Monday 4 June 2012

GOVERNMENT, CHARITY AND ‘MARKETING - THE KOTLER WAY’


                                           64% board room meetings I sleep in (sit in), 32.5% of the expansion program I gone through,27% of the minutes of the meeting I forced to gulp (with a gun pointed to my Adam’s apple)  over the last 10 years, ended up talking magnanimously about exploring the most potential and largest market in the world  called Indian rural market. Yesterday a parrot of a tarot card reader said that this market has the population (If you dare calling them human, as they don’t drink Tequila) of 750 million residing around 6,00,000 villages. This parrot’s ‘brother in law’ saw a pregnant lady walk 5 K.M to reach a substandard clinic to deliver a baby and found discharged in an hour. Sophisticated delivery…ah? Even though India established itself as outsourcing partner in manufacturing and R&D, a messiah for 3rd world countries, boast of largest USFDA approved plants outside U.S, 23,000 manufactures churning out medicine which is as equal as female feticide in numbers … still 80% of its rural population has no access to essential medicine. (Bin Laden was the only one who could explain us which are ‘non-essential medicines’, fortunately he is no more). Even 1,46,244 counterfeit manufacturers (with approvals from all the authorities in the world except DCGI- It’s a foregone conclusion that DCGI doesn’t generally disapprove anything).

                           
Look at this picture very carefully. If u think this lady in the picture as your prospective consumer and assumes her as
Ø  Illiterate with zero brand consciousness
Ø  Zero disposable income with miniscule healthcare expenditure
Ø  Cannot afford your brand
Ø  Would not understand and accept any technological innovations
Ø  Will default the payment frequently
Then you are far from exploiting one of the biggest and viable market in the world called Indian rural Market?
What makes a marketer turn his back against rural market is a combination of challenges and some myths associated with the market. Marketing here would definitely challenge a marketer’s conventional wisdom. (This wisdom is generally spoon-fed to them by Philip Kotler but Kotler has no role here as he did not have to sell medicine to my rural people). Here a marketer is forced to curve a new promotional way but unfortunately in Indian pharmaceutical Industry ‘New promotion’ is an oxymoron.  Here a brand manager’s secret promotional catalogue (spys from secret services like ISI,RAW, FBI and MCI may know this) in every year contain the items like
Ø  one surreptitious price increment,
Ø  Two margin increments,
Ø  Three webinars (two would be with a person with white skin, weird accent, and anonymous language doesn’t matter even if it is Mandarin)
Ø  Ten permutations & combinations of bonus offers
Ø  Twenty four glossy paper reminders (with the innovations like upper part look like Taj Mahal and lower Red Fort)
Ø  Thirty mailers and thirty one web flashes
Ø  50 patient education materials (In all Indian languages including Finnish),
Ø  Gifts ranging from Alphonso mango to Bullock cart

Question is does any of these help you to make this women in the picture buy your brand?

The myths associated with the rural markets are
Rural people are poor: This is a common notion which deters all sorts of marketing action. There are as many rich people in rural India as there are urban poor. Yes………. The priority of purchase could be different.  
They spend less: The fact is that rural people are spending more than their urban counterpart. C.K Prahlad called this phenomenon as ‘Poverty Penalty’. Owing to local monopolies, inadequate access, poor distribution they are made to pay 5-25% more.
They cannot afford my brand: Let me paraphrase… They cannot afford in a form which you offer to them. Given the correct form and cost restructure (Not the price reduction) we can make any world class product affordable. Reliance mobile and Indian Car industry are all significant example of what the correct product offering and price restructure can achieve.
They are not brand conscious: They are as much as brand conscious as any of your urban consumer. But the crucial factor is their switching cost much less owes to their lack of inventory and can shift from one brand to another provided they are not satisfied.
They don’t understand and accept technology: e-Choupal network of ITC demonstrated the speed at which our rural people can adapt to technology. Penetration of mobile phones even to rural house wives is another example.
                                              You have a market which is doubtlessly virgin, unruffled by any corporate mockeries, but you are waiting for this to be developed so that you can plough this land with your Marketing tractor. Yes… you contribute to the development that which you conspicuously past in your official website under the heading corporate social responsibility or corporate alms-giving. Remember 60 years of charity has made no difference to the plight of a single human here.
About our Government, Contrary to popular belief they are the chief contributor in the development of Indian Pharmaceutical industry by denying proper sanitation, promoting poor hygiene and providing poor infrastructure. Some of their healthcare programs have wonderful name like Janani Suraksha Yojna, Rogi Kalyan samiti, Navjat sisu suraksha karyakram but the implementation is ‘a big blatant zero’. No adequate healthcare staffs, Doctors, Nurses, beds and above NHRM reports says 70% of the fund allocated are used to plant trees in the premises. Can you believe it?
As a marketer what I believe is in a “Market Based Solution”.   Though there are programs like Arogya(Novartis), Sanjeewani(Pfizer), SEWA(Eli Lilli), Prayas (Aventis), the solution provided by them is not going to be holistic. If all we want is a market to sell and outcome we expect is the wellbeing of consumers why can’t we involved in partnerships. There are firms strong in manufacturing, some are strong in distribution, some have large sales reach, some have strong warehousing, There are banks who provide microfinance, there are insurance experts, There are good equipment providers, There are good hospital chains…… Why cannot we work together, Put a helping hand together, make profit together. Let our Government play a good intermediary which will strengthen the trust among the members. This kind of a partnership is not new… Bangladesh is a good example where Pfizer with their medicine, GE with their diagnostic equipments and Gramin Bank with finance is creating history. What are we waiting for……? We have a strong healthcare base, what we require is a mindset. Let’s create it…………………  

3 comments:

  1. Are you expecting from an Innovator who divested roughly $20-35 mn in a single product development (conventional form) to be cheaper and enter rural marketing?
    Lets agree the point that even Big Pharma are not having differential pricing so as to humane their service in under developed markets.
    I agree on your statement on not fragmenting markets and terming it as rural or urban.
    Let it be very frank-the only concern why pharma companies are slow in entertaining such markets are not because of turnovers-its because they fear the consequence. Let me exemplify it as below.
    Story starts way back [Feb 2001] when we have launched ARV (Lamivudine, stavudine and Nevirapine) in Africa. Till the time an “innovator” was pinching the local pockets. Due to Cipla, the market prices fallen down almost 1/3rd means volume increasing and subsequent value decreasing-what else “the absolute value in profitability depleted”.
    Now just co-relate it with our rural market-none of the companies want to deplete their absolute value in profitability by entering low cost market.
    Hope you all can co-relate.

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  2. Thank you for your comments. But one thing I agree to differ. Making something affordable need not necessarily correlated to reducing M.R.P. There are numerous ways to do it. Eg: Make an affordable pack. Look how shampoo market thrived in rural India. Here in our context provide them daily dose of medicine. Another way is arranging flexi-payment module. That is let him pay in small amounts. Another way is arranging micro finance. So my point is a big pharma should not bring their cost down to cater to rural market.

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