The Indian Pharmaceutical Industry will witness a very high growth rate expecting to reach US$ 50 billion by 2015. In terms of purchasing power parity India ranks 4th in the World with an addition of 59 million households to growing middle class concentrated on its four major metro cities. The growing Indian market has strategic importance for the world pharmaceutical industry in terms of improvements in healthcare. The prescription of the doctors is based on the packaging design that differentiates the product in a crowded market. The role of technology in designing an attractive, communicating and utility packaging is of strategic importance to success in the market. In this paper we analyze the pharmaceutical injection package designs that are on offer in the market in the Indian market. This study identifies the package design that needs technological improvement based on the perception of the doctors of the culturally diverse Indian market. The study is based on the perception of 400 Indian doctors in the four major metro cities that have distinct cultural identities. The sampling was randomly selected covering the general practitioners and specialists. This study gives the direction for technological improvements in effectively differentiating the pharmaceutical injection in the market. The study showed that 41% of specialist doctors from Mumbai who are mostly influenced by the Western culture consider pharmaceutical packaging design of the injection as extremely important while prescribing. The study analyzed four types of injection package design and there was significant perception for the technological improvement of the packaging design for 'loose injections' sold in the market. This study has important implication for innovation and technology in terms of what specific packaging design needs improvement based on the perceptions of the doctors in order to stand out in the market. As the cultural aspects are considered this study gives a direction for the technology in terms of its acceptance and success for the global organization.
Keywords: Injection Formulation, Packaging Design, Technology, Global Marketing
The healthcare market in India is estimated to be worth US $ 30 billion and this includes pharmaceuticals, healthcare, surgical equipment and supplies, medical and diagnostic equipment. The healthcare sector revenue accounts for 5.2 per cent of the gross domestic product (GDP) employing over 4 million people. In the total healthcare expenses of India almost 80 per cent is accounted by the private spending accounts. The pharmaceutical sector expected to grow by leaps and bounds with the total Indian healthcare market expected to increase to US $53-73 billion (that is 6.2 - 8.5 per cent of GDP) in the next five years.
The latest findings of a McKinsey study show several factors that are responsible for the increase in the pharmaceutical demand. This includes a growing middle class segment with incomes available for spending, increased health insurance reach, several trends of lifestyle diseases such as hypertension and diabetes, and the expanding infrastructure in healthcare for both the public and private sectors.
The key highlights in the study shows by 2015 per capita disposable income growing to US$765 from US$463. The increased middle class households would account for 40% of this projected growth. The Health insurance reach would account for 15% expected growth and would double to 220 million by 2015.
Private-sector investment in the Indian healthcare sector would increase. The hospital beds would double to 2 million, and the number of doctors would double to 400,000. Medical infrastructure will account for 20% of the growth. Specialist treatments will make up 45% of the market, with patented products constituting 10% of the growth. India is expected to rank tenth in the market from fourteenth rank in 2005, overtaking several developing countries like South Korea, Brazil, Mexico and Turkey.
“Taking a look at the opportunities in the market we can identify the potential targets. Twenty seven million households currently in the low income category will move up, with the middle class category witnessing the steepest rise due to an addition of 59 million households” Source: McKinsey Global Institute Report 2007[8]. “Driven mainly through private investments, the number of hospital beds and physicians in India is expected to double by 2015 (that is additional 2 million hospital beds and around 0.4 million physicians)” Source: CII-McKinsey Report 2004[5]. India is basically a branded generic market. In the Indian market the influence of physicians is high allowing fair competition based on the product quality and scientific dealing. The influence of individual pharmacy distributors and retails chains however are on the rise. The current market is mainly from Tier 1 markets (8 cities with the population of over 4 million) which account for nearly 60% of the market with the Tier 2 market(26 cities with the population of over 1-4 million) accounting for the balance 40%. The significant share of the Tier 2 market is credited to the strong wholesale distribution system. It is expected that by the year 2015 the Tier 2 market would grow to 44% with an addition of 46 million households with high and medium levels of affordability, whereas the Tier 1 market is expected to add another 19 million with similar affordability levels the rise of Tier 2 market has important implication in the pharmaceutical companies in terms of matching the sales force deployment (which is currently only 20~30%) with reference to the potential. The two largest contributors are Delhi and Mumbai that continue to be India’s biggest markets. Another change expected is the rising influence of retail. Organized retail constitutes less than 1% of the pharmaceuticals market (compared to 30~40% in Brazil, Mexico and Russia). This share is expected to grow resulting in the shift in influence from physicians and manufacturers to the retail trade. While it will take time to reach such levels in India, pharmaceutical companies will do well to recognize this trend and prepare for the implications. (Source: McKinsey on India: India Pharma 2015)
Packaging has now become a very important part of pharmaceutical companies because the innovation in drugs and the unique novel drug delivery system has reached new heights. There is considerable focus being done by companies to provide total value proposition to the global pharmaceutical sector by using packaging as a functional tool and integrate it to a part of the pharmaceutical product.
The pharmaceutical products are unique in that the packaging also has to be sure on the quality of the drug it’s delivery time in terms of harmful reactions impact to natural conditions, and in order to preserve the shelf life.
Packaging is very important for the stability and efficacy of the drugs. The drugs are mainly prone to reactions external and internal, due to their volatile nature. Therefore pharmaceutical packaging is guided by regulatory and food grade guidelines that are derived by national and international bodies. The stringent stability requirements and the development of new diagnostics and drugs have increased the demand to develop a proper pharmaceutical packaging system.
Packaging not only provides protection to the drug but also decides the potency and the shelf life of the product. It is seen that inappropriate packaging leads to great losses of drugs in terms of loss of their critical activity profile over a period of time. That is why the need is felt to acknowledge packaging as an integral part of the medicine.
How packaging could influence the prescription flow?
In the last decade there has been a 70% increase in R&D spending of over US$ 60 Billion. Only three out of ten marketed products produce revenues that match or exceed the average R&D spending. Also it is noted that from over 100 discovery ideas on an average it takes around 24 drug candidates to yield one marketed product over the average time period of 15 years. Source: CII-GMP Frost & Sullivan. In this connection manufacturers have developed sophisticated packaging systems or marketing strategies based on the existing packaging systems that would support the requirements of the pharmaceutical products. As the technology and drug development advance the packaging systems would become more sophisticated. This along with greater marketing skills would be an important key differentiator in crowded therapeutic areas for solving industry wide problems.
This paper looks at the importance of Design for the Pharmaceutical Injection across the four major cities in India, located in the North (Delhi), South (Chennai), East (Kolkata) and West (Mumbai) which represents the diverse demography in India. The North is influenced by the cultures of Persia, Greece and Middle East invaders who entered India from the North. The East is influenced by the Far East & Chinese influence. The West is the Modern India with the influence of Europeans & lately the Americans. The South is the Traditional India having the original Dravidian Culture. We have analyzed products that are specifically required to be improved in terms of Design so that a strategic offer can be made by the supplier which would give them a competitive edge over the competition.
Packaging is the marketing endgame that consumers see first hence the package structure is the key differentiator of the products” (Arnold, 2003). The importance of packaging has been overlooked in the traditional marketing mix. A package is seen as part of the product because the package contributes to successful product performance. This includes maintaining shelf-life and the ease of use.
Green says the main thrust of marketing strategy is: Finding a value proposition that is unique and works, and then looking at the market niche where there is a value proposition that will be attractive. Rarely does any one product be all things to all people. It is for this reason that there is a need to find more interest in the development of the market including the development of products and/or services that respond to a particular niche segment. (Green, 2000)
There are several gaps that exist in the packaging of pharmaceutical products with reference to Utility functions. This research attempts to study under what conditions and through which the utility functions would create a competitive advantage in terms of evolving suitable marketing strategies. Very often the decision makers face the dilemma to justify their decision making related to packing as their analysis of the packaging functions are done individually and often without the full understanding of all the requirements needed by the customer. The result would be some companies would be blaming their failures on a certain part of the market mix which is not the case. McCarthy's 4 P marketing mix classification can be viewed by suppliers as customers' four Cs that is customer value, cost that satisfies, convenience to all users and the communication. (Olsson A., Györei M. 2002).
It has been found that apart from technical challenges, such as Braille, counterfeit protection, child resistance, senior and consumer friendliness, the expectations regarding the design of pharmaceutical packaging are on the rise as well. The reason being the increasing competitive pressure in the pharmaceutical industry that has discovered the significance of packaging as an important sales instrument as the survey by PRO CARTON, the trade association of the German Folding Carton Industry, shows that packaging is still the decisive criterion when making the purchase decision. Presently, over-the-counter medication packs try to win the patient's favor mainly from their place in the shelves. In those, a growing trend towards both more color and more unusual shapes can be observed. Jurgen Munzel has demonstrated that the usually plain factual pharmaceutical packaging matches the modern sales and marketing guidelines that are attributed to appropriate finishing technologies. (Jürgen Munzel 2007)
Human beings are prone to make mistakes because the tasks, systems, and processes that they work within are designed poorly. “Effective design delivers products, services, processes and environments. These need to be intuitive, simple to use, simple to understand, convenient and comfortable. This would consequently be less likely to lead to errors. WHO estimates that 10% of all medicines worldwide are counterfeit and up to 25% are in developing countries. Counterfeiting is estimated to cost the Pharmaceutical Industry up to $30 billion annually. It is projected to reach $75 billion by 2010 (WHO News Feb 2006, Phil Taylor. 2005).
PLM (Product Lifecycle Management) has been used as a system for managing a product from design and manufacture to distribution and disposal. It is a means of being able to store, access and update information on every element of the creation, governance and manufacturing process. Packaging is an area that addresses regulatory challenges, cultural differences and the ability to turn a profit in the battleground of global pharmaceuticals. When you consider that designing, labeling and managing printed pharmaceutical packaging can account for 60-75% of the total cost of bringing a product to market (once it has been developed and approved), the issue becomes even more compelling. The challenges are immense, while the potential cost and brand damage that can be sustained by getting it wrong are also considerable this is where technology could offer a solution as such advances have a direct impact on packaging (Lars Wahlström 2009)
Pharmaceutical packaging has changed over the years. Innovations are categorized into four types: design, equipment, materials and containers, and logistics. Unique innovations in package design can prevent children from opening the dangerous medication, it can improve seniors' easy accessibility to pharmaceuticals, protect consumers from tampering, reduce medication errors, it also adherence to dosage regimens by simplification, and educate the consumers about the risks and benefits of the drugs. Material and container advances help make design innovations a commercial reality, ensure products are adequately protected to maintain potency until the end of their expected shelf lives, simplify administration, minimize the chances of mislabeling or miss dosing, discourage counterfeiting, and reduce the environmental impact of packaging. Equipment advances have increased productivity and reduced costs by offering higher speeds, hygienic design, quick changeover, low manpower requirements, expedited validation, and automated record-keeping. Insulated packaging and refrigerants, and temperature monitoring devices such as time-temperature indicators and data loggers ensure the safe arrival of sensitive pharmaceuticals and vaccines. (Hallie Forcinio 2007).
Pharmaceutical manufacturers are lately challenged by strict control of contamination requirements, the increased turnover of their brand and broader product lines especially in a range of sizes and formats. To achieve speed time to market and looking at an assortment of packaging styles the pharmaceutical manufacturers need to be flexible on production lines and have a streamlined changeover process in order to maximize return on capital expenditure (ROCE), all while being within the regulatory boundaries of sterilization standards. Incorporating robotics has proven to be a cost-effective and efficient solution. Therefore there is need to offer speed, flexibility and usages ease. Here robots reduce contamination risk thus providing greater flexibility and having more products per manufacturing line. (Ignacio Muñoz-Guerra. 2005).
As Tony Stauffer, president of Packaging Technologies and Inspection, noted in career one of the biggest challenges was to convince companies to replace their destructive methods of package-integrity and leak testing with nondestructive technology as the new technologies are significantly more advanced, provide valuable data that will improve manufacturing processes, and reduce overall costs. Pre filled syringes is a ready-to-use product that is critical in the pharmaceutical industry today. Also, the use of flexible packaging in pharmaceuticals has grown considerably. In general, the pharmaceutical packaging industry is demanding inspection technologies that offer versatility. The role of the packaging technology and inspection is therefore vital in the development of a suitable improved injection formulation. (Tony Stauffer 2009).
The successful design, integration, and implementation of automated systems can significantly increase productivity and improve quality while reducing the number of pharmaceutical and healthcare packaging and labeling errors. Teamwork is key - not only among plant personnel but also among equipment and software suppliers and their customers. In addition to simple cost justification, a risk analysis review of how the automation process reduces a company's liabilities is in order as described by Gary Parish in the Astra Zeneca's automation of the clinical trial label inspection process. (Gary L Parish 2000).
The research in the Pharmaceutical industry is breaking new grounds not only in the product development but also in the packaging of the pharmaceuticals. With a rising middle class population of twenty seven million from the low income category the pharmaceutical industry needs to capitalize on the opportunities especially when they have invested huge sums of money in Pharmaceutical research (Source: McKinsey on India : India Pharma 2015). The old homogenous business model is unlikely to get higher market shares unless the pharmaceutical manufacturer varies their approach to the doctors especially in terms of value additions provided both in the product offering and the packaging.
The cultures of the four metro cities are varied. Mumbai has more influences of the European and American or Western/European culture. Delhi is more of the Persian and Middle East culture based on the Aryan invasions from the North of India. The Southern city of Chennai is the having the traditional Indian / Dravidian influence. Kolkata has more influences from the Far East like Japan & China. So the behavior / perceptions of these regions would defer which helps in differentiating the strategic offer from the manufacturer of pharmaceuticals. It was decided to check the behavior perception for the package in the four metro cities as their cultural influences differ. This result would help in the targeting of the specific market with a specific product-package offer. The relative Importance of the Design based on the four metro cities is done using a Chi square test which would narrow down the geographic location. This gives the focus in terms of improvement in design for the Pharmaceutical Injections based on a target market.
Having specifically identified the target market it was decided to Niche target the consumer. The study on four common types of Injection packaging available worldwide were done.
These are
Loose Injection
Injection in carton
Injection with a syringe
Pre filled syringe
The traditional packaging matrix model (Lockhardt Model) considered the packaging functions as Protection, Utility & Communication operating in the Human, Physical and Ambient Environment. This would be the basis to start our discussion to evolve the marketing strategy. In addition to the traditional roles of protection, utility in terms of product dispensation, and communication in terms of labeling, now the pharmaceutical manufacturers have incorporated several new technological innovations in packaging that are modifications to the existing attributes and several other attribute which are new to the Indian market. These new innovations in the packaging are providing the valuable edge to the product giving the competitive advantage to manufacturers who are incorporating it in their marketing strategy. The valuable innovations in the packaging are increasing the product sales as the physician and consumer identifies the value offer. These value innovations have become friendlier to the administrator or user.
Also the packaging has become more unique or different from the normal offer making the total product offer unique therefore enhancing the core competencies of the pharmaceutical manufacture. This competitive advantage helps the marketer to take advantage of the increasing market share in a highly competitive market. The synergy that the unique package offers to the product is what the pharmaceutical maker is trying to establish. As Packaging is not bound by IPR issues the advantages that the Originator gets could be offset by the Generic maker if the total product offer which includes the unique innovative packaging is really valuable in terms of utility and protection. It is therefore important to identify the winners in the innovative packaging of pharmaceutical products in order to get the first mover advantage in terms of the total product offer.
In the growing market it is wise to find out which is the right segment to approach to get the good returns on the investments made. Niche targeting would give the market strategy an edge over competition thus enhancing the product sales thus improving the efficiency of the targeting.
The design is dealt with the Utility function in the Human Environment in the Lockhardt Model.
Ho1: There is no difference in the importance of the Design of the Injection formulation among the Doctors in the four main Metro Cities in India.
A package is seen as part of the product contributing to successful product performance. This includes maintaining a proper shelf-life and usage ease of use hence the package structure is a key differentiator for the products (Arnold, 2003).
Finding a working value proposition that is unique and trying to find the right market niche that has an attractive value proposition is the key to an effective marketing strategy. Rarely does any one product be all things to all people. This is the reason there is a need for market carving and the development of responsive products or services to a particular segment. (Green, 2000)
The product quality is becoming important with several millions of dollars involved in new drug discovery and over 10-15 years of research. These factors necessitate the incorporation of appropriate product packaging technology for delivering competitive edge market mix strategy for sustainable marketing.
The paper looks at the importance of design among the Doctors.
Since most of the medical colleges and Hospitals with the latest technologies are in the four Metros, it was decided to collect the data from Doctors in the four Metro cities in India that is Mumbai, Kolkata, Delhi and Chennai.
Secondary data: Information based on Packaging, Marketing strategy and Pharmaceuticals will be collected from various Journals like Journal of Healthcare, Journal of Marketing, Journal of Packaging, Journal of Medical Marketing, Journal of Medical Systems, Journal of Product Innovation Management, Design Management Journal, PPharmaBiz, IDS Packaging, Wharton, Pharmacy World & Science
The primary data was collected mainly by the use of questionnaire using the Likert scale. The analysis was done on SPSS 15. The sample is systematic stratified sampling. The stratum was mutually exclusive as the four major cities are several thousand kms apart. The ideal sample size was 400 based on expert opinion of the Indian Market Research Bureau who does several official researches in India for several Indian and MNC’s to estimate pharmaceutical companies’ sales forecast, market share, price movements, etc
The sample break up in the four major cities would be as follows
100
100
100
100
The following Hospital were located in the four metro cities
The Data were from
Mumbai: KEM, Mumbai Hospital, Tata Memorial, JJ, Cooper, TISS, Rajadyaksha, Gandhi Nursing, LIC, Amita Nursing, CGHS, and Shivneri.
Delhi: Bhatia, Jaipur Golden, MIMS, Singhal Maternity, Guru Nanak, UCMS, GTB, City, Sir Ganga Ram, Taneja Clinic, Safdarjung, Indian Air, Chhabra Medicare, GB Pant.
Kolkatta: Sanjivani, P C M H, Ashirbad Nursing, PG, B C Roy Memorial, C C W H Thakurpukur Cance, M O Dum Dum, IPGMER, SSKM, Calcutta Med.
Chennai: Vijaya Heart Foundation, Raj Nursing, Inst of Cardiovascular, I K, T N Govt, Sri Venkateswara, SBI, Apollo, ONGC, Jeevandham Clinic, Rangarajan Memorial.
There were four research teams who were properly briefed to administer the questionnaire in the four metro cities. They approached the above hospitals in every city. The top ten hospitals geographically spread out were identified and in each hospital the sampling was done to collect data from seven to eight doctors from various specializations. The remaining data were collected from the private practitioners geographically spread around in that city. The completed data was collected for total 100 Doctors from each metro city. This ensures that a true representation of the city is obtained. The data was checked and cleaned before inputting into the SPSS.
The data was analyzed using SPSS 15.0
The Cross tab, Table I indicates that Mumbai (41.8%) considered the Design of the Injections to be Extremely Important, whereas Kolkata (40.1%) considered it to be Unimportant.
These results were significant as indicated in Table II
Ho1: Is rejected.
There is a difference in the importance of the Design of the Injection formulation among the various Doctors in the four main Metro Cities in India. (Table 1)
The data was analyzed based on the Doctors to check the significance of Importance of Design for the General Practitioner and the Specialist. The results in Table III indicate that GP’s (81.3%) and the Specialists (100%) from Kolkata considered this as Unimportant, while the Specialists (40.9%) from Mumbai considered this as Extremely Important. These results were significant as indicated in Table IV
The analysis was done on the Doctors for ranking in terms of Packaging Design Improvement for the various four main Metro Cities in India
Loose Injection. There was no significance (0.051)
Injection in carton. There was no significance (0.238)
Injection with a syringe. There was no significance (0.304)
Pre filled syringe. There was no significance (0.257). As seen in Table V.
These results indicated shows that both the General Practitioners and the Specialists were of the same opinion in terms of the improvement of Design for the various types of Injection formulations available. There is no ambiguity in the behavior among the Doctors on the Design improvement of Injection formulations package type.
There is a difference in the importance of the Design of the Injection packaging formulation among the various Doctors in the four main Metro Cities in India.
Table I – Mumbai – 41.8% Consider Design is Extremely Important. (Significantly)
– Kolkata – 40.1% Consider Design is Unimportant. (Significantly)
The results shows that there was a significant difference in the perception of the pharmaceutical packaging design among the General Practitioners and the need to target this niche market.
Table III – 40.9% Specialists in Mumbai – Consider Design is Extremely Important.
– 100% Specialists and 81.3% GP’s in Kolkata – Consider Design is Unimportant
Mumbai is influenced by the Western Culture whereas Kolkata is predominantly influenced by the Eastern Culture of China. The significance of the above data is that the Doctors in Kolkata are not much influenced and or do not perceive the design of pharmaceutical injection as important. As most of the pharmaceutical makers are from US and Europe they have to note that their injection package design has been well appreciated in Mumbai, whereas for the Kolkata market (located in the East) a lower design or design similar to the Chinese or Japanese makers would be better due to culture similarities.
The four types of Injection types was analyzed based on the specialization and it was found that no significant difference for the improvement of design for the four Injection packaging types. Here it can be concluded that the Doctors irrespective of their specialization and geographical region that they are located, are of the opinion that the design for the Injection packaging is good and therefore there is no need to consider any improvement in the packaging design.
As a final conclusion the target market would be Kolkata which has to be offered a product-package design for Injection different from what the West has to offer, perhaps looking at a design from the Far East countries like China or Japan which can increase the influence of the Doctor to prescribe the Injection packaged product based on design.
Looking at the niche targeting it is seen that both the specialized and GP’s regarded the four injection package types as similar in terms of design improvement.
The study can look at the relationship of the perception of the value in the packaging design based on a mathematical relationship of design improvement with its importance in the injection package for a certain geographical city. This would enable a proper budgeting of promotion to the favorable market/city and also look out for the package promotion to the market which does not consider packaging design improvement as important.
The limitation of this study is the assumption that most of the Designs available are based on the four Metro cities (Tier 1). In a couple of years other Cities (Tier II) would be acquiring Tier I status. Due to this rapid expansion of the market the data from Tier II can affect the results/findings in the near future.
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