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MARKET RESEARCH

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by

Daniela Varela

on 11 November 2013

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Transcript of MARKET RESEARCH

MARKET RESEARCH
For BBC development
In Kenya, Nigeria and Ethiopia



Business case with analgesic market example
Information source: Frost & Sullivan Survey and own primary field research
Nairobi, August 2013
Njeri Karibu - E. Stiglingh – R. Satzke

Lack of reliable market data motivates Field research:
Visits to low end outlets (open markets)
Visits to supermarkets
Interviews to pharmacists (small and large PoS)
Interview to distributors
Feedback of our local management

Nairobi, BCC Safari, April 19th 2013, RS

Why we conducted a field research in MA?

Nairobi, BCC Safari, April 19th 2013, RS

Demographic and Economical comparison

The mobile phone business in Kenya was developed by Paraguayan experts

Nairobi, BCC Safari, April 19th 2013, RS

Hypothesis and Findings

Nairobi, BCC Safari, April 19th 2013, RS

La Ramada market
Santa Cruz - Bolivia

Mercado 4 Market
Asunción - Paraguay

Traditional channel Distribution

Eno

Panadol

Images of Nairobi traditional markets and outlets

Nairobi, BCC Safari, April 19th 2013, RS



Common findings in all researched MA markets:

*The OTC market is emerging and offers opportunities in many segments
*Consumers with increasing purchase power prefer branded products
*The distribution channels and differential prices allows wide coverage among population
*BCC will become the mayor sales grow source for BHC in this region


Kenya:

Foreseeable market, distribution and competitive strengths
Few competitors: higher share growth can be assumed
Reinforce marketing and sales resources to support fast BCC portfolio launch

Ethiopia
Socialistic heritage still influencing distribution and consumption behavior
No competitive benchmark available to estimate reliable sales growth
New regulations should promote private channel growth / high expectative
Still existing positive image Bayer brand
Build marketing and sales structure to support BCC portfolio launch

Nigeria
Deregulated and uncontrolled distribution channel / parallel trade
Extended trade channel and importation duties
Huge range of competitive products in nutritionals and analgesics
Finish registration process, adjust supply forecast and reach more distributors
Carefully grow organization according to sales and margin development

Bubble size is indicative of market size. Total market revenues excludes ARV market for all countries. CAGRs exclude all donor expenditure.
No IMS data is available for Nigeria, Kenya, and Ethiopia- Data gathered through primary research. IMS data was used for Ivory Coast analysis
Source: Frost & Sullivan

Deliverable: Establish industry and therapeutic market size and CAGR by country; match outcome with top therapeutic classes per country

Middle Africa Overview: Total Market Size and Forecast
The Ethiopian Pharmaceutical Market will experience the highest growth from 2011 to 2018

Middle Africa Overview Executive Summary

Ivory Coast
Market Size: $185.0m

Nigeria
Market Size: $920.0m

Ethiopia
Market Size: $422.2m

Kenya
Market Size: $376.5m

Pharmaceutical Market Segmentation, Middle Africa, 2011


Total Pharmaceutical Market
Market Size: $1,903.7 billion

Middle Africa Overview: Segment Market Size
The Pharmaceutical Market is valued at $2 billion across the four countries


Source: own research Aug 2013

90% distribution coverage

5%

5%

20%

45%

25%

Kenya: Distribution Coverage of OTC products OTC Distribution flows through mass market in Kenya


Source: own research Aug 2013

Nigeria: Distribution Coverage of OTC products Distribution flows through mass market in Nigeria

95% distribution coverage

5%

15%

80%

Middle Africa Overview Wide distribution coverage and tailored packaging are key for BCC success

Own Promotion &
trade marketing force

order to cash flow

Legal entity

CONSUMERS


Source: own research Aug 2013

The present market research was conducted with purpose
to develop genuine BHC business for a wide range of consumers

Middle Africa Overview Although Bayer does not actively market its consumer care products, they are widely available through parallel channels in MA Countries


A wide variety of Bayer Consumer Care products are available, despite not officially being registered
BCC product enters through parallel channels (trades importing from origin countries, mainly UK and USA).
Parallel traded BCC brands are expensive and only available on outlets for high income level consumers
This “business” represents for BHC no additional costs (distribution, QA requirements, legal, etc)


T

Ethiopia

Nigeria

Kenya

Middle Africa Overview
The maturity and complexity of each market in the analgesic market example

For the business case following products were selected

650 mg ASA + 65 mg caffeine
12 & 60 tabl.
blister x 12 allowing sales per tablet

500 mg ASA + 50 mg caffeine
20 & 100 tabl.
blister x 10 allowing sales per tablet

Cogs, presentations and dossiers with climate zone IV data from BCC Centro
Only as example for this case exercise

FAST

First Sales and Margin Estimation for regional Analgesic Launch in MA

Middle Africa Overview Common findings in researched markets
and recommendations

Recommendations

1. Replace parallel imported volumes (quick win)
Follow up initiated registration process and launch Berocca, Canesten and Redoxon
Second wave: Supradyn, Bephantene
2. Improve FA with aggressive growth estimations and higher security stocks
Reduce PS delays and OoS situations on distributors
3. Build logistic and local marketing structures according to business projection
Carefully in Nigeria, fast in Ethiopia and Kenya
4. Develop sustainable business growth
Launch regional analgesic brand to share on the biggest and fastest growing market

Muchas gracias !

Although most are poor the collective purchasing power is rising

Similar characteristics in consumer product acquisitions, purchasing behaviors and search for branded products

Consumption behaviors are much more similar between those countries as supposed. Consumers in emerging markets are intelligent and experienced.

Similar OTC products distribution and portfolio management. “Low price high volume strategy” for market entry. Cash flow driven business decisions.

Focused Portfolio, small packaging size, adequate out pocket price and trustful distribution as key factors for success

Full transcript