B pharm BP803ETPharma marketing and management

1. PRESENTATION ON :

2. What is a marketing channel ?
 A channel may be defined as a path along which the information/ physical amenities are passed.
 The marketing channel is also known as the Trade Channel or Distribution Channel.
“The Marketing Channel is defined as the set of interdependent organizations involved in the process of
making a product or service available for use or consumption.”
 A distribution involves the movement of goods and services from the manufacturers to the ultimate consumer
passing through various intermediaries.
 Therefore, the key actors in the distribution channel are manufacturers, intermediaries and consumers

3. Main function of
intermediaries
Profitable costumers

4. Channels of distribution
• In retail pharmacies, the term channel is commonly used to describe the routes which are used to communicate
with patients.
• In pharmaceutical industries distribution channels are used for distribution of medicines, payment of medicines
and protection of medicines from any kind of risk. It also facilitates the appropriate usage of medicines.
• A pharmaceutical company is not only responsible for research, production and evaluation of drugs but also
responsible for distribution of drugs to the patients and the physicians.
“According to American Marketing Association : A channel of distribution or marketing channel is a structure of intra-
company organization, units and intra-company agents and dealers, wholesellers and retailers through which a
commodity product or serviced is marketed.”

5. Pharmaceutical Marketing Channels
• Marketing channel requires a minimum of two parties, in so far as the manufacturer of prescription drugs is
concerned, the law requires that at least one intermediary stands between the manufacturer and the consumer
i.e. the doctor.
• The physician is not considered a member of the distribution channel. Instead, he/she is considered an
influencer or intermediary customer.
Manufacture
Physician
Pharmacist
Consumer
Fig. : Pharmaceutical marketing channels

6. Fig. : Pharmaceutical marketing channels levels.
The “pharmacist” in the distribution channel could be either a retail pharmacist, who is commonly known as a
retail chemist or druggist, or a hospital-pharmacist. The five basic members of the distribution channel are :
1. The manufacturer
2. The physician
3. The wholesaler
4. The retailer
5. The consumer

7. Selecting the appropriate channel of distribution
In past pharmaceutical companies did not adopt the concept of supply chain management. Nowadays, various factors
are forcing the firms to change their traditional way of conducting business. There are following determinants that are
considered during the selection of distribution channel :
1. Firm Infrastructure : A manufacturer will inquire about the potential distributor before selecting a distributor. This inquiry
can be done by past and existing customers and by its competitors. Financial strength. management ability, and experiences are
some of the variables of firm infrastructure. Management ability is one of the essential factors for the selection of potential
distributor. Financial strength demonstrates the overall capabilities of potential channel members, in addition to information
related to specific channel functions.
2. Marketing capabilities : Marketing capability is defined as the collective capacity of the firm to apply the knowledge, skills,
capital and resources to capture the highest market share. A manufacturer is highly dependent on distributors for various
marketing activities such as promotion and merchandising. The distributors also act as a marketing partner as they provide
information related to the market which is essential for the manufacturer to understand the changing requirements of the
customers.

8. 3. Relationship intensity : A company should hire those distributors who are enthusiastic about the contract and devoted for
achieving success. Manufacturers are more likely to choose those distributors with whom they are familiar or who have been
recommended by channel customers.
4. Logistics capabilities : Logistics is considered as a source of core strategic advantage. Logistics services are properly
managed by the distributors. It brings financial advantage as well as flexibility, operational efficiency and value to overall supply
chain. An effective channel requires that its members are equipped with good logistics capabilities. It is the basic responsibility
of distributor to manage the inventory cost. Efficiency of delivering products is another important aspect of firms' logistics.
Whenever a right product is delivered in the right quantity, at the right time and place then it is referred to as delivery efficiency.
5. Strategic issues : A distributor should have some strategic importance. A manufacturer has interests associated with the
distributor. This can be in the form of gaining high market share, to counter any strategy of the competitor or to form a high
profile organization. Interests might be varied but these concerns are always on their mind. Sometimes, a cultural match
between the manufacturer and distributor is important so that it becomes easy to carry out business.