The paper studies whether the marketing style, which is typical to Fast Moving Consumer Goods (FMCG), be employed for marketing pharmaceutical products or not. Globally the pharmaceutical industry is growing at a very fast pace cannot be ignored. If the stimulus behind buying the FMCG is studied and extrapolated to use it for marketing pharmaceutical products it is quite possible to increase the sales and thus the bottom-line. However, if a marketer assumes (without a proper research to back up) that pharma products can be marketed in a style similar to FMCG it can lead to catastrophic results for the company. It is, thus, important to the bottom-line. However, if a marketer assumes (without a proper research to back up) that pharma products can be marketed in a style similar to FMCG it can lead to catastrophic results for the company. It is, thus, important to understand if there is a co-relation (from the customer's/buyer's point of view) between the two styles of marketing or not. Hence it is an endeavour of this research paper to solve the mystery.
Major players - pharma
There are five public sector drug-manufacturing units under the Ministry of Chemicals and Fertilisers. These are: Indian Drugs and Pharmaceuticals Limited (IDPL), Hindustan Antibiotics Limited (HAL), Bengal Immunity Limited (BIL), Bengal Chemicals & Pharmaceuticals Limited (BCPL) and Smith Stanistreet Pharmaceuticals Limited (SSPL). In addition, there are a number of pharmaceutical manufacturing units under the control of state governments such as Goa Antibiotics Ltd and Karnataka Antibiotics Ltd.
In the private sector Ranbaxy is number one player in India, both in terms of market capitalization and in terms of sales. Other major players are Cipla, DRL, Glaxo etc. Though Pfizer is world's number one company with a market share of approximately 11 per cent and sales almost 10 times of the whole of Indian pharma industry, it has not done so well in India so far. But this can be attributed to poor intellectual property protection provisions in India, which prevented MNCs like Pfizer, Novartis and Eli Lilly from introducing their blockbuster drugs in India, but now with the arrival of patent regime things can be very different.
The FMCG industry
The Indian FMCG industry has experienced a major slowdown and has been on a recovery path only since the past couple of years. This stage of recovery can be attributed to the retail revolution that has reached every corner of the country. Even the not so conscious small town people and villagers have become conscious of the brands that they buy, all this and more. Heavy advertising spends have become characteristic of the industry and even a novice is today seen talking of the ITC and HLL fight.
The FMCG sector as we so call it is one that is characterized by products of day-to-day use, products which are generally treated as low involvement products but still they attract high advertising spend because of the kind of intense competition among the industry players.
The recent recovery
The recovery in the FMCG sector in India is quite broad-based, covering most product categories and companies, although the degree of recovery differs. Importantly, most companies are also demonstrating renewed optimism in the sector by increasing ad spend and investment in new initiatives. In our view, the market is not fully appreciative of the sustainability of the recovery and hence will likely be positively surprised.
Major growth drivers
. Large and growing market of 1 billion people of which 300 million are middle class consumers.
. India offers a vibrant market of youth and vigour with 54% of population below the age of 25 years.
. Domestic demand is expected to double over the ten-year period from 1998 to 2007. The number of households with "high income" is expected to increase by 60% in the next four years to 44 million households.
. India rated as the fifth most attractive emerging retail market. It has been ranked second in a Global Retail Development Index of 30 developing countries drawn up by A T Kearney.
A T Kearney has estimated India's total retail market at $202.6 billion, is expected to grow at a compounded 30 per cent over the next five years. The share of modern retail is likely to grow from its current 2 per cent to 15-20 per cent over the next decade, is what analysts feel.
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Research design
Objective
. To study the marketing styles adopted by the FMCG and the pharma sector
. To study whether there is a difference in the marketing styles adopted by the pharma and FMCG companies
To check if pharma product can be marketed the way FMCG products are marketed using the statistical techniques and come out with a measured and quantified answer.
Primary data
Our first step was to gather information on the various marketing elements that are used for marketing both pharma and FMCG products. Later data was found from the consumers themselves on the price, product characteristics, and reactions of consumers to promotional offers etc for both the FMCG and pharma products. The sample size taken was 100.
Secondary data
Sources of secondary data include Marketing Journals, Trade Magazines, ICFAI publications, company websites etc. All this helped in authenticating the kind of information we obtained from our primary sources and thus helped us get a very objective view of the study.
Sampling method
Convenience sampling method has been used because the selection of units from the population has been based on easy availability and/or accessibility. The survey has been conducted at college campuses, railway stations, shopping malls etc so as to cover a reasonable cross section of persons who fall into the target group.
Sample
100 persons between the age group of 18-35 who have had some experience in buying of FMCG and pharma products have been taken into consideration.
Sample area
We have chosen Central Suburbs, Western Suburbs and South Mumbai as our sample area so as to include the right mix of people from different income brackets and backgrounds. This helped us obtain a more representative sample for our study.
Data collection methods
The questionnaire method of data collection was used to obtain information from the sample population.
Analysis
We have tested whether there is significant difference between importance given to various attributes for pharmaceutical and FMCG products. We have performed Hypothesis testing for each attribute. For each test the Ho: There is no significant difference in importance given to that attribute between pharmaceutical and FMCG product
Ha: There is significant difference.
The ratings given by the samples were used to measure the importance.
If the value of Zcal is greater than Ztab we reject the hypothesis. The following is the output of the Hypothesis testing.
The table shows that the importance of none of the attribute is same for Pharma and FMCG products hence attributes used while marketing FMCG products might not have an equal impact while used in marketing pharmaceutical products.
Spearman's Rank Correlation:
To test for the various attributes of Pharma and FMCG products to understand is there a relation between the order of weightage given to each attribute, meaning may be the importance for a particular attribute may not be the same for Pharma and FMCG product but is the attribute having same priority, the rank correlation was used.. The ranks were given by totaling up the ratings received and then converting the maximum rating to rank 1 and so on. The working is given in Annexure - B. The following are the briefs of the test:
Ho: There is no correlation between factors for decision making for Pharma & FMCG
Ha: There is either positive or negative correlation between factors for decision making for Pharma & FMCG
At 10% Confidence Level rho = 0.6786
Rho(calc) = 0.3214
Since rho calculated is less than rho tabulated we will accept Ho and reject Ha
We conclude that there is no correlation between factors for decision making for Pharma & FMCG
Conclusion:
Through our analysis we see that not only the importance but also the priority order of the attributes measured differs for Pharma and FMCG products. Also the views on other issues such as impact of advertisements, Mall purchasing etc. does not have an equal agreement for Pharma and FMCG products. Hence we conclude that FMCG style of marketing cannot be applied to pharma marketing.
(The author is emeritus professor and research guide, University of Bombay and Country Head - Rowa Pharmaceutical.)