You are the area sales manager for a pharmaceutical company manufacturing ethical as well as over the counter drugs (OTC). Since you got very high marks in Business Ethics you were disqualified for Ethical division and was assigned as ASM (Area Sales Manager) OTC group. The brand name is PMD. Your company has a very good image in the market and the products of your company are known to be of good quality.
You were horrified to see the performance (or more accurately the lack of it) of PMD. In your briefing after you took charge, you were told that the brand has terrific image and terrific recall. When you saw the sales figures, you were clear that you have got a negative external stimulus. While you have been able to ward of the attacks of the small-scale industries (SSI) and other product categories, the OTC antacids seems to be taking a beating. This is happening despite the fact that your antacid is priced at the same level as that of the SSIs, mainly because you outsource it from SSIs, which is another story and not known to the consumer.
You asked for more data to help you arrive at the exact nature of problem the data is given in the exhibits. Exhibit 1 gives the market share of the various antacid in the market all of them except your brand belong to SSIs. Exhibit 2 gives the perceptions regarding the quality of various antacid by the consumers based on a sample of 800 consumers. A rating of “5” indicate a very high-quality perception while “1” indicate a very low-quality perception.
Exhibit 3 gives the buying behaviour of consumer regarding antacids based on a sample of 800 transactions observed at retail outlets. “Asked for brand” means the consumer take the brand of his/her choice. “Chemist decides” means that the customer takes the brand given by the chemist. “Search for the brand” indicates that the consumer will go to other shop searching for the brand if his/her desired brand is not available. Exhibit 4 give the monthly sales margin received, and average inventory carried by a typical chemist. Exhibit 5 gives the term given to chemist by different companies (for OTC antacids) (including credit periods).
Case Question
1- Compute the segment sizes based on the behaviour at the retail outlet and list the served market shares of PMD in these segments.
2- What interferences can be drawn about the correlation between (a) the margin given to the chemists versus market share and (b) the brand image versus market share?
3- Comment on the possible reasons on why correlation (a) is emerging. Clearly show your calculations.
4- What is the best way to tackle market? Clearly outline the steps you would take to tackle the market.
5- Comment on the possible reasons to why correlation (b) is emerging.
6- Outline the product characteristics that will show correlation (a).

 

Exhibit 1 Market Share 100% GGL DJ GGD YTE PMD NMB GGL 14 DJ 11 GGD 13 YTE 11 PMD 15 NMB 22 GGL DJ GGD YTE PMD NMB 36.32% 21.47% 16.92% 15.03% 6.87% 3.39% Exhibit 3 Buying Behaviour Asks Chemist Searches Chemist Financials (Monthly in Rs.) for Search for Brand 264 156 128 100 4 2 Monthly Sales 4709 2783 2194 1948 891 439 Brand 2 1 Consumer 5 Ratings GGL DJ GGD YTE PMD NMB 1 1 43 12 4 Ethical Drugs Bulk Drugs OTC Drugs OTC Antacid Exhibit 2 3 Margin to Chemist 1.48% 2.08% 2.70% 3.52% 7.35% 16.08% 21.34 24.56 27.68 24.51 21.35 22.78 32.45 21.66 17.62 31.61 26.34 24.56 14.25 37.14 31.14 16.41 27.65 28.23 36.26 7.85 26.27 35.87 26.82 9.32 Exhibit 4 Sales Margin Average Inventory 24281 105378 1.72% 68788 0.77 124870 1.42 12964 3.02 Exhibit 5 Chemist Financials. OTC Antacid 2 Average Inventory 2894 2862 2961 3522 3569 4137 10391 24727 19945 19 25 30 1 Credit From Company (Days) 35 45 60 1.91 1.76 0.87 1.06 0.01 1.72 PMD: Pet Mein Dakar; GGL: Gurgle; DJ: Dil Jalan; GGD: Gud Gudee; NMB: No More Biryani; YTE: Yech Two Ess