GLAXO INDIA

Presented by Group 8
 ABOUT GLAXO
One of the oldest pharmaceutical company in India
(1924)

Globally, a USD 45 billion company.

In India rs1860 cr. Turnover.

5.2% market share

 PRODUCT LINE

1. Prescription medicines:
Analgesic
Anti-Infective
Anti-Inflammatory
Anti-Parasitic
Cardiovascular
Dermatology
Diabetes
Endocrine
Gastrointestinal
Gynaecology
Immunosupressants
Nutritional
Respiratory
CNS
Oncology
 2.vaccines

Brand Active ingredients

Boostrix Tetanus Toxoid
Reduced Diphtheria Toxoid and Acellular Pertussis Vaccine
Adsorbed

Cervarix Human Papillomavirus Vaccine (Types 16 and 18)

Hepatitis B Vaccine
Engerix-B
Fluarix Inactivated split influenza Vaccine (Seasonal Influenza Vaccine)
Havrix Inactivated Hepatitis A virus Vaccine
Hiberix Haemophilus influenzae type b Vaccine (Hib)
Infanrix Diphtheria and Tetanus Toxoids and Acellular Pertussis Vaccine Adsorbed
Mencevax ACWY Group A
C
W135 and Y polysaccharide Meningococcal vaccine (Meningitis Vaccine)

Priorix Combined Measles

Mumps
and Rubella Vaccine (live)

Rotarix Human Rotavirus Vaccine

Live Attenuated

Tritanrix-HB Combined Diphtheria

Tetanus
whole-cell Pertussis and Hepatitis B Vaccine

Twinrix Combined Hepatitis A and Hepatitis B Vaccine

Typherix Vi Polysaccharide Typhoid Vaccine
Varilrix Varicella Vaccine
live attenuated
 Case Summary
Glaxo India Imported a Salbutamol based Formulation
in the Aeresol based System.
Indian Army needs 1 million filled can annually for its
personnel situated in high altitudes.
Also a large no. of Asthma patents are reported in the
Indian sub continent.
Delivered price per aerosol filled anti asthma
formulation is Rs 55.
Glaxo contacted MBIL a Kolkata based company for
manufacturing the aerosol cans with a imported
Dispensation valve.
 Analysis
MG (business development manager) of MBIL was
asked to look upon the business opportunity.
The factory and the India head office of Glaxo India was
located within few hundred meters of MBIL Worli factory.
DMU GLAXO INDIA:

CDM (R&D chief)

MK(Application development head

ABN( Finance Head)

RR(Production Head)

MR( Marketing chief)

 Parameters
Delivery price of the aerosol can should be Rs
22(inclusive of the imported valve worth Rs 5).
The trial sample needs to be accepted by the DMU
of Glaxo for 50% of the Indian Army Business
worth Rs 110 lakhs(22*500000) annually.
 Cost Brake up
Components Rs in Lakhs
Direct variable cost 55
Direct Non variable cost 5.5
Indirect variable cost 2.75
Overhead 11
Net margin 35.75
Other expenses 10
PBT 25.75
 Key Concerns
Cost of blocked capital for special valves was not taken
into consideration.
The relative contribution approach of costing needs to be
approved by Regional head and commercial manager.
Also allocation of resources has to be agreed upon.
Other hidden costs needs to be estimated.
Convincing the Indian army personnel for speeding the
testing process.
Assumptions:
• Development time 6 months
• Minimum contract of 5 lakhs by Indian Army.
 STP ANALYSIS
SEGAMENTATION
1. MACRO SEGAMENTATION
- Size.
-Geographical.
- Usage rate.
2. MICRO SEGAMENTATION
- Hospitals departments.
- Medical stores.
 TARGETING
TWO TARGET MARKETS:
1. INDIAN ARMY (B2B)
2. OTHER USERS (B2B2C)
- Hospitals, medical stores, patients.
 POSITIONING
BASED ON:
1. Quality-price.
2. Use & users.
3. Competitors.
Business Development strategy

Strategy Tactics Action plan

 Assessment

Aim:

• To fulfill the Indian army annual contract of 500000 pieces.
•To Target the large no. of asthma patients in the Indian Sub continent.

Issues:

•Convincing the Indian army personnel for speeding the testing process.
•Development time of 6 months
•Securing Minimum contract of 5 lakhs by Indian Army.
•Market competition.

Market opportunities:

•Allied armed forces
•100% of the Indian Army contract.
•Other Pharmaceutical Co. manufacturing similar products.

Market Obstacles:

•DMU of Glaxo and Indian Army
•Exceeding cost
•Policy decisions.
 Business strategy

Product focused
Service focused
Customer focused
Customer Adoptive
 Tactics

Product Quality
Improved R&D
Reduced cost of production
Setting service standards
CRM
Business development team
 Action plan
Reach other
Develop the
Convince the DMU
Aerosol can
markets trough
within
the
of Indian Army and
the period of 6
business
Glaxo India
months
development team

D
e
v
el
o
p
pr
ic
in
g
st
ra
te
gi
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s
 INDUSTRIAL PRICING PROCESS

1. Set Pricing Objectives

2. Analyze demand
3. Draw conclusions from competitive intelligence
4. Select pricing strategy appropriate to the
political, social, legal and economical
environment
5. Determine specific prices
 Pricing objectives
Profit objectives e.g.
Targeted profit return
Volume objectives e.g.
Dollar or unit sales growth
Market share growth
Other objectives e.g.
Match competitors’ price
Non-price competition
 Price-flexibility strategies
One-price policy—setting one fixed price for all
markets
Flexible-price policy—setting different prices in
different markets based on:
Geographic Location,
Time of delivery, or
The complexity of the product
 PRICING STRATEGIES
INDIAN ARMY- NEGOTIATED PRICING
- Bulk purchase.
- Repeat purchase.
- Government relaxations.
OTHER USERS

NEGOTIATED COMPETITIVE

Hospitals, NGOs. Medical stores &

asthma patients.
 Six ‘Ps’ of business to business marketing

P1 : Production specifications
Special Aerosol Can and imported Valves
P2: Commercial terms
MBIL has decided the upper limit of price to be Rs.22.
The cost for Valve should be Rs 5
The Cost for Tin Cans cannot exceed Rs 17(Variable Price)
Minimum Quantity of dispensers is 3 lakh pieces
P3: Methods of distribution
Distribution will not be a problem for both the buyer and the
vendor as both the plants are located just 100 metres away.
 Cont.
P4: Promotion
Since the customer has approached the vendor, promotion strategy does not hold
true.

P5 : Internal process of purchase decision making in buyer organization

CDM: The R&D Chief plays the role of the initiator in the decision making
process.
MK: Application Development Head
RR: Production Head
ABN: Finance Head
MR: Glaxo Concern Marketing Chief
In order to speed up the testing and approval process, MBIL will send the
samples to Glaxo and the users of the product i.e the Indian army
personnel.
 In Summary

As mentioned above, MBIL cannot differentiate much on the

basis of the marketing mix elements except pricing as
feasibility of the business model depends solely on the pricing
strategy and so is the profitability. The other elements are
more or less non-alterable and thus pricing is the differentiating
factor here.
While considering the Indian army as a large segment the
requirement is in bulk and due to government regulations the
price variations cannot be high and the pricing has to lower
compared to consumer market price.
Since the consumer market is highly competitive and the
marketing mix elements do not play a very big role, only pricing
will be the basis of differentiation.
Thank You!