Planning for Success

TechEmerge Innovator Bootcamp Series

Webinar #2

In partnership with: Powered by:

Introductions

• Vishal Taneja– Business Director, Diabetes Care - Becton Dickinson India

• Rahul Reddy– SVP Strategic Relationships & New Initiatives - Apollo Hospitals

• Iris de Graaf – International Finance Corporation

• Loretta Foran – International Finance Corporation

• Jennifer David – Associate Director, Catalyst @ Health 2.0

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International Finance Corporation (IFC)

IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets.

Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence, to create opportunity where it’s needed most. In FY15, our long-term investments in developing countries rose to nearly $18 billion, helping the private sector play an essential role in the global effort to end extreme poverty and boost shared prosperity.

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The Distributor PerspectiveLaunching products in the Indian Market

Vishal Taneja

Business Director, Diabetes Care - Becton Dickinson India

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India:

•35 states and Union

Territories

•600 districts

•Most MNCs present in

top 8 cities

Metro

4 cities

Class I

49 Towns

Class II

247 Towns

Class III

354 Towns

Class IV

947 Towns

Class V

2104 Towns

Rural

600,000+ Villages

> 5 million population (Delhi,

Mumbai, Kolkata, Chennai)

1-5 million population

100,000-1 million

population

50,000-100,000

population

•Top 8^

accounts for

30% of urban

population and

40% of urban

disposable

income

Identifying & targeting the right segment is critical for any new product launch as reaching the vast and fragmented Indian market could be a daunting task for any organization

Sophistication of healthcare delivery

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• Open to new technology, First Movers• Value Clinical evidence & Clinical education• Higher weightage to addressing unmet need

then price• Service & Support

• Followers, Delayed adoption of technology

• Value seekers

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• Key Opinion Leaders – They are Pioneers to adopt any new products, services or technology. It is important to engage them (Advisory Boards) to understand how the new product will meet the expected need gaps.

• Key unmet need addressed

• Unique Product Offering

• Price- Value Matrix

• Market Access

• Need to identify the best possible Channel(s) to make the product available

• Adoption - New customers addition

• Focus on working with prescribers and providers to achieve early, strong positioning in the dynamic market

• Conversion/ Adoption Funnel management

• % Users in first year of launch

• Adherence/ stickiness of the brand

• % Retention - Retaining users as loyal repeaters

While the product launch and marketing efforts are critical for any new product launch, it is important to understand the criteria to define the success of new product launch

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Companies need to advance their conventional perspective to relevant, insightful and actionable KPIs to track success

Relevant, Insightful and Actionable KPIs to define and track launch/pilot success

Aligned and

Prepared

Organization

Trained Teams

Hiring & Training

Speed to Conversion

Pertinent Value

Proposition

Buyer Perception

Brand/ Message Recall

Barriers to Use/ Prescribe

Time to Adoption

Training and In servicing Needs

Full Account Adoption

Patient Satisfaction

Patient Refill Rates

Product Performance

Effective

Stakeholder

Engagement

KOLs Reached

KOL Message

Media Noise

Nurses/ Technicians Engaged

Patient Groups Engaged

New Customers Engaged.

Source: Succeeding with the Right Key Performance Indicators (KPIs) 2011. IMS Health 7

Distribution in India is a challenge because of the large distances and the location of centers of population

Town classification for India Number of outlets by industry

Automobiles 2,000 – 3,000

Consumer durables 8,000 – 10,000

Mobile Phones 80,000 –

100,000

Pharmaceuticals 350,000

GSM Carriers (SIM cars, recharge

coupons)

500,000

Beverages 1,100,000

FMCG excl. tobacco shops 5,500,000

FMCG incl. tobacco shops 7,500,000

Key distribution highlights

• Value of organized retail highly concentrated in top cities

• Top 6 cities – 68%

• Top 10 cities – 85%

• Beverages distribution done through road transport using

trucks & vans with limited cold chain facilities

• Average time taken from factory to regional

warehouses – 1-2 days

India:

•35 states and Union Territories

•600 districts

•Most MNCs present in top 8

cities

•Top 8^ accounts for

30% of urban population

and 40% of urban

disposable income

Metro

4 cities

Class I

49 Towns

Class II

247 Towns

Class III

354 Towns

Class IV

947 Towns

Class V

2104 Towns

Rural

600,000+ Villages

> 5 million population (Delhi, Mumbai,

Kolkata, Chennai)

1-5 million population

100,000-1 million

population

50,000-100,000

population

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For Consumer Goods companies in India, the flow of goods varies depending upon the channel serviced

Characteristics C&F Agent / Super-stockist Stockist / Wholesaler Retailer

Role • Involved in the business of re-distribution

to authorized distributors

• Responsible for warehousing, transport of

goods to next tier, payment collection

• May be non-exclusive, but have separate

set-up for each business

• Typical margins: 1.5% to 2.0%

• Involved in the business of re-

distribution to wholesalers and

retailers

• Stockists that cater exclusively to

organized retail are known as

Modern Trade Stockists

• Typical margins: 5% to 7%

• Includes all classes of retail

outlets

• Involved in counter sales

only; no re-distribution

• Not exclusive to business

• Typical margins: 10% to

15%

Resources • High financial strength with ability to hold

stocks

• Infrastructure – Office, IT capability,

warehouse space

• High financial strength with ability

to hold stocks and provide credit in

the market

• Infrastructure – IT capability,

warehouse space, delivery units

• Limited spend on localized

sales & promotion

• Appropriate store location &

size

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C&F Agent

C&F Agent

C&F Agent

C&F Agent

Modern Trade DC

Modern Trade

Stockist

Stockist

Natl / Region

Chain

Retailer

Retailer

RetailerStockist Wholesaler

Modern Trade Retail

ChannelTraditional Trade Retail Channel

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India’s retail environment (like most fragmented markets) is characterized by significant levels of complexity forcing companies to use a multi-tier distribution network to reach a large number of retailers

Large Industry size

• Approx USD 180bn or INR

800,000 cr

Fast pace of growth

• Overall growth of ~20% pa

• Organized retail growing at ~

35% pa

Unorganized dominance

• > 95% of Indian retail is

through the unorganized sector

• Multitude of outlet types

enhance complexity

Fragmented structure

• Largest outlet base – 12mn

outlets

• Number of FMCG outlets

increasing at ~8% annually

Multi-tier distribution

• Effective (& low cost) servicing

through a layered structure

• Objectives of trade

intermediaries are not uniform

Heterogeneous retailers

• Multitude of outlet types

enhance complexity

• Channel strategies are rarely

data based

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• Engagement Programs

• Treat Distributors as Partners

• Ensuring ROI as per Agreement

• Training & Servicing

Post Sales

• Supplies & Inventories

• Investments into Increasing Business

• Customer Support & Complaint Handling

• Claim Settlement

• Build Mutual Trust

Building relationships with distributors and post sales relationships

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The Hospital PerspectiveRahul Reddy

SVP Strategic Relationships & New Initiatives - Apollo Hospitals

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Apollo Hospitals Enterprises Ltd.

• Founded in 1983

• Touched over 45+ million lives

• 10 million Preventive Health Checks

• Patients from 120 countries

• 150,000 Heart Surgeries

• Over 20,000 Joint Replacements

• First Liver Transplant in Children & Adults

and Performed Over 1,500 Liver Transplants

• First Multi-Organ Transplant

• Over 16,000 Kidney Transplants

• Surpassed Mayo as busiest Solid Organ Transplant programme in the world

• Largest telemedicine provider in South Asia

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Clinical Excellence

• Among the world’s best, in terms of outcomes

• Pioneers of clinical excellence in India

• Driven by skilled doctors & detailed protocols

• 8 JCI accredited hospitals

• Revolutionary scorecard - ACE@25, which evaluates 25 quality

indicators benchmarked against the world’s best published

outcomes

• Patients from 120 countries

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Keys to Success• Landscape the market

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Keys to Success• Landscape the market

• What problem are you really solving?

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Keys to Success• Landscape the market.

• What problem are you really solving?

• What are the alternatives (price wise, practice wise)?

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Keys to Success• Landscape the market.

• What problem are you really solving?

• What are the alternatives (price wise, practice wise)?

• Adapt to the market

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Keys to Success• Landscape the market

• What problem are you really solving?

• What are the alternatives (price wise, practice wise)?

• Adapt to the market

• Level of commitment

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Questions?

www.techemerge.org

Contact Jennifer David,

jenniferd@health2con.com

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