Kalyan Pharma Case
KALYAN PHARMA LIMITED- CASE ANALYSIS
PHARMA SECTOR BACKGROUND:
In early 1930’s the medicines were dispensed by doctors and the concept of prescription was not present. Later on the prescription segment grew to 80% by 1970’s and the reason being that number of doctors increased to 250000 as opposed to 110000. Presently the sector is growing at the rate of 8% to 9%. Sales of products has increased from 70 billion to 150 billion.
COMPANY BACKGROUND:
In 1907, Kalyan Pharma Limited (KPL) was incorporated at Vatva with a paid-up capital of Rs 5 Lakh. It manufactured glass, pesticides and chemicals, pharmaceuticals, veterinary products and polypropylene fiber. During 1988-89, KPL developed Pharmaceuticals as a separate division (Meager) as a sales promotion strategy. In 1990, the paid-up capital for KPL was Rs 411 Lakh. During 1990-91, its product line included antibiotics, cough syrups, and nutritional, cardiovascular, anti-asthmatic, anti-TB, anti-ulcer, vitamins, anti-arthritic and anti-cold preparations. In 1991, the market share of KPL grew from 2.8 to 3.1 percent
MARKETING STRATEGY OF KPL:
KPL relied on continuous innovation in product mix, promotion and distribution. It moved from galenicals to formulations. In 1990, approximately 60 different pharmaceutical formulations were marketed by KPL. DPCO's regulations influenced pricing strategies of KPL. In 1992, about 25% of KPL's products were under the decontrolled category. In this category, KPL's pricing was in the middle of the industry spectrum. It also followed a strategy of extensive promotion of its product to doctors, institutions and chemists. The budget for the promotion increased from 5 to 9 per cent of sales over the years. In 1988, number of MRs was 687.
Besides this, the most outstanding feature of KPL was its wide network and open door policy. Under open door policy, any chemist could directly ask KPL for its products.
DISTRIBUTION STRATEGY:
1.Pre 1972: Sole-selling Agency There
PHARMA SECTOR BACKGROUND:
In early 1930’s the medicines were dispensed by doctors and the concept of prescription was not present. Later on the prescription segment grew to 80% by 1970’s and the reason being that number of doctors increased to 250000 as opposed to 110000. Presently the sector is growing at the rate of 8% to 9%. Sales of products has increased from 70 billion to 150 billion.
COMPANY BACKGROUND:
In 1907, Kalyan Pharma Limited (KPL) was incorporated at Vatva with a paid-up capital of Rs 5 Lakh. It manufactured glass, pesticides and chemicals, pharmaceuticals, veterinary products and polypropylene fiber. During 1988-89, KPL developed Pharmaceuticals as a separate division (Meager) as a sales promotion strategy. In 1990, the paid-up capital for KPL was Rs 411 Lakh. During 1990-91, its product line included antibiotics, cough syrups, and nutritional, cardiovascular, anti-asthmatic, anti-TB, anti-ulcer, vitamins, anti-arthritic and anti-cold preparations. In 1991, the market share of KPL grew from 2.8 to 3.1 percent
MARKETING STRATEGY OF KPL:
KPL relied on continuous innovation in product mix, promotion and distribution. It moved from galenicals to formulations. In 1990, approximately 60 different pharmaceutical formulations were marketed by KPL. DPCO's regulations influenced pricing strategies of KPL. In 1992, about 25% of KPL's products were under the decontrolled category. In this category, KPL's pricing was in the middle of the industry spectrum. It also followed a strategy of extensive promotion of its product to doctors, institutions and chemists. The budget for the promotion increased from 5 to 9 per cent of sales over the years. In 1988, number of MRs was 687.
Besides this, the most outstanding feature of KPL was its wide network and open door policy. Under open door policy, any chemist could directly ask KPL for its products.
DISTRIBUTION STRATEGY:
1.Pre 1972: Sole-selling Agency There