Penetration is key to growth – Mr S P Chakraborty, Group President, Lupin

In this edition of Brandspeak we have Mr Shakti Chakraborty, Group President, Lupin, speaking on the industry’s current challenges. Mr Chakraborty’s dynamic career has traversed the grass root through the sales and marketing paths to currently heading the formulations business of Lupin for India and CIS Countries. His great Indian experience comes from being in the great Indian giants Aristo, Alkem and Wockhardt. Mr. Chakraborty is a pioneer in rural marketing and believes that conquering rural is the next frontier for the Indian pharmaceutical industry.

You have witnessed the industry evolve, what factors have played a vital role in reaching this scale?

The rise of the Indian economy leading to higher disposable income is one of the primary reasons for the phenomenal growth we witnessed in the last two decades. Also the larger apportioning of this disposable income to the health and wellness category has fueled growth. Over two decades, medical infrastructure has grown to keep pace with the increase in healthcare needs. Newer techniques in detection, diagnosis and treatment have definitely improved the quality of healthcare in comparison.Intelligent engineering has made processes simpler and economical reducing the burden of cost in healthcare.

What are the growth challenges the industry is going to face in the coming years?

The Government is too inclined to increase the span of price control on pharmaceutical products.With the signing of GATT, companies who shied away from India post the 70’s will want to renter. The in-clinic share of voice of the branded generic players will be significantly impacted.The almost parched product pipeline is a challenge. Time and costs are prohibitive to all Indian companies. Only an extremely favourable R& D policy from the government can see the greenery return, albeit in its own time. In wake of this the generic mushrooming is the only way to fuel growth, something which is already happening even with the till now reticent MNCs.

If not for the generic ride, global alliances with boutique research outfits or larger MNCs will see a rise. The medical universe comprises 7 lakh qualified doctors and equal number of RMPs and non-MBBS doctors. Companies with the largest field forces are able to cover about 2 lakh. That’s about 25% penetration. Increasing the field forces without a proportionate increase in ROI seems to be the dangling sword. Strategy heads at every large company are putting their heads together to bring together a viable expansion strategy.

Do you agree that healthcare has failed to penetrate the markets, something which telecom has done successfully?

Yes telecom has been way more efficient in creating a deep seated infrastructure and catering to the consumer. Telecom has penetrated the micro villages, whereas healthcare has been far slower and is still to make inroads into even the mega villages. Creating infrastructure is a matter of government priorities too. Once the hospitals and clinics are set, I am sure the private sector will follow.

Rural India needs a different brand building strategy. Do you agree? Can you site an example for our audience?

In terms of the positioning construct, that can’t really change for a doctor whether in urban or rural area. However the operational strategies can change depending on the difference in the purchasing power. Pricing can be a strategy for product placements. While we understand the needs of our metros and urban universe, very little work has been done in understanding the needs of the rural target group. Research studies to understand needs and behavior of this group will help develop more evolved strategies for this sector. Only then we will be able to develop customized branding strategies.

Regional communication and customization – will it strengthen the branding process.

Regional communication has never been explored officially, but may be an interesting idea. Again I would reiterate need for improving our understandings and learning here.