A study on Beximco Pharmaceuticals Limited Essay
A study on Beximco Pharmaceuticals Limited
Medicine is directly related to human life and therefore, its manufacturers have immense social responsibility of providing safe and effective medicine, demanding uncompromising efforts, at all levels of its activities. Beximco pharmaceuticals Ltd the leading health care company in Bangladesh has been making every effort to ensure the effectiveness and safety of the medicine that it produces. Physicians and patients of the company reply on the efficacy of the medicines of Beximco Pharma at the time of critical needs demonstrating their confidence and trust on BPL products. BPL has a remarkable mission statement, which is being seriously pursued in its thoughts and actions. An increasing amount of contribution is ploughed back into social causes demonstrating BPL’s commitment to the nation. As we continue to grow, it should not only benefit BPL itself but it should also positively contribute to the nation and society where we live.
In BPL believe that they manufacture and sell medicine to provide health, happiness and smile back in life of our fellow citizens. We intend to help realize the ultimate aspiration of the nation for a lifetime of good health ensuring a healthier tomorrow for the people.
Beximco Pharma is a leading edge pharmaceutical company, based in Dhaka, Bangladesh and is acclaimed for outstanding product quality, world-class manufacturing facilities, product development capabilities and outstanding service.
We produce and market ‘branded generics’ for almost all diseases from AIDS to cancer, from infection to asthma, from hypertension to diabetes, for both national and international markets. We also manufacture active pharmaceutical ingredients and intravenous fluids and contract manufacture for major international brands of leading multinational companies. We partner our activities to the humanities quest for longer, healthier, and happier life.
We employ more than 2,300 staff, including over 300 qualified specialists such as pharmacists, chemists, microbiologists, engineers. As a listed company, Beximco Pharma’s shares are traded on the London (LSE), Dhaka (DSE) and Chittagong (CSE) Stock Exchanges
1.1 ORIGIN OF THE STUDY
This report has been prepared as a requirement of the internship program , Daffodil International University (DIU). The organization attachment started on 1st may 2007 and ended on 31st july 2007 “Marketing of Pharmaceuticals product: A study on Beximco Pharmaceuticals Limited.”. was assigned by Mr. Mohammad Masum Iqbal , Associate Professor was my academic supervisor , Daffodil International University, Bangladesh .
1.2 PURPOSE OF THE STUDY:
The main purpose of this study is to analyze the Marketing strategies of different product of the Beximco Pharmaceutical Limited and their position in the present market compare with the competitors leading in the pharmaceutical Industry. This study attempted to understand product of the Beximco Pharma while dealing with these different functions. The purpose is also to make recommendations for improving the marketing strategies.
1.2 OBJECTIVES OF THE REPORT:
The study has been carried out with by the following Objectives
To describe various Product of BPL
To describe the pricing approach of BPL
To depict channel of distribution of BPL and marketing strategies SWOT analysis of Beximco pharmaceuticals based on company’s present scenario To show the competitive position of BPL product in the industry in terms of prescription To make some recommendation
1.4 METHODOLOGY OF THE REPORT:
The study requires various types of information on past and present policies, procedures and methods of accounting system. All the information incorporated in this report has been collected both from the primary sources and as well as from the secondary sources.
1.5 SOURCES OF DATA COLLECTION:
1.5.1 PRIMARY SOURCES OF INFORMATION:
Before discussing about the primary sources of this research project let us try to know first of the basic concept regarding primary sources. The primary sources are that information which has been collected for the first time relevant with –the research project. In this regard the primary sources are the direct personal prescription observation from the chemist shop are been used
1.5.2 SECONDARY SOURCES OF INFORMATION:
Different types of secondary data are included in this study report. Sources of secondary information can be defined as follows Internal Sources:
Annual report of 2005 and 2006 of Beximco Pharmaceuticals Ltd. Unpublished information from the staffs of MRC dept.
Daily Note Book (containing my activities of practical observation of Beximco Pharmaceuticals Limited) maintained by me. Internal records
As an external secondary source of information I have taken data from some other reports of other pharmaceuticals companies
1.6 LIMITATIONS OF THE STUDY
Every matter has got some limitation. So, this is also not an exception. The Limitation of this report research are been stated bellow.
1)Time limitation is one of the biggest limitations regarding this report. Due to lack of time larger number prescription from different parts of the country can not been collected. 2)The attendants of different chemist shops are sometimes not co‑operative in survey activities. 3)As I am a business student, it was sometimes become difficult for me identify the name of the product referred by the doctors in the prescription for lack training and skills. 4). There were some restrictions to have access to the information confidential by concern authority.
2.0 PHARMACEUTICAL INDUSTRY
The pharmaceuticals sector is a high-technology and knowledge-intensive industry in Bangladesh. The industry has two-tier structure. The largest firm accounts for the majority of the R&D investment in the industry and hold the majority of patents. There are a large number of smaller firms producing mostly for local markets. The pharmaceuticals industry is heavily regulated.
Once a product is brought to market, pharmaceuticals companies spend heavily on marketing and promotion. The larger drug companies maintain a large sales force, which makes direct regular contact with individual prescribing physicians and other pharmaceuticals decision makers. The money spent on marketing is huge. Pharmaceuticals marketing efforts are not only directed at physicians and consumers; drug companies have also sought to directly influence pharmacist, in some cases paying pharmacist to induce customers to change their drug consumption habits.
The nature of competition in this industry differs between the two sets of firms. The second tier of firms holds fewer patents and relies primarily on manufacturing off patent generic medicines or patent medicines under license. Competition between these firms takes the conventional form of competition on price, cost efficiency and quality. In contrast, a few large research-based pharmaceutical companies invest heavily in R&D and hold the bulk of the patents, and can often enjoy substantial market power while these patents are in force. For these companies, competition is not primarily on the basis of price, but rather on the basis of marketing and innovation. These companies compete to develop entirely new drugs which treat new medical conditions, improve upon existing drugs, or serve as substitute for existing patented drugs. Some large pharmaceutical companies in this tier export and compete in international markets.
The scenario of pharmaceutical industry can be depicted in two parts-before the Drug policy ordinance, 1982 and after the Drug policy ordinance, 1982. Before the ordinance there were 177 pharmaceutical companies in the country but local production is used to be dominated by multinational drug companies which manufactured 75% of total production. 25 medium sized national companies manufactured about 15% of total production. 133 small local based companies produced the remaining 10%. The multinational companies were fully armed with modern technology for producing sophisticated essential drugs, but they were only engaged, large extent, in formulation of simple drugs including many useless products. At that time, the unregulated drug market of the country had very little favorable conditions for pharmaceuticals to over price their products. Near monopoly market conditions mean that local firms could not compete effectively with these multinational market tycoons.
A great change was noticeable in the pharmaceutical industry after the drug policy ordinance of 1982. The total national production of pharmaceuticals has risen by a substantial 63%; the value of essential drugs made in national factories has gone up to 140% over the four years. At present there are 260 national & multinational based pharmaceutical companies in Bangladesh.
3.0 BEXIMCO PHARMACEUTICALS LTD
3.0 HISTORY OF BEXIMCO GROUP
Beximco is the largest business conglomerate of private sector in Bangladesh. Over the years since started it could gain a position to symbolize effective management, fund generation, and diversification of exploring business opportunities. Today it is one of the most known name is the country’s business arena.
Beximco was the first private sector company to be registered in Bangladesh as a public limited company in September 1972. Since then, Beximco has taken the lead in public equity offerings in Bangladesh.
At the end of 1996, the ten publicly listed companies of the Beximco Group accounted for Tk. 33.87 billion or 20.4% of the market capitalization of the Dhaka stock exchange and Tk. 31.12 billion or 21.3% of the market capitalization in Chittagong stock exchange. Beximco shares are also the volume leaders on the national bourses, accounting for 22.08% of turnover at the DSE and 29.23% turnover at the CSE in 1996.
The Beximco Group has also played a pioneering role in establishing and expanding the debt instruments market in Bangladesh. Beximco Pharmaceuticals Ltd was the first Group Company to issue debentures in 1988 and has been followed by seven additional Groups companies since.
Beximco equities and debentures continue to perform the market as a rule, and have been often rated as buys by several foreign investments firms such as UBS, Crosby Securities, Peregrine and the erstwhile Smith New court. Beximco stocks are also well represented in the emerging market funds portfolios of leading mutual funds world wide.
An emerging economy like that of Bangladesh needs not just newer and bigger industries, but also a reliable service infrastructure, especially in financial services. Anticipating this, the Group decided to start Beximco securities Ltd., which is the first firm formed especially for the retail individual investor offering a customer friendly environment for its growing number of individual clients. The firm is also aggressively engaged with institutional clients and issue underwritings.
3.1 VISION OF BEXIMCO GROUP
“If there is one characteristic that has typified the BEXIMCO approach it is Vision to be the best of our nature and human resource. A vision to establish our group and country as respected and valued regional presence”.
3.2 MISSION OF BEXIMCO GROUP
“Each of our activities must benefit and add value to the common wealth of our society. We firmly believe that, in the final analysis we are accountable to each of the constituents with whom we interact; namely: our employees, our customers, our business associates, our fellow citizens and our shareholders. Each of our activities must benefit and add value to the common wealth of our society. We firmly believe that, in the final analysis we are accountable to each of the constituents with whom we interact; namely: our employees, our customers, our business associates, our fellow citizens and our shareholders.” 3.3 MAJOR ACHIEVEMENT OF BEXIMCO PHARMA
2000 : Agreement to manufacture Metered Dose Inhaler (MDI) for Glaxo SmithKline 2001 : Introduction of Small Volume Parenterals (Injectables) Establishment of Analgesic-Anti-inflammatory API plant 2002 : Won the first prize of ICAB National Awards 2000 for ‘Best Published Accounts and Report’s Non- Financial Sector Category The first Bangladeshi company to supply pharmaceuticals to Raffles Hospital- the most prestigious hospital of Singapore 2003 : Received ‘National Export Trophy (Gold)’for consecutive 2 years (1998-99, 1999-2000) Won the Silver prize of ICAB National Awards 2003 for ‘Best Published Accounts and Reports’ in Non-Financial Sector Category.
BPL also won a tender to supply Neoceptin -R and Neofloxin to Raffles Hospital of Singapore for the whole year’s consumption. In this period BPL Introduced Anti-HIV drugs for the first time in Bangladesh which Diversification into Anti-Cancer therapeutic class. 2004: signed contract with Novartis to manufacture their liquid, cream, ointment and suppository products under “Toll Manufacturing “agreement. Visit of Saudi delegated by Hon’ble Minister, Kingdom of Saudi Arabia 2005: Merger of Beximco Infusions Ltd. With Beximco pharmaceuticals Ltd. Admission to alternatives Investment market (AIM) of London Stock Exchange (LSE)
3.4 B0ARD AND MANAGEMENT
The management of BEXIMCO PHARMA is simply exceptional in comparison to any other listed companies in this country. It has a blend of professionalism and wisdom, which plays a key role in managing the champion organization. The Board of Directors includes‑. A S F Rahman
3.5 CHEMCIAL DIVISION
The introduction of pharmaceutical plant in 1979 marked the beginning of today’s chemical divisions. BPL started its journey back in 1980 with manufacturing and marketing of licensee products of Bayer AG, Germany an Upjohn Inc. of USA. After its initial years of struggle, it broke ground with the launching of its own products in 1983. Today in addition to manufacturing pharmaceutical formulations in dosage forms and basic chemicals at Beximco Pharmaceutical Ltd, the divisions also produces intravenous fluids at Beximco Infusions Ltd. a state-of-art ISO 9001 certified intravenous fluid production facility.
The Chemical Division also has I & I Service Ltd, its own in-house organization for direct distribution national wide. Today Beximco Pharmaceutical Ltd is one of the market leadings in Bangladesh. The bulk of the profit BEXIMCO group comes from the chemical division. Its quality services and high standard of professionalism helped to earn public recognition both home and abroad. Today Beximco Pharmaceutical Ltd is one of the market leadings in Bangladesh. Its success is evidence of what a strict focus on quality can achieve. Beximco Pharmaceuticals product range continues to expand every year and each new product adds to the many lives already improved.
A partnership with former Ciba-Giedy now Aventis of Switzerland, the Beximco Pharma center for Etc & Industrial Research Ltd. was set up to conduct collaborative research programs through which Beximco scientists will be developing high performance pigments, which Aventis will screen for commercial potential and ultimate commercialization.
3.6 DEPARTMENT OF BEXIMCO PHARMACEUTICALS
BPL operates its business through extensive departmentalization as needed. This is for specified effectiveness of the tasks. The business activities of BPL, BIL and PCL are directed, controlled and monitored from the head office of Beximco Pharmaceuticals Ltd. located at 7A, Dhanmondi, Dhaka. Being a leading Pharmaceutical company in the country it employs good number of people in different departments to keep its business thriving. The following major departments coordinate the activities of BPL, BIL and PCL: Central product management (CPM) department
Sales education and training department
Medical services department
Business Research & Development department
International marketing & fine chemicals department
Finance and Accounts department
3.6.1 CPM Department
CPM stands for Central Product Management that takes care the total marketing of a product. It includes selection of new product
design of new product
design of packaging
Introduction of the product to the market and others
3.6.2 Planning Department
The planning department ensures smoothness of total operation of BPL. It is concerned with the following:
The production planning and
Raw material procurement.
Based on sales forecast from the CPM planning department breaks up the yearly sales forecast to monthly basis and develop the planning of production, purchase and stock maintenance. It also initiates the negotiation of purchase. It refers the suppliers’ quotations to the purchase departments. Planning department try to ensure buffer stock of three months of all the raw materials to meet any untoward events or circumstances in market.
3.6.3 Purchase Department
The purchase department is concerned with all the purchases of BPL. Apart from purchasing it keeps the record for tracking the costs of the company. This department works in coordination with planning department for negotiation and price fixing.
3.6.4 Sales Department
To follow the recent management of the business world the sales department has been completely separated from marketing department. It sets the forecast in coordination with marketing department and upon fixation of the sales it is the responsibility of the sales department to realize the yearly sales volume forecasted. Medical representatives are farthest unit of the organization. They are to generate demand for products. They are trained before sent for field.
3.6.5 Training Department
Training department is to provide the training to the medical representatives of the company. This training is necessary to improve the quality of job-related function. The curriculum of training varies from group to group. The department basically offers 4 types of training programs: Induction Training Programs (for MRRs )
Supervisory Management Programs (for FSs)
Advanced Supervisory Management
Refresher Training Programs (for everyone in sales in as and when basis).
3.6.6 MIS Department
The MIS department is the department that takes care of total automation of BPL. It supports the hardware and network of the company and the factory. It maintains the automation regularly and keeps the pace with the global IT. The MIS department also maintains the radio-link between the factory and the head-office. Though separately dealt before, recently software department has been incorporated with MIS department. This software section is to work for developing software solutions as per organizational requirements. It also supports the other companies’ requirements of the chemical division. The facilities of MIS department are available round the clock for 24 hours.
3.6.7 HUMAN RESOURCES DIVISION:
Human resource department is the most important department in any organization. Beximco Pharma is not an exceptional one. BPL has also have a strong and effective human resource department which plays an important role maintaining & motivating employees of entire organization. The Human Resource Dept. is headed by the human resource manager, some human resource OFFICERS & executives. All of the staffs of human resource dept. of BPL are very much effective & efficient in performing their tasks.
FUNCTIONS OF HUMAN RESOURCE DEPARTMENT
1. Recruitment of new employees by proper methods.
2. Training of the employees for increasing their efficiency.
3. Maintenance of the staffs of entire organization.
4. Control of data.
5. Studying different market etc.
3.6.8 MEDICAL SERVICES DEPARTMENT
In 1990 this department was formally announced as a separate department and the objective is to provide continuously Medical Education program to the practicing doctors. It is involved in indirect promotion of the company by helping the doctors with academic support. As a result it causes a good image of the company among the doctors. As the medical science if an ongoing process, many know about all those things unless and until they do through all medical journals. In our country there are very few magazines on medical science. There are some good world class medical journals which are very expensive. The medical service department of Beximco Pharma prepares its own medical journal from other journals which are relevant to our medical practices and supply it to the doctors at free of cost. So the doctors can know about the new contribution of the medical world.
The functions of medical service department have been listed below:
Every three months the department publishes a medical news letter of 24 pages. 22500 copies are published among which 18000 copies are most important here is Beximco is the only company in Bangladesh who has the initiative to publish such an article for the doctors. 4 to 5 booklets are published in a year about disease related its available medicines in Bangladesh. MSD arranges different seminars, meetings, symposiums on different topics of medical science. They focus on a particular topic which has a significant affect in our medical practice recently.
Doctors are requested to deliver a speech on that particular topic. After their speeches a medical officer of Beximco Pharma Ltd. gives a speech with the multimedia projection. They focus on their products and their functions over the diseases. It keeps doctor’s request by making multimedia projections for them that would be used by them nationally and internationally in seminars and symposiums. Most important tasks of MSD here were adding video clippings inside the presentations. Over 15000 requests were attended by MSD last year. BMA (Bangladesh Medical Association) arranged clinical meetings are attended by MSD. It responds to the queries of the doctors through mail or medical representatives around the country. 3.6.9 BRDD
It is a staff department. It comprises of four specialists comprising of a pharmacist, a financial specialist, a marketing specialists and an engineer. Major Jobs performed by this Department:
Business development agent: It acts as the business development agent of BPL. It is the duty of this department unveils the alternatives regarding business functions available in the world. International Affairs: It tries to interact with WTO, USFDA (United States Food and Drug administration authority), MCA (Medical Council) and other regulatory authority of the world. Source Department: It searches of raw materials, accessories, and machineries around the world and selects the best source available. International Market: It seeks for international export markets for BPL products. Projects Development:
1. It takes new projects in hand.
2. It does the financial projections for the new projects.
3. It searches cheaper sources of machineries and accessories around the globe.
3.6.10 MULTIMEDIA DEPARTMENT
BPL is the only pharmaceutical company that has a multimedia department. This is helping the product promotion. It designs medical videos for the doctor. The color, size, littering etc of the text are carefully selected to attract the target audience easily. Major function of multimedia department:
Web page designing
Developing multimedia presentation on program
Making video conference
Designing cover page of the annual report
Making video for product
Making video for company
Keeping the record of annual meeting and others meeting
Storing still photograph and video on medical science
3.6.11 INTERNATIONAL MARKETING DEPARTMENT
In 1991, the company took the challenge to venture into the international arena. At first it started exporting only formulation product. There were many reasons not to export finished goods. The reason are- Drug law imposed on finished products not on formulation products. Formulation products do not require any registration operation. To register a finished goods bio-equivalence test is required which is too much expensive.
In 1996 the company first started their finished goods export operation to Russia. After the war, there was great demand of medicine. The people of Russia needed good medicine in a cheap rate. Along with many multinationals Beximco Pharma started its operation in Russia. Beximco did well there as it provided products in a cheap rate.
Bangladesh is a third world country and its image is not satisfactory in the world. So it is quite tough to operate internationally. The marketing ream has to hard to convince the buyer.
Functions of the international marketing department are.
Studying rules and regulations.
Studying different market.
Studying different buying behavior.
Studying sales force for different culture.
Studying different market characteristics is another major function of international marketing department. There are different types of market for pharmaceutical products. According to the market characteristics a product can be classified in three major parts.
POP (Prescription only products) – Only registered chemists can sell these pharmaceutical products under the prescriptions generated by registered doctors. OTC (Over the counter) – Anyone can buy and sell these products. Pharmacy products- Only registered chemists can sell these pharmaceutical with or without a prescription of a doctor.
Marketing of pharmaceutical product in abroad is not like as it is in Bangladesh. In abroad the drug buying and selling is completely regulated by rules. Pharmaceutical product can not enjoy advertising like any other consumer products. So personal selling is the way the products can be advertised and sold. As OTC products do not require any rules to buy or sell it has a chance to go through print advertising and TV advertising. But, marketing of POP and pharmacy products can be done by personal selling. The customer of a drug is a patient. What ever the doctors prescribe patients buy. So, the department has to decide which group of doctor they should convince for a particular product.
For govt. hospitals, army or govt., institution the company participate in the tender. Different buying behavior has a great impact on marketing a product. Understanding the buyer’s buying attitude is the fist job of any marketer. To analyze behavior, the marketer has to visit the place, gain knowledge about their financial condition, culture tradition and the competitor’s position. After analyzing the buyer’s attitude, the second important factor is to make the sales force effective and efficient. International marketing department determine the process in which way they will market the products. It depends on the various factors.
4.0 MARKETING STRATEGIES OF BEXIMCO PHARMA
4.0 SALES AND MARKETING STRATEGIES
In terms of prescription medicines, it was believed for a long time that, as doctors and physicians made the decision on the selection of drugs they prescribed; mass marketing was a waste of resources. Sales forces were employed to target the medical profession face-to-face. A medium sized pharmaceutical company could have a sales force of 1000 people; larger companies tens of thousands, and these reps try and see a physician every few weeks. It was the most effective way to promote a drug, with the rep providing information and free samples in the hope of persuading a doctor to use his or her particular brand. The use of sales reps is still alive, but price pressures combined with doctors and physicians having less influence over which brands they use mean that pharmaceutical companies are being forced to rethink the approach economically.
I think the following variable plays the most important part behind the success of Beximco Pharmaceuticals Ltd. In Bangladesh and also across the globe. They are Distribution Strength.
Quality controls of BPL.
Use of modem technology in production.
4.0.1 DISTRIBUTION STRENGTH:
Distribution of product is very important no matter how good product is. In case Beximco pharmaceuticals Ltd. the distribution of BPL product is really good. In fact BPL has a distribution unit I & I services Ltd which is the distribution wing of chemical divisions. It maintained a large distribution network and covers over 25000 retail pharmacies every month all over the country.
4.0.2 QUALITY CONTROLS:
Quality is the ultimate factor that works in the mind of the customers which create brand image at the end of day. The Beximco Pharmaceuticals Ltd. is known for its products. The strength of BPL lies in its quality controls system and up to date manufacturing facilities. It has established manufacturing facilities conforming to GMP and WHO standards. During all stages of manufacturing operation from receiving raw material to the release of the finished product the requirement of GMP are strictly adopted.
4.0.3 PRODUCT INNOVATION:
Product innovation is successive factor behind the success of Beximco Pharmaceuticals Ltd in the pharmaceutical industry of Bangladesh. BPL knew that in order to survive in this challenging market product innovation is need to focus on deeply. So, as result research and development department were established in order to innovat new product, improving production process, product quality for further strengthen the position of BPL in the industry. This R & D teams is also continuously monitoring market feedback of various product to find ways of betterment
4.0.4 USE OF MODERN TECHNOLOGY IN PRODUCTION:
Beximco Pharmaceuticals Ltd. is equipped with modem and updated technology in their production process. In the production process BPL is adopting all modem technology which strengthens the quality of product in more efficient manner. From my point view I think this is another reason for the success of BPL i Bangladesh and also across the globe.
BPL’s most vital resource is its people. Its dedicated team of professionals form various disciplines are integrated in conducive environment to achieve companies objective. The people of BPL strongly believe in the company’s philosophy of serving the nation and contributing to the society. BPL’s over 1,981 young, energetic, professionals ensures the timely promotion and smooth running of the product to every parts of the country. Thus this is another factor for the success of BPL.
At the conclusion of this section I would like to say that now Beximco is a name of unique quality, commitment for society, customers and all parties involved with BPL. Co-ordination of this factor is another reason behind the success of BPL. If BPL could not make the co-ordination between these variables then the situation might have been different from now.
4.1 PROBLEMS & LACUNAS
After analysis the market share of the Beximco Pharmaceutical Limited, it shows that Beximco Pharmaceuticals Ltd. is doing really well in the pharmaceuticals industry of Bangladesh in fact Beximco Pharmaceutical Ltd. is one of the market leader in this industry. Beximco Pharmaceutical is exporting their product in 19 countries and earning a lot of foreign exchange.
To me, I do not find any discrepancy between the survey findings of MRC and all partisan approach In fact as Beximco Pharma is implementing the survey findings properly, they are acting as the market leader in this pharmaceutical industry. MRC department conduct the survey and prepare the survey report on monthly basis and send that report to CPM department. CPM department analyze that report and implement the findings if they think it
The current performance shows that Beximco Pharmaceuticals holds 19.26% market share in the overall market.
4.2 Marketing theory
Marketing is how you define, promote and distribute your project and maintain a relationship with the consumers. Remember the five Ps: 4.2.1 Product
But prescription also shows that there are some products which have high demand in the market in other way we can say that this product of BPL is contributing greatly for high market share. These products are
5.1.1DEMANDABLE PRODUCTS OF BPL