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The last decade witnessed manifold increase in Animal Wealth in India, leading thereby to a boom in the Animal

Healthcare sector. This article explores the scope of Animal Healthcare Industry and discusses Innovativepromotional strategies which play a critical role in Growth of this business.

Challenges of the Animal Health Industry

Dr. Kirti Wadekar

Vol. 10 Issue-1 Jan - Mar 2012Interlink Insight

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he animal healthcare market has been asilent contributor to the balance sheetsTof some of the Indian pharmaceutical

companies for many years now. But of late, this

segment is undergoing a transformation into a According to 2009 data published in Businessmore aggressive one. Although the AH industry Line, the therapeutics market in Indiain India was affected by recession in 2009, its contributes about `820 crore, nutritionalestimated Rs 2,000 crore market size supplements about`470 crore, and bio-security,(according to experts, the unorganized sector, like vaccines, about `480 crore. In comparisonwhich is not captured in market data, could add with the companion animal segment, the farmanother Rs 1,000 crore) is still one of the fast- animal segment faces a number of challengesgrowing segments, and the industry is looking like increasing costs of distribution, marketingto raise its profile and change its image to that of and sampling, difficulties in promotion,the food factory to the world. Some of the inadequate product pipeline, diseases inmajor players in the Indian organized sector that animals, and competition from unorganized

have a stake in the AH market include Zydus players leading to substandard drugs. In order toAHL, Alembic, Vetnex, Virbac Animal Health grow this business as a separate entity ratherIndia, Intas Pharmaceuticals, Intervet India, than allowing it to be simply an extension of theConcept Pharmaceuticals, and Wockhardt. pharmaceutical business, the industry has toTheir global counterparts include Pfizer, deal with these challenges strategically on aMerial, Schering Plough, DSM Nutritional continuous basis in order to increase the overallProducts, BASF Animal Nutrition, Bayer AH, market size.Elanco, Novartis, and Ceva Sante. Apart fromthese, many more multinational AH players are

1.Increasing productivity and reducingrapidly increasing their foot-print in India.

marketing and distribution costs:The cattle

These are usually global developers, population in India is highly fragmented,manufacturers, and marketers of a range of AHmaking distribution a businessman's nightmare.

and nutrition products used preventively andAs cattle owners, organized as well as

therapeutically to produce healthy animals andunorganized, are spread over a very wide

for animal nutrition.geographic area (sometimes there may be onlyone or two customers in a town), it is extremely

Industry scopedifficult to reach these end users through a

The two commonly known segments of the AHdistribution network and marketer is unable to

industry companion animals and farmreach a substantial proportion of the market,

animals are of importance. The 1st segment iswhich poses a critical business challenge.

growing because pet owners are taking steps to

Managing a base of professional vets andensure that companion animals enjoy a healthyparavets in the country is another issue. Apartlifestyle. Although this segment is growingfrom individual owners (end users), there arefaster than the farm animal segment, the latermore than 10,000 vet practitioners and 90,000has almost 90% of the market share. This isnon vet practitioners (paravets orpranibandhu)because agriculture and its allied industries arepan India. To serve this customer segment, it isgaining importance in our country. Farmersnecessary to build a strong network of C&Fs,have also started realizing the benefits ofdistributors, and retailers, to increase spendingkeeping their animals disease free and healthy.on the development of a distribution networkSecondly, there has been a global rise in theand channels, thereby raising the end pricedemand for safe meat and dairy products fromsubstantially.

healthy livestock, particularly in the developing Reducing these marketing and distributionmarkets. India, being one of the countries withcosts is a major challenge. The best way to dealthe largest cattle populations and one thatwith this issue is to organize group meetingsbreeds world-class buffaloes, goats, cows andincluding vets, paravets, and farmers at cattleeven poultry; there exists a growing need tofeed-selling points or milk-collection centers atprevent losses resulting from diseased animals.regular intervals. This will provide a companyAs Indian pharma companies in this space offerwith access to a large number of owners,a wide range of therapeutic and supplementarythereby increasing the market share.products that cater to the poultry, swine, cattle,2.Innovative approach to promotion: Inand aquaculture markets, industry experts haveorder to reach the stakeholders in rural India andcategorized this animal health market into two

to help them understand the product integrities,different segments as follows:a Marketer has to spend more and more on out ofthe box product promotion. E.g. the field staff of

Product-based: Therapeutics, Feed & feedsupplements, Growth promoters, Herbals,Diagnostics & Biosecurity

Species-based: Poultry, Livestock, Companionanimals, Aqua

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a Bangalore-based AH company has been given molecules being introduced into the market.DVD players with an LCD screen for structured Improving R&D with a focus on innovativeand undiluted communication down the line. nutraceuticals like growth promoters, milkThis allows medical representat ives to enhancers, canine food supplements etc., can

communicate the most technical messages in a help company develop a strong productsimilar way to end customers across the pipeline.country. For effective utilization of this tool, 7.Threat from substandard drugsdifferent versions of detailing need to be created Companies and authorized persons should notin order to maintain customer interest. Some encourage substandard drugs/supplements as itother innovative ways to promotion could be gets transformed to human consumption. Thea. Promotion in regional languages use of low quality drugs containing an incorrectb.Farming and production-related movies with amount of active ingredient due to poor

social messages emphasizing on the manufacturing controls or losses due to agingimportance of animal health can lead to fatalities. Also, it could result in the

c. Pr om oti on th ro ugh KO Ls , le ad in g emergence of drug-resistant forms of infectious

p r a c t i t i o n e r s p e c i f i c a l l y , D a i r y agents, which has disastrous consequences forConsultants/Dairy Co-operative practitioners medical treatment programmes.

3.High sampling cost: The cost involved in Ap ar t fr o m he a lt h -r el a te d is su es ,sampling is very high in the AH industry. It is spurious/substandard products and localimportant to develop a sampling strategy that influential dealers appear to be a hurdle to brandcan be used to analyze if samples are used for building for good quality products. One way ofselected doctors or for all, whether every doctor tackling this could be to involve these dealers inwho receives a sample writes a prescription or company promotion.not, how the sample cost can be reduced, and 8.Disease eradication: Industry should focuswhether a sample package should be small. on eradication of diseases which can spread

4.Competent field force: As compared to the through animals to prevent infection and deathpharma industry, AH companies find it difficult of human beings. Animals dedicated for foodto acquire skilled and knowledgeable sales and consumption should be kept disease free. Themarketing personnel. These are needed to performance indicators are determined througheducate farmers and impart techno-marketing the health status of the animals, for which germ-information to vets and paravets for the up-keep free water, for instance, is a basic requirement.of AH. These internal stakeholders in turn have Companies, can use a disinfecting solution foran impact on the top line. Apart from quality and water treatment, thereby improving animalperformance, training them on some of the PRE health, decreasing mortality, achieving betterCALL, DURING CALL, and POST CALL FCR, and increasing daily weight gain.techniques should be considered as a priority.

Some of the DURING CALL techniques that Conclusionneed to be addressed while training sales During the last decade, animal wealth in Indiarepresentatives are: has increased manifold. The veterinaryFunctional skills: converting features into infrastructure has also grown to the extent ofbenefits, objection handling, probing, selling 50,000 hospitals/dispensaries/first-aid centersskills, customer profiling and tracking and polyclinics, and over 300 diseaseTechnical skills: veterinary science, product diagnostic laboratories all over India. But alongknowledge, product communication with the health of companion and farm animals,5.Competition from unorganized players the health of the business also needs to be takenFragmented cattle population leading to large care of. For any business to grow, government

number of unorganized players affects backing is important.marketing of organized players. Small The eleventh Five Year Plan of India (2007 -local/regional players indulging in unethical 2012) has regarded AH industry as one of themarketing practices can negatively affect the major thrust areas. The government focus willmarket. Also, improper manufacturing units be on effective management including controlaffect product quality and output. and eradication of important animal diseases6.Lack of new molecules: The small AH and establishment of "Animal Diseasemarket, dominated by a dozen international and Information Service" for farmers.national players, leaves little margin for R&D For other business issues, the industry will haveand new molecules. Thus, high R&D costs and to take a step forward to manage and expandless funding options have led to fewer new business.

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Vol. 10 Issue-1 Jan - Mar 2012Interlink Insight

Dr. Kirti Wadekar, Ph. D. in Management, is an expert in nutraceuticals. She has handled Project Managementof various consulting, competency development and market research assignments at IMC Pvt. Ltd.