Is there a business in rural markets

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Pharma market in rural India,

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  • And after so many years, we still wonder – Is there a business in Rural Markets?
  • According to census 2011, 121,01,93,422 Indian population, Rural – 83,30,87,662 (68.84%) Urban – 37,71,05,760 (31.16%)
  • According to census 2011, 121,01,93,422 Indian population, Rural – 83,30,87,662 (68.84%) Urban – 37,71,05,760 (31.16%)
  • Rural India is undergoing a change – Man and tools are being replaced by Machines – farmers and their families have time for non-farming activities.
  • Bullock carts are fast being replaced by motor vehicles.
  • There was a time when to locate a PCO in rural area was an ordeal.
  • Now number of household with access to phone out number the total urban households; 54% of households have phones in rural India compared to 63 % in Urban.
  • Now number of household with access to phone out number the total urban households; 54% of households have phones in rural India compared to 63 % in Urban.
  • Computer is not a magic-box or a genie for a rural folk anymore. There are 8.64 million households with a computer in rural India. Internet usage in rural India has overtaken usage in urban India.
  • Computer is not a magic-box or a genie for a rural folk anymore. There are 8.64 million households with a computer in rural India. Internet usage in rural India has overtaken usage in urban India. More internet users in rural India than in urban.
  • TV and dish antennas are common sigth in rural India. 56 millions households have a TV, compared to 60 million urban households.
  • TV and dish antennas are common sigth in rural India. 56 millions households have a TV, compared to 60 million urban households.
  • Government is aggressively spending for rural development.
  • Active steps are being taken to improve healthcare. Rashtriya Swasthya Bima Yojna (RSBY) was launched in 2008. Its purpose is to cover all BPL families with an health insurance of Rs. 30,000/ (Govt or Pvt hospital treatment). No age limit and pre-existing ailments are also covered. One needs to pay a registration fee of Rs. 30 to enroll. Govt (center 75%, rest state) pays the premium. 10000 more PG seats are sanctioned for private colleges, and 4000 more seats created in existing government colleges. Land requirements to open a hospital is being reduced from 25 to 20 acres. To meet the shortage of teachers in medical colleges, age-bar for faculty position is being increased from 65 to 70 yrs. To encourage rural healthcare, 50% PG seats are allocated to doctors working in rural areas.
  • Income from non-farming sector is increasing. Now around 50% income in rural India is being generated from trade, food processing, industry, and money brought back by emigrants. Better procurement prices for crops, a run of good monsoons, cash crops, etc. have increased disposable income. Rural folks are buying cars, flat screen TVs, microwaves and high end mobile phones. Infrastructure such as roads and availability of electricity is improving.
  • 493 million literate in rural and 285.4 million in urban. Insurance sector penetration is increasing. Rural income is 43% of national income. In terms of absolute numbers disposable income and middle class is more in rural India. Rural India literates 493 million, urban 285.4 million.
  • Some consultancy firms had predicted that rate of growth in rural healthcare market will overtake growth rates in urban India.
  • Rural India and class II-VI towns contribute > 30 % to IPM and growing at par with Metros and Class I towns. But predictions of rural market overtaking urban market are yet to become true.
  • In absolute numbers, though rural market is a huge one – rural, along with class II-VI towns constitutes 2110 crores of 5550 crores total market.
  • Not bad, but not good enough also.
  • There are gaping holes both in government as well as private sector’s initiatives to create a good healthcare infrastructure.
  • Inadequate and inefficient govt. healthcare infrastructure - be it the number of hospitals, dispensaries, staff, or doctors (only 1 doctor per 3000 people in rural area, compared to 2/3000 in urban). Quacks rule the roost. 60% of rural diseases do not get treated at all.
  • Lack of awareness towards diseases, even the highly prevalent ones. Superstition and belief in witchcraft is still rampant. Most of folks still believe that diseases are due to God’s curse, and have fatalistic attitude towards health and disease.
  • Lack of awareness towards diseases, even the highly prevalent ones. Superstition and belief in witchcraft is still rampant. Most of folks still believe that diseases are due to God’s curse, and have fatalistic attitude towards health and disease.
  • Many drugs remain expensive. Rural masses have stronger value for money. A few days’, or a little, suffering is preferred to spending money on medicines.
  • Many drugs remain expensive. Rural masses have stronger value for money. A few days’, or a little, suffering is tolerated rather than to spend money on medicines.
  • Highly disbursed markets make distribution expensive and a logistic nightmare. Maintaining cold chain, or special storage conditions is a challenge due to erratic electricity supply. Needs strategic approach, rather than tactical, as ROI period is long.
  • Highly disbursed markets make distribution expensive and a logistic nightmare. Maintaining cold chain, or special storage conditions is a challenge due to erratic electricity supply. Needs strategic approach, rather than tactical, as ROI period is long.
  • It must be considered as community responsibility rather than only government’s responsibility.
  • It must be considered as community responsibility rather than only government’s responsibility. The program is a partnership between Public Health Foundation of India (PHFI) and Dr. Mohan's Diabetes Education Academy (DMDEA) and was launched in February 2010. Roll out of the certification programme was achieved by establishing city/town level networks between interested primary care physicians as trainees and diabetes care specialists as training faculty; 200 such networks have been established and 2,000 primary care physicians trained. Sanofi aventis’ PRAYAS, a program to meet rural India’s healthcare needs and to bridge the gap by training rural doctors, was a success. Empowering doctors in rural India Prayas is our endeavour to improve the practice of health care in rural India, by aiding speedier diagnosis and early and efficient treatment. The programme keeps rural doctors and medical practitioners updated about latest developments in medicine and better disease management practices. Prayas enables primary level physicians (mentees) to receive training from Key Opinion Leaders (mentors), thus establishing a knowledge-based link between them. As part of Prayas , sanofi-aventis also makes available certain medicines at subsidized rates for rural populations. Salient features of Prayas are: Aims to improve healthcare in rural India by mentoring doctors in quicker diagnosis and competent treatment of disease Currently has a network of 400 mentors and 5,500 mentees Seeks to empower at least 1,50,000 doctors across 60,000 towns and villages of India by 2015
  • J&J’s Mobile health for mothers: Free mobile text messages on prenatal health, appointment reminders and phone calls from health coaches to expectant mothers. As part of a five-year $200 million annual donation, Johnson & Johnson has launched a mobile health initiative similar in aim and execution to Text4Baby for the more than 20 million expectant mothers in China, India, Mexico, Bangladesh, South Africa and Nigeria. J&J estimates that 1.1 billion women in those countries have a mobile phone today and are likely to sign up for its new program, Mobile Health for Mothers, which includes free mobile text messages on prenatal health, appointment reminders and phone calls from health coaches. Novo Nordisk Education Foundation is undertaking massive diabetes control program, which would include creating mass awareness regarding diabetes, conducting diabetes screening programs and enabling practical training camps for medical professionals. It has been done in Goa and Bihar and recently MOU has been signed with Gujarat govt. as well. Novo Nordisk also conducts training for anganwadi workers on various aspects of diabetes including early symptoms of diabetes, diagnosis complications and unlearning myths about diabetes. ‘ Goli ke hamzoli’ campaign to increase OCPs acceptance was a great success. Sparsh is being extended to its osteoporosis drug and Zucor (simvastatin).
  • Like microsoft windows are sold at differential prices to homes, students and corporate. Partnering with insurance companies
  • The program emphasizes patient education and local capacity building to ensure long-term success. Health educators, usually local women, are recruited and trained to raise awareness about diseases and preventive health measures, while health supervisors serve as the initiative's sales force, working to ensure that medicines are available in the most remote locations. Got award for social marketing. Operating in 10 states across India, the program's product portfolio has grown to cover 11 therapeutic areas and offers nearly 80 pharmaceutical, generic and over-the-counter products as well as vaccines to treat and prevent conditions ranging from tuberculosis and diabetes to pain and colds. The program emphasizes patient education and local capacity building to ensure long-term success. Health educators, usually local women, are recruited and trained to raise awareness about diseases and preventive health measures, while health supervisors serve as the initiative's sales force, working to ensure that medicines are available in the most remote locations.
  • Highly disbursed market, thinly populated. Difficulty in maintaining cold chain, storage conditions. Need strategic initiatives, rather than tactical ones, as ROI period is long. Making more drugs OTC may improve distribution.
  • Every other day you read Ranbaxy hiring, DRL hiring, etc. – to penetrate rural markets.
  • Is there a business in rural markets

    1. 1. India lives in its villages.
    2. 2. Is there a Businessin Rural Markets? Dr Surinder Kumar Pharma Marketing Conference, IDMA, Chennai, 19 May 2012.
    3. 3. 69 %
    4. 4. 69 %83 Crores of 121 Crores
    5. 5. Image: wikimedia
    6. 6. Image: Adam Jones
    7. 7. Image: Zenit
    8. 8. Image: Banana Chippy
    9. 9. Image: IndiaAfrica connect.in
    10. 10. 100 91.21 90 80 70 64.67 60 50 40 30 20 10 0 Rural UrbanImage: IndiaAfrica connect.in Census 2011, Number in Million
    11. 11. Image: Youthkiawaaz
    12. 12. 16 14.72 14 12 10 8.64 8 6 4 2 0 Rural Urban Census 2011, Number in MillionImage: Youthkiawaaz
    13. 13. 7065 60.5060 56.005550 Rural4540 Urban35302520 Rural Urban Census 2011, Number in Million
    14. 14. Investment on rural development Source: Rural Ministry Annual Report 2012 Value in Rs. Crores Planned Spent
    15. 15. Image: The Viewspaper
    16. 16. Narrowingrural-urban divide Image: The Viewspaper
    17. 17. Narrowing rural-urban divide•Better income from farming•Increasing income from non-farming avenues and emigrants
    18. 18. Narrowing rural-urban divide Contd..•Industry projects in rural areas•Infrastructure development•Increase in literacy and awareness•Affordability of technology & whitegoods
    19. 19. Is there a Businessin Rural Markets?
    20. 20. There a Businessin Rural Markets!
    21. 21. Contribution by Rural Market 100% 90% 19.07 17.79 18.08 19.24 80% 70% 19.97 20.08 19.71 18.95 Rural 60% Class II-VI 50% 28.01 29.55 30.52 30.62 40% Metros 30% Class I 20% 32.94 32.59 31.69 31.19 10% 0% 2009 2010 2011 2012Metro > 10 lacsClass 1 – 1-10 LacsClass 2 – 6 – between 20,000 to 1 lacRural –not urban IMS March 2012
    22. 22. Contribution by Rural Market 60000 50000 10678 8725 RURAL 40000 7435 10517 6766 9513 CLASS I TO VI 30000 8392 7084 16998 METROS 20000 12351 14728 9937 CLASS I TOWNS 10000 13622 15291 17314 11686 0Metro > 10 lacs 2009 2010 2011 2012Class 1 – 1-10 LacsClass 2 – 6 – between 20,000 to 1 lacRural –not urban IMS March 2012, Value in Rs. Crores
    23. 23. Contribution by Rural Market 60000 50000 10678 8725 2957 (16%) RURAL 40000 7435 2411 (15%) 10517 6766 1977 (14%) 9513 CLASS I TO VI 30000 8392 7084 16998 METROS 20000 12351 14728 9937 4350(20%) 4046 (15%) 4293 (14%) CLASS I TOWNS 10000 13622 15291 17314 11686 0Metro > 10 lacs 2009 2010 2011 2012Class 1 – 1-10 LacsClass 2 – 6 – between 20,000 to 1 lacRural –not urban IMS March 2012, Value in Rs. Crores
    24. 24. Image: Evelyn Simak
    25. 25. Road blocks… Image: Evelyn Simak
    26. 26. Image: The Hindu Business Line
    27. 27. InadequateHealthcare System Image: The Hindu Business Line
    28. 28. Image: Chattopadhyay
    29. 29. Lack ofAwareness Image: Chattopadhyay
    30. 30. Lack ofAffordability
    31. 31. Pharmacy 12 KM Image: Vrittiimedia.com
    32. 32. Poor AccessibilityPharmacy 12 KM Image: Vrittiimedia.com
    33. 33. •Improve Healthcare System•Create Awareness•Provide Affordability•Ensure Accessibility
    34. 34. Improving Healthcare System•Partnering with government, NGOsand other key stake holders• Training rural doctors and supportingstaff•Providing microfinance to doctors,retails, etc. to create healthcareinfrastructure
    35. 35. Improving Healthcare System Example•MSD India launched Project Transcend, aprogram to train GPs on evidence basedmanagement of diabetes.•Sanofi Aventis’ PRAYAS, a program tomeet rural India’s healthcare needs and tobridge the gap by training rural doctors, planto train150000 doctors across India.
    36. 36. Creating Awareness•Educating rural masses about safe andreliable remedies for common ailments•Partnering with rural institutions and NGOs•Making use of annuals fairs, weekly haatsand mandis to spread awareness
    37. 37. Creating Awareness - Examples•Novo Nordisk Education Foundation is undertakingmassive diabetes control program that involvesscreening, spreading awareness and training doctors.•SPARSH, a multilingual helpline for diabetics to supportJanuvia and Janumet.•NPL had run ‘Teach more, reach more’ campaign toeducate masses about epilepsy.•J&J’s Mobile health for mothers helped many.
    38. 38. Providing Affordability•Making medicine more affordable•Rural healthcare insurance•Training medical staff
    39. 39. Providing Affordability ExamplesArogya Parivar (Healthy Family), a low-profit social initiative developed byNovartis, proved to be a commerciallysustainable program. It had achievedbreak-even within 30 months.
    40. 40. Ensuring Accessibility•Company delivery vansPharmacy 12 KM•Pooling of resources by collaborations•Developing products suitable for roughstoring conditions•Mobile clinics and mobile pharmacies•Post offices duplicating as pharmacies
    41. 41. Ensuring AccessibilityPharmacy Examples 12 KMRanbaxy and Pfizer have formalized analliance with ITC to penetrate the ruralmarkets for their over-the-counter (OTC)products.
    42. 42. Indian & Multinationals in Rural Markets • Traditionally Indian companies, especially mid- & small-size, have better penetration in rural and class II-VI markets. • Now multinationals (Indian & foreign) are becoming more aggressive in these markets. • Mid- & small-size companies need to be proactive to exploit the new markets created by these companies and to protect their current business.
    43. 43. Challenges are whatmake life interesting;overcoming them is whatmakes life meaningful.
    44. 44. Thank Youhttp://www.surinderkumar.com Image: Ebyabe

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