current practices for the sale and distribution of veterinary drugs in africa to farmers chris van...
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CURRENT PRACTICES CURRENT PRACTICES FOR THE SALE AND FOR THE SALE AND DISTRIBUTION OF DISTRIBUTION OF
VETERINARY DRUGS IN VETERINARY DRUGS IN AFRICA TO FARMERS AFRICA TO FARMERS
Chris van DijkChris van Dijk
Introduction Introduction
The livestock sector is of The livestock sector is of fundamental importance fundamental importance to present and future to present and future food security in Africa food security in Africa
Losses due to Losses due to preventable livestock preventable livestock diseases amount to diseases amount to about one quarter of the about one quarter of the total annual productive total annual productive value of livestock in value of livestock in Africa Africa
Introduction Introduction
Commercial livestock sectors Commercial livestock sectors – Highly developed veterinary Highly developed veterinary
systems systems – Supported by numerous Supported by numerous
Animal Health companies Animal Health companies – Infrastructure for Infrastructure for
distribution of veterinary distribution of veterinary products and services products and services
Nomadic or pastoral farmers Nomadic or pastoral farmers and Communal farmers and Communal farmers – No or very low key No or very low key
distribution and supply of distribution and supply of veterinary products and veterinary products and services services
Objective Objective
Overview Overview – Sale Sale – Distribution Distribution
Constraints Constraints Critical Critical
requirementrequirements s
Marketing consists of Marketing consists of management tasksmanagement tasks and and decisionsdecisions directed at successfully directed at successfully meeting meeting opportunitiesopportunities and and threatsthreats in a in a dynamic environmentdynamic environment by effectively by effectively developingdeveloping and and ttransferringransferring a a need-need-satisfying market offeringsatisfying market offering to to consumersconsumers, in such a way that the , in such a way that the objectives of the objectives of the enterpriseenterprise,, the the consumerconsumer and and societysociety will be achieved. will be achieved.
THE MARKETING THE MARKETING PERSPECTIVE PERSPECTIVE
THE MARKETING THE MARKETING PERSPECTIVE PERSPECTIVE
Product Product (Solution)(Solution)
– Product/packaging Product/packaging – Quality Quality – FeaturesFeatures– Brand nameBrand name– ServicesServices
Price Price (Cost) (Cost)
– Pricing Pricing
Place Place (Convenience)(Convenience) – Distribution Distribution
channels channels – Transport Transport
Promotion Promotion (Communication)(Communication)
– Advertising Advertising – Sales force Sales force – Training Training
PRODUCT PRODUCT (CUSTOMER (CUSTOMER SOLUTION) SOLUTION)
Commercial farmers Commercial farmers – Antimicrobials including mastitis remediesAntimicrobials including mastitis remedies– EctoparasiticidesEctoparasiticides– EndoparasiticidesEndoparasiticides– EndectocidesEndectocides– Anti-inflammatory (steroid and non-Anti-inflammatory (steroid and non-
steroid)steroid)– Reproductive hormonesReproductive hormones– Biologicals Biologicals
Product and packaging Product and packaging varietyvariety
Nomadic/Pastoral or Communal Nomadic/Pastoral or Communal – Antimicrobials including mastitis remediesAntimicrobials including mastitis remedies– EctoparasiticidesEctoparasiticides– EndoparasiticidesEndoparasiticides– EndectocidesEndectocides– Anti-inflammatory (steroid and non-Anti-inflammatory (steroid and non-
steroid)steroid)– Reproductive hormonesReproductive hormones– Biologicals Biologicals
Product and packaging Product and packaging varietyvariety
Innovator productsInnovator products– Patent protection expired (generics) Patent protection expired (generics) – Intellectual property – poor enforcementIntellectual property – poor enforcement– Disincentive – new/existing products not marketed Disincentive – new/existing products not marketed
Generic products Generic products – High quality generic drugs High quality generic drugs – Low quality generic productsLow quality generic products
ResistanceResistance Residues Residues Chronic diseaseChronic disease Death Death
QualityQuality
In countries with commercial herds most of In countries with commercial herds most of the needs and wants have been addressed the needs and wants have been addressed
Compared to this we have only a small Compared to this we have only a small number of product groups in the countries number of product groups in the countries with communal or pastoral farmers with communal or pastoral farmers – Subclinical/erosive diseases such as BVD Subclinical/erosive diseases such as BVD
need to be addressed need to be addressed – Preventing and treating for external and Preventing and treating for external and
internal parasites only will not improve internal parasites only will not improve productivity productivity
FeaturesFeatures
Brand nameBrand name
Certain brand Certain brand names are well names are well established in established in Africa Africa
Farmers tend to Farmers tend to be relatively be relatively brand loyal but brand loyal but price does play a price does play a role in the role in the decision to buydecision to buy
ServicesServices
Southern Africa Southern Africa – State State
extension extension services services
– Co-operativesCo-operatives– VeterinariansVeterinarians– Animal health Animal health
companiescompanies
ServicesServices
Other parts of AfricaOther parts of Africa– Veterinarians and Veterinarians and
extension officers as extension officers as distributorsdistributors
– Commercial business Commercial business not focusing on their not focusing on their strength: strength: knowledge knowledge transfertransfer
PRICEPRICE(CUSTOMER COST) (CUSTOMER COST)
Southern AfricaSouthern Africa– Pricing from Pricing from standardisedstandardised price lists, with bulk price lists, with bulk
discounts and sliding scales on productsdiscounts and sliding scales on products Rest of AfricaRest of Africa
– Agents importing products into a countryAgents importing products into a country– Supply chain Supply chain
Main distributorMain distributor Distributor Distributor Outlet Outlet
– There is no or little regulation on the mark up or There is no or little regulation on the mark up or margins in this supply chain margins in this supply chain
– Smaller pastoral type of farmer will be especially Smaller pastoral type of farmer will be especially affected by this pricing structure as large scale affected by this pricing structure as large scale commercial farmers usually buy direct from the main commercial farmers usually buy direct from the main distributor distributor
Pricing Pricing
PLACE PLACE (CUSTOMER (CUSTOMER
CONVENIENCE) CONVENIENCE)
DISTRIBUTION DISTRIBUTION CHANNELS CHANNELS
Southern Africa
Co-op’sOTC 60%
Wholesalers OTC/POM
25%
Vets POM /OTC
15%
Rest of
Africa
Distri- butors
Pharma-cies
Agro-vets
Private Vets
Large Scale
farmers
Van or Truck Based Sales
Van/Truck Sales only legal for Ecto- and Endoparasiticides.
Cold chain as well as advice questionable
DISTRIBUTION DISTRIBUTION CHANNELS CHANNELS
•Insecurities •Political •Weather
•Large Geographical areas•Poor Transport •Lack of outlets•Cold Chain •Poor cash flow
PROMOTION PROMOTION (CUSTOMER (CUSTOMER
COMMUNICATION) COMMUNICATION)
Southern Africa Southern Africa – Extensive advertising and sales Extensive advertising and sales
promotionspromotions Magazines to Vets and Farmers Magazines to Vets and Farmers Television and radioTelevision and radio
Rest of Africa Rest of Africa – Advertising to clients by distributorsAdvertising to clients by distributors– Advertising over regional radio in Advertising over regional radio in
the language or dialect of the the language or dialect of the region region
Advertising Advertising
Commercial farmers Commercial farmers – Major Major animal health companiesanimal health companies have sales forces either have sales forces either
operating on a operating on a salary basis or as commission agents salary basis or as commission agents Salaried representatives - value added service - Salaried representatives - value added service -
involved in the day to day management decisions on involved in the day to day management decisions on the farmsthe farms
Commission agents - some instances solely driven by Commission agents - some instances solely driven by sales sales
– Sales people are trained to communicate the cost-Sales people are trained to communicate the cost-benefit value of products to the end user benefit value of products to the end user
Nomadic/Pastoral or Communal farmers Nomadic/Pastoral or Communal farmers – Many situations a case of "sell and go" with minimal or Many situations a case of "sell and go" with minimal or
no input from the sellers side as well as no or minimal no input from the sellers side as well as no or minimal after sales support if for example adverse drug after sales support if for example adverse drug reactions or lack of efficacy is experienced reactions or lack of efficacy is experienced
Sales forceSales force
TrainingTraining SAAHA – Mission: To promote ethical SAAHA – Mission: To promote ethical
marketing practices, client and marketing practices, client and environmental care of high standing environmental care of high standing quality at all times, supported by quality at all times, supported by knowledgeable, experienced sales knowledgeable, experienced sales personnel who have completed accredited personnel who have completed accredited courses courses
2 compulsory modules 2 compulsory modules – IndustryIndustry– Anatomy/Physiology Anatomy/Physiology
3 modules of choice 3 modules of choice – EctoparasitesEctoparasites– EndoparasitesEndoparasites– BiologicalsBiologicals– MastitisMastitis– AntimicrobialsAntimicrobials– Nutrition and growth stimulants Nutrition and growth stimulants
Ensures an uniform knowledge base Ensures an uniform knowledge base across the industryacross the industry
TrainingTraining
In-house company training - Product In-house company training - Product related training related training
Vendor vs. consultant Vendor vs. consultant Assisting the end user to make the Assisting the end user to make the
correct decision on where, when and correct decision on where, when and how to use the correct product for a how to use the correct product for a specific animal health related specific animal health related problem problem
Veterinarians are generally well Veterinarians are generally well trained and are well versed in trained and are well versed in diseases and problems in their diseases and problems in their regions or countries, but as with regions or countries, but as with veterinarians almost world-wide they veterinarians almost world-wide they are not well trained in business skillsare not well trained in business skills
This needs to be addressed as it is in This needs to be addressed as it is in almost all cases being identified as almost all cases being identified as the reason for veterinarians not the reason for veterinarians not being successful in the commercial being successful in the commercial world world
Conclusion Conclusion
The availability of the The availability of the correct productcorrect product, in the , in the correct packagingcorrect packaging at the at the correct timecorrect time and place is and place is usually good to usually good to excellent for excellent for commercial commercial farmersfarmers in Africa in Africa
In rural Africa however, In rural Africa however, the availability, quality the availability, quality and distribution to and distribution to communal farmers and communal farmers and pastoralistspastoralists is is far from far from the ideal and needsthe ideal and needs attention attention
Extension servicesExtension services on the on the continent of Africa have continent of Africa have declined over the past declined over the past decade or two and decade or two and needs to needs to be addressedbe addressed
Veterinarians can play an Veterinarians can play an important roleimportant role in this, but in this, but they will require extra they will require extra training in business skillstraining in business skills and acumenand acumen
Farmers are prepared to pay Farmers are prepared to pay market pricesmarket prices for for reliable reliable drugs, treatmentsdrugs, treatments as well as as well as transfer of informationtransfer of information to to support the health of their support the health of their animals and herds animals and herds
Conclusion Conclusion
Industry representatives will play an ever Industry representatives will play an ever increasing roleincreasing role in bringing in bringing quality quality productsproducts and and knowledgeknowledge to the end user to the end user
Imperative will also be the Imperative will also be the training of training of private and government officials as well private and government officials as well as so called paravets and community as so called paravets and community animal health workersanimal health workers to establish a to establish a distribution network that not only distribution network that not only distributes veterinary pharmaceuticalsdistributes veterinary pharmaceuticals, , but also helps to ensure the but also helps to ensure the dissemination of knowledge to the end dissemination of knowledge to the end useruser
Conclusion Conclusion
Educated, enthusiastic Educated, enthusiastic sellers, who understand sellers, who understand their customers are the their customers are the
key to the successful key to the successful distribution of distribution of
veterinary veterinary pharmaceuticals in pharmaceuticals in
AfricaAfrica