer
6. Trade Margins given to Pharma Retailers
7. Services rendered by Pharma Companies through their sales representatives / MRs to Pharma
Retailers
8.
Retailer prescription audit
1. What is RCPA (Retail Chemist Prescription Audit)
2. Significance of Retail Chemist Prescription Audit (RCPA) in Pharmaceutical Marketing.
3. What pivotal information one can get from RCPA
4. Dos & Donts of RCPA
5. Methodology of RCPA
6. How to furnish data in RCPA format
7. How to analyze the RCPA data
8. What is the ultimate outcome of RCPA
9. How can you use RCPA to select your future sales man
International Pharmaceutical market
Export management of Pharmaceuticals
1. How to market/ export a brand already being marketed in India to Non-
Regulated markets like South Africa, Middle East, South East Asian
countries, CIS countries etc.

Export of pharmaceuticals or marketing a brand in International market mainly Non-Regulated

markets like any of the above countries, would require following points / procedures to be
done:

a) Require to apply for British Pharmacopoeia/ USP license to Kenya under Schedule C &
C1 license of Drug & Cosmetics Rule (for this you require purchase of order from
Kenya).
b) Based on this FDA will issue product & purchase order specific permission for additional
product to be included in the already issued Indian Manufacturing Licence.
c) Purchase the material/ API as per B.P./ USP
d) WHO GMP Certification: can be done by applying to local / FDA & DCGI.
e) Facility will be inspected by both these agencies for compliance to WHOGMP
f) Product is developed along with Raw Material specifications especially method of
Analysis, Accelerated stability studies (short term & long term both) as per ICH to be
submitted in the form of dossier with samples to the concerned country Regulatory
Agency through one Agent in that country who will represent the Indian Company.
g) Indian Company needs to register their company in the target country indicating who
their local representing company is.
h) The target country regulatory body will approve the product, after analysis at their end,
and then they will inspect the facility in India.
i) Once target country regulatory agency inspects the Indian manufacturing facility for
WHO-GMP compliance, they will approve the facility.
j) Local agency will generate the orders for purchase of product in Target Country
2. How to market/ export a brand already being marketed in India to
Regulated markets like U.S., Europe etc

API to be purchased from approved DMF source

All excipients have to be as per USP /B.P.
Total stability of studies of product (short and long term i.e. 6 months )
For US ANDA approval , pharmaceutical equivalence (dissolution etc.) with innovator product
need to be submitted
Application has to be in e-CTD (Common Technical Document)
After samples are analyzed satisfactorily USFDA will come for inspection of facility for CGMP
inspection.
Once USFDA approved , You need to have representative in US in term (agency / organization)
for your company
For manufacturing USP license to be taken as additional product approval as product and
order specific in the original schedule C & C1
At the time of export, your pack needs to have barcode at all following things: blister, foil,
carton, PIL (Patient Information Leaflet), outer shipper.
The product export is done through palletized manner & shrink wrapped along with Data
Logger (to monitor temp, humidity every 1-2 hours)
Provide format to customer to advise on opening of the shipper and open the data logger and
switch it off
Return the data logger along with the format duly filled in with time and date of the receipt.
Data logger is put in the manufacturing facility computer which gives data on temp humidity
during transit.
If you find an abnormal excursion in the temp / humidity during transit, pl call back few sample
from the consignment for complete analysis at your end in India.
Once you have analyzed , if the product is satisfactory and comparable with the earlier
accelerated stability study data then this information and the data should be attached to the
manufacturing batch record for future reference to USFDA inspection.

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