Kalyan Pharma LTD.: Presented by - Group 5

Kalyan Pharma Ltd.
Presented by – Group 5

Jayashri S (PGP26090)
Mohammed Jafer (PGP26097)
Rudraditya Bhattacharya (PGP26110)
Sarath U Nair (PGP26115)
Saumitra Nanda (PGP26116)
Savisesh (PGP26117)
The company
Incorporated In 1907 with a paid up capital of Rs.5
Lakh
Manufacture of glass, pesticides and chemicals,
pharmaceuticals, veterinary products and
polypropylene fibres
Products produced and distributed through
independent divisions
Annual sales turnover Rs.138.63 crore as on 31 st
March, 1991
Market share of 2.8 % to 3.1 %
Pharmaceutical Industry in India
Industry has been expanding
Capital investment in industry around 750 crores in
1989
Categorized into public, foreign, private and small-
scale sectors
About 8000 firms engaged in production of drugs
200 units registered under the Director General of
Technical Development
Problems faced – non availability of superior
technology and trained personnel
Marketing Strategy at KPL
Achieved leading position through continuous changes
in product mix, promotion and distribution
Development in response to the changing market
conditions
As of 1990, product line consisted mainly of
formulations
60 different products marketed by KPL
Followed a strategy of extensive promotion of its
products to doctors, institutions and chemists
Major elements in distribution strategy were its wide
network and open door policy
Distribution of KPL
Pre 1972 : Sole selling agency
Appointed exclusive sole selling agent for distribution
Agent’s commission of 15%
Commission to cover entire distribution cost – free
delivery to wholesale chemists, admin and maintenance
cost
1972-79 : Regional marketing companies
Strategy of strengthening presence in secondary and
tertiary markets
Formed 4 regional marketing companies in 1972 which
looked over promoting goods to doctors and retailers
Stocking and movements of goods taken over by KPL
Distribution Contd….
Introduced parenterals and antibiotics, distribution done from
company branch to retailers
Wide distribution became less economical and difficult to
control
Market share started going down due to hike in price of raw
materials, increase in wage rate, less efficient and less
effective distribution
1979-87 : Introduction of Wholesalers
Started giving goods on credit
Annual sales target linked rebate ranging from 2.5 to 5%
Company’s products were sometimes being used as “Loss
leaders” by the trade
Distribution Contd….
1982 – stopped direct supply to retailers, restricted
supply to a few selected wholesalers
Did away with the 4 marketing companies
1987-90 : Introduction of Regional Depots (KRDs)
Shut down half of the branches to reduce distribution
costs
KRDs to perform the functions of sales promotion,
distribution and administration
Major disadvantages – higher cost of distribution
compared to industry and poor customer service
Sales promotion was neglected
Present System - 1991
Distributors were introduced in every state
Goods to flow from factories -> KRDs -> distributors
-> supply to wholesalers
Purpose to provide better service to customers, reduce
account receivables and improve sales and profit
Led to reduction in inventory levels along the channel
Future Concerns
Evaluate the new distribution system
Objectives
To improve customer service and sales promotion
To bring down the cost of distribution
To minimize order processing time
To reduce stock levels at different levels in distribution
system
To improve profitability
Recommendations
Introduce enterprise wide IT solutions such as ERP for
handling the stock in different KRDs
CRM can be used to handle the customer order
information and passed on to the distributors
Promotion through the branches and distributors
Explore areas where the number of participants can be
reduced in the distribution channel
Direct contact of retailers with distributors will enhance
promotion
New distribution channel
KRD BRANCH
DISTRIBUTOR RETAILER

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