Many of the major pharmaceutical companies in India had started the voyage as a small scale industry. The gradual growth of these companies suggests the extend the small scale manufacturing companies can grow, through proper steps and strategy. Today's SSI companies can also enter into this big game, by daring to foray into new areas and by closely watching the success stories of the major companies.
The major area, into which the small scale players should foray into, is direct marketing. The present scenario projects that majority of the small scale manufacturers rely on propaganda cum distribution (PCD) players for marketing their products. Some of the manufacturers may have supply to hospitals, mainly government and charitable hospitals, from which the price of distribution may not be received for a long period. Another way of sustenance is contract manufacturing for big companies, again where the SSI manufacturer have to wait for the mercy of the client.
Thus the number of SSI units marketing their products directly in market is only about 10% of the total. Another small percentage (about 5%) is only concentrating on export marketing, where they can stand on their own in the market.
It is time for the SSIs to probe the matter in a different perspective. Things must be changed to extend the horizon of small manufacturers, and the one of the way for growing is to foray directly into marketing, that is to rely on their own assets. Of course, the problems like limited resources, heavy expenses in marketing, hiring big professionals with limited resources, expensive sales promotional materials are not simple problems to be solved with a single stroke of pen. But there are many other ways, by which we can overcome our shortcomings.
Starting regional marketing is one of the best starting point an SSI can focus while entering directly into marketing. Try to concentrate on a particular region, say a district or a state, as market. This will help the manufacturer to study the market inside-out and mould their strategy as it needed. The money spend in a wider area without knowing the whole market will be diluted and will give limited results, while the same amount of money spend in a focused area where the manufacturer knows the need of the market will be far more useful.
The companies should also focus on a selected therapeutic area, for better results. This will help the company to study the particular therapeutic area and the needs of the market in that region. The number of staff in marketing can be reduced, and the existing resource can well managed, the companies can expertise in the particular area and the limited resources of the SSI will be quite adequate to meet the needs.
Niche marketing is another area, which SSIs can utilize. The companies should target on the therapeutic gaps that remains in the market. The big companies may not be interested if the market size of the product is small. The SSIs can place themselves in these gaps. Addressing the unmet needs of the market will help the SSIs to place them in a good position in the game.
Finding such opportunities is not much expensive, as it seems. The manufacturer himself can collect the basic details of the market, evaluate the market conditions and to probe through the market needs. By collecting the data, the manufacturer can assess the needs and can furnish his marketing strategy, without major expense. The things needed for this is to spend some time for marketing as an initial venture and to strain the brain for making out a way. Thus, like in IT, the pharmaceutical sector can also grow with their brainpower in India.
We have the opportunity around us, and it is definite that there is some space vacant for the SSI manufacturers. The major draw back in this area is that we forget the strength and knowledge we have in the particular region. As far as the patents are concerned, the patented drugs constitute only 10% of the total market now. There are many drugs, which the WHO has approved as essential drugs, which can be produced without the intricacies of patents. Let the major companies take care of patented drugs, which are limited in number, and the SSIs can concentrate on the other drugs. Thus, the patent is also not a major hazard for the small scale manufacturers.
Co-marketing is another area that the SSIs can focus on for growth. The companies can rely on each other by exchanging their drugs or formulations with the companies, which have a lack on the particular field. A good networking between the SSIs of each state with supporting each other in the weaker areas will help the small companies to stand on their own.
Walking with big companies doesn't mean competing with them. The SSIs need not compete with the major companies in all areas. Finding the niche areas and untapped areas, where they can get much more results than by competing the big companies.
In exports marketing also, as the schedule M complied company's need a few upgradation to get GMP (WHO) approvals, SSIs can venture in exports. In exporting, selection of countries can bring better results to the SSIs. The SSIs may not be able to enter the USA and European countries, where the laws are very much stringent. The SSIs should choose the numerous other countries in Africa, South East Asia, South America and CIS, where the WHO's GMP is enough for exporting. Again, the small companies can achieve better results by concentrating on a few countries. The strategy will help the manufacturer to study the particular market and can become an expert in the particular market.
The same is the case of institutional marketing, as the market includes a vast area including the ESI, Railways, ONGC, BHEL, Eastern Coal Fields, Hindalco industries, NTPC, defense supplies, port trusts etc. The market requires schedule M compliance, which anyway mandatory for the industry at present.
The herbal, ayurvedic drug market is another field, in which the SSI can focus on, especially the OTC market in this field. The approach for ethical marketing will be the same as allopathic product marketing, but customers will be ayurvedic doctors. A company, which starts to concentrate on any of these fields, can pick up adequate knowledge from its marketing area itself, as mentioned earlier. The question is whether we have the self-belief in such marketing ventures.
At present, the SSIs are not entering into direct marketing, because of some fears and apprehensions about the unknown area. It is at this point, the SME committee of IDMA commenced its operations, to make the SSIs aware of the horizon that is open for them.
The organization is throwing such ideas, giving expert guidance, and supplying a variety of tips for the small-medium drug manufacturers to rise up to the situation. The organization is in a venture to make them realize their strength in finding new areas to foray via seminars. It makes clear to the companies that the unlimited horizon of marketing is open for all the players, whether the small or the big one. We are asking them to decide whether they want the limited opportunities through contract manufacturing and propaganda cum distribution or the vast area of direct marketing which has tremendous growth opportunities.
The small-medium scale manufacturers are much enthusiastic in realizing the opportunity and are eager to proceed in the new path, as we came to know from the feedback of the first seminar conducted at Mumbai recently. Most probably, IDMA may start separate seminars for each field, as the companies have shown such an enthusiasm in the matter.
We are trying to make them realize their strength and not to ape the big players in manufacturing and marketing. The government should support the SSIs and it can help the industry to grow rapidly. But the whole matter is not up to the government. The entrepreneurs should grab the situations to encash the opportunities. To break the vicious circle around us with paradigm to reach the horizon should be the motto of the SME in India.
- (The author is chairman - SME Committee, Indian Drug Manufacturers' Association Mumbai)