CURRENT PRACTICES CURRENT PRACTICES FOR THE SALE AND FOR THE SALE AND DISTRIBUTION OF DISTRIBUTION OF

VETERINARY DRUGS IN VETERINARY DRUGS IN AFRICA TO FARMERS AFRICA TO FARMERS

Chris van DijkChris van Dijk

Introduction Introduction

The livestock sector is of The livestock sector is of fundamental importance fundamental importance to present and future to present and future food security in Africa food security in Africa

Losses due to Losses due to preventable livestock preventable livestock diseases amount to diseases amount to about one quarter of the about one quarter of the total annual productive total annual productive value of livestock in value of livestock in Africa Africa

Introduction Introduction

Commercial livestock sectors Commercial livestock sectors – Highly developed veterinary Highly developed veterinary

systems systems – Supported by numerous Supported by numerous

Animal Health companies Animal Health companies – Infrastructure for Infrastructure for

distribution of veterinary distribution of veterinary products and services products and services

Nomadic or pastoral farmers Nomadic or pastoral farmers and Communal farmers and Communal farmers – No or very low key No or very low key

distribution and supply of distribution and supply of veterinary products and veterinary products and services services

Objective Objective

Overview Overview – Sale Sale – Distribution Distribution

Constraints Constraints Critical Critical

requirementrequirements s

Marketing consists of Marketing consists of management tasksmanagement tasks and and decisionsdecisions directed at successfully directed at successfully meeting meeting opportunitiesopportunities and and threatsthreats in a in a dynamic environmentdynamic environment by effectively by effectively developingdeveloping and and ttransferringransferring a a need-need-satisfying market offeringsatisfying market offering to to consumersconsumers, in such a way that the , in such a way that the objectives of the objectives of the enterpriseenterprise,, the the consumerconsumer and and societysociety will be achieved. will be achieved.

THE MARKETING THE MARKETING PERSPECTIVE  PERSPECTIVE 

THE MARKETING THE MARKETING PERSPECTIVE  PERSPECTIVE 

Product Product (Solution)(Solution)

– Product/packaging Product/packaging – Quality Quality – FeaturesFeatures– Brand nameBrand name– ServicesServices

Price Price (Cost) (Cost)

– Pricing Pricing

Place Place (Convenience)(Convenience) – Distribution Distribution

channels channels – Transport Transport

Promotion Promotion (Communication)(Communication)

– Advertising Advertising – Sales force Sales force – Training Training

PRODUCT PRODUCT (CUSTOMER (CUSTOMER SOLUTION) SOLUTION)

Commercial farmers Commercial farmers – Antimicrobials including mastitis remediesAntimicrobials including mastitis remedies– EctoparasiticidesEctoparasiticides– EndoparasiticidesEndoparasiticides– EndectocidesEndectocides– Anti-inflammatory (steroid and non-Anti-inflammatory (steroid and non-

steroid)steroid)– Reproductive hormonesReproductive hormones– Biologicals Biologicals

Product and packaging Product and packaging varietyvariety

Nomadic/Pastoral or Communal Nomadic/Pastoral or Communal – Antimicrobials including mastitis remediesAntimicrobials including mastitis remedies– EctoparasiticidesEctoparasiticides– EndoparasiticidesEndoparasiticides– EndectocidesEndectocides– Anti-inflammatory (steroid and non-Anti-inflammatory (steroid and non-

steroid)steroid)– Reproductive hormonesReproductive hormones– Biologicals Biologicals

Product and packaging Product and packaging varietyvariety

Innovator productsInnovator products– Patent protection expired (generics) Patent protection expired (generics) – Intellectual property – poor enforcementIntellectual property – poor enforcement– Disincentive – new/existing products not marketed Disincentive – new/existing products not marketed

Generic products Generic products – High quality generic drugs High quality generic drugs – Low quality generic productsLow quality generic products

ResistanceResistance Residues Residues Chronic diseaseChronic disease Death Death

QualityQuality

In countries with commercial herds most of In countries with commercial herds most of the needs and wants have been addressed the needs and wants have been addressed

Compared to this we have only a small Compared to this we have only a small number of product groups in the countries number of product groups in the countries with communal or pastoral farmers with communal or pastoral farmers – Subclinical/erosive diseases such as BVD Subclinical/erosive diseases such as BVD

need to be addressed need to be addressed – Preventing and treating for external and Preventing and treating for external and

internal parasites only will not improve internal parasites only will not improve productivity productivity

FeaturesFeatures

Brand nameBrand name

Certain brand Certain brand names are well names are well established in established in Africa Africa

Farmers tend to Farmers tend to be relatively be relatively brand loyal but brand loyal but price does play a price does play a role in the role in the decision to buydecision to buy

ServicesServices

Southern Africa Southern Africa – State State

extension extension services services

– Co-operativesCo-operatives– VeterinariansVeterinarians– Animal health Animal health

companiescompanies

ServicesServices

Other parts of AfricaOther parts of Africa– Veterinarians and Veterinarians and

extension officers as extension officers as distributorsdistributors

– Commercial business Commercial business not focusing on their not focusing on their strength: strength: knowledge knowledge transfertransfer    

PRICEPRICE(CUSTOMER COST) (CUSTOMER COST)

Southern AfricaSouthern Africa– Pricing from Pricing from standardisedstandardised price lists, with bulk price lists, with bulk

discounts and sliding scales on productsdiscounts and sliding scales on products Rest of AfricaRest of Africa

– Agents importing products into a countryAgents importing products into a country– Supply chain Supply chain

Main distributorMain distributor Distributor Distributor Outlet Outlet

– There is no or little regulation on the mark up or There is no or little regulation on the mark up or margins in this supply chain margins in this supply chain

– Smaller pastoral type of farmer will be especially Smaller pastoral type of farmer will be especially affected by this pricing structure as large scale affected by this pricing structure as large scale commercial farmers usually buy direct from the main commercial farmers usually buy direct from the main distributor         distributor        

Pricing Pricing

PLACE PLACE (CUSTOMER (CUSTOMER

CONVENIENCE) CONVENIENCE)

DISTRIBUTION DISTRIBUTION CHANNELS CHANNELS

Southern Africa

Co-op’sOTC 60%

Wholesalers OTC/POM

25%

Vets POM /OTC

15%

Rest of

Africa

Distri- butors

Pharma-cies

Agro-vets

Private Vets

Large Scale

farmers

Van or Truck Based Sales

Van/Truck Sales only legal for Ecto- and Endoparasiticides.

Cold chain as well as advice questionable

DISTRIBUTION DISTRIBUTION CHANNELS CHANNELS

•Insecurities •Political •Weather

•Large Geographical areas•Poor Transport •Lack of outlets•Cold Chain •Poor cash flow

PROMOTION PROMOTION (CUSTOMER (CUSTOMER

COMMUNICATION) COMMUNICATION)

Southern Africa Southern Africa – Extensive advertising and sales Extensive advertising and sales

promotionspromotions Magazines to Vets and Farmers Magazines to Vets and Farmers Television and radioTelevision and radio

Rest of Africa Rest of Africa – Advertising to clients by distributorsAdvertising to clients by distributors– Advertising over regional radio in Advertising over regional radio in

the language or dialect of the the language or dialect of the region region

Advertising Advertising

Commercial farmers Commercial farmers – Major Major animal health companiesanimal health companies have sales forces either have sales forces either

operating on a operating on a salary basis or as commission agents salary basis or as commission agents Salaried representatives - value added service - Salaried representatives - value added service -

involved in the day to day management decisions on involved in the day to day management decisions on the farmsthe farms

Commission agents - some instances solely driven by Commission agents - some instances solely driven by sales sales

– Sales people are trained to communicate the cost-Sales people are trained to communicate the cost-benefit value of products to the end user benefit value of products to the end user

Nomadic/Pastoral or Communal farmers Nomadic/Pastoral or Communal farmers – Many situations a case of "sell and go" with minimal or Many situations a case of "sell and go" with minimal or

no input from the sellers side as well as no or minimal no input from the sellers side as well as no or minimal after sales support if for example adverse drug after sales support if for example adverse drug reactions or lack of efficacy is experienced reactions or lack of efficacy is experienced

Sales forceSales force

TrainingTraining SAAHA – Mission: To promote ethical SAAHA – Mission: To promote ethical

marketing practices, client and marketing practices, client and environmental care of high standing environmental care of high standing quality at all times, supported by quality at all times, supported by knowledgeable, experienced sales knowledgeable, experienced sales personnel who have completed accredited personnel who have completed accredited courses courses

2 compulsory modules 2 compulsory modules – IndustryIndustry– Anatomy/Physiology Anatomy/Physiology

3 modules of choice 3 modules of choice – EctoparasitesEctoparasites– EndoparasitesEndoparasites– BiologicalsBiologicals– MastitisMastitis– AntimicrobialsAntimicrobials– Nutrition and growth stimulants Nutrition and growth stimulants

Ensures an uniform knowledge base Ensures an uniform knowledge base across the industryacross the industry

TrainingTraining

In-house company training - Product In-house company training - Product related training related training

Vendor vs. consultant Vendor vs. consultant Assisting the end user to make the Assisting the end user to make the

correct decision on where, when and correct decision on where, when and how to use the correct product for a how to use the correct product for a specific animal health related specific animal health related problem   problem  

Veterinarians are generally well Veterinarians are generally well trained and are well versed in trained and are well versed in diseases and problems in their diseases and problems in their regions or countries, but as with regions or countries, but as with veterinarians almost world-wide they veterinarians almost world-wide they are not well trained in business skillsare not well trained in business skills

This needs to be addressed as it is in This needs to be addressed as it is in almost all cases being identified as almost all cases being identified as the reason for veterinarians not the reason for veterinarians not being successful in the commercial being successful in the commercial world world

Conclusion Conclusion

The availability of the The availability of the correct productcorrect product, in the , in the correct packagingcorrect packaging at the at the correct timecorrect time and place is and place is usually good to usually good to excellent for excellent for commercial commercial farmersfarmers in Africa in Africa

In rural Africa however, In rural Africa however, the availability, quality the availability, quality and distribution to and distribution to communal farmers and communal farmers and pastoralistspastoralists is is far from far from the ideal and needsthe ideal and needs attention attention

Extension servicesExtension services on the on the continent of Africa have continent of Africa have declined over the past declined over the past decade or two and decade or two and needs to needs to be addressedbe addressed

Veterinarians can play an Veterinarians can play an important roleimportant role in this, but in this, but they will require extra they will require extra training in business skillstraining in business skills and acumenand acumen

Farmers are prepared to pay Farmers are prepared to pay market pricesmarket prices for for reliable reliable drugs, treatmentsdrugs, treatments as well as as well as transfer of informationtransfer of information to to support the health of their support the health of their animals and herds animals and herds

Conclusion Conclusion

Industry representatives will play an ever Industry representatives will play an ever increasing roleincreasing role in bringing in bringing quality quality productsproducts and and knowledgeknowledge to the end user to the end user

Imperative will also be the Imperative will also be the training of training of private and government officials as well private and government officials as well as so called paravets and community as so called paravets and community animal health workersanimal health workers to establish a to establish a distribution network that not only distribution network that not only distributes veterinary pharmaceuticalsdistributes veterinary pharmaceuticals, , but also helps to ensure the but also helps to ensure the dissemination of knowledge to the end dissemination of knowledge to the end useruser

Conclusion Conclusion

Educated, enthusiastic Educated, enthusiastic sellers, who understand sellers, who understand their customers are the their customers are the

key to the successful key to the successful distribution of distribution of

veterinary veterinary pharmaceuticals in pharmaceuticals in

AfricaAfrica