Project Report of Summer Training in a Pharma company

LOVELY PROFESSIONAL UNIVERSITY DEPARTMENT OF MANAGEMENT

Report on Summer Training

Submitted to Lovely Professional University

In partial fulfillment of the Requirements for the award of Degree of Bachelor of Business Administration

Submitted by: ARCHIT SHARMA R1813A12 1O8OO482 BBA-MBA (DUAL INTEGRATED).

LOVELY PROFESSIONAL UNIVERSITY PHAGWARA

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DEPARTMENT OF MANAGEMENT

Table of Contents Contents

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Acknowledgement...................................................................................................................

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Executive Summary……………………………………………………….............................

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Introduction…….…………………………………………………………………………………..

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Company profile…… ……………………………………………………………………………..

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Competitors analysis…………………………………………………………………………………………….

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EXACUTIVE SUMMARY

Summer training offered to me was six weeks was based on marketing project. Through these projects, I was able to get direct interaction with different chemists along with staff of Finance, Marketing- sales, Production and Logistics, Marketing communications, Administration and Human Resources Departments of Laborate Pharma.

Acknowledgement

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The Summer Training Program in BBA is very beneficial to have practical exposure of how things really operate in market. Being a student who wants to mark in marketing field, the best place to gain practical understanding of marketing is to do summer training in the marketing department of Pharmaceutical Industry which can be regarded as one of the most dynamic industry in India. I completed the summer training with Seagull Labs India. Which is recognized one of the fastest growing pharmaceutical Companies by ORG-IMS. I am proud to work as an internee with Laborate Pharma and the experience will surely help me in my future assignments as a marketing professional. The absolute guidance and concern of higher management of the staff of all departments especially the marketing department facilitated in making my summer Training a wonderful learning experience in all aspects.

“No man is indispensable but there are certain mortal without whom the quality work there suffers their guidance becomes important in acquiring quality results” I would like to express my deep sense of gratitude to Mrs. Dogra the director of Seagull lavatories of Mehtpour (branch) and project guide Mr. Choudhary to give me an opportunity to work in seagull lavatories and who has provided me with the necessary information and also for the support extended out to me in the Completion of this report and his valuable suggestion and comments On bringing out this report in the best way possible. I would like to extend my special thanks to all the executives of Seagull lavatories Pvt. Ltd. and its associates who have helped me directly or indirectly to complete this project work. I am sincerely thanks to my friends to guide me and suggestion during my project work which inspired me to put in best my efforts in the work

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Introduction

The pharmaceutical industry is the world’s largest industry due to worldwide revenues approximately US$2.8 trillion. Pharma industry has seen major changes in the recent years that place new demands on payers, providers and manufacturers. Customers now demand the same choice and convenience from pharma industry that they find in other segment. Indian Pharmaceutical Industry is poised for high consistent growth over the next few years, driven by a multitude of factors. Top Indian Companies like Ranbaxy, DRL CIPLA and Dabur have already established their presence. The pharmaceutical industry is a knowledge driven industry and is heavily dependent on Research and Development for new products and growth. However, basic research (Discovering new molecules) is a time consuming and expensive process and is thus, Dominated by large global multinationals. Indian companies have only recently entered the area. The Indian pharmaceutical industry came into existence in 1901, when Bengal Chemical & Pharmaceutical Company started its maiden operation in Calcutta. The next few decades saw the pharmaceutical industry moving through several phases, largely in accordance with government policies. Commencing with repackaging and preparation of formulations from imported bulk drugs, the Indian industry has moved on to become a net foreign exchange earner, and has been able to underline its presence in the global pharmaceutical arena as one of the top 35 drug producers worldwide. Currently, there are more than 2,400 registered pharmaceutical producers in India. There are 24,000 licensed pharmaceutical companies. Of the 465 bulk drugs used in India, approximately 425 are manufactured here. India has more drug-manufacturing facilities that have been approved by the U.S. Food and Drug Administration than any country other than the US. Indian generics companies supply 84% of the AIDS drugs that Doctors without Borders uses to treat 60,000 patients in more than 30 countries.

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SEAGULL PHARMA ABOUT US Seagull Pharma – a more than two decade old pharmaceutical manufacturing & marketing company – is today a well established company having its marketing operations spanning a large part of the country. Most modern production facilities are equipped to manufacture tablets (coated, uncoated, sustained released, chewable and dispersible), capsules & dermatologicals (ointments & lotions). Team at the production facilities is constantly studying and upgrading the processes and staff competency as required by advancements in the pharma industry. Quality Control Department is equipped with modern equipments to carry out quality checks from raw material to packing materials upto finished products. To double check the quality assurance of our products we establish the quality through government approved external quality control agencies. Self life and stability studies are conducted on all products produced by us. The production team at their facilities undergo regular health checks. Regular training programs are conducted to upgrade their skills. All this helps us to lay down our quality parameters which are well above the acceptable norms. The company’s research and development team is constantly carrying out study to understand the requirements and carry out developments to best suit the needs. Most of the products are manufactured at our manufacturing facilities in Bhiwadi – 60 km from Delhi, the Capital of India. The factories are most modern and certified as per GMP/WHO GMP Standards. Some of the company’s products are also contract manufactured by its business associates who also have state of the art manufacturing facilities and are also WHP GMP certified.

A large part of the company’s business involves ethical marketing of prescription products. Products are extensively prescribed all over the country and we ensure satisfactory customer service in terms of availability. They cover almost whole of India and Nepal with various distribution centers from where a network of 300 wholesalers are supplied. They have a well developed professional team of 150 persons covering all important cities and towns.

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All products that reach our clients through us are supervised and quality checked at every stage. We at Seagull believe that every manufacturing endeavor must not only yield optimum customer satisfaction but also fulfill the customers ever changing needs.

METHODOLOGY Primary data collection: I collected all the data by personal interviews of Chemists of Leading Nursing Homes and chemists of different locations of Himachal including: Bobby Hospital, Sharma Nursing home, Rvindra Hospital, Goyal Hospital, Sanjeevni Hospital. And from the company web-site and from my project guide Mr. choudhary and the executives of Seagull lavatories Pvt. Ltd. and its associates.

S.No.

Name of the Chemist shop

Contact No.

1.

Guru Nanak (Una)

9817513383

2.

Creative Pharma near Bus stand(Amb)

9418365908

3.

Lovely Medical hall (Dada Siba)

9816390674

4.

Rajeev Medical store (Dehra)

9817300177

5.

Suda Medical store (kangra)

9625762807

6.

Akash Medical store (Seul)

9418494862

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HISTORY

Mr. D. Dogra Director

Mr. S. Malhotra Director

Seagull was incorporated in 1981 as Seagull Labs (I) Pvt. Ltd. to undertake marketing of Pharmaceutical Formulations. In 1985, Seagull Pharmaceuticals Pvt. Ltd. was incorporated to give focused attention to manufacturing activities. The founding members Mr. S. Malhotra and Mr. D. Dogra along with the employees have made the company what it is today and carved a niche in the minds of the Medical Professionals. From the very onset Seagull brands like Capex Expectorant and Aglow-Fe started enjoying major market shares so much so that well established multinationals were forced to monitor the growth of their brands in the same segment. Since then the company's synergistic approach has resulted in remarkable success in manufacturing and marketing of a wide range of products in various therapeutic segment comprising analgesic, anti-inflammatory drugs, nutritional products, products for respiratory segment and antibiotics. In 1989, Seagull started its Ayurvedic unit and commenced manufacturing with the development of three ointments Zerub (rubefacient), Zefort (arthritis) and Xorexin (bed sores). Page7

VISION

Our vision is to provide quality products & quality service.

COMPANY’S VALUES

Creativity leads to innovation which lays the foundation for success. Innovative and updated technology to produce the best quality products. Utmost the employees, customers and society we live in. Respect the employees and their contribution at workplace Committed to the highest standards of ethics and integrity. Trust in the relationship with clients.

COMPANY DEAL IN

Herbal products like laxatives, Rubifacients, Uterine tonic, Glactogogue, Baby oil, Hair oil and many more. Allopathic products portfolio for Respiratory, Gastroenterology, Gynaecology, Neutraceuticals, Dentistry, Pediatrics and Orthopedics.

Interested in Having Marketing tie ups for research based products, Biotech products, and to be a partner in R & D Activity.

Supply

Seagull Trading Seagull aims to be single stop solution to all hospitals needs of its clients .Therefore Seagull has tied up with superior producers in the surgical and medical disposable sectors such as Disposable syringes, needles, sterile gloves, I.V. set, I.V cannula, feeding tube, scalp vein set and examination gloves etc. All products that reach to their clients through us are supervised and quality checked at every

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Formulations Bulk drugs and Herbal Extracts at competitive prices.

stage. We at Seagull believe that every manufacturing endeavour must not only yield optimum customer satisfaction but also fulfil the customers ever changing needs.

PRODUCTION Their most modern production facilities are equipped to manufacture tablets (coated, uncoated, sustained released, chewable and dispersibles), capsules (soft and hard), dermatologicals (ointment and lotions), liquids and injectables. Page9

Seagull has two production facilities located at Bhiwadi (Rajasthan), an industrial township in the vicinity of Delhi - the capital of India.

The production units are manned by trained production staff and senior supervisory staff for stringent production check and in-process controls. Production Capacities per annum (in millions)

Tablets Capsules Ointments

600 150 20

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These production units are laid out according to WHO GMP regulations is shortly awaiting the approvals.

Liquids Injectables

10 50

Seagull is fast moving towards doubling the capacities by the year 2002. Their team at the production facilities is constantly studying and upgrading the processes and staff competency as required by advancements in the pharma industry.

PRODUCTS Prescription Medicines

Aglow Fe Capsule

Neogat- 400 Tablet

Gravimem Injection Page11

Exports

Alertac Tablet

Duozid-Forte Tablet

Fertile Tablet Fertile-M Tablet

Ibustal Cream

Painrub Gel

Their entry into the export market received a very favorable response from overseas buyers primarily because of their product quality, presentation and time bound delivery.

At present Seagull is exporting to: South America U.K. Nigeria Ghana Afghanistan Myanmar Philippines Syria Brands are currently under registrations in various countries. The company holds free sales certificate and GMP certificate which are required by their foreign buyers. They export their products under their own label as well as under neutral label depending upon the client requirement

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Nepal

Marketing Process and its Challenges

Increased competition and shortened window of opportunity. Low level of customer knowledge (Doctors, Retailers, Wholesalers). Poor customer acquisition, development and retention strategies. Varying customer perception. The number and the quality of medical representatives Very high territory development costs. High training and re-training costs of sales personnel. Very high attrition rate of the sales personnel. Busy doctors giving less time for sales calls.

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Seagull lavatories have successfully deployed a excess of strategies to target the various customer types, recent business and customer trends are creating new challenges and opportunities for increasing profitability. In the pharmaceutical and healthcare industries, a complex web of decision-makers determines the nature of the transaction (prescription) for which direct customer of pharma industry (doctor) is responsible. Essentially, the end-user (patient) consumes a product and pays the cost. Use of medical representatives for marketing products to physicians and to exert some Influence over others in the hierarchy of decision makers has been a time-tested tradition. Typically, sales force expense comprises an estimated 15 percent to 20 percent of annual product revenues, the largest line item on the balance sheet. Despite this other expense, the industry is still plagued some very serious strategic and operational level issues. From organizational perspective the most well-known performance related issues are enlisted below:

Poor territory knowledge in terms of business value at medical representative level. Unclear value of prescription from each doctor in the list of each sales person. Unknown value of revenue from each retailer in the territory Virtually no mechanism of sales forecasting from field sales level, leading to huge deviations. Absence of analysis on the amount of time invested on profitable and not-so profitable. customers and lack of time-share planning towards developing customer base for future markets. Manual and cumbersome administrative systems and processes designed which don't facilitate optimal efficiency levels in sales teams. and many more…………

How to Access Market

A. Domestic Investigate the industries using Seagulls in their final products Contact established traders and manufacturers Acquire market information on price, demand, quantity, supply season (peak season, lean season, etc) B. International Approach traders/importers/end-users by contacts (mail, electronic media, internet) Send offer with representative samples

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Potential exporters should contact established importers or processors in order to have their Sample evaluated and to obtain advice on the possibilities for penetrating a given market. The current market for Seagull Lavatories is not short of supplies, and all things considered, new companies seeking entry will have to compete with traditional suppliers. The only way to penetrate the market is to offer products of consistently high quality. Clean products of assured quality, good appearance, and if possible, with properties distinguishing them from their competitors (flavor, color, essential oil content) can secure a place in European market. They can be sold at a premium price over products from other origins. The Seagulls consuming countries in Europe are quality conscious. Their quality requirements are more stringent, particularly with respect to cleanliness and chemical contamination.

Get sample evaluated and obtain advice from the importer for quality & quantity Negotiate contract on the basis of quantity delivered, purchasing price, mode of delivery And payment

THE COMPETITION The level of competition in very high in Acute segment on day to day basis however the Degree of competition in not as much as high in Chronic therapy area on day to day basis. As doctor has to prescribe drug for a long time in chronic cases and patient is suppose to consume it without any change of brand. While in acute cases doctor is changing brands on day to day basis.

Current Distribution Chain in India

The Indian pharmaceutical industry is continuing its high growth rate at 13% for the last six years. From foreign control, to domestic grass-roots growth, the Indian pharmaceutical segment has evolved over the last three decades. According to Bio Plan Associate’s recent report, Advances in Biopharmaceutical Technology in India, the Indian pharmaceutical industry has the potential to reach $25 billion by 2010. This rapid growth has yet to create radical changes in the Indian distribution system. The main hurdles include the highly fragmented nature of the distribution network, limited advancement in

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regulatory reforms, and presence of strong resistance from lobbies of traders involved in the supply chain of pharmaceutical products. India’s current distribution situation creates greater risks for biotech products, which require careful climate control throughout their transit period. The lack of awareness toward the importance of these requirements makes bio therapeutics even more vulnerable to spoilage during distribution. Moreover, the infrastructure for cold chain management is still developing in India. This situation has forced both pharmaceutical and biotech companies to consider alternate distribution systems. These attempts, however, have faced severe resistance by the lobbies of traders involved in the channel.

Indian distribution System: The Current State India is a geographically diverse country with extreme climates that make distribution critical function. The long channel of distribution and high incidence in cadence of brand substitution makes it mandatory for a company to make all its stock keeping units (SKUs) available at all levels at all times. In India, most brands have generic versions of drugs and retailers can usually obtain higher margins with generics than for branded products. To reduce risks of substitution, innovator companies must make sure their products are made available to the stockiest and retail shops. Drug distribution in India has witnessed a paradigm shift. Before 1990, pharmaceutical companies used a different distribution system, in which they established their own depots and warehouses that now have been replaced by clearing and forwarding agents (CFAs).

Despite the rapid increase in the number of stockiest and pharmacies, there has not been a proportional increase in the volume of prescriptions distributed. Thus, the efficiency of the current system has clearly not been demonstrated. Further, it is estimated that more than threefifths of Indians still do not have access to modern medicines. This clearly shows that the rural market is largely unattended and untapped

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These organizations are primarily responsible for maintaining storage (stock) of the company’s products and forwarding SKUs to the stockiest on request. Most companies keep 1–3 CFAs in each Indian state. On an average, a company may work with a total of 25–35 CFAs. Unlike a CFA that can handle the stock of one company, a stockiest (distributor) can simultaneously handle more than one company (usually, 5–15 depending on the city area), and may go up to even 30 50 different manufacturers. The stockiest, in turn, after 30–45 days (a typical credit or time limit) pays for the products directly in the name of the pharmaceutical company. The CFAs are paid by the company yearly, once or twice, on a basis of the percentage of total turnover of products. In above Figure shows how a manufactured product passes through the companyowned central warehouse, which supplies it to the CFA or super stockiest. From the CFA the stocks are supplied either to the stockiest, sub-stockiest, or hospitals. The retail pharmacy obtains products from the stockiest or sub-stockiest through whom it finally reaches the consumers (patients). Certain small manufacturers directly supply the drugs to the super stockiest.

Large Untapped Rural Market The growth of institutional sales had little impact on the accessibility of medicine in rural areas, according to an analysis by the Indian Retail Druggists and Chemists Association. A large proportion of the rural population still does not have access to proper medication and the situation may take long to improve. Rural areas contribute around 21% to the total pharmaceutical market. In 2006–07, the rural pharmaceutical market was estimated at around $1.4 billion. Nearly 70% of India’s population lives in rural areas where healthcare infrastructure is poor. With increasing rural household incomes, the rural market is becoming more attractive. According to estimates by the Planning Commission, rural households now spend 12% of their income on healthcare.

Value Added Tax (VAT) Impact With the introduction of VAT, medicine prices have been standardized and price discrimination, in which different states pay different prices for the same products, has reduced. VAT has also helped reduce the illegal interstate transfer of goods and the unethical interstate trade for higher margins. Per the new rules, sales tax is levied at each stage of value addition and credit for the tax paid on the inputs can be obtained.

Futures challenges

Long-Channel Inventory Management The multilayered distribution channel and lobbying at all layers has been successful at preventing pharmaceutical companies from bringing in significant reforms toward higher trade margins, and at bypassing the multiple distribution layers to reach customers directly. Because pharmaceutical companies do not have direct access to retailers’ data on sales (tertiary sales), most pharmaceutical companies depend on sockets’ sales data to monitor sales (secondary sales). The primary sale involves transferring stock from the central warehouse to its CFA. The medical representatives are given predefined sales targets. To meet these targets they push inventory on the stockiest to levels that exceed the actual demand. When the next level of sale does not take place, the stockiest will either return goods to the company or the stock expires.

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Pharmaceutical companies in India have realized the importance of SCM and are aggressively looking for ways to improve the costs associated with SCM. Distribution in India is proportionally much more costly than it is in the US or EU. The companies, which have spent as much as one-third of their revenues toward financing their supply-chain operations, recognize that the cost of logistics is very high in India. In US and EU, the expenditure on SCM alone is perhaps 2%, whereas in India it averages 4–6% of total sales. It s mainly because in India the cost of drugs is very low compared to the developed markets. Taking into consideration the poor infrastructure and extreme geographic conditions, it is difficult to curtail the cost involved in SCM.”

Increasing Competition between Wholesalers and Retailers Today, with so many mergers and acquisitions in the Indian pharmaceutical industry, the number of stockiest for each company has increased. Now two stockiest of the same company may be competing against each other. Retailers take advantage of this situation by prolonging the credit period and asking for more discounts, which has an adverse effect on stockiest, because they have to comply with the retailers.

International Competitiveness and Cold-Chain Management Indian pharmaceutical companies are increasingly seeking opportunities to supply drugs to the world market. More developed cold-chain management practices will be required to achieve this goal. This is one of the major challenges faced by the industry if they are to retain product quality during shipment. Companies like Eli Lilly in India have implemented initiatives such as having their own vehicles equipped with cold-chain management systems. Other companies such as World Courier have developed cold-chain management models to help pharmaceutical companies maintain the cold chain.

Conclusion There can be various ways through which a business organization can achieve success in the market, but all those ways can be comprised into as above, then it can be rightly said that it revolves specifically around three parties or more; the triangular linkages or the relationship between these three parties (company, customers and competitors) determine the success and failure of business organization.Manufacturers must ensure that their drug reaches customers with uncompromised quality. In India, because manufacturers do not retain control over the multilayered distribution system, the cold-chain management process continues to be difficult and expensive. However, manufacturers are increasingly realizing the importance of an effective distribution system, all the way to the end-customer. Coping with the challenges of streamlining the systems in India will ultimately benefit the patient and the healthcare system. Page18