Consumer Behaviour

RESEARCH TOPIC
An In-depth-study of OTC medicine segment of Indian Pharmaceutical Industry with

special emphasis on consumer behavior
RESEARCH OBJECTIVES
Macro objective
To study the Indian Pharmaceutical Industry as a whole
Micro objectives
To understand the consumers attitude towards OTC products of the pharmaceutical i
ndustry To understand the healthcare products contribution and also its effects o
n pharmaceutical market To determine the extent to which the respondents prefer
self-medication instead of going to the doctor for common health problems To fin
d out the criteria on which the consumers rely for making their purchase decisio
n regarding OTC products To find out the extent to which consumers read the labe
ling information before making a purchase To find out the extent to which the re
spondents perceive OTC products as safe to use To understand the influence of ad
vertising on consumer behavior towards them To find out the most preferred brand
in each OTC product category To know the frequency of purchase of OTC products
by the consumers To know the preferred medium of communication for advertisement
of OTC products
RESEARCH METHODOLOGY
Research Design:
Target Population: Population of the research is the consumers who are well awar
e of the OTC products and who are above 18 years of age
N.R.Institute of Business Management Page 1
Research Design : Descriptive Research Sampling unit: Same as the sample element
Sampling Technique: Convenience sampling Sample Size : 300 sampling units selec
ted from the Target population Contact Method: Researcher have contacted samplin
g units personally and with the help of one to one interaction researcher have c
onducted survey. Extent: The location considered by the researcher is Ahmedabad
city.
Data Sources:
Primary Source: Questionnaire Secondary Sources: Books like Marketing Research b
y Malhotra Journals Websites Reports LIMITATIONS OF THE STUDY The main limitatio
n of the study is the time span available with researcher for conducting the res
earch is 6-8 months. Another limitation is that the scope of the researchers stud
y is Ahmedabad city. So the population considered may not be the actual represen
tative of the population of the nation. The information given by the respondents
can be biased. In order to limit the scope of the project only 5 categories of
OTC products segment were included based on frequency of usage, in the question
that ask for highly consumed brand.
N.R.Institute of Business Management
Page 2
INTRODUCTION:
The pharmaceutical industry is a knowledge driven industry and is heavily depend
ent on R&D for new products and its growth. However, Basic Research (discovering
new molecules) is a time consuming and expensive process and is thus, dominated
by large global multinationals. In the Global Pharmaceutical Market, Western Ma
rkets are the largest and fastest growing due to introduction of newer molecules
at high prices. A well-established reimbursement and insurance system implies t
hat per capita drug expenditure is abnormally high in Western Countries as compa
red to the developing nations. The Indian Pharmaceutical Industry is highly frag
mented, but has grown rapidly due to the friendly patent protection, low cost ma
nufacturing structure, intense competition, high volumes and low prices. Exports
have been rising at around 30% CAGR over last five years. The Drug Pricing Cont
rol Order (DPCO) has severely restricted profitability and hence innovation. How
ever, the government has been relaxing controls in a slow but progressive manner
. The span of control of DPCO has come down from 90% in 1980s to 50% in 1995 and
is likely to be further reduced as per the latest proposed changes. In the dome
stic market, old and mature categories like anti-infective, vitamins, analgesics
are degrowing or stagnating while new lifestyle categories like cardiovascular,
CNS, anti diabetic are growing at double-digit rates. The growth of a company i
n the domestic market is thus critically dependent on its therapeutic presence.
DEFINITION OF PHARMACEUTICALS:
Pharmaceuticals are substances known as medicines, used in preventing and curing
illness and disease. Usage of pharmaceutical is governed by underlying science
of illness and disease. The branches of medical science are shown in the followi
ng figure.
Ancient civilization allowed India to develop various kinds of medical and pharm
aceutical systems. In addition to the allopathic system, which is prevalent in t
he United States, Japan and Europe, the following types of medical and pharmaceu
tical systems are used by the Indian people:
Medical Science
Allopathy
Ayurveda
Siddha
Unani
Homeopathy
Naturopathy
Allopathy: It is known as the modern medicine and world over the pharmaceutical
industry is focused upon it.
Ayurveda: Ayurveda translates as the science of life. It encompasses fundamentals
and philosophies about the world and life, diseases and medicines. The knowledge
of Ayurveda is compiled in Charak Samhita and Sushruta Samhita. The curative tr
eatment lies in drugs, diet and general mode of life.
Siddha: The Siddha system is one of the oldest Indian systems of medicine. Siddh
a
means achievement. Siddhas were saintly figures who achieved healing through the p
ractice of yoga. The Siddha system does not look merely at a disease but takes i
nto account a patients age, sex, race, habits, environment, diet , physiological
constitution and so forth. Siddha medicines have been effective in curing some d
iseases, and further work is needed to truly understand why this system works.
Unani: The Unani system originated in Greece and progressed to India during the
medieval period. It involves promotion of positive health and prevention of dise
ase. The system is based on the humoral theory i.e. the presence of blood, phleg
m, yellow bile and
black bile. A persons temperament is accordingly expressed as sanguine, phlegmati

c, choleric or melancholic. Drugs derived from plant, metal, mineral and animal
origins are used in this system.
Homeopathy: Homoeopathy is a branch of therapeutics that treats the patient on t
he
principle of SIMILIA SIMILIBUS CURENTUR which simply means Let likes be cured by li
kes. Homeopathy seeks to stimulate the body s defense mechanisms and processes so
as to prevent or treat illness. Treatment involves giving very small doses of s
ubstances called remedies that, according to homeopathy, would produce the same
or similar symptoms of illness in healthy people if they were given in larger do
ses. Treatment in homeopathy is individualized (tailored to each person). Homeop
athic practitioners select remedies according to a total picture of the patient,
including not only symptoms but lifestyle, emotional and mental states, and oth
er factors.
Yoga and Naturopathy: Yoga and Naturopathy are ways of life. In naturopathy one
applies simple laws of nature. It advocates proper attention to eating and livin
g habits. It also involves hydrotherapy, mud packs, baths, massage and so forth.
Yoga consists of eight components: restraint, observance of austerity, physical
postures, breathing exercises, restraining of the sense organs, contemplation,
meditation and Samadhi. Increasing interest exists in revisiting these ancient d
rug systems.
MANUFACTURING PROCESS:
Step by step manufacturing process has been described on subsequent page. Bulk d
rugs are prepared by appropriate reactions of natural/synthetic intermediate raw
material under controlled conditions. Right dosage of the bulk drug (active ing
redient) is mixed with filler substances (passive ingredient), to make the formu
lation acceptable. This is done in a batch process. Formulations are packed acco
rding to their physical form - blister strips for tablets/capsules, bottles for
liquids or ampoules for powders. Each pack must have price,
expiry date, storage conditions and dosage. Stringent quality control is must at
each stage as per the requirement of concern authority. The following figure sh
ows the flow chart for manufacturing process.
INTERMEDIATE RAW MATERIAL (Plant derivatives/ Animal derivatives/ Synthetic Chem
ical)
BULK DRUGS ACTIVE INGREDIENT (Raw medicines cant be used for medicinal purpose) F
ILLER SUBSTANCE PASSIVE INGREDIENT (To make bulk drugs FORMULATION (Packed with
proper instruction regarding price, expiry date, storage condition and dosage)
PATIENTS (Either directly or under prescription of the doctors)
Manufacturing Process N.R.Institute of Business Management Page 6
BULK DRUGS AND FORMULATION:

In basic form, pharmaceutical are called bulk drugs. They are derived from inter
mediate raw material, namely Plant derivatives Animal derivatives Synthetic chem
icals Bulk drugs in their raw form cannot be used as medicine and they have to b
e converted in to form in which human can use them as medicine. This type of fin
al dosage form is known as formulations. Formulations can be classified into two
types namely, Ethical products: These types of formulations are available only
under medical prescription to prevent misuse. Doctors, to cure a disease in the
patient primarily prescribe ethical formulations. Generally, for ethical product
s direct advertisements to users are prohibited. Over The Counter: These types o
f formulation known as OTC can be purchased by users directly, for example pain
balms, health tonics etc. For OTC product, direct advertisements to user can be
used to promote product under certain conditions. Formulations can be categorize
d as per the route of administration to patients, namely, Oral: They are taken i
nternally by patients, for example tablets, syrup, capsules, powders Topical: Th
ey are applied on skin, for example creams, ointments, liquids, aerosol etc. Par
enterals: They are injected in an intravenous and intramuscularly fashion. Other
s: It includes eye drops, surgical dressings etc.
RESEARCH & DEVELOPMENT:
Pharmaceutical industry is driven by a need to conquer disease. New diseases eme
rge as humans find the solution to cure old diseases. New medicines are develope
d to treat new diseases or existing medicine are reformulated to improve upon th
e treatment of existing diseases. That is
Page 7
why R&D of drugs is a key to success in the pharmaceutical industry. Four kind o
f research are conducted in the pharmaceutical industry namely, 1. Fundamental o
r Basic Research: This involves discovering new molecules from scratch. No India
n company does Basic Research, simply because it is very expensive. Indian drug
companies do not make the kind of profit required for this kind of research. In
the West, hi-tech equipments screen, can compound a cost up to $3 billion. 2. Pr
ocess research or Reverse Engineering: This involves a copy of existing molecule
by manufacturing it with different process. Indian patent law, at present, cove
rs process patents, not product patents. Indian companies are very effective and
efficient in reverse engineering. However, a new paten law will obviously, not
permit reverse engineering. 3. Analogue or Discovery Research: Companies modify
an existing molecule (or a new one that has not yet commercialized), after acces
sing international patent databases, to arrive at a new molecule. Some of the bi
gger Indian companies like Dr. Reddy, Ranbaxy, Cadila, and Torrent etc. are cond
ucting discovery research or plan to do so. 4. Genetic research: It aims at esta
blishing the link between genes and diseases and one day determine the best drug
s for individuals based on their makeup. World leaders of the pharmaceutical ind
ustry have started devoting resources to this type of research called Genomic. No
Indian company does this kind of research, but several government or academic in
stitutions like National Institute of Immunology, New Delhi and Center for Micro
biology, Hyderabad have begun work in this area.
PATENTS - A PROJECTION:
Discovery of a new drug or modifications on existing drug requires intensive R&D
efforts and companies have to spent huge amount on R&D to find new drugs or mod
ify existing one. If a protection is not provided to innovator of drugs no one w
ould prefer to spend on R&D and it
will hinder to growth of pharmaceutical industry and of human being. To protect

the interest of an innovators patent is provided to ensure commercial gains on t
heir R&D investment. Patents are a vital aspect for the global pharmaceutical in
dustry. Two kind of patent protection is granted to the innovators by different
countries, namely Product patent: It provides an exclusive manufacturing and lic
ensing rights of product, to innovator of that product for a stipulated time per
iod. So, if company A discovers drug Z then no other manufacture can produce dru
g Z without consent of company A. At present only the developed nations endorse
product patent. Process patent: It provides an exclusive manufacturing and licen
sing rights of process to manufacture a product, to innovator of that product fo
r a stipulated time period. So, if company A discovers drug Z by process P then
no other manufacture can produce drug Z by process P without consent of company
A. But other manufactures can produce drug Z by any other process then P. Most u
nder developed nations endorse process patent.
Patent is granted for stipulated time period. Once this time period gets over a
drug becomes off patent or generic and any one can manufacture that drug. Based
on this criteria drugs can be classified as: Under patent Generic or off patent
THERAPEUTIC MARKET SEGMENTATION:
Commencing with repackaging and preparation of formulations from imported bulk d
rugs, the Indian industry has moved on to become a net foreign exchange earner,
and has been able to underline its presence in the global pharmaceutical arena a
s one of the top 35 drug producers worldwide. Currently, there are more than 2,4
00 registered pharmaceutical producers in India. There are 24,000 licensed pharm
aceutical companies. Of the 465 bulk drugs used in
India, approximately 425 are manufactured here. India has more drug-manufacturin
g facilities that have been approved by the U.S. Food and Drug Administration th
an any country other than the US. Indian generics companies supply 84% of the AI
DS drugs that Doctors without Borders uses to treat 60,000 patients in more than
30 countries. However total pharmaceutical market is as follows:
Page 10
INTRODUCTION:
The pharmaceutical industry is a very unique and spectacular industry, with an i
mpressive evolution along the 20th and the beginning of the 21st centuries, as w
ell as facing a challenging future. The situation in the industry at the global
level has spectacularly changed in the past two decades, leading to new strategi
es and new portfolios, especially for the major pharmaceutical companies worldwi
de. The current pharmaceutical industry characterizes as a mature and stable ind
ustry that is constantly affected by mergers and acquisitions, as well as by new
scientific discoveries. Therefore, it becomes very essential to understand the
global scenario and the current trends in the pharmaceutical industry for the co
mpanies to operate in a single market and serve the mankind across the globe. In
this chapter an overview of the global pharmaceutical industry has been given.
Starting from the origins and evolution of the global pharmaceutical industry to
the current market structure and the industry trends are being discussed. Also
the challenges that are faced by the global pharmaceutical industry are mentione
d. Finally the future outlook is being provided for the current year 2009 based
on the predictions of IMS Global Pharmaceutical and Therapy Forecast 2009. The p
harmaceutical industry is a knowledge driven industry and is heavily dependent o
n R&D for new products and its growth. However, Basic Research (discovering new
molecules) is a time consuming and expensive process and is thus, dominated by l
arge global multinationals. In the Global Pharmaceutical Market, Western Markets
are the largest and fastest growing due to introduction of newer molecules at h
igh prices. A well-established reimbursement and insurance system implies that p
er capita drug expenditure is abnormally high in Western Countries as compared t
o the developing nations.
ORIGINS AND EVOLUTION:
The modern pharmaceutical industry is a highly competitive non-assembled1 global
industry. Its origins can be traced back to the nascent chemical industry of th
e late nineteenth century in the Upper Rhine Valley near Basel, Switzerland when
dyestuffs were found to have antiseptic properties. A host of modern pharmaceut
ical companies all started out as Rhinebased family dyestuff and chemical compan
ies e.g. Hoffman-La Roche, Sandoz, Ciba-Geigy (the
product of a merger between Ciba and Geigy), and Novartis etc. Most are still go
ing strong today. Over time many of these chemical companies moved into the prod
uction of pharmaceuticals and other synthetic chemicals and they gradually evolv
ed into global players. The introduction and success of penicillin in the early
forties and the relative success of other innovative drugs, institutionalised re
search and development (R&D) efforts in the industry. The industry expanded rapi
dly in the sixties, benefiting from new discoveries and a lax regulatory environ
ment. During this period healthcare spending boomed as global economies prospere
d. The industry witnessed major developments in the seventies with the introduct
ionof tighter regulatory controls, especially with the introduction of regulatio
ns governing the manufacture of generics. The new regulations revoked permanent pa
tents and established fixed periods on patent protection for branded products, a
result of which the market for branded generics emerged.
Branded companies: Branded companies are the innovative companies that carry out
the
Research and Development (R&D) of new drugs (or contract this process). Initiall
y, their products are protected by patents. The clinical test data, used for the
approval of the drugs, is usually protected as well.
Generic companies: Generic companies produce drugs that they have not developed
themselves. Normally these drugs are not protected by patents anymore. However,
many branded companies have divisions or subsidiaries that produce generics as w
ell. With regard to the products of these companies, three categories of drugs a
re commonly distinguished.
Prescription drugs These have to be prescribed or administered by healthcare
professionals.
Over the counter (OTC) drugs also called self-medication drugs. These can be
purchased without a prescription.
Vaccines These are usually regarded as a separate category next to pharmaceutica
ls. In
contrast to pharmaceuticals, vaccines are not based on chemical compounds but on
live bacteria and viruses. The production process of vaccines is therefore quit
e different and far more complicated.
GLOBAL SCENARIO:
The global pharmaceutical market can be classified into two categories: regulate
d and unregulated/semi regulated. The regulated markets are governed by governme
nt regulations like intellectual property protection, including product patent r
ecognition. As a result, they have greater stability in both volumes and prices
like the United States. The unregulated/semiregulated markets have lower entry b
arriers in terms of regulatory requirements and hence, they are highly competiti
ve. The global pharmaceutical companies till 2010 will be closely regulated by e
merging issues like patent safety, side effects, adverse action reporting, stren
gthening harmonization and regulations and stronger clinical evidence. Global ph
armaceutical market has increased its focus on novel drugs, good delivery system
, and new chemical entities. The other factor which is driving the growth of glo
bal pharmaceutical market is speeding up regulation in bio-generic segment. More
over there will be shift in growth from top ten markets to emerging economies. T
he global pharmaceutical market will change its shape from primary care driven t
o specialty care driven that is oncology and biotech. The global pharmaceutical
industry will take a shape of virtually integrated pharmaceutical company. There
is a widening gap between mature market performance and emerging market perform
ance, which will require many pharmaceutical companies all over the globe to mak
e changes throughout their operations from shifting their sales and market, revi
sing there strategies, changing there business models to fuel there growth. For
the global pharmaceutical industry, 2008 will be a year of softening growth and
a widening gap in performance between the increasingly generalized and cost-cons
trained mature markets, as well as the burgeoning pharmerging sectors where demand
is growing and economies and access to healthcare are expanding at record level
s. Marking an important inflection point for the industry, for the first time th
e worlds seven key markets (US, Japan, UK, Germany, France, Spain and Italy) will
drive less than half of the industrys growth in 2008, while the pharmerging mark
ets will contribute nearly a quarter of growth worldwide (Figure 1). Further div
ergence will be apparent between primary care-driven and specialist-driven thera
py areas, and between therapy classes with major unmet needs and innovations, an
d those dominated by generics.
Page 13
PACE OF THE MARKET GROWTH:

Page 14

Page 15
INDUSTRY TRENDS:
Structural changes: The pharmaceutical industry is currently undergoing a period
of
very significant transformation. The majority of Big Pharma companies are generati
ng high returns which provide them with excess cash for further rapid growth whe
ther organic, or through mergers and acquisitions. In pharmaceutical industry si
ze of the company on its own is a significant advantage. Besides economies of sc
ale in manufacturing, clinical trials and marketing, bigger companies can get a
competitive advantage by allowing investments in more research and development (
R&D) projects which in turn diversify their future drugs portfolio and make them
much more stable in the long term. As the result, topcompanies in the industry
were active participants of mergers and acquisitions (M&A). Another form of stru
ctural change in the industry was establishing of new strategic alliances and jo
int ventures. So far as the research and development process for each drug take
many years and requires significant investments, and the outcome of these invest
ments of time and financial resources remains unclear until the final approval o
f the drug, Big Pharma companies are constantly looking for synergies that they ca
n get from cooperation with their competitors. For example, cooperation of Sanof
i-Aventis and Bristol-Myers Squibb resulted in production of Plavix, which is cu
rrently one of the top-selling products for each of these companies. Yet another
trend is selling off low-profitability or non-core businesses. Big Pharma compani
es in order to maintain strong sales growth and meet profitability expectations
of their shareholders actively engage in these activities. For example, in 2003
Merck sold its low-profitability Medico Health Solutions that helped to increase
its profitability margin. Massive sales of non-pharmaceutical businesses by Tak
eda also were compatible with its strategy to concentrate its financial resource
s on its core pharmaceutical business.
Major factors of future growth: The pharmaceutical industry showed high sales
growth rates in the recent past, and a number of factors suggest that this trend
will continue in the future. Some of these factors are:
Page 16
1) According to various studies, a significant portion of elderly population in

the United States and other countries does not receive proper treatment. For exa
mple, only about one third of the U.S. population who requires medical therapy f
or high cholesterol is actually receiving adequate treatment. As it is expected,
the Medicare Prescription Drug Improvement and Modernization Act starting from
the beginning of 2006 will increase access of senior citizens to the prescriptio
n drug coverage, thus increasing pharmaceutical sales. 2) Although developing co
untries at the moment have a small portion of world pharmaceutical sales, these
countries also have a significant potential for the pharmaceutical industry in t
he future. Fast growing economies in Asia, South America and Central & Eastern E
urope suggest an increasing solvency of population and make these markets more a
nd more attractive for Big Pharma companies. Further reforms of legislation system
s in the countries of these regions, especially regarding patent protection issu
es, will inevitably result in growing pharmaceutical sales.
KEY CHALLENGES:
The main challenges for drug companies come from four areas. First, they must de
al with competition from within and without. Second, they must manage within a w
orld of price controls that dictate a wide range of prices from place to place.
Third, companies must be constantly on guard for patent violations and seek lega
l protection in new and growing global markets. Finally, they must manage their
product pipelines so that patent expirations do not leave them without protectio
Competition The pharmaceutical industry currently repres
n for their investment.
ents a highly competitive environment. One can distinguish three layers of compe
tition for Big Pharma companies. First, obviously, Big Pharma companies compete amon
g themselves. Although not all leading pharmaceutical companies cover all segmen
ts of pharmaceutical market, almost all of them are active in R&D and production
of drugs in the segments with the highest potential such as treatment
of infectious, cardiovascular, psychiatric or oncology diseases. Secondly, Big Ph

arma companies experience significant profit losses due to competition from the g
eneric drug manufacturers. Opposite to the research-oriented pharmaceutical comp
anies, which invest significant financial resources and time to develop new medi
cines, generic drug manufacturers spend minimum resources on R&D, and start manu
facturing already developed by other companies drugs after their patent expirati
on. Because generic drug manufacturers do not have to recoup high R&D costs, pri
ces of their products are usually much lower then those of major pharmaceutical
companies; as the result, after patent expiration, generic drugs manufacturers c
apture significant market share, dramatically decreasing revenues of the Big Phar
ma companies. Finally, the whole pharmaceutical industry competes with other heal
th care industries. In this case, pharmaceutical companies should not only demon
strate high efficiency of their products, but also provide obvious proof of cost
advantages in comparison with other forms of care.
Price control Pharmaceutical
companies have to operate in a highly regulated environment; the degree of regu
lation to a significant extent depends on the country and type of the product. O
ne of the most important aspects of government regulation for pharmaceutical com
panies is price regulation, and different countries have different policies on t
his issue. In the United States the largest and the most attractive pharmaceutic
al market currently there is no direct price control for non-government drug sal
es. At the same time, it is expected that Medicare Prescription Drug Improvement
and Modernization Act will potentially increase downward price pressure. The ma
jority of European countries control drug prices, and this downward pressure on
prices has been increasing during last years. Japan has even stricter price cont
rols than European countries; all prices are controlled by the government, and t
hey are subject to a periodic price review. As the result of price control, pric
es of the same products can significantly differ in different countries.
Page 18
Protection of patents
Generic drugs manufacturers represent a significant threat to research-based pha
rmaceutical companies. For example, Schering-Ploughs Claritin patent expired in 2
002; as the result of generic drug competition, sales of Claritin by Schering-Pl
ough declined from $3.2 billion in 2001 to $1.8 billion in 2002 and to $0.37 bil
lion in 2003.Moreover, generic drugs manufacturers sometimes start production of
patent-protected drug analogues even before a patent expires. Although research
-oriented companies in many cases are able to protect their patents, they do suf
fer from lost revenues. Therefore, protection of patents is one of the key condi
tions necessary for further development of the pharmaceutical industry. At the s
ame time, non-efficient legislation that does not provide the necessary level of
patent protection is one of the factors that hamper expansion of Big Pharma compa
nies to the developing countries.
Drugs portfolio management
Drug portfolio management is one of the most important determinants of long-term
prosperity of research-oriented pharmaceutical companies. First, it takes an ex
tremely long time to develop a new drug, and only a very small portion of all pr
ojects is successful. Projects that the company starts today will determine its
financial performance 10-15 years later. Therefore, careful planning of R&D proj
ects is very important for the long-term stability of the company. Second, insof
ar as patents keep exclusivity of drugs only during a limited time, and soon aft
er the expiration of the patent the sales of the drug sharply go down, the compa
ny has to carefully monitor its patent expiration dates, and insure that new pro
ducts become available by that date. Otherwise, we are reminded of the case of S
heringPlough, when after expiration of its major drug patent the company did not
have a new product of similar value and the company experienced losses in 2003
and 2004. Definitely, planning errors or rapidly changing demand in the industry
can be corrected by acquisition of smaller research companies or patents from c
ompetitors, but in any of these cases the company will have to pay a premium pri
ce, thus reducing its profitability.
Page 19
Major Players in the Market:

The pharmaceutical industry is characterized by a high level of concentration of
multinational companies dominating the industry. Table below contains informati
on about the top 10 pharmaceutical companies across the globe that are sorted in
the order of their 2009 revenues of pharmaceutical products in terms of US doll
ars.
Rank
Company
Country
Total Revenues (USD millions)
61,897
1
Johnson & Johnson Pfizer Roche GlaxoSmithKline Novartis Sanofi-Aventis AstraZene
ca Abbott Laboratories Merck & Co. Bristol-Myers Squibb
United States
2 3 4 5 6 7 8
United States Switzerland United Kingdom Switzerland France United Kingdom Unite
d States
50,009 45,304 44,421 44,267 40,870 32,804 30,800
9 10
United States
27,428 24,158
United States
Page 20
CONCLUSION:
Given the changing trends in the industry s global value chain and gradual shift
s in international trade patterns, if the former pioneers (US, UK, Switzerland,
and Germany) wish to remain competitive, they need to expand the development of
new drugs. Otherwise, they will face a continuing of the intensified competition
from developing nations that has appeared over the last decade as outsourcing i
nvestment in drug discovery and product development has grown. Also, as major pa
tents expire and generic companies in countries like Israel and India enter thes
e markets, this will be put added pressure from emerging economies on the former
pioneer nations. The political determinants that govern the pharmaceutical indu
stry are all regulated by the Food and Drug Administration. The government estab
lished this organization to protect the health and safety of all customers by en
suring the quality of all drugs produced. As a result the regulations are extrem
ely strict and few drugs are actually passed and reach the open market. Entering
the field takes an immense amount of capital, due to the time needed to researc
h, test and produce the drugs. Also drugs that have already been created are pro
tected under WTO patents. But, once a successful drug is marketed, the industry
can be very lucrative. The demand for pharmaceuticals is relatively stable even
if other markets decrease in an economic slump, so with constant research and pr
oduction of new drugs, a company can benefit largely. This therefore would ensur
e global competitiveness and success for a corporation; that is if the drugs als
o passed the other nations regulations. Over the past 50 years, the pharmaceutic
al industry has experienced tremendous growth and change. Along with this growth
has come a series of pressures to unite the industry under international standa
rds and regulations. These international regulatory guidelines have increased th
e barriers to entry in the international market and have driven top firms to cre
ate voluntary corporate standards. Also, the idea of "corporate social responsib
ility" has recently emerged as companies attempt to avoid liability issues and d
ecrease their impact on the environment. In addition, environmental certificatio
n issues are a becoming driving force for change in the pharmaceutical industry.
In the future, if pharmaceutical companies are able avoid liability issues by a
djusting social and environmental regulations; they will be very competitive in
the international marketplace.
Page 21
INTRODUCTION:
Pharmaceutical Industry in India is one of the largest and most advanced among t
he developing countries. It is ranked 4th in volume terms and 11th in value term
s globally. It provides employment to millions and ensures that essential drugs
at affordable prices are available to the vast population of India. Indian Pharm
aceutical Industry has attained wide ranging capabilities in the complex field o
f drug manufacture and technology. From simple pain killers to sophisticated ant
ibiotics and complex cardiac compounds, almost every type of drug is now made in
digenously. Indian Pharmaceutical Industry is playing a key role in promoting an
d sustaining development in the vital field of medicines. Around 70% of the coun
try s demand for bulk drugs, drug intermediates, pharmaceutical formulations, ch
emicals, tablets, capsules, orals and vaccines is met by Indian pharmaceutical i
ndustry. A number of Indian pharmaceutical companies adhere to highest quality s
tandards and are approved by regulatory authorities in USA and UK. The Indian ph
armaceutical industry traditionally relied on reverse engineering i.e. product cop
ying, through which vast profits were made. In recent years, however, the larger
domestic companies have realized the need to undertake original research and /
or penetrate into the regulated generics markets in the USA/EU in order to survi
ve in the global market. At the same time, the Indian pharmaceutical industry is
renowned for supplying affordable generic versions of patented drugs for illnes
ses like HIV/AIDS to some of the worlds poorest countries. Some of the strategies
that have been followed by Indian pharmaceutical companies for their growth in
the global markets have been as follows: Geographic diversification with few com
panies focusing on increasing presence in the regulated markets and others explo
ring the developing/under-developed markets of the world.
Page 22
As a part of diversification strategy, some of the companies have acquired brand

s, facilities and businesses overseas. Some companies have even started their lo
cal marketing in foreign markets. Partnerships for supply of bulk drugs and form
ulations with the generic companies as well as innovators. For regulated markets
such as the US, there are companies focusing on value added generics, niche seg
ments or patent challenges in the US. Focus on offering research and manufacturi
ng services on a contractual basis(CMOs and CROs) Apart from these strategies In
dian companies have to devise newer strategies continuously to survive in the hi
ghly competitive global market in an industry that is characterised by - high ca
pital requirement, high technical requirement, high process skills, high value a
ddition prospects, high export volumes, high market sophistication. Indian compa
nies are following the route of mergers and acquisitions to make inroads in the
foreign markets. They need to consolidate further in different parts of the worl
d to become trans-national players. Indian companies will have to rise above the
statement of Michael Porter (1990), that most multi-national firms are just nat
ional firms with international operations. They shall certainly be at an advanta
ge, as their strong national identities will give them a competitive advantage i
n the global markets.
HISTORY:
The pharmaceutical industry in India has evolved through three phases over the p
ast 50 years. The first was the period prior to 1970, when the industry was rela
tively small in terms of production capacities. The second phase spanned the lat
e 1970s to the early 1990s, a period during which the industry experienced polic
y-induced growth. In its third phase, during the 1990s, much of the regulatory s
tructure that the Government had imposed during the previous two decades was dis
mantled. Even as late as the mid-1970s, India had a relatively small pharmaceuti
cal industry, with a total production of just over US$ 600 million. During the s
ubsequent four years, the total output of the industry more than doubled, the ma
jor contribution being made by formulations, which accounted for 85 per cent of
total production. Table 5.2.1
shows the production figures for the two broad segments of the industry: bulk dr
ugs and formulations.
The table shows an overwhelmingly large share of installed capacity of the India
n industry was in the small-scale sector. In the 70s 43 were affiliates of foreig
n firms in which the parent firms share in equity holdings exceeded 40 per cent
. These foreign affiliates were deemed to be foreign-controlled firms, in accordan
ce with the guidelines stated by the Foreign Exchange Regulation Act of 1973 (co
mmonly known as FERA). This indicates that foreign industry had a disproportiona
tely high share in total production in the mid-1970s. They produced 42 per cent
of bulk drugs and formulations put together and about 38 per cent of the bulk dr
ugs produced by the Indian industry. Major changes that contributed in the growt
h of this sector are enumerated below: 1) The policy regime since the 1970s: Thr
ee critical policy initiatives taken by the Government marked a turnaround in In
dian Pharmaceutical Industry: a) The Drugs Price Control Order (DPCO), which was
adopted in 1970. b) Adoption of the new Patents Act, which became effective in
1972 c) Adoption of a new drug policy in 1978. The above-mentioned policy initia
tives were taken with two broad objectives in view: (i) to develop a strategy fo
r the expansion of the domestic pharmaceutical industry by relying
essentially on Indian enterprises, and (ii) to establish a structure for keeping

the prices of drugs within affordable limits.
a) DPCO, 1970 On 16 May 1970, a comprehensive order was promulgated under Sectio
n 3 of the Essential Commodities Act and in super cession of all the earlier ord
ers on the subject. This order was called the Drugs (Prices Control) Order, 1970
. In its introductory form, DPCO was a direct control on the profitability of a
pharmaceutical business, and an indirect control on the prices of pharmaceutical
s. The government stipulated that a companys pre-tax profit from its pharmaceutic
al business should not exceed 15% of its pharmaceutical sales (net of excise dut
y and sales tax). In case profits exceeded this sum, the surplus was deposited w
ith the government. So, a pharmaceutical company had the freedom to decide the p
rices of its products. Product-wise margins were also flexible, so long as the o
verall margin did not exceed the stipulated norm. Since individual product price
s did not require approval from the government, bureaucratic hurdles were low. A
t that time, the Indian pharmaceutical industry was largely dominated by MNC aff
iliates and subsidiaries. These MNCs were hardly affected by the relatively mild
form of DPCO and continued operating in the domestic market. However, FERA (For
eign Exchange Regulations Act) which came in mid 70s did curb the operations of
MNCs. Overall, the Indian pharma industry prospered from 1970 to the next DPCO i
n 1979. The first step towards evolving a comprehensive policy regime for the In
dian pharmaceutical industry was taken by the setting up of the Hathi Committee
in 1974. The Committee had an exhaustive mandate that aimed at the realization o
f the two broad objectives mentioned above. The Hathi Committee presented its re
commendations in 1975. b) The Hathi Committee, 1974 The Hathi committee report w
hich, under chapter IV stated - The committee believes that health care has a dire
ct relationship with socio economic growth of the country and a welfare state sh
ould treat production, procurement and distribution of essential drugs, as a soc
ial
responsibility just as import as ensuring supply of food and shelter. With a vie
w to tackling the problem of large scale production of a Statutory Body which ma
y be called the National Drug Authority of India (NDA). The report had mentioned
several functions for NDA. The Government of India, however, did not accept this
recommendation and no action was taken for creating NDA. Thus the drug policy f
ormulated by Government of India for the first time in 1978 did not include the
concept of NDA. c) The new drug policy of 1978 The new drug policy announced by
the Government in 1978 had the following five broad objectives: (i) to develop a
strong Indian sector with the public sector playing a leading role; (ii) to cha
nnel the activities of the foreign firms in accordance with the national priorit
ies and objectives; (iii) to deepen the production base of the domestic industry
by ensuring that the production of drugs took place from as basic a stage as po
ssible; (iv) to encourage research and development and improve the technological
sinews of the industry; and (v) to provide drugs to consumers at reasonable pri
ces.
2) Post-Liberalisation:
As an integral part of economic reforms, the industrial, trade and technology po
licy framework that had evolved from 1950s to late 1980s was considerably change
d in the 1990s. The New Industrial Policy (NIP) announced on 24th July 1991 and
subsequent amendments brought far reaching changes in the policy regime evolved
thus far. The liberalisation of the economy in 1991 had a major impact on the tw
o vital policies (Drug Policy and Price Controls) related to the pharmaceutical
industry which are discussed below. a) Drug policy In September 1994, government
announced a revision of the Drug Policy, 1986 making major modifications. The m
odifications included: abolishing licensing policy for all bulk drugs except tho
se reserved exclusively for the public sector units and other using new technolo
gies,
removing limitations on the use of imported bulk drugs, allowing foreign holding
s up to 51 percent, and automatic approval for foreign technology agreements in
the case of almost all drugs. Later on, the pharmaceutical industry was included
in the list for automatic approval up to 74 per cent in March 2000 and to 100 p
er cent in December 2001. b) Price Controls Another aspect of the reforms has be
en substantial dilution of the price controls. The Drug Policy, 1994 liberalized
the criteria for selecting drugs for price controls. Inline with the changes in
drug policy a new DPCO was notified in January 1995 bringing down the number of
drugs under the ambit of price controls to 74 from 166 (as was under DPCO, 1987
). These 74 drugs accounted for only about 40 percent of the total market thus s
etting the bulk of the pharmaceuticals market out of price controls. The exempti
on period for new drugs, produced through indigenous R&D was also increased from
5 years to 10 years. Although, the piecemeal reforms have been criticized for s
low industrial progress gradual liberalization of the policy regime from overbea
ring governmental control to subtle emergence of open market principles gave time
and opportunity to firms and the local administration to adapt to the changing s
cenarios. The policy regime adopted for the pharmaceutical industry in India thu
s changed from one in which the industry was subjected to government controls in
the 1970s to one that was almost completely guided by market forces two decades
later. This changed scenario can be best understood by looking at the sharply d
eclining number of bulk drugs under price control since 1970, the year in which
the first DPCO was introduced in the country.
INDUSTRY STRUCTURE:
The Pharmaceutical industry in India is fragmented with over 3,000 small/medium
sized generic pharmaceutical manufacturers. It has over 20,000 units out of whic
h 300 units are in the organized sector; while others exist in the small scale/u
norganized sector. The leading 250 pharmaceutical companies control 70% of the m
arket with market leader holding nearly 7% of the market share. There are also 5
Central Public Sector Units that manufacture drugs. These companies are:
Page 27
Indian Drugs & Pharmaceuticals Hindustan Antibiotics Ltd. Bengal Chemical and Ph
armaceuticals Ltd. Bengal Immunity Ltd. Smith Stanistreet Pharmaceuticals Ltd. T
he Indian pharmaceutical industry consists of manufacturers of bulk drugs and fo
rmulations. Bulk drugs include the active pharmaceutical ingredients (APIs) whic
h are used for the manufacture of formulations. According to estimates, the prop
ortion of formulations and bulk drugs is in the order of 75:25. There are over 6
0,000 formulations manufactured in India in more than 60 therapeutic segments. M
ore than 85% of the formulations produced in the country are sold in the domesti
c market. India is largely self-sufficient in case of formulations, though some
life saving, new-generation-technology-barrier formulations continue to be impor
ted. The Indian pharmaceutical industry has the highest number of plants approve
d by the US Food and Drug Administration outside the US. It also has the large n
umber of Drug Master Files (DMFs) filed which gives it access to the high growth
generic bulk drugs market. The industry now produces bulk drugs belonging to al
l major therapeutic groups requiring complicated manufacturing processes and has
also developed good manufacturing practices (GMP) compliant facilities for the pr
oduction of different dosage forms. Setting up a plant is 40% cheaper in India c
ompared to developed countries and the cost of bulk drug production is 60-70 per
cent less. The strength of the industry is in developing cost effective technolo
gies in the shortest possible time for drug intermediates and bulk activities wi
thout compromising on quality. In accordance with WTO stipulations, India grants
product patent recognition to all New Chemical Entities.
INDUSTRY SEGMENTATION:
Indian pharmaceutical industry can be widely classified into bulk drugs, formula
tions and contract research. Bulk drugs are the Indian name for Active Pharmaceu
ticals Ingredients (API). Formulations cover both branded products and generics.
Indian pharmaceutical sector is self
sufficient in meeting domestic demand and exports successfully to various market

s globally. The existence of process patents in India till January 2005 fuelled
the growth of domestic pharmaceutical companies and developed them in areas like
organic synthesis and process engineering, as a result of which, Indian pharmac
euticals sector is able to meet almost 95 percent of the countrys pharmaceutical
needs. India is globally recognized as a low cost, high quality bulk drugs and f
ormulations manufacturer and supplier. Contract Research, a nascent industry in
India has witnessed commendable growth in the last few years. As per Yes Bank /O
PPI report (2007-08), formulation segment (including domestic formulation and fo
rmulation exports) constituted 72%of the total pharmaceutical industry (in terms
of sales) while bulk drugs and contract research constituted 25% and 3% of phar
maceutical industry respectively.
Fig: Segmentwise sales
Page 29
Bulk drugs
Bulk drug industry is the backbone of the Indian pharmaceutical industry. Growth
of Indian bulk drug industry in the last five decades has been impressive and h
ighest among developing countries. From a mere processing industry, Indian bulk
drug industry has evolved into sophisticated industry today, meeting global stan
dards in production, technology and quality control. Today, India stands among t
he top five producers of bulk drugs in the world. The market is fragmented with
far too many players. About 300 organized companies are involved in the producti
on of bulk drugs in India. Over 70 percent of Indias bulk drug production is expo
rted to more than 50 countries and the balance is sold locally to other formulat
ors. Indian bulk drug industry is mainly concentrated in the following regional
belts - Mumbai to Ankleshwar, Hyderabad to Madras and Chandigarh. Around, 18000
bulk drug manufacturers exist in India. Some major producers of bulk drugs in In
dian pharmaceutical industry are Ranbaxy Laboratories, Sun Pharma, Cadila, Wockh
ardt, Aurobindo Pharma, Cipla, Dr. Reddys Laboratories, Orchid Pharmaceuticals &
Chemicals, Nicholas Piramal, Lupin, Aristo Pharmaceuticals, etc. Most are involv
ed in bulk as well as formulations while a few are solely into bulk drugs. India
is the worlds fifth largest producer of bulk drugs. The market size is expected
to grow at higher percentages in future years with more and more international c
ompanies depending on India to meet their bulk-drug supply needs. Moreover, Indi
a is way ahead of competitors in the total number of Drug Master File (DMF) fili
ngs. Of the overall DMF filings to US FDA, the portion of filings by Indian play
ers has jumped from around 14% in 2000 to 46% of total filings in 2008( JanuaryJune) This growth in proportion speaks volumes about the quality standards follo
wed in Indian manufacturing facilities.
Page 30
Fig: Increasing share of Indian companies in DMF filings (US FDA) (SOURCE: CRISI
NFAC, YES BANK/ OPPI)
The growing number of DMF filings signifies the increase in number of contracts
that Indian players have garnered. While India has recorded 1671 DMF filings, Ch
ina shows a tally of 520, the second largest number of DMF filings after India.
In 2008 (January-June), Indias DMF filings were around 3.5 times that of China -1
87 from India vis--vis 51 from China. The bulk drug segment is a low-margin and v
olume-driven business. The thrust is on manufacturing. In manufacturing operatio
n, efficiency through better process skills to reduce both manufacturing time an
d cost is critical. Low cost manufacturing is a distinct advantage gained by Ind
ian companies over a period of time with a steep learning curve. Bulk Drugs expo
rts have grown significantly in the past on account of growth in generic industr
y, increasing share of Indian companies in DMF filings and contract manufacturin
g opportunity. As already explained, India has carved a niche for itself by bein
g one of the largest bulk drug suppliers. India offers a number of distinctive a
dvantages in the pharmaceutical industry, as illustrated in the figure below:
Page 31
Fig: Advantage India-API (SOURCE: CRISINFAC, YES BANK/ OPPI)

India has many local manufacturing equipment manufacturers. These equipments are
of high quality and low cost, thus reducing the cost of capital. According to i
ndustry estimates, Indian companies are able to reduce the upfront capital cost
of setting up a project by as much as 25-50%due to locally manufactured equipmen
t and high quality technology/engineering skills. Competition in the Indias domes
tic formulation market has made it inevitable for API suppliers to continuously
develop alternative production methods to improve yield or reduce costs. This en
sures that India has a significant cost advantage due to process engineering. Ap
art from availability of a high number of skilled chemists, India also offers sc
ientists with vast experience and unmatched skills. The scientific staff in Indi
a though equivalent or better qualified are also available at a fraction of the
cost. This makes Indian research firms more competitive than many international
firms while being cost competitive. Labor costs are also low in India, being alm
ost 1/7th of that in many developed countries and offer an obvious cost advantag
e.
Page 32
Formulations
Formulations are broadly categorized into patented drugs and generic drugs. A pa
tented drug is an innovative formulation that is patented for a period of time (
usually 20 years) from the date of its approval. A generic drug is a copy of an
expired patented drug that is similar in dosage, safety, strength, method of con
sumption, performance and intended use. Formulation Industry can be subdivided i
nto two segments: a) Domestic Formulation Industry b) Indian Formulation Exports
a) Domestic Formulation Industry Between 2002 and 2007, the domestic formulation
industry grew at a CAGR of 14% from around USD4.3 billion in 2002 to USD 8.4 bi
llion in 2007. Demand in India is growing markedly due to rising population, inc
reasing per capita income, increasing access to medicine, especially in the rura
l areas and an increasing population of over sixty years of age.
Fig: Growth in domestic formulation industry (OPPI, ORGIMS) (SOURCE: CRISINFAC,
YES BANK/ OPPI
b) Indian formulation exports Indian formulation exports grew at a CAGR of 23.2%

touching around USD 4 billion in 2007-08. The growth has been spurred mainly du
e to the focus on regulated markets by most Indian companies, thereby increasing
revenues.
Fig: Indian Formulation Exports
Contract research and manufacturing
Increasing costs of R&D, coupled with low productivity and poor bottom lines, ha
ve forced major pharmaceutical companies worldwide to outsource part of their re
search and manufacturing activities to low-cost countries, thereby saving costs
and time in the process. The global pharmaceutical outsourcing market was worth
USD57.2 billion in 2007. It is expected to grow at a CAGR of 10% to reach USD76
billion by 2010. Global market for Contract Research and Manufacturing Services
(CRAMS) in 2007 is estimated to be USD55.48 billion. Out of the total global CRA
MS market, contract research was USD16.58 billion, growing at a CAGR of 13.8% an
d contract manufacturing was USD38.89 billion accounting for the major share (ap
proximately 68%) of the total global pharmaceutical outsourcing market. India, w
ith more than 80 US FDA-approved manufacturing facilities, is one of the most pr
eferred locations for outsourcing manufacturing services in India by the multina
tionals and
global pharmaceutical companies. The Indian pharmaceutical outsourcing market wa

s valued at USD1.27m in 2007 and is expected to reach USD3.33 billion by 2010, g
rowing at a CAGR of 37.6%. The Indian CRAMS market stood at USD1.21 billion in 2
007, and is estimated to reach USD3.16 billion by 2010. India holds the lion s s
hare of the world s contract research business as activity in the pharmaceutical
market continues to explode in this region. Over 15 prominent contract research
organisations (CROs) are now operating in India attracted by her ability to off
er efficient R&D on a low-cost basis. Thirty five per cent of business is in the
field of new drug discovery and the rest 65 per cent of business is in the clin
ical trials arena. India offers a huge cost advantage in the clinical trials dom
ain compared to Western countries. The cost of hiring a chemist in India is onefifth of the cost of hiring a chemist in the West.
CRITICAL SUCCESS FACTORS:
The rules of pharmaceutical business are changing. Indian pharmaceutical compani
es can no longer get away with plundering intellectual properties of multination
al companies. Pharmaceutical business has become a new ballgame altogether after
the introduction of product patents in January 2005.
New product development
Pre 2005: New product development efforts of Indian pharmaceutical companies in
process patents era were limited to reverse engineering molecules discovered by
other companies. Thanks to absence of product patents, Indian companies did not
have to go through long winded drug development process. Nor did Indian companie
s have to expend any effort on research focus. Indian companies simply zeroed in
on blockbuster drugs and tried to come up with an alternative process as fast a
s they could. The focus of the Indian companies was to launch a copy of a blockb
uster drug ahead of their rivals in India and abroad.
Page 35
Key areas to focus on R&D for Indian companies: 1. Potential product identificat
ion a) Complex API b) Complex finished product c) Commercial potential of produc
ts d) Out-licensing opportunity to MNCs 2. Novel Drug Delivery System (NDDS) 3.
New Drug Development Post 2005: A large number of drugs are going off patent in th
e next few years. According to IMH Health, more than $60 billion worth of drugs
are going off patent by 2011. Thus, Indian companies will not be short of new prod
ucts for at least another two years. In the long run, however Indian companies m
ay find it hard to make money from drugs coming off patent. Already competition
in generic market is intense and likely to increase further in the future. Hence
, new molecules rather than generics will drive revenues and profits in the prod
uct patents area. Indian companies need to discover new drugs either through the
ir own efforts or research alliances. Perhaps licensing deals with multinational
s could also provide Indian companies access to new drugs. Focus on basic resear
ch will come with its own issues. Indian companies will have to acquire the skil
ls of identifying research areas that offer excellent revenue and profit potenti
al. This will entail a closer tracking of disease profiles and related therapies
as well as keeping a close tab on the research programmes of rivals. Besides, I
ndian companies will have to pay more attention to economics of drug development
process. A product patent is granted for a period of 20 years
Therapeutic coverage
Pre-2005: In the absence of product patents, Indian pharmaceutical companies did
not feel the need to focus on specific therapeutic areas. Most Indian pharmaceu
tical companies eschewed narrow focus and tried to cover as many therapeutic are
as as possible. Now the product
portfolio of many Indian companies has considerable breadth and depth. Given the
price controls in the market, diversification worked to the advantage of compan
ies in the domestic markets. In the export markets, a wider product portfolio ga
ve companies the option of picking and choosing from an array of opportunities.
Post 2005: Opinion is divided over the therapeutic strategy that Indian companie
s should pursue in product patent era. Some companies believe that focus on sele
ct therapeutic segment will fetch them greater dividends in terms of new chemica
l entities and market share. Other companies believe such a strategy is risky gi
ven the size of Indian companies and that a big setback in research could sink t
he company. Instead such companies are pursuing a de-risking strategy of buildin
g a wide product portfolio. In the domestic market, such a strategy will result
in economies of scale at production and marketing stage, putting the company in
a better place to weather competition from multinationals. In the export markets
even after the introduction of product patents, products under patent protectio
n will comprise only 15 percent of the market. So a vast chunk of the market wil
l be still open for competition although margins will be wafer thin.
Exports
Pre-2005: Most Indian companies focused on exports. Exports improve the valuatio
n of companies owing to higher margin in overseas markets. Indian companies buil
t fortunes by making cheaper versions of blockbuster drugs and selling them in d
omestic and export markets. Indian companies built especially strong position in
manufacture of bulk drugs. Out of the total exports, formulations constituted 5
5 percent and bulk drugs constituted 45 percent. Success in export market allowe
d some Indian companies to build a strong position in the domestic market organi
cally and through acquisitions of brands and companies.
Page 37
Post 2005: Exports has continued to be a priority for Indian companies. Major bl
ockbuster drugs will come off patent in the near future, creating a big generic
opportunity for Indian companies. Also, a growing demand for anti-AIDS drugs in
Africa will keep Indian companies busy. Exports have and will continue to provid
e Indian companies with the strength to withstand the onslaught of multinational
s in the domestic market.
Low cost production through scale
Pre-2005: Indian pharmaceutical companies have mastered the science of producing
drugs cheaply. Thanks to benign patents regime, Indian companies have developed
a high level of chemical synthesis skills. The absence of development costs tog
ether with efficient production has enabled Indian companies to establish a soli
d position in bulk drug manufacturing. But scale did not receive as much importa
nce as it should have, because the cost of Indian pharmaceutical companies was a
lready low owing to aforesaid reasons. Many Indian companies did not find the re
turn on investment of world class plants compelling enough. Post 2005: By 2011,
drugs worth $60 billion will come off patent, presenting a huge generic opportun
ity to Indian companies. But the competition in the generic market will be bruta
l, resulting in thin margins. The cost of production will hold the key to succes
s in the generic market. The production cost in turn depends on scale. Indian ph
armaceutical companies need to build global scale to stand a chance in the gener
ics market.
PHARMACEUTICAL REGULATORY BODIES IN INDIA:
1) National Pharmaceutical Pricing Authority (NPPA)NPPA is an organization of th
e Government of India which was established, to fix/ revise the prices of contro
lled bulk drugs and formulations and to enforce prices and availability of the m
edicines in the country, under the Drugs (Prices Control) Order, 1995.
The organization is also entrusted with the task of recovering amounts overcharg
ed by manufacturers for the controlled drugs from the consumers. It also monitor
s the prices of decontrolled drugs in order to keep them at reasonable levels. 2
) Central Drugs Standard and Control Organization (CDSCO) CDSCO lays down standa
rds and regulatory measures of drugs, cosmetics, diagnostics and devices in the
country. It regulates clinical trials and market authorization of new drugs. It
also publishes the Indian Pharmacopeia. The main functions of the Central Drug S
tandard Control Organization (CDSCO) include control of the quality of drugs imp
orted into the country, co-ordination of the activities of the State/UT drug con
trol authorities, approval of new drugs proposed to be imported or manufactured
in the country, laying down of regulatory measures and standards of drugs and ac
ting as the Central Licensing Approving Authority in respect of whole human bloo
d, blood products, large volume parenterals , sera and vaccines. The CDSCO funct
ions from 4 zonal offices, 3 sub-zonal offices besides 7 port offices. The four
Central Drug Laboratories carry out tests of samples of specific classes of drug
s.
3) Department of Chemicals & Petrochemicals (DCP) DCP is responsible for the pol
icy, planning, development, and regulation of the chemical, petrochemical, and p
harmaceutical industries in India. This department aims: To provide impartial an
d prompt services to the public in matters relating to chemical, pharmaceutical
and petrochemical industries; To take steps to speedily redressal of grievances
received; To formulate policies and initiate consultations with Industry associa
tions and to amend them whenever required.
Page 39
INTRODUCTION:
1) Porters 5 force analysis of industry
Page 40
A) THREAT TO ENTRY (ENTRY BARRIER) In pharma industry there are various stumblin
g blocks to enter the market. Since the industry is one of the very high profile
industry and a very profitable one also. Industry being profitable then the ent
ry barriers should be low but the nature of industry, the products and its relat
ionship with the external environment makes it difficult for the firm to enter i
nto pharmaceutical industry. For pharma industry some of the barriers are Govern
ment policies and FDA regulations Government policies regarding the infrastructu
re required and the licensing procedure to produce drugs pose initial barriers.
Also with the new patent law commencing from 2005, it would become difficult to
enter the industry, as till now in India the patent was only process patent and
not product patent therefore any body could obtain a license and manufacture the
products, but after 2005 it would become necessary to own molecules of its own
and formulate drugs on the same. FDA is an international body, which looks after
all the functioning of the firm of pharma industry. According to FDA any new fi
rm entering the industry should not only have complete infrastructure facilities
but it should also have required manpower and certain SOP mentioned by FDA are
needed to be followed, which now include setting up R&D facility compulsorily fo
r all firms. Cost disadvantages independent of economies of scales Since the gov
ernment policy and FDA regulations are stricter and the patent law has made majo
r barriers to entry. Cost disadvantages would be in the form of product technolo
gy. As discussed earlier till now in India it was the process patentised but now
any molecule discovered by a particular firm would be the sole applicant of the
formulation of that molecule or final product along with the technology to manu
facture the product.
Page 41
Capital requirements Pharma industry is highly capital-intensive industry. The n

ature of huge investments in setting up manufacturing facilities and R&D facilit
ies is a discouraging factor for the new entrant. In case of pharma industry, it
has been made mandatory for the firms to invest at least 4% of the equity capit
al in to R&D. B) RIVALRY AMONG EXISTING FIRMS Though there is high competition w
ithin the firms of pharma industry but other factor such as its relationship wit
h Healthcare Industry makes competition and rivalry a backseat. The market share
of top five-pharma company is 1. Ranbaxy Lab 2. Dr. Reddy Lab 3. Cipla 4. Glaxo
Smithkline Pharma 5. Sun Pharma 10.7% 8% 7% 5.4% 3.75%
Also the growth of industry is very high and hence market share becomes a latent
factor in terms of rivalry. The special case of this industry is that this indu
stry follows not only concept but is more inclined towards societal marketing. T
he fixed or storage costs are high in case of pharma industry and hence firms in
this industry take various measures like sometimes outsourcing for improving up
on storage costs. Many times firms have to collaborate with each other for certa
in productions and operations of certain nature. Products in this case are very
important factor for competition. Standardization of any sort of product by any
firm can lead to monopoly too. The price though can become a major tool for comp
etition, but the social environment does not allow this strategy to gain impact.
Distribution of the all firms is almost same; hence there is no difference here
.
Page 42
C). BARGAINING POWER OF THE BUYERS The importance of the product is much more hi
gher to the buyer in terms of total cost. The bargaining power of the buyer in t
his industry is almost nil as compared to other industry. For the final consumer
s, the products are life saving drugs and buyers are ready to pay any amount to
buy the product so the bargaining power of buyers at the time of requirement is
low.
D). BARGAINING POWER OF THE SUPPLIER Suppliers are abundant in this industry hen
ce the bargaining power of suppliers is much higher. Switching costs are very lo
w, but the substitutability of the product is nil. The products are bought by th
e buyer in bulk and hence the supplier is keen to have a long-term relationship
with the buyer, hence for the supplier buyer is very important link to maintain
him in the industry. E). THREAT OF SUBSTITUTE In Pharma industry, there is threa
t of substitutes since the industry produces life saving drugs. The substitutes
of these products are: Ayurveda Unani Homeopathy Acupressure Acupuncture
Conclusion
This model gives a fair idea about the industry in which a company operates and
the various external forces that influence it. However, it must be noted that an
y industry is not static in nature. Its dynamic and over a period of time the mod
el, which have used to analyse the pharmaceutical industry may itself evolve.
Going forward, we foresee increasing competition in the industry but the form of
competition will be different. It will be between large players (with economies
of scale) and it may be possible that some kind of oligopoly or cartels come in
to play. This is owing to the fact that the industry will move towards consolida
tion. The larger players in the industry will survive with their proprietary pro
ducts and strong franchisee. In the Indian context, companies like Cipla, Ranbax
y and Glaxo are likely to be key players. Smaller fringe players, who have no di
fferentiating strengths, are likely to either be acquired or cease to exist. The
barriers to entry will increase going forward. The change in the patent regime
has made sure that new proprietary products come up making imitation difficult.
The players with huge capacity will be able to influence substantial power on th
e fringe players by their aggressive pricing thereby creating hindrance for the
smaller players. Economies of scale will play an important part too. Besides gov
ernment will have a bigger role to play.
Page 44
2) PEST analysis
Technological advancements, tighter regulatory-compliance overheads, rafts of pa
tent expiries and volatile investor confidence have made the modern pharmaceutic
al industry an increasingly tough and competitive environment. Below is an analy
sis of the structure of the pharmaceutical industry using the PEST (political, e
conomic, social and technological) model.
To understand the implications of the environment on any industry it is imperati
ve to study the four cardinal influencers on the industry namely Political, Econ
omic, Social and Technological factors. It is rather unfortunate that in India t
hese factors have a rather disproportionate influence on the functioning of a co
mmercial organization. From the days of independence the business environment ha
s been overly regulated by a handful of bureaucrats, middlemen, businessmen and
politicians. Its only a decade since the country has seen an emergence of a poli
tical thought that encourages free enterprise. A welcome change indeed!
A) POLITICAL FACTORS Today there is political uncertainty in the air. A combinat
ion of diverse political thought have got together to cobble together a rag-tag
coalition, that is riddle with ideological contradictions. Therefore, any consis
tent political or economic policy can not be expected. This muddies the investme
nt field. The Minister in charge of the industry has been threatening to impose
even more stringent Price Control on the industry than before. This is throwing
many an investment plan into the doldrums. DPCO which is the bible for the indus
try has in effect worked contrary to the stated objectives. DPCO nullifies the m
arket forces from encouraging competitive pricing of goods dictated by the marke
t. Now the pricing is determined by the Government based on the approved costs i
rrespective of the real costs.
Effective January, 2005 the country goes in for the IPR (Intellectual Property R
ights) regime, popularly known as the Patent Act. This Act will impact the Pharm
aceutical Industry the most. Thus far an Indian company could escape paying a pa
tent fee to the inventor of a drug by manufacturing it using a different chemica
l route. alternate manufacturing methods. A lot of money was saved this way. Ind
ian companies exploited this law and used the reverse-engineering route to inven
t a lot of This also encouraged competing company to market their versions of th
e same drug. That meant that the impurities and trace elements found in differen
t brands of the same substance were different both in qualification as well as i
n quantum. Therefore different brands of the same medicine were truly different.
Here Branding actually meant quality and a purer brand actually had purer activ
e ingredient and lesser or less toxic impurities. Product patent regime will eli
minate all this. Now, a patented drug would be manufactured using the same chemi
cal route and would be manufactured by the inventor or his licentiates using the
chemicals with same specifications. Therefore, all the brands of the same activ
e ingredient would not have any difference in purity and impurities. The differe
nt brands would have to compete on the basis of non input-related innovations su
ch as packaging, color, flavors, Excipients etc. This is the biggest change the
environment is going to impose on the industry. The marketing effort would be no
w focused on logistics, communications, and economy of operation, extra-ingredie
nt innovations and of course pricing. In Pharma industry there is a huge PSU seg
ment which is chronically sick and highly inefficient. The Government puts the s
urpluses generated by efficient units into the price equalization account of ine
fficient units thereby unduly subsidizing them. On a long term basis this has ma
de practically everybody inefficient. Effective the January, 2005 the Government
has shifted from charging the Excise Duty on the cost of manufacturing to the M
RP thereby making the finished products more
Page 46
costly. Just for a few extra bucks the current government has made many a life s
aving drugs unaffordable to the poor. The Government provides extra drawbacks to
some units located in specified area, providing them with subsidies that are un
fair to the rest of the industry, bringing in a skewed development of the indust
ry. As a result Parma units have come up at place unsuitable for a best cost man
ufacturing activity. B) ECONOMIC FACTORS India spends a very small proportion of
its GDP on healthcare (A mere 1%). This has stunted the demand and therefore th
e growth of the industry. Per capita income of an average Indian is low (Rs. 12,
890), therefore, spending on the healthcare takes a low priority. An Indian woul
d visit a doctor only when there is an emergency. This has led to a mushrooming
of unqualified doctors and spread of nonstandardized medication. The incidence o
f Taxes is very high. There is Excise Duty ( State & Central), Custom Duty, Serv
ice Tax, Profession Tax, License Fees, Royalty, Pollution Clearance Tax, Hazardo
us substance (Storage & Handling) license, income tax, Stamp Duty and a host of
other levies and charges to be paid. On an average it amounts to no less than 40
-45% of the costs. The number of Registered Medical practitioners is low. Pharma
ceuticals is affected adversely. There are only 50, 00,000 Medical shops. Again
this affects adversely the distribution of medicines and also adds to the distri
bution costs. As a result the reach of
Page 47
India is a high interest rate regime. Therefore the cost of funds is double that
in America. This adds to the cost of goods. Adequate storage and transportation
facilities for special drugs are lacking. A study had indicated that nearly 60%
of the Retail Chemists do not have adequate refrigeration facilities and store
drugs under sub-optimal conditions. This affects the quality of the drugs admini
stered and of course adds to the costs. India has poor roads and rail network. T
herefore, the transportation time is higher. This calls for higher inventory car
rying costs and longer delivery time. All this adds to the invisible costs. Its
only during the last couple of years that good quality highways have been constr
ucted. C) SOCIO-CULTURAL FACTORS
Poverty and associated malnutrition dramatically exacerbate the incidence of Mal
aria and TB, preventable diseases that continue to play havoc in India decades a
fter they were eradicated in other countries. Poor Sanitation and polluted water
sources prematurely end the life of about 1 million children under the age of f
ive every year. In India people prefer using household treatments handed down fo
r generations for common ailments. The use of magic/tantrics/ozhas/hakims is pre
valent in India. Increasing pollution is adding to the healthcare problem. Smoki
ng, gutka, drinking and poor oral hygiene is adding to the healthcare problem. L
arge joint families transmit communicable diseases amongst the members.
Page 48
Cattle-rearing encourage diseases communicated by animals. Early child bearing a

ffects the health standards of women and children. Ignorance of inoculation and
vaccination has prevented the eradication of diseases like polio, chicken-pox, s
mall-pox, mumps and measles. People dont go in for vaccination due superstitious
beliefs and any sort of ailment is considered as a curse from God for sins commi
tted.
D) TECHNOLOGICAL FACTORS Advanced automated machines have increased the output a
nd reduced the cost. Computerization has increased the efficiency of the Pharma
Industry. Newer medication, molecules and active ingredients are being discovere
d. As of January 2005, the Government of India has more than 10,000 substances f
or patenting. Ayurveda is a well recognized science and it is providing the indu
stry with a cutting edge. Advances in Bio-technology, Stem-cell research have gi
ven India a step forward. Humano-Insulin, Hepatitis B vaccines, AIDS drugs and m
any such molecules have given the industry a pioneering status. Newer drug deliv
ery systems are the innovations of the day. The huge unemployment in India preve
nts industries from going fully automatic as the Government as well as the Labor
Unions voice complains against such establishments.
3) SWOT analysis
The Indian pharmaceutical industry is one of the fast growing sectors of the Ind
ian economy and has made rapid strides over the years. From being an import depe
ndent industry in the 1950s, the industry has achieved self-sufficiency and gain
ed global recognition as a producer of low cost high quality bulk drugs and form
ulations. Leading Indian companies have developed infrastructure in over 60 coun
tries including developed markets like US and Europe. In the recent past, severa
l pharmaceutical companies have demonstrated that they possess the ability to en
gage in commercially viable research and development activities and become signi
ficant players in the international market. SWOT Analysis, is a strategic planni
ng tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats i
nvolved in a project or in a business venture. It involves specifying the object
ive of the business venture or project and identifying the internal and external
factors that are favorable and unfavorable to achieving that objective.
A) STRENGTHS Indian with a population of over a billion is a largely untapped ma
rket. In fact the penetration of modern medicine is less than 30% in India. The
growth of middle class in the country has resulted in fast changing lifestyles i
n urban and to some extent rural centers. This opens a huge market for lifestyle
drugs, which has a very low contribution in the Indian markets. Indian manufact
urers are one of the lowest cost producers of drugs in the world. With a scalabl
e labor force, Indian manufactures can produce drugs at 40% to 50% of the cost t
o the rest of the world. In some cases, this cost is as low as 90%. Indian Pharm
aceutical industry posses excellent chemistry and process reengineering skills. T
his adds to the competitive advantage of the Indian companies. The strength in c
hemistry skill helps Indian companies to develop processes, which are cost effec
tive. Indian pharmaceutical industry is highly developed and the most modern amo
ngst the developing world.
The pharmaceutical industry has a favourable balance of payment and the quality
of our products, are of international standards. There is flexibility for the in
dustry to move from one drug to another. Strong distribution network of industry
. Stronger presence in the foreign markets. Low manufacturing costs as compared
to global norms. Mature players in the industry have elaborate domestic marketin
g setups supplied by an efficient distribution network. Street smarts in branded
generics market, global perspective. Good blend of eastern and western styles o
f management. Superb chemists proven by strong branded generic market share in I
ndia by Indian workforce. High volume large-scale businesses, experience of runn
ing multiple, large, high volume manufacturing plants and managing 1000 sales pe
ople. Many leading companies already Globalising on many levels. Strong presence i
n a country with a large growth potential over the next twenty-five years, based
on population and current economic and potential situation. The new patent prod
uct regime will bring with it new innovative drugs. This will increase the profi
tability of MNC Pharma companies and will force domestic Pharma companies to foc
us more on R&D. This migration could result in consolidation as well. The migrat
ion into a product patent based regime is likely to transform industry fortunes
in the long term. B) WEAKNESSES The NPPA (National Pharma Pricing Authority), wh
ich is the authority to decide the various pricing parameters, sets prices of di
fferent drugs, which leads to lower profitability for the companies. The compani
es, which are lowest cost producers, are at advantage while those who cannot pro
duce have either to stop production or bear losses. In India Pharmaceutical sect
or has been marred by lack of product patent, which prevents global Pharma compa
nies to introduce new drugs in the country and discourages
Page 51
innovation and drug discovery. But this has provided an upper hand to the Indian
Pharma companies. Indian majors are relying on exports for growth. To put thing
s in to perspective, India accounts for almost 16% of the world population while
the total size of industry is just 1% of the global Pharma industry. Due to ver
y low barriers to entry, Indian Pharma industry is highly fragmented with about
300 large manufacturing units and about 18,000 small units spread across the cou
ntry. This makes Indian Pharma market increasingly competitive. Indian Pharma ma
rket is one of the least penetrated in the world. However, growth has been slow
to come by. The industry witnesses price competition, which reduces the growth o
f the industry in value term. While India accounts roughly 1/6th of the worlds po
pulation, it accounts only 1.6% of the worlds value of pharmaceutical consumption
. Only 30% of the population has access to modern medicines. R&D efforts to impr
ove product efficacy is a continuous activity and is extremely expensive and tim
e consuming. The industry is played by drug policy, price controls special restr
ictions on licensing etc. It is passionately hoped that controls would be eased
shortly. The industry is characterized by low margins. The buzzword in the pharm
aceutical industry is R & D. With the signing of the GATT agreement it is impera
tive for the research for discovery and development of new drug molecule. Unfort
unately, R & D is a major drawback of the Indian pharma industry. Negotiable R &
D activity. Most of the manufacturing facilities are not eligible for exports t
o the developed world. Made in India label is a handicap on the global markets. C)
OPPORTUNITIES The new patent product regime will bring with it new innovative d
rugs. This will increase the profitability of MNC Pharma companies and will forc
e domestic Pharma companies to focus more on R&D. This migration could result in
consolidation as well. The
migration into a product patent based regime is likely to transform industry for
tunes in the long term. Opening up of health insurance sector and the expected g
rowth in per capita income are key growth drivers from a long-term perspective.
This leads to the expansion of healthcare industry of which Pharma industry is a
n integral part. Being the lowest cost producer combined with FDA approved plant
s, Indian companies can become a global outsourcing hub for Pharmaceutical produ
cts. Large number of drugs going off-patent in Europe and in the US between 2005
to 2009 offers a big opportunity for the Indian companies to capture this marke
t. Since generic drugs are commodities by nature, Indian producers have the comp
etitive advantage, as they are the lowest cost producers of drugs in the world.
Pharmaceuticals and bulk drugs are identified as thrust areas for exports by the
government of India. With economic development, it is presumed that in the next
few decades almost 90% of the population would have access to modern medicine.
Thus the growth potentials are immense. Number of manufacturing units approved b
y Food and Drug Administration (FDA), USA is growing and providing vast scope fo
r future growth. Concentrate on R & D and technical base to create a competitive
edge. Create synergies through joining hands with other operators in the indust
ry. Go for backward and forward integration to utilize the resources in better m
anner. The latest trend in the industry seems to be towards a greater backward i
ntegration by manufacturing bulk intermediates. This is a plus point to the Indi
an industry since the intermediates do not come under GATT agreement. This is on
e virgin area, which has not yet been tapped. Large and growing domestic markets
at least 80% of products are expected to be off patent products. There are trem
endous scopes to develop and market New Drug Delivery System.
Excellent opportunities in untapped niche markets. Vast potential of the OTC mar
ket. A 2500 crores generics market expected to grow up to 4500 crores by 2500. D
) THREATS Threats from other low cost countries like China and Israel exist. How
ever, on the quality front, India is better placed relative to China. So, differ
entiation in the contract manufacturing side may wane. The short-term threat for
the Pharma industry is the uncertainty regarding the implementation of VAT. Tho
ugh this is likely to have a negative impact in the shortterm, the implications
over the long-term are positive for the industry. There are certain concerns ove
r the patent regime regarding its current structure. It might be possible that t
he new government may change certain provisions of the patent act formulated by
the preceding government. Increase in over the counter medicines also create pro
blem for medicines because people will buy it directly from market Export of bul
k drugs is vulnerable to various changes in the international market. GATT agree
ment would after the pharmaceutical scenario drastically by 2005 AD. Most of the
Indian companies do not have a research base. Such companies will be severely a
ffected in the post GATT era. Small-scale sector will be severally affected in t
he times to come. They will be forced to close their shops or act as manufacturi
ng base for the bigger Indian companies or MNCs. Small and medium formulation co
mpanies to face stiff competition in the generic drugs market leading to squeeze
on their market share and profit. Erosion of image in the domestic market due t
o lack of R & D. Increased competition from china especially in the bulk drug se
ctor.
Page 54
INTRODUCTION:
OTC Drugs means drugs legally allowed to be sold Over The Counter, i.e. without the
prescription of a Registered Medical Practitioner. In India, though the phrase h
as no legal recognition, all the drugs that are not included in the list of presc
ription only drugs are considered as non-prescription drugs (or OTC drugs). Presc
ription-only drugs are those medicines that are listed in Schedules H and X appe
nded to the Drug and Cosmetics Act & its Rules. Drugs listed in Schedule G (most
ly antihistamines) do not need prescription to purchase but require the followin
g mandatory text on the label: Caution: It is dangerous to take this preparation
except under medical supervision. Drugs falling in these 3 schedules are currentl
y not advertised to the public under a voluntary commitment by the pharmaceutica
l industry. Currently, non drug-licensed stores (e.g. non-chemists) can sell a f
ew medicines classified as Household Remedies listed in Schedule K of the DCA&R in
villages whose population is below 1 000. OTC proprietary drugs registered as Ay
urvedic Medicines (= traditional Indian medicines containing natural / herbal ing
redients) are also regulated by the DCA and DCR. However, as they do not require
a drug licence they can be sold by non-chemists. Some of the top OTC brands in
India (e.g. Vicks VapoRub, Amrutanjan Balm, Zandu Balm, Iodex , Moov Pain Cream,
Itch Guard Cream, Eno Fruit Salt, Vicks Cough Drops, Halls Lozenges, etc.), are
registered as Ayurvedic Medicines because of their plant-based natural active ing
redients. There are no price controls on Ayurvedic Medicines. Considering the abov
e framework, key categories with OTC potential in India are: Vitamins and minera
ls Cough and cold Gastrointestinals Analgesics Dermatologicals Herbal / Ayurvedi
c Medicines.
Page 55
Labeling requirements
There are no separate labeling requirements for OTC drugs. Under the Packaging C
ommodities Act, most packaged consumer products including drugs are required to
have the Maximum Retail Price (MRP) printed on the label. The selling of any pro
duct at a price higher than the MRP is not permitted.
Advertising requirements
The Drug & Magic Remedies (Objectionable Advertisement) Act mentions a list of a
ilments for which no advertising is permitted. It also prohibits misleading adve
rtisements which, directly or indirectly, give false impressions regarding the t
rue character of the drug, make false claims, or are otherwise false or misleadi
ng in any particular respect. The DCGIs office -in collaboration with the Organis
ation of Pharmaceutical Producers of India (OPPI) has released a Voluntary Code
on OTC Advertising which is being followed by all OPPI member companies. There i
s also an OPPI Code of Pharmaceutical Marketing Practices, January 20071, based
on the IFPMA code. Currently, there is no specific law which prohibits the adver
tising of prescription drugs although industry practice is not to advertise pres
cription-only drugs. The DCGIs office is considering coming out with a notificati
on prohibiting the advertising of any drug which legally requires a doctors presc
ription for its supply. The following OTC medicines advertising can be seen on T
V in India: Digestives Antacids Antiflatulents Cold rubs and analgesic balms/cre
ams Vitamins/tonics/health supplements (especially herbals and Ayurvedic-registe
red) Medicated skin treatment
Analgesic /cold tablets Antiseptic creams/liquids Glucose powders Cough liquids

Throat lozenges Medicated dressings (band-aids) Baby gripe water.
World Scenario of OTC market:
At a global level pharma giants are leveraging the power of OTC to face the chal
lenges they face today .Globalization, shrinking new product pipeline, increasin
g cost of new drug discovery, shrinking PLC of existing products, ever increasin
g demand by managed healthcare organisations, public and government to cut down
the prices of patent protected drugs, stringent safety rules of FDA and entry of
new players in the market are putting tremendous pressure on all pharma compani
es especially the giants. Pfizer Incs, worlds largest drug maker, recent decision
to cut US sales force by about 20% clearly express the pressure such giants face
. OTC products are an essential component of any health care system. According t
o a oneyear survey in the United States, six of the ten most frequently used dru
gs, including the top four, were OTCs.41 In another report, 60 percent of medici
nes purchased by consumers were OTCs.42 In fact, OTC products account for the ma
jority of all medications used in most countries. There were almost 16,800 OTC d
rugs (the total number of medicines was 22,000) available on Health Canadas list
of drugs approved for human use in the year 2000.27 According to the Consumer He
althcare Products Association, there were more than 100,000 OTC products (approx
imately 1,000 active ingredients) available in the United States as of 2001.43 T
he number of OTC medicines available in the United States is much higher than an
y other nation. Consequently, North America is the leading OTC market in the wor
ld; accounting for 31 percent of global sales of OTC products in 1995. Western E
urope ranked second (26 percent), followed by Japan (16 percent).44
Page 57
In dollar value, OTC sales comprise from 10 to 30 percent of total medication sa

les in various countries (circa 1996), for example, 26 percent in Switzerland; 2
4 percent in the USA; 20 percent in Britain; 18 percent in Germany; 15 percent i
n Japan; and 11 percent in France.45 Reasons for this include differences in hea
lth care funding, cultural health beliefs, and the range of OTC drugs available
on the market of each nation. In recent years, OTC spending has been increasing
in many countries, except in Japan where people are more likely to use formal me
dical care rather than self-care.45 In the United States, retail sales of OTC pr
oducts (excluding Wal-Mart) in 2001 were $17.1 billion, up 2.4 percent over 2000
($16.7 billion).46 Canadians spent $3.3 billion on the OTC market in 2001 (20 p
ercent of all drug expenditures) according to a report released by the Canadian
Institute for Health Information.27 In general, OTC drugs cost about $100 per pe
rson per year. The OTC expenditure in 2001 increased 3 percent over the previous
year and has risen by 73.6 percent (from $1.9 billion to $3.3 billion) since 19
95.27
US OTC Pharmaceuticals market
Approval of over-the-counter status for a drug requires an assessment by the Foo
d and Drug Administration (FDA) that the drug is safe and effective. Under curre
nt regulations, a new drug can be exempted from prescription-only status by FDA
approval of a new-drug application supporting the use of the product on an overthe-counter basis. Alternatively, a drug can be marketed over the counter if its
ingredients are included in previously published regulations defining the requi
rements for over-the-counter status and if the labeling of the product complies
with these regulations. The standards also apply to drugs that have already been
approved for prescription-only sale and that are being considered for a switch
to over-thecounter status. The Drug Price Competition and Patent Term Restoratio
n Act of 1984 potentially provides three additional years of marketing exclusivi
ty for the makers of drugs switched from prescription to over-the-counter status
if the FDA has required additional clinical trials deemed essential to evaluate
the switch. If a prescription drug is approved for over-the-counter marketing,
the drug may still be available by prescription for certain indications or for u
se at doses not approved for over-the-counter marketing. The DurhamHumphrey and K
efauverHarris Amendments define criteria to be used by the FDA in evaluating a ne
w-drug application for a proposed over-theN.R.Institute of Business Management
Page 58
counter drug. The required demonstrations of safety and efficacy for an over-the
-counter drug include components distinct from those for prescription drugs. Uni
ted States OTC pharmaceutical market segmentation (in % share, by value)
Category cough and cold preparation Vitamin and Minerals Analgesics Medicated sk
in products Traditional Medicines Other
% share 22.30 18.70 15.20 12.60 5.30 25.90
European OTC Pharmaceuticals market
The European OTC Pharmaceuticals market generated total revenues of $23.6 billio
n in 2006,this representing a CAGR of 2.5%for the five year period spanning 2002
-06.In comparison, the Global and Asia-Pacific OTC Pharmaceuticals markets grew
with CAGR of 5.1% and 6.9 % over the same period, to reach respective values of
$88.7 billion and $39.1billion in 2006. Europe OTC pharmaceutical market segment
ation (in % share, by value)
% share 18.70 16.00 15.00 8.90 16.70 24.60
Page 59
The chart below shows the percentage of problems treated with non-prescription m
edications by consumers in 10 nations. The percentages are the highest in the Un
ited States and in South Africa. While in a developed country like the US many p
atients consider self-treatment with over-the-counter medicines as a cost and ti
me-saving alternative to doctor visits for common ailments, a country like South
Africa perhaps relies on self-medication more as a major contributor to health
maintenance because of lower levels of infrastructure and professional staff. Pe
rcentage of common conditions treated with OTCs
Page 60
Indian scenario:
The Indian market for over-the-counter medicines (OTCs) is worth about $940 mill
ion and is growing 20 per cent a year, or double the rate for prescription medic
ines. The government is keen to widen the availability of OTCs to outlets other
than pharmacies, and the Organisation of Pharmaceutical Producers of India (OPPI
) has called for selling OTCs in post offices. Developing an innovative new drug
, from discovery to worldwide marketing, now involves investments of around $1 b
illion, and the global industry s profitability is under constant attack as cost
s continue to rise and prices come under pressure. Pharmaceutical production cos
ts are almost 50 per cent lower in India than in Western nations, while overall
R&D costs are about one-eighth and clinical trial expenses around one-tenth of W
estern levels. India s longestablished manufacturing base also offers a large, w
ell-educated, English-speaking workforce with 700,000 scientists and engineers g
raduating every year, including 122,000 chemists and chemical engineers, with 1,
500 PhDs. The industry provides the highest intellectual capital per dollar worl
dwide, says OPPI. The industry s exports were worth more than $3.75 billion in 2
004-05 and they have been growing at a compound annual rate of 22.7 per cent ove
r the last few years, according to the government s draft National Pharmaceutica
ls Policy for 2006, published in January 2006. The Policy estimates that, by the
year 2010, the industry has the potential to achieve $22.40 billion in formulat
ions, with bulk drug production going up to 5.60 billion from $1.79 billion. "In
dia s rich human capital is believed to be the strongest asset for this knowledg
e-led industry. Various studies show that the scientific talent pool of 4 millio
n Indians is the second-largest Englishspeaking group worldwide, after USA." In
India the prescription drugs are listed under Schedule H. There are about 570 mo
dules in this category that are stocked in a total of 5 to 8 lakh retail chemist
s. Currently, non pharmacy stores can sell a few drugs on the schedule K of the
Drugs & Cosmetics Act in rural areas in villages, whose population is below 1,00
0,
Page 61
Currently, aches/pains, cough, colds, hyperacidity, minor topical infections and

indigestion are major OTC categories. Emerging categories include cuts, wounds
and burns, muscle pains and sprains, diarrhoea and constipation. There are many
products in the Rx sector which could be revitalised through OTC switches. An an
alytical interpretation of various data places the focus on vitamins, cough & co
ld, antacids, antipyretics and NSAIDs as opportunity areas for switch in India.
However, the big issue in OTC marketing is not the switch climate as currently e
ven drugs which do not require a prescription are promoted via the doctor becaus
e: Marketing through medical representatives is less expensive than mass media a
dvertised marketing. This makes that OTC medicines are higher priced than the eq
uivalent medicines promoted ethically. Practically all Rx drugs can be purchased
without a prescription. Doctor influence is strong in patients purchase behaviou
r. Distribution of allopathic OTC medicines is limited to drug licensed stores (
mainly Pharmacies). Indian market faces the problem of Deemed OTC market where in
ethical drugs are also sold without a prescription due to poor monitoring and co
ntrol by FDA. Self medication tendency is traditionally very high due to the hig
h availability of traditional medicines, the awareness and acceptance of which i
s very high among the public. The Indian OTC pharmaceuticals market generated to
tal revenues of $2.5 billion in 2006,this representing a compound annual growth
rate of 8.3%for the five year period spanning 2002- 2006. In comparison ,the US
and Chinese OTC pharmaceuticals markets grew with CAGRs of 4.3% and 7% over the
same period ,to reach respective values of $21.2billion and $11.9billion in 2006
. Traditional medicines proved the most lucrative for the Indian OTC pharmaceuti
cals market in 2006, generating total revenues of $679.3 million. In comparison,
sales of cough and cold preparations generated revenues of $492.6 million in 20
06.
Page 62
Indian OTC pharmaceuticals market segmentation (In % share, by value)

% share 19.80 11.60 11.40 2.60 27.30 27.30
Major Players of OTC Pharmaceutical Market in India
1) Proctor & Gamble: P&G Hygiene and Health Care Limited is one of India s faste
st growing Fast Moving Consumer Goods Companies that has in its portfolio P&G s
Billion dollar brands such as Vicks & Whisper. With a turnover of Rs. 500+ crore
s, the Company has carved a reputation for delivering high quality, value-added
products to meet the needs of consumers. P&G Hygiene and Health Care Limited tak
es pride in being voted India s Best Employer 2003 in a survey of 200 companies
conducted by International HR Consultancy Hewitt Associates in association with
Business Today magazine. Earlier, the Company was voted India s 2nd Best Employe
r in previous editions of the survey in 2001 and 2002. Notably, there are over 2
00 Indian employees with P&G Subsidiaries abroad Health Care Vicks is Indias No.1
Cough & Cold Brand. It created the cold & cough Over-the-Counter (OTC) category
in India way back in 1952 and has led the category till date. Today it has comp
leted more than 50 years in India. Its current portfolio in India comprises Vick
s Action500+, Vicks VapoRub, Vicks Cough Drops, Vicks Formula 44 Cough Syrup and
Vicks Inhaler. It was rated as Indias Most Trusted Brand by the Advertising & Marke
ting Magazine and continues to be on top of the charts of Brand-Equity surveys ti
ll date. The Vicks
business in India is the biggest in the ASEAN-Australasia-India (AAI) region. Ov

er the years, Vicks has launched several heart-tugging advertising campaigns, so
me of which were the Happy Birthday Mummy and Touch Therapy campaigns for Vicks Vapo
Rub, the Khich Khich Dooor Karo ad for Vicks Cough Drops, the Haan Bhai Haan ad for
Vicks Action 500. Following are the products of Proctor & Gamble:

vicks Cough Dros Vicks formula 44 cough syrup Vicks Action 55+ Vicks VapoRub Vic
ks Inhaler
2) Dr. Morepen Ltd.: Keeping in line with Morepen s commitment to healthier futu
re for all, The Company has taken another step to come closer to the consumers w
ith the launch of "Dr. Morepen", a range of self health products. MLL has now en
tered the Rs.4500 crore of fast Moving Health Goods (FMHG) market. The category
of self health has been identified after lot of research on modern behaviour and
preferences and Morepen sees a huge opportunity in this segment. Dr. Morepen is
envisaged as a forward looking, futuristic, lifestyle driven brand that empower
s the modern customers to be in charge of their own health and live life without
any stops. The brand is positioned on a simple philosophy of "health in your ha
nds" A mantra for contemporary life, full of hectic schedules, impending deadlin
es and tough competition. The brand is being promoted by a new subsidary Dr. Mor
epen Ltd which has a vast sales & marketing network that reaches to over a lakh
of retail outlets already and the count is growing everyday. With the launch of
Dr. Morepen the distribution of Morepen has moved beyond pharmacist, to super st
ores, retail outlets & neighbourhood shops. The growing list of Dr. Morepen s Se
lf Health FMHG product includes DAB (instant antacid), SAT ISABGOL (Natural laxa
tive), GOL GOLI (Hajma Candy), LEMOLATE (Cold
relief ), BURNOL ( for burns and cut) to take care of minor day to day problems,
where as product like C SIP (refreshing energy drink), Y SUGAR (Low cal sweeten
er), and 2 KOOL, (Throat drops), and C-CANDY (Health candy) are life style compa
nions that vitalizes and keep people fit. Many more products are being launched
soon, thus building up the FMHG category. In a step that would expand Dr. Morepe
n s franchise into a retail format, Morepen acquired LIFESPRING, the renowned ch
ain of health & beauty stores. Lifespring is an internationally styled, health a
nd beauty chain of retail stores offering a range of nearly 15,000 domestic and
international branded products under one roof. Lifespring stores are located at
high retail density areas in New Delhi, catering to a wide ensemble of health an
d beauty customers. The Stores have three sections - Personal Care and Beauty, O
TC and Prescription Medicines and Optical Center. Following are the products of
Dr. Morepen Ltd: Dab Range Sat Isabgol Gol Goli Y . Sugar C-Sip Solid Tas
d Health C - Candy Burnol Lemolate
3) GlaxoSmithKline Pharmaceuticals Limited GlaxoSmithKline Pharmaceuticals Limit
ed (GSK) is India s leading research-based Company committed to improving the qu
ality of human life by enabling people to do more, feel better and live longer.
The Company has a formidable presence in the domestic pharmaceuticals market wit
h a market share of above 5.9 per cent. GSK India markets a wide range of ethica
l formulations and is the leader in therapeutic areas of respiratory, dermatolog
y and vaccines, besides having a significant presence in areas of gastroenterolo
gy, dietary supplements, gynecology, neurology,
cardiovascular and intensive care. GSK India is also the undisputed leader in th
e animal health and fine chemicals businesses. Following are the products of Gla
xoSmithKline Pharmaceuticals limited: Crocin Crocin Pain Relief CrocinQuik Eno
noTabs Iodex Iodex Power cream
4) Zydus Cadila Zydus Cadila is an innovative global pharmaceutical company that
discovers, develops, manufactures and markets a broad range of healthcare produ
cts. The groups operations range from API to formulations, animal health products
and cosmeceuticals. Headquartered in the city of Ahmedabad in India, the group
has global operations in four continents spread across USA, Europe, Japan, Brazi
l, South Africa and 25 other emerging markets.In its mission to create healthier
communities globally, Zydus Cadila delivers wide ranging healthcare solutions a
nd value to its customers. With over 8,000 employees worldwide, a world-class re
search and development centre dedicated to discovery research and eight state-of
-the-art manufacturing plants, the group is dedicated to improving peoples lives.
With three multi-therapy divisions and eight specialty divisions, Zydus Cadila
is one of the leading player in the Indian healthcare industry. It is the leadin
g player in the cardiovascular, gastrointestinal and women s healthcare segments
. The group has strong presence in respiratory, pain management, CNS, anti-infec
tives, oncology, neurosciences, dermatology and nephrology segments. It has been
able to maintain overall position and market share through faster growing chron
ic / lifestyle segments. With several new product introductions and pillar brand
s such as Aten, Ocid, Deriphyllin, Pantodac, Atorva, Nucoxia, Mifegest to name a
few, Zydus Cadila is
considered a tour-de-force in therapy management and brand management. The group

has several in-licensing alliances with global multinationals such as Schering
AG, Boehringer Ingelheim, Viatris, etc. The portfolios of over 200 products are
marketed by a specialised field force of 3,000. With one of the strongest distri
bution channels in the industry, the group reaches out to 1,00,000 chemists and
serves 2,00,000 doctors including physicians, specialists and super specialists.
Cadila Healthcare Limiteds parent organisation Zydus Group is one of the fastest
growing integrated healthcare companies with a turnover of Rs.13 billion. Zydus
Group is the 5th largest player in the Indian domestic formulations market and
also has a global presence. Cadila Healthcare came into being under the aegis of
the Zydus Group in 1995. Zydus today has a leadership position in key segments
like cardio vascular, gastro intestinal and womens healthcare and is amongst top
three in the respiratory, pain management and anti-infective segments. It also i
s a leading producer of niche and complex bulk drugs. Some of the wellknown bran
ds of Zydus Cadila include Aten - the largest hypertensive brand in the country,
Ocid, Amlodac, Atorva, Pantodac, GRD, Penegra, Nucoxia, Ciprobid, Dexona, Primo
lut-N, Dulcolax, Enew, Sugar Free, Diane 35, Mifigest among others. Following ar
e the products of Zydus Cadila: a) Functional Health Foods and Dietary Products
In the health foods segment, the Consumer Division is a pioneer in offering heal
thier dietary options to the consumers with the Sugar Free and Nutralite range o
f products. Sugar Free Gold is the largest selling aspartame based low calorie s
ugar substitute in India with market share of over 75%. Sugar Free Natura is the
latest new generation zero calorie sugar substitute made from sucralose - a sug
ar derivative. Sugar Free Dlite is a low calorie healthy drink fortified with ele
ctrolytes, vitamins and just 10 calories. It is available as powder soft drink a
s well as in a ready to drink form.

Nutralite is a healthy cholesterol-free butter substitute (table margarine), and
is the largest selling table margarine in India.
b) Speciality Skincare Products In the skincare segment, the EverYuth brand enjo
ys the distinction of being a skincare brand from a healthcare company . Enrich
ed with the power of natural ingredients, EverYuth has a strong presence in adva
nced skincare segments like soap-free face washes, face masks, skin exfoliators
amongst others. The EverYuth range also includes speciality dermatologically tes
ted skincare solutions for sun protection, pigmentation, acne and aging under th
e recently launched EverYuth Derma Care range.
5) Novartis: Novartis was created in 1996 through the merger of Ciba-Geigy and S
andoz. Novartis offers a wide range of healthcare products through our Pharmaceu
ticals, Vaccines and Diagnostics, Sandoz and Consumer Health Divisions. Nearly 1
00 000 people are working at Novartis to help save lives and improve quality of
life. Corporate citizenship at Novartis rests on four pillars: patients, busines
s conduct, people and communities, and environmental care. Operate in 140 countr
ies, with our global headquarters in Basel, Switzerland. Novartis is one of the
industrys biggest investors in research. Over-the-Counter (OTC) is a world leader
in the research, development, production and marketing of self-medication produ
cts that do not require prescriptions. Our products are designed for the in-home
treatment and prevention of medical conditions and ailments as well as the enha
ncement of overall health and well-being. The main OTC product categories are an
algesics, cough, cold, allergy, gastrointestinal, skin care and smoking-cessatio
n treatments, as well as mineral supplements. Following are the products of the
Novartis: Benefiber powder Benefiber Caplets Benefiber plus calcium
Page 68

Excedrin Extra Strength Excedrin Excedrin Tension Headache Excedrin Migraine Excedri
n PM Gas-X Products Children s Gas-X Tongue Twisters Thin Strips Baby Gas-X Infant Dro
ps Gas-X Thin Strips Softgels Chewables Bufferin Aspirin Calcium Sandoz Mineral su
pplement Excedrin Ex-Lax Overnight laxative Keri Lamisil AT Athletes foot and joc
k itch
6) Paras pharmaceuticals Pvt. Ltd.: It is this incessant desire on part of peopl
e that has inspired Paras to dedicate itself to issues that might appear to be t
rivial, but in reality, are quite significant in life. The range of such issues
is extensive. To identify them, one simply needs to be sensitive towards such pr
oblems. And make the right solutions available. At Paras, the process behind fin
ding every such solution is backed by extensive consumer research, often carried
out in an obsessive manner. While
identifying these real life problems and related behavioral patterns, the health
aspects are also put on high priority, so that the end result is not just a cos
metic one, but a truly healthy solution. The result of these efforts is that tod
ay, Paras has a diverse range of innovative products, many of which have created
totally new categories by themselves. Not to mention, they have been enormously
successful. So much so, that today, Paras products have not only found a place
on the shelves of most households, but in the hearts of people as well. In short
, the philosophy at Paras, of providing solutions that care about you, is quite
visible in its many works of art - the many brands that truly enhance life. New
categories. New promises. What makes the customer believe in them all? Its the fa
ith that comes with time, with a positive experience of using a product/service
offered by the company. By realizing that the promises were indeed fulfilled. Bu
t winning this faith isn t easy. It comes after plenty of research and consumer
study done on a large scale. In case of Paras, the entire process of advanced re
search hinges on one focal point to provide care, and not just cure. To serve pe
ople with value added products and not just cosmetic makeovers. And to create ne
w product categories. All this has made Paras a reliable and favoured name among
st the masses. For Paras, this long journey of many years has indeed been a glor
ious one. And with more and more dreams taking shape at Paras, its glorious stre
ak will continue to brighten up many more lives. Following are the products of t
he Paras Pharmaceuticals Pvt.Ltd.: Afterbath FreshnessCream BoroSoft Krac
D Cold Cough Syrup ItchGuard Moov Moov spray RingGuard Stopache
Page 70
7) Dabur India Limited: Dabur India Limited is the fourth largest FMCG Company i
n India with interests in Health care, Personal care and Food products. Building
on a legacy of quality and experience for over 100 years, today Dabur has a tur
nover of Rs.2233.72 crore with powerful brands like Dabur Amla,Dabur,Chyawanpras
h,,Vatika, Hajmola & Real. Dabur India Limited is a leader in manufacturing and
marketing herbal, nature-based products. Today Daburs products are available for
people in more than 50 countries across the world, helping them move towards a h
ealthy, natural and holistic lifestyle. Our products are available in the market
s of the Middle East, South-East Asia, Africa, the European Union and America. F
ollowing are the products of Dabur India Limited: Dabur Glucose-D Dabur Hajmo
table Dabur Hingoli Pudin Hara Pudin Hara-G Dabur Shankha Pushpi Shilajit Gold D
abur Sarbyna Strong
Page 71
Survey Analysis:
Demographic Profile:
Gender
EXHIBIT I
Male Female
Frequency 148 152
Percent 49 51
FIGURE I
Page 72
Age
EXHIBIT II
19 years - 30 years 31 years - 40 years 41 years - 50 years 51 years - 60 years
Above 60 Years Total
Frequency 210 34 22 26 8 300
Percent 70 11 7 9 3 100
FIGURE II
Page 73
Education
EXHIBIT III
Undergraduate Graduate Post-Graduate Total
Frequency 90 116 94 300
Percent 30 39 31 100
FIGURE III
Page 74
Monthly Income
EXHIBIT IV
Rs. 0 - Rs. 10,000 Rs. 10,001 - Rs. 20,000 Rs. 20,001 - Rs. 30,000 Rs. 30,001 Rs. 40,000 Above Rs. 40,000 Total
Frequency 118 66 52 36 28 300
Percent 39 22 17 12 9 100
FIGURE IV
Page 75
1) What do you do when you suffer from a minor disease?

EXHIBIT 1
Consult to the doctor Consult a friend Consult to a family member Take a medicin
e on your own Take a medicine which the storekeeper suggests Do nothing Total
Frequency 54 12 52 118 34 30 300
Percent 18 4 17 40 11 10 100
FIGURE 1.1
Page 76
FIGURE 1.2
Interpretation:
The above column graph indicates that 118 respondents take medicine on their own
when they suffer from minor disease while the number of respondents that consul
t to the doctor and the number of respondents that take advice from family membe
rs are almost equal i.e 54 & 52 respondents respectively. 34 respondents take a
medicine which the storekeeper suggests and 30 respondents do nothing when they
suffer from minor disease. The option being least preferred by the respondents w
hen they suffer from minor disease is consulting a friend i.e 12 respondents. Th
e above pie chart implies that 40% respondents take medicine on their own which
is the most preffered option . while the number of respondents that consult to a
doctor or a family member when they suffer from minor disease is almost half th
e number of respondents that take medicine on their own. On the other hand only
4% of the respondents consult to a friend. Thus, from the above analysis one can
easily conclude that people are well aware of the OTC medicines and for the min
or diseases they dont prefer anybodys advice.
2) Have you ever used any of the pharma OTC products?

EXHIBIT 2
Yes No Total
Frequency 266 34 300
Percent 89 11 100
FIGURE 2.1
Page 78
FIGURE 2.2
Interpretation:
According to the column chart given above, 266 out of 300 respondents have used
any of the Pharma OTC products atleast once in their life which is quite a signi
ficant number. The pie chart also draws attention to the same thing that 89% of
respondents have used Pharma OTC products while 11% of respondents have never us
ed any of the pharma OTC products.
Page 79
3) Which place you generally prefer to purchase pharma OTC products?

EXHIBIT 3
Neighborhood chemist store Drug retail chain Supermarket/mall Grocery stores Tot
al Missing Grand Total
Frequency 215 30 14 7 266 34 300
Percent 81 11 5 3 100
FIGURE 3.1
Page 80
FIGURE 3.2
Interpretation:
Many of the healthcare products are also available at grocery store and supermar
ket/mall but still from the above graphs it can be said that majority of the res
pondents ie 215 respondent out of 300 prefer to purchase from Neighborhood chemi
st store which accounts to about 81% of total respondents while about only 7 out
of 300 respondent which accounts to 3% of total respondents prefer Grocery stor
es for purchasing OTC products. Moreover, respondents preferring Drug retail cha
in and supermarket/mall are 11% and 5% respectively. The above analysis indicate
s that people still prefer conventional chemist stores to purchase medicines. Ho
wever, with Supermarket/mall growth this percentage will fall down as the share
of supermarket will grow. At the same time, Drug retail chains like Apollo pharm
acy are gaining preference quickly.
Page 81
4) What is your preferred time interval for buying OTC products?

EXHIBIT 4
As and when needed Every week Every fortnight Every month Total Missing Grand To
tal
Frequency 231 14 6 15 266 34 300
Percent 87 5 2 6 100
FIGURE 4.1
Page 82
FIGURE 4.2
Interpretation:
The above column graph indicates that 231 respondents buy OTC products As and Wh
en needed while the number of respondents that purchase OTC products on weekly b
asis, fortnight basis and monthly basis are 14, 6, and 15 respectively. It can b
e implied from the above pie chart that majority of the respondents i.e. 87% pre
fer buying OTC products As and When needed. While only 2% of respondents prefer
buying OTC products on fortnight basis. Thus, above analysis implies that people
generally dont prefer stocking OTC products at home.
Page 83
5) Which factors influence you while making the purchase decision regarding part
icular brand of OTC product?
EXHIBIT 5
Frequency Earlier prescription from doctors Recommendation from a friend/relativ
e Advertisement of a product Through product trial Total Missing Grand Total 142
62 20 50 266 34 300
Percent 52 23 7 18 100
FIGURE 5.1
Page 84
FIGURE 5.2
Interpretation:
From the above column graph 142 respondents uses earlier prescription from docto
rs as a basis for making purchase decision regarding particular brand of OTC pro
ducts. This is the most influencing factor as 52% of respondents base their purc
hase decision on it. The second most influencing factor is recommendation from a
friend/ relative as 62 respondents i.e. 23% take it into account while making p
urchase decision. 50 respondents i.e. 18% of respondents make purchase decision
through product trial. Thus the conclusion is that in India people still conside
r doctors next to God.
Page 85
6) Rank the following features of particular brand of OTC products in order of y

our preference.
EXHIBIT 6
Rank 1 Efficacy Brand Name Packaging Pricing Promotional Offer 146 102 2 11 4
Rank 2 79 122 15 36 14
Rank 3 28 38 109 57 31
Rank 4 5 2 88 132 37
Rank 5 8 36 50 28 178
Descriptive Statistics N Statistic Efficacy Brand name Packaging Pricing Promoti
onal offer Valid N 266 264 264 264 264 264 1.6842 1.7727 3.6402 3.4924 4.4053 Me
an Statistic Std. Error .05829 .04399 .05405 .06119 .06091 Std. Deviation Statis
tic .95062 .71476 .87816 .99425 .98974
Page 86
FIGURE 6.1
Interpretation:
The most frequency rank given to the
d of OTC products by the respondents
Efficacy Rank 1 Brand Name Rank
Offer Rank 5
below mention features of a particular bran

as seen in the column graph are as follows:
2 Packaging- Rank 3 Pricing Rank 4 Promotional
Page 87
Efficacy
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Total Missing Grand Total Frequency 146 79 28
5 8 266 34 300 Percent 55 30 11 2 3 100
FIGURE 6.2.1
Page 88
Brand Name
Frequency 102 122 38 2 0 264 36 300 Percent 39 46 14 1 0 100
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Total Missing Grand Total
FIGURE 6.2.2
Page 89
Packaging
Frequency 2 15 109 88 50 264 36 300
FIGURE 6.2.3
Percent 1 6 41 33 19 100
Page 90
Pricing
FIGURE 6.2.4
Page 91
Promotional Offer
FIGURE 6.2.5
Page 92
Interpretation:
For efficacy 55% respondents have given rank 1 and only 2 %respondents have give
n rank 5. For Brand Name 39% respondents have given rank 1 and o% respondents ha
ve given rank 5. For packaging 1%respondents have given rank 1 and 19% responden
ts have given rank 5. For Pricing 4% respondents have given rank 1 and 11% respo
ndents have given rank 5. For promotional offer 2% respondents have given rank 1
and 67% have given rank 5. Thus, according to the respondents efficacy and bran
d name are the most important features for selecting a particular brand of OTC p
roducts.
Page 93
7) Which medium of communication is most appealing to you for advertisement of O

TC products?
EXHIBIT 7
Newspaper Magazines Television Internet Billboard Pamphlet Total Missing Grand T
otal
Frequency 58 16 143 25 5 19 266 34 300
FIGURE 7.1
Percent 22 6 54 9 2 7 100
Page 94
FIGURE 7.2
Interpretation:
From the above graph it can be said that respondents most preferred medium among
all media is Television. 143 respondents preferred Television, followed by 58 re
spondents who preferred Newspaper. Television is preferred by 54% of respondents
while Newspaper is preferred is by 22% of respondents. Other mediums i.e. Magaz
ines, Internet, Billboard and Pamphlet are preferred by 16, 25, 5 and 19 respect
ively. Thus, Pamphlets, Billboard & Magazines are found to be least appealing fo
r advertisement of OTC products i.e only 7%, 2% and 6% of respondents respective
ly.
Page 95
8) Do you seek detail information from the chemist of brand of the OTC products
which you purchase?
EXHIBIT 8
Yes No Total Missing Grand Total
Frequency 157 109 266 34 300
Percent 59 41 100
FIGURE 8.1
Page 96
FIGURE 8.2
Interpretation:
From the column chart itself it can be predicted that most of the respondents i.
e 157 out of 300 seek detail information from the chemist about product use and
other effects. Also the pie chart indicates that 59% respondents seek detail inf
ormation from chemist, while 41% respondents say that they do not require detail
information from the chemist. Thus, Chemists play an important role in creating
awareness among people regarding various aspects of OTC medicines.
Page 97
9) Do you perceive OTC products as safe to buy and use?

EXHIBIT 9
Frequency 167 99 266 34 300
Percent 63 37 100
FIGURE 9.1
Page 98
FIGURE 9.2
Interpretation:
From the column chart itself it can be ascertained that most of the respondents
i.e 167 out of 300 perceive OTC products as safe to buy and use. Also the pie ch
art indicates that 63% respondents perceive OTC products as safe to buy and use,
while 37% respondents say that they do not perceive OTC products as safe to buy
and use. Thus, people in India are still suspicious about the safety of using m
edicines without the prescription of the doctor.
Page 99
10)
Are you aware of side effects of OTC products you take?
EXHIBIT 10
Frequency 158 108 266 34 300
Percent 59 41 100
FIGURE 10.1
Page 100
FIGURE 10.2
Interpretation:
The above column graph indicates that most of the respondents i.e 158 out of 300
are aware of the side-effects of OTC products they take. Also the pie chart ind
icates that 59% respondents are aware of side-effects of OTC products they take,
while 41% respondents are unaware of sideeffects of OTC products they take. Thu
s, it can be safely concluded that consiousness about health is increasing day b
y day among the people.
Page 101
11)
Do you read the labeling information on an OTC products package before using it?
EXHIBIT 11
Frequency 244 22 266 34 300
Percent 92 8 100
FIGURE 11.1
Page 102
FIGURE 11.2
Interpretation:
Almost all the repondents i.e 244 said that they read the labeling information o
n the OTCs product package before using it as seen from the column graph while on
ly few respondents ie 22 said that they do not read the labeling information on
the OTCsproduct package before using it. From the above pie chart it can be seen
that 92% respondents read the labeling information while 8% respondents do not r
ead the labeling information.
Page 103
If yes, when you look at the package including the front, back, and sides, what
information do you read?
EXHIBIT 11.1
Frequency Direction for use Active ingredients Warnings Possible Side effects Pr
ice, manufacture date and expiry date Other 158 122 125 126 192 12
Percent 21 17 17 17 26 2
FIGURE 11.1.1
FIGURE 11.2.1
Page 104
Interpretation:
Those respondents who read the labeling information before using it were further
asked to tick the information that they read on the package. According to the a
bove column chart, 192 respondents read the Price, manufacuture date and Expiry
date while 158 repondents read the directions for use. At the same time, number
of respondents reading the active ingredients, possible side effects, warnings a
re almost equal i.e 122, 126 and 125 respectively. only 12 respondents read othe
r information on the package. The above pie chart indicates that most of the res
pondents (26%) read the Price, maufacture date and expiry date while only 2% res
pondents read the other information on the package. The above analysis shows tha
t people are less aware and least concern of the important things while using me
dicines like active ingredients, warnings, and possible side effects. But they a
re most concern about reading the price, manufacure date and expiry date on the
drug package.
Page 105
12)
How often do you follow directions given on OTC drug package?
EXHIBIT 12
Always Most of the times Sometimes Rarely Never Total Missing Grand Total
Frequency 100 90 54 19 3 266 34 300
Percent 38 34 20 7 1 100
FIGURE 12.1
Page 106
FIGURE 12.2
Interpretation:
From the above column chart, it can be seen that almost 1/3rd repondents always
follow the directions given on OTC drug package. while 90 respondents follow the
directions given on drug package most of the times. Only 3 respondents never fo
llow the directions on drug package. From this sample, 38% reported that they al
ways followed the directions on the OTC drug package, while 34% said they follow
the directions on the OTC drug package most of the times. 20% of respondents sa
id they would sometimes follow these directions while 7% and 1% would rarely or
never follow the directions respectively. Thus, most of the people know that med
icines should always be used according to the directions given.
Page 107
13)
Do point of sale display influence you while making a purchase decision regardin
g OTC products?
EXHIBIT 13
Always Most of the times Sometimes Never Total Missing Grand Total
Frequency 30 55 99 82 266 34 300
Percent 11 21 37 31 100
FIGURE 13.1
Page 108
FIGURE 13.2
Interpretation:
The responses clearly signify that respondents sometimes or never get influenced
by the point of sale display while making the purchase decision regarding OTC p
roducts. 82 respondents never get influenced while 99 respondents sometimes get
influenced by point of sale display respectively. From the above Pie chart perce
ntage of respondents getting influenced by point of sale display always, most of
the times, sometimes and never are 11%, 21%, 37% and 31% respectively. Thus, pe
ople are conservative about the OTC products and they know that medicines should
not be taken just by seeing the display in the shop.
Page 109
14)
Do you visit Drug store with primary intension to purchase only OTC products?
EXHIBIT 14
Frequency 118 148 266 34 300
Percent 44 56 100
FIGURE 14.1
Page 110
FIGURE 14.2
Interpretation:
The above graph signifies that 118 respondents (44%) visit drug store with prima
ry intention to purchase only OTC products while 148 respondents (56%) visit dru
g store to purchase Prescription medicines along with the OTC products. Thus, te
ndency among people is more towards purchasing OTC products whenever they visit
drug store for some other purpose.But still clear distinction cannot be made as
what is the general tendency among people because even respondents visiting drug
store with primary intention to purchase OTC products is 44%.
Page 111
15)
How would you feel when your doctor inquires you about OTC medicines taken befor
e consulting him/her?
EXHIBIT 15
He should do it routinely It would be a good idea sometimes I don t mind either
ways It would be better if he don t I would rather be upset if he did Total Miss
ing Grand Total
Frequency 121 56 64 18 7 266 34 300
Percent 45.5 21.1 24.1 6.8 2.6 100.0
FIGURE 15.1
Page 112
FIGURE 15.2
Interpretation:
A total of 266 respondents responded about prior use of OTCs out of which 121 sa
id that doctor should do it routinely, 56 said that it would be a good idea some
times, 64 said that I dont mind either ways, 18 said that It would be better if d
octor dont inquire and only 7 stated that they would be upset if doctor inquire t
hem. Thus, 45% of respondents preferred Doctor doing inquiry while 24% responden
ts expressed indifference to such inquiry which least proportion of respondents
i.e only 3% respondents said that they would be upset with doctors, inquiry.
Page 113
16)
Frequency of stocking common OTC medicines at home
EXHIBIT 16
Always Vitamins and minerals Indigestion. Heart burn Medicated skin care product
s Cough remedies Sore throat Herbal remedies Laxatives Anti- Diarrhoeals Hemorrh
oids Products 76 60 97 114 78 55 19 56 12
Sometimes 80 84 76 90 74 82 55 64 26
Seldom 39 48 42 38 54 52 71 61 41
Never 71 74 51 24 60 77 121 85 187
Descriptive Statistics N Statistic Vitamin and Minerals Indigestion/Heartburn Me
dicated skin care products Cough remedies Sore throat Herbal remedies Laxatives
Anti-Diarrhoeals Haemorrhoid product Valid N 266 266 266 266 266 266 266 266 266
266 2.3947 2.5113 2.1767 1.8947 2.3609 2.5677 3.1053 2.6579 3.5150 Mean Statist
ic Std. Error .07122 .06888 .06891 .05896 .06918 .06835 .05944 .06964 .05198 Std
. Deviation Statistic 1.16157 1.12345 1.12383 .96163 1.12829 1.11471 .96944 1.13
581 .84773
Page 114
FIGURE 16.1
Interpretation:
From the above Column graph following can be concluded about most preferred freq
uency of stocking among respondents for major OTC categories: Vitamins and
als are stocked sometimes Indigestion and heart burn medicines are stocked somet
imes Medicated skin care products like Soframycin are always stocked Cough remed
ies are always stocked Sore throat medicines are also always stocked Herbal reme
dies are sometimes stocked Laxatives are never stocked Anti-Diarrheals are never
stocked Hemorrhoid products are never stocked Thus, it can be ascertained that
Cough remedies, Sore throat medicines and Medicated skin care products are more
frequently stocked and used than Vitamins and minerals, Indigestion and heart bu
rn medicines and herbal medicines. And at the same time, Anti-Diarrhoeals, Haemo
rrhoid products and Laxatives are least stocked and used than other categories.
Vitamin and Minerals

EXHIBIT 16.1
Always Sometimes Seldom Never Total Missing Grand Total
Frequency 76 80 39 71 266 34 300
Percent 28 30 15 27 100
FIGURE 16.2.1
Page 116
Indigestion / Heartburn
EXHIBIT 16.2
Frequency 60 84 48 74 266 34 300
Percent 22 32 18 28 100
FIGURE 16.2.2
Page 117
Medicated Skin Care Products

EXHIBIT 16.3
Frequency 97 76 42 51 266 34 300
Percent 36 29 16 19 100
FIGURE 16.2.3
Page 118
Cough Remedies
EXHIBIT 16.4
Frequency 114 90 38 24 266 34 300
Percent 43 34 14 9 100
FIGURE 16.2.4
Page 119
Sore Throat
EXHIBIT 16.5
Frequency 78 74 54 60 266 34 300
Percent 29 28 20 23 100
FIGURE 16.2.5
Page 120
Herbal Remedies
EXHIBIT 16.6
Frequency 55 82 52 77 266 34 300
Valid Percent 21 31 19 29 100
FIGURE 16.2.6
Page 121
Laxatives
EXHIBIT 16.7
Frequency 19 55 71 121 266 34 300
Percent 7 21 27 45 100
FIGURE 16.2.7
Page 122
Anti Diarrheals
EXHIBIT 16.8
Frequency 56 64 61 85 266 34 300
Percent 21 24 23 32 100
FIGURE 16.2.8
Page 123
Hemorrhoid Products
EXHIBIT 16.9
Frequency 12 26 41 187 266 34 300
Percent 4 10 15 70 100
FIGURE 16.2.9
Page 124
17)
Give the following ten statements score from 1 to 5 where 1 means you strongly d
isagree and 5 means you strongly agree
EXHIBIT 17 Strongly Disagree
Statement 1
Disagree 38
44 47
Neutral 57
53 73
Agree 32
56 33
Strongly Agree 50
71 26
89
42 87
Statement 2 Statement 3 Statement 4 Statement 5 Statement 6 Statement 7 Statemen
t 8 Statement 9 Statement 10
32 51 33 28 30 30
66
27 21 20 44 27 25
38
83 51 68 67 48 45
71
61 65 69 56 73 62
37
63 78 77 71 88 104
54
Descriptive Statistics N Statistic Statement 1 Statement 2 Statement 3 Statement
4 Statement 5 Statement 6 Statement 7 Statement 8 Statement 9 Statement10 266 2
66 266 266 266 266 266 266 266 266 2.6842 3.2632 2.4887 3.3609 3.3684 3.5150 3.3
684 3.6090 3.6955 2.9060 Mean Statistic Std. Error .09222 .08700 .08100 .07841 .
08960 .08064 .08077 .08194 .08374 .08854 Std. Deviation Statistic 1.50405 1.4189
8 1.32104 1.27879 1.46132 1.31528 1.31737 1.33648 1.36580 1.44412
Page 125
FIGURE 17.1
Page 126
I reach for OTC medicines at the first sign of illness

EXHIBIT 17.1
Strongly disagree Disagree Neutral Agree Strongly agree Total Missing Grand Tota
l
Frequency 89 38 57 32 50 266 34 300
Valid Percent 34 14 21 12 19 100
FIGURE 17.2.1
Interpretation:
It can be seen from the above Pie-chart that 34% respondents have strongly Disag
reed with this statement while only 19% have strongly agreed with this statement
. Thus, it shows that people take OTC medicines only when the illness is severe.
Page 127
I use OTC medicines only if the illness is quite severe

EXHIBIT 17.2
l
Frequency 42 44 53 56 71 266 34 300
Percent 16 16 20 21 27 100
FIGURE 17.2.2
Interpretation:
In this statement, 27% respondents strongly agree with this statements and so it
reconfirms first statement that people use OTC medicines only if the illness is
quite severe. Only 16% of sample strongly disagrees with this statement.
Non-prescription medicines are totally safe to use

EXHIBIT 17.3
l
Frequency 87 47 73 33 26 266 34 300
Valid Percent 33 18 27 12 10 100
FIGURE 17.2.3
Interpretation:
The above Pie chart indicates that 33% respondents strongly disagree with this s
tatement while only 10% respondents strongly agrees with this statement. This me
ans that people are well aware of the fact that no medicines are devoid of any s
ide-effects and no medicine in the world is good for our health.
Non-prescription medicines can have dangerous side-effects

EXHIBIT 17.4
l
Frequency 32 27 83 61 63 266 34 300
FIGURE 17.2.4
Percent 12 10 31 23 24 100
Interpretation:
31% respondents are neutral to this statement as seen in above pie while 23% and
24% respondents agree and strongly agree respectively. The proportion of neutra
l respondents is high because of the word dangerous. People know that Non-prescrip
tion medicines have side-effects but they are not sure if they are having danger
ous side-effects or not.
Page 130
The effect of incorrect use of non-prescription medicines can be as serious as t

hat of prescription medicines
EXHIBIT 17.5
l
Frequency 51 21 51 65 78 266 34 300
Percent 19 8 19 25 29 100
FIGURE 17.2.5
Interpretation:
29% respondents strongly agree with this statement and 25% respondents agree wit
h this statement. It means people believe that medicines should be used accordin
g to directions for use.
Page 131
Non-prescription medicines can sometimes mask serious health problems

EXHIBIT 17.6
l
Frequency 33 20 67 69 77 266 34 300
Percent 12 8 25 26 29 100
FIGURE 17.2.6
Interpretation:
The response for this statement is quite clear as 29% respondents strongly agree
and 26% respondents agree with this statements. Thus, people believe that use o
f Non-prescription medicines can mask serious health problems.
Page 132
Some non-prescription medicines interfere with the natural healing process of th

e body
EXHIBIT 17.7
l
Frequency 28 44 67 56 71 266 34 300
Percent 10 17 25 21 27 100
FIGURE 17.2.7
Interpretation:
Proportion of respondents agreeing with this statement is almost half of the tot
al respondents while of the respondents have expressed neutral opinion about the
statement while remaining of the respondents have disagreed with the statement.
With continual use, some non-prescription medicines lose their effectiveness

EXHIBIT 17.8
l
Frequency 30 27 48 73 88 266 34 300
Percent 11 10 18 28 33 100
FIGURE 17.2.8
Interpretation:
It can be seen from the Pie-chart that 28% respondents agree and 33% strongly ag
ree with the statement. So it can be easily concluded that people believe that N
on-prescription medicines should not used frequently as they may lose their effe
ctiveness and thereafter they will not work at a same dose.
Page 134
Some non-prescription medicines may cause dependency or addiction if taken for a

long period of time
EXHIBIT 17.9
l
Frequency 30 25 45 62 104 266 34 300
FIGURE 17.2.9
Percent 11 10 17 23 39 100
Interpretation:
39% respondents strongly agree to this statement as seen in above pie chart whil
e 23% respondents agree to this statements. People believe that Non-prescription
medicines can also cause addiction when used for a longer period of time but 17
% respodents are not sure about this statement.
Page 135
Non-prescription medicines should be used frequently to relieve minor health pro

blems
EXHIBIT 17.10
l
Frequency 66 38 71 37 54 266 34 300
FIGURE 17.2.10
Percent 25 14 27 14 20 100
Interpretation:
From the above Pie-chart it can be concluded that 27% respondents are neutral to
this statement. Moreover, 25% respondents strongly disagree with this statement
and 20% respondents strongly agree with this statement. Thus, the response is q
uite ambigious and it cannot be clearly stated as what is the opinion of the res
pondents.
18)
What action would you take if an OTC medicine did not work within reasonable per
iod of time?
EXHIBIT 18
Stop using the product and consult the doctor Stop using the product and ask the
retailer Decrease the dose or stop the medication Increase the dose or use prod
uct more often Use for longer time Total Missing Grand Total
Frequency 198 31 23 12 2 266 34 300
Percent 74 12 9 4 1 100
FIGURE 18.1
Page 137
FIGURE 18.2
Interpretation:
When asked what action they would take if an OTC medicine did not work within th
e recommended period of time, 198 respondents reported that they would stop and
consult the Doctor. 31 respondents said that they would stop using the product a
nd ask the retailer while 23 respondents said that they would decrease the dose
or stop the medication. Moreover 12 respondents indicated that they would increa
se the dose or use the product more often while only 2 respondents said that the
y would use the product for a longer time. Thus the most prominent response is t
o stop the medication and consult the doctor as chosen by 74% of respondents whi
le the least preferred action is to use the product for a longer time as only 1%
of respondents prefer that action.
Page 138
19)
Tick ( ) against the brand(s) which you have used for personal
consumption COLD AND COUGH SEGMENT
TABLET
EXHIBIT 19.1.1
Frequency Lemolate Dcold total Crocin cold and flu Vicks action 500 Okaset cold
Other tablet
FIGURE 19.1.1
105 139 118 128 14 27
Percent 20 26 22 24 3 5
Page 139
FIGURE 19.2.1
Interpretation:
The analysis of the above data using column graph and pie chart indicates that L
emolate is used by 105 respondents and Dcold Total is used by 139 respondents. M
oreover, Crocin Cold And Flu and Vicks Action 500 is used by 118 and 128 respond
ents respectively. 14 respondents have used Okaset Cold while 27 respondents use
other brands. Thus, Dcold Total is a leading brand with majority of respondents
i.e 26% have used it. Even Vicks Action 500 is not far behind as 24% of respond
ents have used it. At the same time, Okaset Cold is a new brand for the consumer
s and only 3% of respondents use it for personal consumption.
Page 140
SYRUP
EXHIBIT 19.1.2
Benadryl Corex dx Tossex Brozedex Phensedyl Other Syrup
Frequency 135 79 44 29 31 23
percent 40 23 13 8 9 7
FIGURE 19.1.2
Page 141
FIGURE 19.2.2
Interpretation:
The analysis of the above data using column graph and pie chart states that Bena
dryl is used by 135 respondents while Corex Dx is used by 79 respondents. Moreov
er, Tossex and Brozedex is used by 44 and 29 respondents respectively. 31 respon
dents have used Phensedyl while 23 respondents use other brands. Thus, Benadryl
is a leading brand with majority of respondents i.e 40% have used it. Corex Dx i
s very far behind as only 23% of respondents have used it. At the same time, Phe
nsedyl is a not so famous brand among the consumers as only 8% of respondents us
e it for personal consumption.
Page 142
LOZENGES
EXHIBIT 19.1.3
Alex Vicks Strepsils Halls Koflet Other Lozenges
Frequency 21 215 149 117 29 3
Percent 4 40 28 22 5 1
FIGURE 19.1.3
Page 143
FIGURE 19.2.3
Interpretation:
The above column graph and pie-chart states that Vicks and Strepsils are most fr
equently used by the respondents as Vicks and Strepsils is used by 215 and 149 r
espondents respectively and both together is favored by 68% of respondents. The
least used lozenges is Alex which is used by only 21 i.e 4% of respondents.
Page 144
ANALGESIC (PAIN KILLER)

EXHIBIT 19.2
Voveran Metacin Disprin Calpol Combiflame Saridon Dolo Other Analgesic
Frequency 19 166 139 55 161 64 23 20
Percent 3 26 21 8 25 10 4 3
FIGURE 19.1.4
Page 145
FIGURE 19.2.4
Interpretation:
From the above analysis it can be concluded that Metacin, Disprin and Combiflam
are far ahead of all the other analgesic or pain killer brands as 166, 139, and
161 respondents respectively have used it. This three brands in total accounts f
or 72% of respondents. The least used brands are Voveran and Dolo as only 19 (3%
) and 23(4%) of respondents have used it personally.
Page 146
MULTI VITAMIN
EXHIBIT 19.3
Revital Riconia Beplex Becosules Polybion Other Multi vitamin
Frequency 101 19 25 28 21 7
Percent 50 10 12 14 10 4
FIGURE 19.1.5
Page 147
FIGURE 19.2.5
Interpretation:
It is clearly seen from the column chart that Revital is far far ahead of all th
e other vitamin brands. 101 respondents have used Revital personally. This accou
nts to about 50% of total respondents using any multi-vitamin brand. This is due
to the intense advertisement by Revital. Responses for other brands like Riconi
a, Beplex, Becosules and Polybion are almost similar i.e 19,25,28 and 21 respect
ively. In total, these four brands along with others account for remaining 50% o
f respondents.
Page 148
ANTACID
EXHIBIT 19.4
Digene Gelucil Rantac Zintac Ranitin Other Antacid
Frequency 96 58 98 43 47 5
Percent 28 17 28 12 14 1
FIGURE 19.1.6
Page 149
FIGURE 19.2.6
Interpretation:
Both Digene and Rantac are leading in the market with 96 and 98 respondents resp
ectively using them as seen from the Column graph. The third most frequently use
d brand is Gelucil. It is but obvious due to popularity of brand as a result of
advertisement. While Zintac and Ranitin is used by 43 and 47 respondents respect
ively. Only 5 respondents uses other brand of antacids. Also the Pie-chart indic
ates that there is fierce competition between Digene and Rantac with 28 % respon
dents each using it. At the same time Zintac is new in the market with 12% of re
spondents using it.
Page 150
BALM AND OINMENT

EXHIBIT 19.5
Zandu Tiger Moov Iodex Amrutanjan Vicks Other Balm and Oinment
Frequency 87 87 125 133 45 189 8.0
Percent 13 13 18 20 7 28 1
FIGURE 19.1.7
Page 151
FIGURE 19.2.7
Interpretation:
It can be concluded from the above column graph that 189 respondents have person
ally used Vicks. The second most frequently used balm and ointment is Iodex whic
h is used by 133 respondents. Not so far behind is the Moov which is used by 125
respondents. Both Zandu and Tiger balm is used by 87 respondents each. The leas
t used brand is the Amrutanjan which is used by 45 respondents.8 respondents use
s other balm and ointment. As seen from the Pie-chart, the most frequently used
brand that is Vicks is used by 28% of respondents while the least used brand tha
t is Amrutanjan is used by 7% of respondents. Thus, Vicks has benefited from the
intense advetising since many years
Page 152
Hypothesis Analysis:
1) ANOVA
Gender
Ho: Population means for following the directions given on the package are not s
ignificantly different across gender groups H1: Population means for following t
he directions given on the package are significantly different across gender gro
ups Level of significance () = 0.05
Follow direction on pckge 95% Confidence Intervl for Men N Mle Femle Totl
134 132 266 Men 2.0149 1.9924 2.0038 Std. Devition .97321 .99997 .98478 Std.
Error Lower Bound Upper Bound Minimum Mximum .08407 .08704 .06038 1.8486 1.8202
1.8849 2.1812 2.1646 2.1226 1.00 1.00 1.00 5.00 5.00 5.00
N.R.Institute of Business Mngement
Pge 153
EXHIBIT 1.1
ANOVA Follow direction on pckge Sum of Squres Between Groups Within Groups To
tl .034 256.963 256.996 Df 1 264 265 Men Squre .034 .973 F .035 Significnce
.853
Interprettion:
The significnce level s indicted in the tble is 0.853 which is much higher t
hn predetermined level of significnce () (0.853 > 0.5). This implies tht there
re no significnt differences in popultion mens for following the directions
given on the pckge cross gender groups. So, null hypothesis Ho is ccepted
nd Alternte hypothesis H1 is rejected. Hence, it cn be concluded tht mles fo
llow the directions given on the pckge to the sme extent s femles.
Pge 154
Age
Ho: Popultion mens for following the directions given on the pckge re not s
ignificntly different cross ge groups H1: Popultion mens for following the
directions given on the pckge re significntly different cross ge groups De
scriptives Follow direction on pckge 95% Confidence Intervl for Men N 19 ye
rs - 30 yers 31 yers - 40 yers 41 yers - 50 yers 51 yers - 60 yers Above
60 Yers Totl 186 30 19 24 7 266 Men 1.8226 2.5000 2.5789 2.1667 2.5714 2.0038
Std. Devition .86726 1.00858 1.26121 1.16718 .97590 .98478 Std. Error .06359 .
18414 .28934 .23825 .36886 .06038 Lower Bound 1.6971 2.1234 1.9711 1.6738 1.6689
1.8849 Upper Bound 1.9480 2.8766 3.1868 2.6595 3.4740 2.1226 Minimum Mximum 1.
00 1.00 1.00 1.00 2.00 1.00 5.00 4.00 5.00 4.00 4.00 5.00
Pge 155
EXHIBIT 1.2
tl 22.672 234.324 256.996 df 4 261 265 Men Squre 5.668 .898 F 6.313 Sig. .000
Follow direction on pckge Scheffe Men Difference (I(I) Age (J) Age J) Std. Er
ror Sig. * 19 yers - 30 yers 31 yers - 40 yers -.67742 .18642 .012 41 yers
- 50 yers 51 yers - 60 yers Above 60 Yers 31 yers - 40 yers 19 yers - 30
yers 41 yers - 50 yers 51 yers - 60 yers Above 60 Yers 41 yers - 50 yers
19 yers - 30 yers 31 yers - 40 yers 51 yers - 60 yers Above 60 Yers 51 y
ers - 60 yers 19 yers - 30 yers 31 yers - 40 yers 41 yers - 50 yers Abov
e 60 Yers -.75637* -.34409 -.74885 .67742* -.07895 .33333 -.07143 .75637* .0789
5 .41228 .00752 .34409 -.33333 -.41228 -.40476 .22821 .20551 .36481 .18642 .2778
1 .25949 .39772 .22821 .27781 .29096 .41894 .20551 .25949 .29096 .40702 .029 .59
2 .380 .012 .999 .800 1.000 .029 .999 .734 1.000 .592 .800 .734 .911
95% Confidence Intervl Lower Bound Upper Bound -1.2558 -.0991 -1.4644 -.9817 -1
.8806 .0991 -.9408 -.4717 -1.3053 .0484 -.7829 -.4904 -1.2922 -.2935 -1.1384 -1.
3150 -1.6675 -.0484 .2935 .3829 1.2558 .7829 1.1384 1.1625 1.4644 .9408 1.3150 1
.3072 .9817 .4717 .4904 .8580
*. The men difference is significnt t the 0.05 level.
Pge 156
Interprettion:
The ANOVA tble revels tht significnce level is much lower thn lph () (0 <
0.05). This mens tht there re significnt differences in popultion mens for
following the directions given on the pckge cross ge groups. Hence, null hy
pothesis Ho is rejected nd Alternte hypothesis H1 is ccepted. In order to ex
mine where differences existed, the post-hoc Scheffe Test is employed. First, fo
r ge level, there re significnt differences between men direction follow for
19 yers - 30 yers ginst the group of 31 yers - 40 yers. The difference w
s lso significnt between respondents who re between 41 yers - 50 yers nd t
hose who re between 19 yers - 30 yers. Moreover it cn be concluded from the
descriptive tble tht respondents tht re between 19 yers 30 yers follow dir
ections given on pckge more often thn other ge groups. Respondents between 5
1 yers 60 yers follow directions given on pckge more often thn other ge gr
oups except respondents flling in ge group of 19 yers 30 yers.
Pge 157
Eduction
ignificntly different cross eduction level groups H1: Popultion mens for fo
llowing the directions given on the pckge re significntly different cross e
duction level groups Descriptives Follow direction on pckge 95% Confidence In
tervl for Men N Undergrdut e Grdute PostGrdute Totl 78 104 84 266 Men
2.2051 2.1827 1.5952 2.0038 Std. Devition 1.10910 .99283 .69627 .98478 Std. Err
or .12558 .09736 .07597 .06038 Lower Bound 1.9551 1.9896 1.4441 1.8849 Upper Bou
nd 2.4552 2.3758 1.7463 2.1226 Minimum Mximum 1.00 1.00 1.00 1.00 5.00 5.00 3.0
0 5.00
EXHIBIT 1.3
tl 20.511 236.485 256.996 df 2 263 265 Men Squre 10.256 .899 F 11.406 Sig. .0
00
Pge 158
Multiple Comprisons Follow direction on pckge Scheffe Men Difference (I(J) E

duction J) Std. Error Grdute Post-Grdute Grdute Undergrdute Post-Grdu
te Post-Grdute Undergrdute Grdute .02244 .60989* -.02244 .58745
*
95% Confidence Intervl Sig. .988 .000 .988 .000 .000 .000 Lower Bound Upper Bou
nd -.3272 .2428 -.3721 .2450 -.9770 -.9299 .3721 .9770 .3272 .9299 -.2428 -.2450
(I) Eduction Undergrdute
.14204 .14911 .14204 .13911 .14911 .13911
-.60989* -.58745
*
*. The men difference is significnt t the 0.05 level.
Interprettion:
The ANOVA tble indictes tht significnce level is much lower thn lph () (0
< 0.05). This mens tht there re significnt differences in popultion mens f
or following the directions given on the pckge cross Eduction groups. Hence,
null hypothesis Ho is rejected nd Alternte hypothesis H1 is ccepted. The pos
t-hoc Scheffe Test signifies tht there re significnt differences between men
direction follow for Under-Grdutes ginst the group of Post- Grdutes. The
difference ws lso significnt between respondents who re between Grdutes n
d those who re between Post-Grdutes. Moreover it seems from the descriptive t
ble tht Post Grdute respondents follow directions given on pckge more ofte
n thn other eduction groups.
Pge 159
Income
ignificntly different cross income groups H1: Popultion mens for following t
he directions given on the pckge re significntly different cross income gro
ups
Descriptives Follow direction on pckge 95% Confidence Intervl for Men N Rs.
0 - Rs. 10,000 Rs. 10,001 - Rs. 20,000 Rs. 20,001 - Rs. 30,000 Rs. 30,001 - Rs.
40,000 Above Rs. 40,000 Totl 107 55 46 33 25 266 Men 1.9907 1.9455 1.8913 2.09
09 2.2800 2.0038 Std. Devition 1.12010 .70496 .87504 1.01130 1.06145 .98478 Std
. Error .10828 .09506 .12902 .17604 .21229 .06038
EXHIBIT 1.4
Lower Bound 1.7760 1.7549 1.6314 1.7323 1.8419 1.8849
Upper Bound 2.2053 2.1360 2.1512 2.4495 2.7181 2.1226
Minimum Mximum 1.00 1.00 1.00 1.00 1.00 1.00 5.00 3.00 4.00 4.00 4.00 5.00
tl 2.945 254.051 256.996 df 4 261 265 Men Squre .736 .973 F .756 Sig. .554
Pge 160
Multiple Comprisons Follow direction on pckge Scheffe Men Difference (I-J) .

04520 .09935 -.10025 -.28935 -.04520 .05415 -.14545 -.33455 -.09935 -.05415 -.19
960 -.38870 .10025 .14545 .19960 -.18909 .28935 .33455 .38870 .18909 Std. Error
.16369 .17395 .19645 .21916 .16369 .19712 .21724 .23798 .17395 .19712 .22507 .24
514 .19645 .21724 .22507 .26159 .21916 .23798 .24514 .26159 95% Confidence Inter
vl Lower Upper Bound Bound -.4626 .5530 -.4403 -.7097 -.9693 -.5530 -.5574 -.81
94 -1.0728 -.6390 -.6657 -.8979 -1.1492 -.5092 -.5285 -.4987 -1.0007 -.3906 -.40
38 -.3718 -.6225 .6390 .5092 .3906 .4626 .6657 .5285 .4038 .4403 .5574 .4987 .37
18 .7097 .8194 .8979 .6225 .9693 1.0728 1.1492 1.0007
(I) Monthly income (J) Monthly income Rs. 0 - Rs. 10,000 Rs. 10,001 - Rs. 20,000
Rs. 20,001 - Rs. 30,000 Rs. 30,001 - Rs. 40,000 Above Rs. 40,000 Rs. 10,001 - R
s. Rs. 0 - Rs. 10,000 20,000 Rs. 20,001 - Rs. 30,000 Rs. 30,001 - Rs. 40,000 Abo
ve Rs. 40,000 Rs. 20,001 - Rs. Rs. 0 - Rs. 10,000 30,000 Rs. 10,001 - Rs. 20,000
Rs. 30,001 - Rs. 40,000 Above Rs. 40,000 Rs. 30,001 - Rs. Rs. 0 - Rs. 10,000 40
,000 Rs. 10,001 - Rs. 20,000 Rs. 20,001 - Rs. 30,000 Above Rs. 40,000 Above Rs.
40,000 Rs. 0 - Rs. 10,000 Rs. 10,001 - Rs. 20,000 Rs. 20,001 - Rs. 30,000 Rs. 30
,001 - Rs. 40,000
Sig. .999 .988 .992 .783 .999 .999 .978 .740 .988 .999 .940 .643 .992 .978 .940
.971 .783 .740 .643 .971
Pge 161
Interprettion:
The significnce level s indicted in the tble is 0.554 which is much thn pre
determined level of significnce () (0.554 > 0.5). This implies tht there re no
significnt differences in popultion mens for following the directions given
on the pckge cross income groups. So, null hypothesis Ho is ccepted nd Alte
rnte hypothesis H1 is rejected. Hence, it cn be concluded tht respondents fl
ling in ny of the income groups follow the directions given on the pckge to t
he sme extent.
Pge 162
2) CHI- SQUARE
Income nd Doctors inquiry
H0: Income nd feel bout Doctors inquiry re independent to ech other H1: Incom
e nd feel bout Doctors inquiry re dependent on ech other Degree of freedom= (
row-1) (column-1) = (5-1) (5-1) = 16 Level of significnce = 0.10
EXHIBIT 2.1
Monthly income Feel when doctor inquires you Rs. 0 - Rs. Rs. 10,001 10,000 Rs. 2
0,000 52 24 Rs. 20,001 - Rs. 30,000 22 Rs. 30,001 - Rs. 40,000 16 Totl Above Rs
. 40,000 7 121
He should do it routinely It would be good ide sometimes I don t mind either
wys It would be better if he don t I would rther be upset if he did Totl
14
16
12
4
10
56
31
13
6
8
6
64
5
2
6
3
2
18
5
0
0
2
0
7
107
55
46
33
25
266
Pge 163
Row 1
1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5
Column 1
2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Observed Frequency 52
24 22 16 7 14 16 12 4 10 31 13 6 8 6 5 2 6 3 2 5 0 0 2 0
Expected Frequency 48.7 25 20.9 15 11.4 22.5 11.6 9.7 6.9 5.3 25.7 13.2 11.1 7.9
6 7.2 3.7 3.1 2.2 1.7 2.8 1.4 1.2 0.9 0.7
Fo - Fe 3.3 -1 1.1 1 -4.4 -8.5 4.4 2.3 -2.9 4.7 5.3 -0.2 -5.1 0.1 0 -2.2 -1.7 2.
9 0.8 0.3 2.2 -1.4 -1.2 1.1 -0.7
(Fo - Fe)^2 10.89 1 1.21 1 19.36 72.25 19.36 5.29 8.41 22.09 28.09 0.04 26.01 0.
01 0 4.84 2.89 8.41 0.64 0.09 4.84 1.96 1.44 1.21 0.49
(Fo-Fe)^2/Fe 0.224 0.040 0.058 0.067 1.698 3.211 1.669 0.545 1.219 4.168 1.093 0
.003 2.343 0.001 0.000 0.672 0.781 2.713 0.291 0.053 1.729 1.400 1.200 1.344 0.7
00 27.222
Pge 164
FIGURE 2.1
Tabulated = 23.542 Calulated = 27.222 Thus, Ho is rejeted and H1 is aepted.
Interpretation:
The above analysis shows that H1 is aepted and Ho is rejeted. So it an be o
nluded that there is dependene between feel about Dotors inquiry and inome. T
he given onlusion is due to the fat that inome of the people has the bearing
on their attitude towards the soiety. People with high inome do not prefer be
ing inquired by any person may it be a Dotor. They feel that they have a higher
status in the soiety than others and they are not required to answer anybodys q
uestions. While the people with low inome think logially that it is better if
Dotor inquires them as it would help the Dotor to diagnose more aurately.
Page 165
Age and Dotors inquiry

H0: Age and feel about Dotors inquiry are independent to eah other H1: Age and
feel about Dotors inquiry are dependent on eah other Degree of freedom= (row-1)
(olumn-1) = (5-1) (5-1) = 16 Level of signifiane = 0.10
EXHIBIT 2.2
Feel when dotor inquires you He should do it routinely It would be a good idea
sometimes I don t mind either ways It would be better if he don t I would rather
be upset if he did Total
Age 19 years 30 years 85 34 48 14 5 186 31 years 40 years 12 10 8 0 0 30 41 year
s 50 years 11 4 4 0 0 19 51 years 60 years 12 6 4 2 0 24 Above 60 Years 1 2 0 2
2 7
Total 121 56 64 18 7 266
Page 166
Row 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5
Column 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Observed Frequeny 85 12 11 12 1 34 10 4 6 2 48 8 4 4 0 14 0 0 2 2 5 0 0 0 2
Expeted Frequeny 84.6 13.6 8.6 10.9 3.2 39.2 6.3 4 5.1 1.5 44.8 7.2 4.6 5.8 1.
7 12.6 2 1.3 1.6 0.5 4.9 0.8 0.5 0.6 0.2
Fo - Fe 0.4 -1.6 2.4 1.1 -2.2 -5.2 3.7 0 0.9 0.5 3.2 0.8 -0.6 -1.8 -1.7 1.4 -2 1.3 0.4 1.5 0.1 -0.8 -0.5 -0.6 1.8
(Fo-Fe)^2 0.16 2.56 5.76 1.21 4.84 27.04 13.69 0 0.81 0.25 10.24 0.64 0.36 3.24
2.89 1.96 4 1.69 0.16 2.25 0.01 0.64 0.25 0.36 3.24
(FoFe)^2/Fe 0.002 0.188 0.670 0.111 1.513 0.690 2.173 0.000 0.159 0.167 0.229 0.
089 0.078 0.559 1.700 0.156 2.000 1.300 0.100 4.500 0.002 0.800 0.500 0.600 16.2
00 34.484
Page 167
FIGURE 2.2
Tabulated = 23.542 Calulated = 34.484 Thus, Ho is rejeted and H1 is aepted.
Interpretation:
The above analysis shows that H1 is aepted and Ho is rejeted. So it an be o
nluded that there is dependene between feel about Dotors inquiry and age. The
given onlusion is due to the fat that people in different age groups have dif
ferent attitude towards the soiety. Most people in age group of 19 years- 30 ye
ars ie young generation prefer being inquired by Dotor beause they know the im
portane of Dotors inquiry about prior OTC mediation use. Still many people in
age group of 19 years 30 years do not mind either ways whether Dotor inquires o
r do not inquires. While the people in the age group of Above 60 years have narr
ow minded approah and they feel that why should I tell everything to the Dotor
? More than 50% of people in this age group feel that Dotors should not inquiry
them about prior OTC mediines usage.
Page 168
3) Z-Test
Ho: p = 0.5 50% of people seek detail information from the hemist of brand of t
he OTC produts H1: p > 0.5 Proportion of people seeking detail information from
the hemist of brand of the OTC produts is greater than 50% Level of Signifia
ne () = 0.05 Defining the probbility of success p1 = p/n = 157/266 = 0.5902 q1
= q/n =109/266 = 0.4098 pHo = 0.5 qHo = 0.5
Clcultion of Stndrd Devition Stndrd devition = p = pq/n = (0.50X0.50)/266
= 0.00094 =0.0307
N.R.Intitute of Buine Management
Page 169
FIGURE 3.1
Calculation of z-tatitic Calculated Z tatitic = (p1 pHo) / p1 = (0.5902 0.5
0) / 0.0307 = 2.9381 Z-Critical for 95% confidence level i 1.645 from the z tab
le which i le than the calculated value i.e. 2.9381
Therefore Ho rejected and H1 i accepted.
Interpretation:
Hence, Proportion of people eeking detail information from the chemit of brand
of the OTC product i greater than 50%. Thu, It can be afely concluded that
in India, Chemit play a major role in creating awarene about the medicine am
ong the people.
Page 170
4) Krukal-Walli Tet Between age and feature of brand of OTC product

EXHIBIT 4.1
Efficacy
Brand name
Packaging
Pricing
Promotional offer
Age 19 year - 30 year 31 year - 40 year 41 year - 50 year 51 year - 60 ye
ar Above 60 Year Total 19 year - 30 year 31 year - 40 year 41 year - 50 y
ear 51 year - 60 year Above 60 Year Total 19 year - 30 year 31 year - 40
year 41 year - 50 year 51 year - 60 year Above 60 Year Total 19 year - 30
year 31 year - 40 year 41 year - 50 year 51 year - 60 year Above 60 Year
Total 19 year - 30 year 31 year - 40 year 41 year - 50 year 51 year - 6
0 year Above 60 Year Total
N 186 30 19 24 7 266 186 28 19 24 7 264 186 28 19 24 7 264 186 28 19 24 7 264 18
6 28 19 24 7 264
Mean Rank 132.28 159.13 102.82 148.04 89.57 130.98 116.36 160.13 123.50 193.21 1
32.67 126.68 131.11 146.71 106.36 129.25 114.88 160.08 161.04 116.71 134.79 135.
89 128.45 105.92 160.14
Page 171
Tet Statitica,b Efficacy Brand name Packaging Chi-Square df Aymp. Sig. 11.81
8 4 .019 10.197 4 .037 2.057 4 .725 Pricing 9.245 4 .055 Promotional offer 5.955
4 .202
a. Krukal Walli Tet b. Grouping Variable: Age
EFFICACY
Ho: There are no difference among the population group o they have ame mean
H1: There are difference among the population group o they do not have ame m
ean
Interpretation:
A oberved ignificance level i below
importance that repondent in the age
rejected and H1 i accepted. Moreover,
above table indicate that people above
efficacy among all the age group.
0.05, there i ignificant difference in

group give to the efficacy. Thu, Ho i
analyi of the mean rank hown in the
60 year give the maximum importance to
BRAND NAME
ean
Interpretation:
A oberved ignificance level i below 0.05, there i ignificant difference in
importance that repondent in the age group give to the brand name. Thu, Ho
i rejected and H1 i accepted. Moreover, analyi of the mean rank hown in th
e above table indicate that people in 31-40 year give the maximum importance t
o brand name among all the age group.
N.R.Intitute of Buine Management Page 172
PACKAGING
ean
Interpretation:
A oberved ignificance level i above 0.05, there i no ignificant difference
in importance that repondent in the age group give to the packaging. Thu, H
o i accepted and H1 i rejected.
PRICING
ean
Interpretation:
in importance that repondent in the age group give to the pricing. Thu, Ho
i accepted and H1 i rejected.
PROMOTIONAL OFFER
ean
Interpretation:
in importance that repondent in the age group give to the promotional offer.
Thu, Ho i accepted and H1 i rejected.
Page 173
Between Income and feature of brand of OTC product

EXHIBIT 4.2
Efficacy
Monthly income R. 0 - R. 10,000 R. 10,001 - R. 20,000 R. 20,001 - R. 30,00
0 R. 30,001 - R. 40,000 Above R. 40,000 Total
N 107 55 46 33 25 266 107 55 46 33 23 264 107 55 46 33 23 264 107 55 46 33 23 26
4 107 55 46 33 23 264
Mean Rank 134.69 122.05 153.80 125.30 127.06 135.99 128.59 110.98 135.14 164.89
127.03 126.22 138.70 123.35 173.70 121.18 141.54 134.92 129.67 162.76 141.86 139
.18 124.09 142.59 75.33
Brand name
R. 0 - R. 10,000 R. 10,001 - R. 20,000 R. 20,001 - R. 30,000 R. 30,001 R. 40,000 Above R. 40,000
Packaging
Total R. 0 - R. 10,000 R. 10,001 - R. 20,000 R. 20,001 - R. 30,000 R. 30,
001 - R. 40,000 Above R. 40,000 Total
Pricing
R. 0 - R. 10,000 R. 10,001 - R. 20,000 R. 20,001 - R. 30,000 R. 30,001 R. 40,000 Above R. 40,000
Total Promotional offer R. 0 - R. 10,000 R. 10,001 - R. 20,000 R. 20,001 R. 30,000 R. 30,001 - R. 40,000 Above R. 40,000 Total
Page 174
Tet Statitica,b Efficacy Chi-Square df 6.190 4 Brand name 9.755 4 .045 Packag
ing 9.477 4 .050 Pricing 7.926 4 .094 Promotional offer 23.310 4 .000
Aymp. Sig. .185 a. Krukal Walli Tet
b. Grouping Variable: Monthly income
EFFICACY
ean
Interpretation:
in importance that repondent in the income group give to the efficacy. Thu,
Ho i accepted and H1 i rejected.
BRAND NAME
ean
Interpretation:
importance that repondent in the income group give to the brand name. Thu,
Ho i rejected and H1 i accepted. Moreover, analyi of the mean rank hown in
the above table indicate that people having R.20001 R.30,000 income give th
e maximum importance to brand name among all the income group.
PACKAGING
ean
Interpretation:
importance that repondent in the income group give to the packaging. Thu, H
o i rejected and H1 i accepted. Moreover, analyi of the mean rank hown in
the above table indicate that people having R.30001 R.40,000 income give the
maximum importance to packaging among all the income group.
PRICING
ean
Interpretation:
in importance that repondent in the income group give to the pricing. Thu,
Ho i accepted and H1 i rejected.
PROMOTIONAL OFFER
ean
Interpretation:
importance that repondent in the income group give to the promotional offer.
Thu, Ho i rejected and H1 i accepted. Moreover, analyi of the mean rank
hown in the above table indicate that people
having Above R.40,000 income give the maximum importance to promotional offer
among all the income group.
Page 177
FINDINGS
In Ahmedabad, when people uffer from minor dieae mot of them ie 40% take med
icine of their own 89% of repondent have ued any of the pharma OTC product a
t ome point of time in their life Mot of the repondent prefer to purchae Ph
arma OTC product from Neighborhood chemit tore In Ahmedabad, mot of the rep
ondent prefer to purchae OTC medicine a and when needed a reponded by 87%
of repondent When aked about the factor that influence them in making the pu
rchae deciion, 52% of repondent ha aid that early precription from doctor
influence them 55% of repondent ha ranked efficacy a mot preferred featur
e of particular brand of OTC product Highet proportion of repondent that i
46% ha ranked brand name a econd mot preferred feature of particular brand o
f OTC product 41% repondent ha ranked packaging a third mot preferred feat
ure of particular brand of OTC product 50% repondent ha ranked pricing a fo
urth mot preferred feature of particular brand of OTC product Promotional offe
r ha been ranked by 67% of repondent a fifth mot preferred feature of parti
cular brand of OTC product Among the medium of communication , televiion i pr
eferred by 54% of repondent a mot appealing for advertiement of OTC product
Chemit play a major role a 59% of repondent eek detail information from t
he chemit about the brand of product they purchae 63% repondent perceive OTC
product a afe to buy and ue People in Ahmedabad are well informed a 59% of
repondent are aware of the ideeffect of the OTC product they take
Page 178
Mot of the repondent read the labeling information on an OTC product package
before uing it Price, manufacture date and expiry date i read by mot of the r
epondent The repondent that alway follow direction given on drug package a
re maximum in number Though 31% of repondent never get influenced by point of
ale diplay while making a purchae deciion, there are 37% repondent who om
etime conider point of ale diplay in their purchae deciion regarding OTC p
roduct 56% repondent never viit drug tore with primary intention to purcha
e only OTC product but they purchae OTC product along with other precription
drug In Ahmedabad, 45.5% of repondent believe that when doctor inquire prio
r OTC medicine ue it help him to diagnoe better and that doctor hould do it
routinely. The mot preferred frequency of tocking among repondent for major
OTC categorie: o Vitamin and mineral are tocked ometime,Indigetion and he
art burn medicine are tocked ometime, Medicated kin care product like Sofr
amycin are alway tocked, Cough remedie are alway tocked, Sore throat medici
ne are alo alway tocked, Herbal remedie are ometime tocked, Laxative ar
e never tocked, Anti-Diarrhoeal are never tocked, Haemorrhoid product are ne
ver tocked 48% repondent take OTC medicine only when the illne i evere 2
7% repondent reconfirm firt tatement that people ue OTC medicine only if
the illne i quite evere 51% repondent in Ahmedabad are well aware of the f
act that no medicine are devoid of any ide-effect and no medicine in the worl
d i good for our health 48% repondent in Ahmedabad know that Non-precription
medicine have ide-effect but they are not ure if they are having dangerou
ide-effect or not 54% repondent believe that medicine hould be ued accord
ing to direction for ue 55% people believe that ue of Non-precription medici
ne can mak eriou health problem
Page 179
Almot half of the total repondent agree that non-precription medicine inte
rfere with the natural healing proce of the body 61% repondent aid that Non
-precription medicine hould not ued frequently a they may loe their effect
ivene and thereafter they will not work at a ame doe According to 62% of re
pondent, Non-precription medicine can alo caue addiction when ued for a lo
nger period of time 25% of repondent trongly diagree that Non-precription me
dicine hould not be ued frequently while 20% of repondent trongly agree wi
th thi tatement When aked about what action you will take if an OTC medicine
did not work within reaonable period of time , 74.4 % repondent would top u
ing the product and conult the doctor Dcold Total i a leading brand in cold an
d cough egment in tablet doage form a majority of repondent i.e 26% have u
ed it Benadryl cough yrup i a leading brand a majority of repondent i.e 40%
have ued it Vick lozenge i the mot conumed brand while Alex lozenge i t
he leat conumed brand Metacin i the mot conumed brand with 26% of reponden
t uing it while Combiflam i not far behind with 25% of repondent are uing
it Revital i far far ahead of all the other vitamin brand a 50% repondent h
ave ued Revital peronally In Antacid category, there i fierce competition bet
ween Digene and Rantac with 28 % repondent each uing it The mot frequently u
ed brand i Vick while the leat ued brand i Amrutanjan The Anova technique
reveal that there i no difference between male and female for following the dir
ection given on drug package while among the age group ignificant difference
exit between 19 year-30year and 31year-40year, and between 19year30year a
nd 41year50year Among the education group, ignificant difference exit betwee
n under-graduate and Pot-graduate and between Graduate and Pot-graduate fo
r following the direction while among the income group, no uch difference ex
it.
Chi-Square technique reveal that there i dependence between feel about doctor
inquiry and income and between feel about doctor inquiry and age Chemit play a
major role a according to Z-tet more than 50% of population eek detail inform
ation from chemit about OTC product Krukal Walli tet i done to undertand
whether ignificant difference exit in importance repondent in variou popula
tion group give to the variou feature of brand of OTC product or not and fo
r age group, ignificant difference i found only for efficacy and brand name a
mong all the other criteria. Moreover, people above 60 year give the maximum im
portance to efficacy and people in 31-40 year give the maximum importance to br
and name among all the age group. For income group, ignificant difference i
found for brand name, packaging and promotional offer among all the other criter
ia. Moreover, people having R.20001 R.30,000 income give the maximum importanc
e to brand name, people having R.30001 R.40,000 income give the maximum import
ance to packaging and Above R.40,000 income give the maximum importance to prom
otional offer among all the income group.
Page 181
RECOMMENDATIONS
Chemit hould play a very important role in the ociety and hould try to infor
m conumer about ide effect and doage rate of the medicine Many repondent ar
e till not aware about the ide effect therefore government hould create awar
ene about the non-precription medicine ide-effect and hould cap on thee h
azardou OTC product Conumer hould prefer to purchae healthcare product fr
om medical tore rather than grocery tore, becaue they can get information abo
ut advere effect more from the chemit Companie hould give information about
contra indication and doage in the advertiement and on label of the drug An a
warene program hould be tarted by the government that explain the importanc
e of reading labeling information to the conumer Conumer can not differentia
te between precribed and non precribed drug. Therefore government hould conv
ert ome of the well known and frequently purchaed product into OTC product th
at i Rx to OTC witch People conider Brand rather than price and packaging of
the OTC product o companie hould advertie more and build tronger brand At t
he ame time, people alo conider efficacy or effectivene a important featur
e thu companie hould build brand loyalty by providing high quality product I
n order to increae the effectivene of the advertiement, companie hould ue
televiion a a medium of communication Supermarket/ mall hould trive to imp
rove their market by intilling trut into the people and offering variou incen
tive like lower price and good quality product Doctor hould inquire the pat
ient properly about prior OTC medicine ue o that he can diagnoe in the bett
er way and even people feel that doctor hould do that routinely People conider
early precription from a doctor a a mot influencing factor for making the pu
rchae deciion o rather than focuing on direct advertiing, pharma companie
hould alo direct their attention to advertiing to the doctor
Mot of the people are not influenced by point of ale diplay while purchaing
o it i a good thing a medicine hould not be taken without prior experience
and it i alo an indication for the pharma companie to reduce pending on poin
t of ale diplay
Page 183
CONCLUSION
The Indian Pharmaceutical Indutry today i in the front rank of India cience-b
aed indutrie. Thi highly fragmented indutry i very competitive. The compan
ie are compelled to focu on R&D and innovative method to improve their manufa
cturing capabilitie. In the OTC drug marketing, the Cutomer and Conumer being
the ame, companie have to immediately addre the information need more effe
ctively and on a continuou bai. The acceptability of OTC drug will improve o
nce the awarene level i enhanced. When the knowledge of the traditional medic
ine i rooted in the culture, the knowledge about allopathic OTC drug ha to be
dieminated by manufacturing company and enure dratic reduction in the high
information aymmetry exiting today. The OTC drug offering i incomplete with o
ut empowering the public on it rational ue through well planed trategic marke
ting initiative revolving around the aliment, the knowledge to diagnoe and mana
ge the ame. In thi empowerment proce which can be conidered a CSR, the obj
ective hould be prevention and holitic awarene creation leading to health an
d wellbeing than jut offering the minimum needed information to ue one product
. Thu by educating public (conumer) on how to manage common ailment and fina
lly how to prevent them, the pharma companie can achieve it real goal of healt
h for all and improve the quality of people life. The ocial benefit at a nation
al level will be leer work load on general practitioner, pharmacit who are
more empowered to guide and counel patient and more confident public who are i
n a better poition to take more informed choice of the bet available olution
to treat their common ailment and prevent the frequent occurrence of the ame.
Thi will increae productivity at work and every one in ociety can make uperi
or contribution toward nation building a it trive to be a developed one. In
India, mot reident are aware that OTC medicine could be purchaed in conveni
ence tore, although mot till howed preference for making purchae in pharm
acie. Thi may be due to different expectation for thi outlet the public may
expect that pharmacie
can provide profeional help, a well a offer good quality, lower price, and
a greater variety of product. A OTC product today enjoy a good market hare an
d alo in coming future a number of drug are going off-patent, o OTC market
i going to ee increaing market hare.
Page 185
Book
Malhotra, N.K., Marketing Reearch. Delhi : Pearon Kothari, C., Buine Method
ology Levin and Rubin, Statitic for Management. Delhi: Prentice-hall
Web ite
Pharma new retrieved from http://www.pharmabiz.com/article/earch.ap Pharmaceu
tical market information from http://pharmexcil.org/index.php OTC profile retrie
ved from http://www.indiaoppi.com/IndiaOTCProfile2008.ap Regulation retrieved
from http://nppaindia.nic.in/index1.html Perception for OTC product retrieved f
rom http://fampra.oxfordjournal.org/cgi/content/full/22/2/170#top Pharmaceutica
l market information retrieved from http://www.pharmaexpre.com/index.php Compa
ny profile retrieved from http://www.novarti.com/product/over-counter.html Co
mpany profile retrieved from http://www.zyducadila.com/aboutu.html Company pro
file retrieved from http://www.gk-india.com/product-index.html
Journal
Empirical analyi of OTC upplement in India retrieved from International Jour
nal of Indian Culture and Buine Management
Page 186
Efficacy: Power or capacity to produce a deired effect; effectivene. Laxative

: Laxative are food, compound, or drug taken to induce bowel
movement or to looen the tool, mot often taken to treat contipation.
Anti-Diarrheal: An anti-diarrheal drug i any
ymptomatic relief for diarrhea.
medication which provide
Hemorrhoid: Hemorrhoid are
anu.
welling and inflammation of vein in the rectum and

Point of ale diplay: A point-of-ale diplay (POS) i a pecialized form of a
le
promotion that i found near, on, or next to a checkout counter (the "point of
ale").
Indigetion: Ued in curing Acidity Antacid: ued in curing Acidity Lozenge: A
mall, medicated candy intended to be diolved lowly in the mouth to
lubricate and oothe irritated tiue of the throat.
Gatrointetinal: The digetive ytem i the ytem by which ingeted food i a
cted
upon by phyical and chemical mean to provide the body with nutrient it can ab
orb and to excrete wate product; in mammal the ytem include the alimentar
y canal extending from the mouth to the anu, and the hormone and enzyme ai
ting in digetion.
API: An active ingredient (AI) i the ubtance in a pharmaceutical drug or a pe
ticide
that i biologically active.
Drug Mater File or DMF: DMF i a document prepared by a pharmaceutical
manufacturer and ubmitted olely at it dicretion to the appropriate regulator
y authority in the intended drug market.
Stem cell: Stem cell are cell found in mot, if not all, multi-cellular organ
im. They
are characterized by the ability to renew themelve through mitotic cell divii
on and differentiating into a divere range of pecialized cell type.
Antiflatulent: An antiflatulent agent i a drug ued for the alleviation or prev
ention
of exceive intetinal ga, i.e., flatulence
QUESTIONNAIRE FOR CONSUMERS

Dear Sir/Madam, I am conducting a urvey which i a part of Grand Project for pa
rtial fulfillment of MBA curriculum. Your view about the quetion aked are we
lcomed and are of great importance to my project. The urvey i olely for the a
cademic purpoe and detail provided by you will be very much confidential. 1) W
hat do you do when you uffer from a minor dieae? Conult to the doctor Conul
t a friend Conult to a family member Take a medicine on your own Take a medicin
e which the torekeeper ugget Do nothing 2) Have you ever ued any of the pha
rma OTC product? (OTC product are the medicine that can be purchaed without
advice of the Doctor) Ye No 3) Which place you generally prefer to purchae Pha
rma OTC product? Neighborhood Chemit tore Drug retail chain (like Apollo Phar
macy) Supermarket/mall Grocery tore 4) What i your preferred time interval fo
r buying OTC product? A and when needed Every Week Every Fortnight Every Month
5) Which factor influence you while making the purchae deciion regarding par
ticular brand of OTC product? Earlier precription from a Doctor Recommendation
from a friend/relative Advertiement of a product Through product trial 6) Rank
the following feature of a particular brand of OTC product in order of your p
reference. Efficacy Brand name Packaging Pricing Promotional Offer N.R.Intitute
of Buine Management Page 188
7)
Which medium of communication i mot appealing to you for advertiement of OTC
product? Newpaper Magazine Televiion Internet Billboard Pamphlet
8) Do you eek detail information from the chemit of brand of the OTC product
which you purchae? Ye No 9) Do you perceive OTC product a afe to buy and u
e? ye No 10) Are you aware of ide effect of OTC product you take? Ye No 11)
Do you read the labeling information on an OTC product package before uing it?
Ye No If Ye, when you look at the package including the front, back, and ide
, what information do you read? (Tick multiple option if you want) Direction
for ue Active ingredient Warning (about uing it with other drug or conditio
n) Poible ide effect Price, manufacture date and expiry date Other_________
______________________________________________ If No, then what i the reaon be
hind it? _______________________________________________________________________
_ 12) How often do you follow direction given on OTC drug package? Alway Mot
of the time Sometime Rarely Never
Page 189
13) Do point of ale diplay influence you while making a purchae deciion rega
rding OTC product? Alway Mot of the time Sometime Never 14) Do you viit Dr
ug tore with primary intention to purchae only OTC product? Ye No 15) How wo
uld you feel when your doctor inquire you about OTC medicine taken before con
ulting him/her? He hould do it routinely It would be a good idea ometime I do
nt mind either way It would be better if he dont I would rather be upet if he di
d 16) Frequency of tocking common OTC medicine at home CATEGORIES Vitamin and
Mineral Indigetion/Heartburn Medicated kin care product Cough remedie Sore
throat Herbal remedie Laxative AntiDiarrheals Hemorrhoid product ALWAYS SOMETIM
ES SELDOM NEVER
Page 190
17) Give the following ten statements score from 1 to 5 where 1 means you strong
ly disagree and 5 means you strongly agree
STATEMENTS 1 2
SCORE 3 4 5
I reach for OTC medicines at the first sign of illness I use OTC medicines only
if the illness is quite severe Nonprescription medicines are totally safe to use
Nonprescription medicines can have dangerous side effects The effect of incorrect
use of nonprescription medicines can be as serious as that of prescription medici
nes Nonprescription medicines can sometimes mask serious health problems Some nonp
rescription medicines interfere with the natural healing process of the body Wit
h continual use, some nonprescription medicines lose their effectiveness Some nonp
rescription medicines may cause dependency or addiction if taken for a long peri
od of time Nonprescription medicines should be used frequently to relieve minor h
ealth problems
18) What action would you take if an OTC medicine did not work within reasonable
period of time? Stop using the product and consult the doctor Stop using produc
t and ask the retailer Decrease the dose or stop the medication Increase the dos
e or use product more often Use for longer time
Page 191
19) Tick ( ) against the brand(s) which you have used for personal consumption.
COLD AND COUGH SEGMENT TABLET BRAND Lemolate Dcold Total Crocin Cold and Flu Vic
ks Action 500 Okaset Cold Other (Specify all the names) USAGE
SYRUP BRAND Benadryl Corexdx Tossex Brozedex Phensedyl Other ( specify all the na
mes) USAGE
LOZENGES BRAND Alex Vicks Strepsils Halls Koflet Other (Specify all the names )
USAGE
Page 192
ANALGESIC (PAIN KILLER) BRAND Voveran Metacin Disprin Calpol Combiflam Saridon D
olo Other (Specify all the names) USAGE
MULTIVITAMIN BRAND Revital Riconia Beplex forte Becosules Polybion Other (Specify
all the names) USAGE
ANTACID BRAND Digene Gelucil Mps Rantac Zintac Ranitin Others(Specify all the nam
es) USAGE
Page 193
BALM AND OINTMENT BRAND Zandu Tiger Moov Iodex Amrutanjan Vicks Other (Specify a
ll the names) USAGE
Personal Details:
Name (Optional):________________________________________________________ Gender:
Age: Male 19 years 30 years 31 years 40 years 41 years 50 years 51 years 60 yea
rs Above 60 years Undergraduate Graduate Post Graduate Rs. 0 Rs. 10,000 Rs. 10,00
1 Rs. 20,000 Rs. 20,001 Rs. 30,000 Rs. 30,001 Rs. 40,000 Above Rs. 40,000 Female
Education:
Monthly Income:
Thank You

Consumer Behaviour

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Consumer Behaviour

Uploaded by

Copyright:

Available Formats

RESEARCH TOPIC

An In-depth-study of OTC medicine segment of Indian Pharmaceutical Industry with

black bile. A persons temperament is accordingly expressed as sanguine, phlegmati

BULK DRUGS AND FORMULATION:

will hinder to growth of pharmaceutical industry and of human being. To protect

PACE OF THE MARKET GROWTH:

N.R.Institute of Business Management

1) According to various studies, a significant portion of elderly population in

of infectious, cardiovascular, psychiatric or oncology diseases. Secondly, Big Ph

Major Players in the Market:

As a part of diversification strategy, some of the companies have acquired brand

essentially on Indian enterprises, and (ii) to establish a structure for keeping

sufficient in meeting domestic demand and exports successfully to various market

Fig: Advantage India-API (SOURCE: CRISINFAC, YES BANK/ OPPI)

b) Indian formulation exports Indian formulation exports grew at a CAGR of 23.2%

global pharmaceutical companies. The Indian pharmaceutical outsourcing market wa

Capital requirements Pharma industry is highly capital-intensive industry. The n

Cattle-rearing encourage diseases communicated by animals. Early child bearing a

Analgesic /cold tablets Antiseptic creams/liquids Glucose powders Cough liquids

In dollar value, OTC sales comprise from 10 to 30 percent of total medication sa

Currently, aches/pains, cough, colds, hyperacidity, minor topical infections and

Indian OTC pharmaceuticals market segmentation (In % share, by value)

business in India is the biggest in the ASEAN-Australasia-India (AAI) region. Ov

considered a tour-de-force in therapy management and brand management. The group

1) What do you do when you suffer from a minor disease?

2) Have you ever used any of the pharma OTC products?

3) Which place you generally prefer to purchase pharma OTC products?

4) What is your preferred time interval for buying OTC products?

6) Rank the following features of particular brand of OTC products in order of y

below mention features of a particular bran

7) Which medium of communication is most appealing to you for advertisement of O

9) Do you perceive OTC products as safe to buy and use?

Vitamin and Minerals

Medicated Skin Care Products

I reach for OTC medicines at the first sign of illness

I use OTC medicines only if the illness is quite severe

Non-prescription medicines are totally safe to use

Non-prescription medicines can have dangerous side-effects

The effect of incorrect use of non-prescription medicines can be as serious as t

Non-prescription medicines can sometimes mask serious health problems

Some non-prescription medicines interfere with the natural healing process of th

With continual use, some non-prescription medicines lose their effectiveness

Some non-prescription medicines may cause dependency or addiction if taken for a

Non-prescription medicines should be used frequently to relieve minor health pro

ANALGESIC (PAIN KILLER)

BALM AND OINMENT

Multiple Comprisons Follow direction on pckge Scheffe Men Difference (I(J) E

Multiple Comprisons Follow direction on pckge Scheffe Men Difference (I-J) .

Age and Dotors inquiry

4) Krukal-Walli Tet Between age and feature of brand of OTC product

0.05, there i ignificant difference in

Between Income and feature of brand of OTC product

Efficacy: Power or capacity to produce a deired effect; effectivene. Laxative

welling and inflammation of vein in the rectum and

QUESTIONNAIRE FOR CONSUMERS

You might also like