Today we are discussing key challenges that are faced by newly launched pharma franchise company by any sales and marketing professional. Finding new customers is not difficult in franchise business but keeping them with you is very difficult process. Daily many pharma marketing and franchise companies start but why don’t most of new start ups perform good enough to capture the market. Our many readers ask us about why start up fails in franchise marketing.
Unlike starting pharma marketing company which can be start with 2-3 products, starting pharma franchise marketing company is not low investment work. For starting franchise company one needs good amount of money. Suppose you are going to associate with franchise company. At that time what qualities would you like to in a company. The first thing every marketing person or distributor will look at products list of franchise company. There should be atleast 45-60 products in list so this can attract some one. Companies having Above 200 molecules list are considered to be best of association.
Every marketing person or distributor will work with maximum of 30 products only but they will always give preference to company having more and unique combinations in the list. If you are going to launch franchise company, you have to investment for atleast 45-60 products. Minimum amount that is required for these products will be more than 15 lac.
Secondly pharma marketing process is slow moving. Franchise sale also depend at prescription by doctor but doctors are not primary customer for franchise marketing, not retailers or stockists. Their primary customers are marketing persons or distributors who do marketing and sale on behalf of them. This also makes process lengthy. What happens here, company (franchiser) will market or advertise to find marketing partner for them, then marketing partner (franchisee) will market or promote products to doctors. In starting franchisee will take time to faith at company, once franchisee satisfied with company, he will promote it with full capacity. Mean time doctors also take time to trust efficacy and results of products.
A single party takes around six to 1 year in establishing company sale at regular basis. It is the time period when you can trust it will continue business with you. 5 out of 10 will stop working with company with any reason ( personal or professional ). If number of marketing persons that are associating with you are new comers in franchise marketing or they are first time launching any franchise company in their area then chances is there 8 out of 10 will close work within first year of association.
At average, if you tie up with 25 associates in a year, you will end up with 6-10 franchisees that are giving regular business to you in a financial year. And out of these 6-10 franchisees, only 3-5 parties will provide enough business to pay your bills. In first two year, you will associate with 12-20 party. After two year you will have enough income and inventory to run a company. Once company has started to earn all expenses and salary of all partners and staff, then we can assure about its future.
One more thing, franchise advertisement is expensive one process. Inquiry in pharma franchise marketing generated through print media ( like drug books, healthcare news papers etc ), online portals ( like www.pharmafranchisehelp.com, India mart, pharma mart etc ), pharmaceutical expo shows, website, adwords etc. Without advertisement and promotion, it is very difficult to get inquiries.
Quick look at cost of advertisement:
Print Media- 20000-40000/- per 3 months per book
Online Portals: 21000-30000/- per year per portal
Pharma Expo Shows: 50000-150000/- per show
Website: Site creation + Promotion = Minimum of 15000/- per year
Adwords: Depend upon pay per click rate for keyword you choose
Without proper advertisement and promotion it become difficult to get 100 inquiries per month. Out of hundred, you can expect minimum of 4-5 matured inquiries. Most of parties will also ask for your ad in print media. Ad in print media create impression at mind of franchisee and doctors.
Cut throat competition also add fuel to fire. Inquiry that you receive, you are not the single person that receive that inquiry. Distributor or marketing person will send this inquiry to more than 5 companies including you. He will compare rate, products, range etc. He will contact all and will try to find out best possible associate. Company that will provide the satisfaction, will catch the opportunity.
Proper support to franchisee matter most but neglected by most of companies. In franchise marketing, work is totally at branded or ethical basis. It requires all promotional material that is used by big pharma companies. Give and take was the procedure at which most of franchisee were dependent but this philosophy now use by every company whether big or small. Now is the time when demand of promotional and marketing material is increasing by franchisee side. Neglecting or cost cutting doesn’t provide any benefits to any one. New strategy and regular supply will make the difference.
Shortage of products, irregular supply, no follow-up, shortage of staff, no vision etc are also very much responsible for slow or negligible growth. Franchise provide small entrepreneur to succeed in hug pharma market dominated by big cos. What direction we can give to this market will depend upon new comers in market. What type of vision and strategy they implement to make presence in market.
Conclusion: Like all other businesses, pharma franchise business is also require patience, hard work, dedication, time, knowledge, relationship, vision, strategy etc to be successful. Success is not a over night process. It comes with time as you proceed in your journey.
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