Proactive Consultants

Non-Transdermal Patches

NANOTECH

Target Market: India Launch Date: June 2011

Executive Summary
Market Size & Growth Potential PEST Analysis Legal Requirements Competition Evaluation Entry & Local Marketing Strategies Management & Supply Chain Financial Requirements Strategic Plan

Nanotech Products
Energy

Sleep Aid
Non-transdermal

Pain Relief Patches

Weight Loss

Anti - Aging

Passive medical devices that are activated by the interaction of molecular structures with the bodys own natural incident Electromagnetic emissions.

Energy Drink Market Size

v Energy drinks are non-alcoholic beverages which are intended to provide a quick burst of high energy to the consumer. v May be prepared with a composition of methylxanthines, caffeine, natural flavors, some herbal components or specific vitamins including Vitamins. v May also contain taurine, guarana, maltodextrin, ginseng, carnitine, inositol, glucuronolactone, creatine and ginkgobiloba. v Most products include artificial sugar. v The primary active component is generally caffeine. Source: www.istockanalyst.com

Pain Relief Market Size

v Indian pharmaceutical market accounts for 1-2% of the global pharmaceutical market in value terms and 8% in volume terms. v In 2007 it has grown by 12.9% to reach USD8.16 billion. v Market growth during 2007 was driven by a number of new product launches by both Indian and foreign companies. v The pharmaceutical market has grown at a compounded annual growth rate (CAGR) of 13% during the last five years. v The market size comprises of domestic consumption of bulk drugs and formulations and does not include exports of the same.

Sleep Aid Market Size

v Sales for drugs targeting sleep disorders constitute close to half of total revenues, with another 29% coming from drugs that alleviate pain. v About 42 million sleeping pill prescriptions were filled in 2005 which is up nearly 60 percent since 2000! v Experts acknowledge that insomnia has become a cultural benchmark a side effect of an overworked, overwrought society.

Anti-Aging Market Size

v The global market for anti-aging products and services was worth $162.2 billion in 2008.

Weight Loss Market Size

v Between $33 billion and $55 billion is spent annually on weight loss products and services, including medical procedures and pharmaceuticals, with weight loss centers garnering between 6 percent and 12 percent of total annual expenditure. v About 70 percent of Americans' dieting attempts are of a self-help nature. Although often short-lived, these diet fads are a positive trend for this sector as Americans ultimately turn to professionals to help them meet their weight loss goals

Source: www.themarketfinancial.com

Growth Potential
v By Year 2050, India will be the Worlds 3rd Largest Economy v India has consistently improved over the last 17 years.
courtesy of www.bigcharts.com

India is one of the Worlds Top Investment Destinations

v The Indian economy posted robust growth of 9.4% in 2006-07. Despite a sharp deceleration in the agricultural sector, the strong GDP growth of 2006-07 was mainly powered by impressive growth of 10.0% in industry and 11.0% services.

POLITICAL, Economic, Social, & TECHNOLOGICAL Analysis

v No strict regulations for the product. v Network marketing has been legal in India since 2000. v India lacks related laws or guidance. They are still working on how to define pyramid scheme vs. true network marketing. v NM is expanding at a phenomenal growth rate while scams are worse than the U.S. or Singapore. v IDSA: an interface between the industry and policy-making bodies of the Government facilitating the cause of Direct Selling Industry in India. v Establishment of technological and research institute
500 technological institutes & 1080 research institutes for providing education to Indian students.

v Positive Technical policy

Opens door to import technology from foreign countries for increasing agricultural and industrial developments.

v High Growth Rate of IT in India

35% growth rate, 2nd country after China who is using internet at large scale for ecommerce , e-education and e-accounting.

v Incentive for promoting technology

100% income tax exemption for expenses incurred in research of technology in India. State financial corporation is uplifting domestic technology by supporting finance to domestic Industries.

http://economictimes.indiatimes.com/Analysis/Remove_policy_ambiguity_on_direct_selling_industry/articleshow/ 3483601.cms http://shiksha-mba.blogspot.com/2009/11/what-is-technological-environment-and.html

Political, ECONOMIC, Social, and Technological Analysis

v The economic factors in India are improving continuously GDP - Among the growing economies of the world, India is second only to China. The country's GDP has been growing at an average rate of 8.5% for the last 5 years. its GDP is expected to increase 7.5% in 2011 v Domestic consumption fuelling economic growth India has the largest independent consumer market in the world. As compared to other countries, India is relatively insulated to external shocks due to strong domestic consumption. Private domestic consumption accounts for more than 50% of the country's GDP and is one of the key factors driving overseas investments in the country Income per capita: $884.75(2009)-->$977.41(2010) 10.5% increase!

FY05
Growth Rate Private Consumption Expenditure

FY06 9.5% $423Bi

FY07 9.7% $467Bi

FY08 9.0% $534Bi

FY09 6.7% $601Bi

FY10 6.5% NA

FY11 7.5% NA

7.5% $378Bi

Source: www.cmie.com

Political, Economic, SOCIAL, and Technological Analysis

v Collectivism Extremely people-oriented, community conscious, large in-group Indian make their goals around people of the family/friends. Believe in long term relationships. Respect human relationships. Indians are known for their hard work vitality and dynamism, they enjoy working as members of a group. v Value The spirit of competition is more in Indians as compared to Americans. Careless about the value of time. v Belief in natural treatment Treatment of health is not based only on the use of medications natural & herbal healing (no chemicals inputs) Yoga - a spiritual and traditional practices Meditation - done though mind along with breathing exercises have a direct effect on the body and helps in treating its various disorders.
http://www.healthaidindia.com/

INDIA is a great market to enter!

4
Sustained Economy Growth & Strong Domestic Private Consumption

4
No restriction on products + Network marketing is allowed in India

5
People Oriented & Acceptance of Natural Treatment

5 types of patches Network Marketing

4 4+4+5+4=17 17 4 = 4.25
Positive Technological Development & Strong Related Policy

Legal Requirements
vApproval needed CDSCO (Central Drugs Standard Control Organization)
Ministry of Health and Family Welfare

http://cdsco.nic.in/index.html

Location: FDA Bhavan, ITO, Kotla Road, New Delhi -110002 Phone: 91-11-23236965 / 91-11-23236965 Fax: 91-11-23236973

http://cdsco.nic.in/index.html
http://cdsco.nic.in/index.html

Legal Documents (Product Registration)

Covering Letter Plant Master File LEGAL DOCUMENTS Power Of Attorney
Free Sales Certificate
Authorization Letter

Form 40

TR6 Challan

Inspection / Audit Report

Schedule DII

Schedule DI

Guidance Document on Common Submission Format for Registration of Medical Devices in India http://cdsco.nic.in/Guidance%20Document%20on%20Common%20%20%20Submission%20Format%20for %20Registration%20of%20Medical%20Devices%20in%20India.Pdf

Legal Documents - I
vCover Letter Cleary specify the intent of the application. Provide important and relevant information. vAuthorization Letter Original issue by Director / Company Secretary / Partner of India Agent vForm 40 ** Performa prescribed in the Drugs & Cosmetics Rules

Guidance Document on Common Submission Format for Registration of Medical Devices in India http://cdsco.nic.in/Guidance%20Document%20on%20Common%20%20%20Submission%20Format%20for %20Registration%20of%20Medical%20Devices%20in%20India.Pdf

Legal Documents - II
vTR6 Challan Requite Fee
**

USD 1500 Registration of the manufacturing Premises USD 1000 Single device USD 1000 Each additional device

vPower Of Attorney ** Authorization by a manufacturer to agent in India shall be documented by POA executed.

Guidance Document on Common Submission Format for Registration of Medical Devices in India http://cdsco.nic.in/Guidance%20Document%20on%20Common%20%20%20Submission%20Format%20for %20Registration%20of%20Medical%20Devices%20in%20India.Pdf

Legal Documents - III

vSchedule DI ** Undertaking as per the Performa prescribed in the Drugs & Cosmetics Act & Rules. vSchedule DII vFree Sales Certificate Issued by GHTF (Global Harmonization Task Force) member.
Enhancing patient safety Increasing access to safe, effective and clinically beneficial medical technology around the world.
Guidance Document on Common Submission Format for Registration of Medical Devices in India http://cdsco.nic.in/Guidance%20Document%20on%20Common%20%20%20Submission%20Format%20for %20Registration%20of%20Medical%20Devices%20in%20India.Pdf

Legal Documents - IV
vInspection / Audit Report Latest copy carried out by Notified bodies / National Regulatory Authority.

Notes: Soft Copy of the Plant Master File ** may submitted along with the application.
** Refer to Appendix
Guidance Document on Common Submission Format for Registration of Medical Devices in India http://cdsco.nic.in/Guidance%20Document%20on%20Common%20%20%20Submission%20Format%20for %20Registration%20of%20Medical%20Devices%20in%20India.Pdf

Import Duties
vHarmonized Tariff Code (HTS) 3005.10.90
Duty 10%

http://www.cbec.gov.in/customs/cst-0910/chap-30.pdf

Competitors Evaluation
vCompanies vProducts

Network Marketing
vNo. 1 Amway
turnover 800 crores = 8 billion dollars ( 10 crores = 23,32,627.85 US Dollars ) 16.9% market share

vNo. 2 Avon
turnover 180 crores =1.8 billion dollars 3.8% market share

http://in.answers.yahoo.com/question/index?qid=20080615230715AAwxvwi http://www.business-standard.com/india/news/amway-dabur-to-sweat-it-out-over-vitamins-dietary-supplements/357463/

How to join
Amway vStart-up price
Rs 995 = $ 22.2 All Product Handbook A set of 2 CDs
Opportunity CD Product CD

Avon vStart-up price

A little more than the price of a lipstick

vBuying products regularly

http://www.amway.in/Articles/Article.aspx?pid=3e3b6905-209e-442e-b8a8-9a0980241c6s&ctg=CompanyProfile

Energy Drink Market

Red Bull Power H Others

Energy Drinks
Product Red Bull

(Total turnover Rs 500 cores)

Power Horse 22%

Australia $2/250ml (Rs96)

Market share Country Base Price

60%
Australia $2/250ml (Rs95)

Others (AmwayXL, Bullet, etc.) 18%

Vary Vary

BuzzHoReCa 60% Retail, Direct Distribution Marketing Retail 40% Sell etc. /Strategy

Nanotech V.S. Traditional Energy Drinks

Nanotech Energy Patch Caffeine-Free Drug-Free Stimulant-Free

Energy Drinks Caffeine Stimulant

http://www.thehindubusinessline.com/2003/01/02/stories/2003010202060600.htm http://marketingpractice.blogspot.com/2008/08/red-bull-it-gives-you-wiings.html http://www.citeman.com/4318-market-size-for-energy-drinks-in-india-is-growing-rapidly/

Popular Pain Relief Products

vAyurveda Ayurvedic Medicine vHerbal Oil, Cream etc. Zandu Balm (under Emami)
65~67% Market share $0.5 ~ $1.5 (Local Price) $ 2 up ( Online for Worldwide)

http://business.rediff.com/report/2010/sep/27/dabangg-moment-for-zandu-balm.htm

Products that similar to Nanotech vSalonpas vBen Gay vTylenol vIcy Hot Only Online

Beauty Industry

vHindustan Lever, Ltd Market share vary (average 30~55%) 250+ personal care products from H to T
$8 ~ $15

http://www.hul.co.in/ http://en.wikipedia.org/wiki/Hindustan_Lever_Ltd

Beauty International
vMarket share around 23% v30 million dollars on local manufacturing since 1994 vYES to fairer and younger looking skin or Against inside cell damages. vFairness is the most important thing for Indian women

http://www.loreal.co.in/_hi/_in/maybelline.aspx http://www.indiatogether.org/manushi/issue145/lovely.htm http://www.nytimes.com/2007/05/30/business/media/30adco.html?_r=1

Weight loss
vPhentramin-d (no need doctors prescription)
60ct 120ct 180ct 360ct 540ct $67 $127 $157 $314 $471

vThermo Phen Phen

100ct $29.99

both claim to reduce appetite and enhance metabolism

Global Entry Strategies

Strategies Trade (Export) Strategy Licensing Strategy Entry sopport Very traditional and well established form of operating in foreign market -Valuable product and unique technology -Loyalty fee

Foreign Investment Strategy Network Marketing

-Long-term participation -Reduces investment of both money and management -Not a traditional, but a powerful strategy -The consultant gets a chance to do business without any investment -The end customers get genuine product

Global Entry Strategies

Strategies
Export strategy

Pros
Least effort approach to enter foreign market -Product customization -Avoiding potential risks due to unfamiliarity -A good way to occupy foreign market with unique technology -Minimum capital involved -Simple transaction -Powerful strategy -Everyone could be the top -No money investment, but profitable

Cons
Least development of market potential -Potential loss of trademark, patent -May create a potential competitor -Must share profits & relationship with partner -different standards -More people involved -Illegal way in some countries -Hard to start -Depends highly on the product quality

Licensing strategy

Foreign Investment

Network Marketing

Global Entry Strategies

Network Marketing is the best strategy to enter Indian Market: --Network Marketing is a strategy entering India market with the maximum impact at minimum cost among all of other strategies --It is a powerful tool with word of mouth marketing, no advertsing budget --The consultant gets a chance to do business without any investment, and the customers get the genuine product --A good way for a start business

Local Marketing Strategy

vProduct Brand Name: Nanotech Inc. Type of Product: Improving health and wellness Product Feature:
Non-Transdermal patches Patch for Energy, Pain, Sleep, Anti-Aging, and Weight Loss FDA-Approved Class II Device

Appearance: form of a small patch, slightly bigger than a quarter coin Usage: Disposable and may be applied daily for up to 12 hours at a time

Local Marketing Strategy

vPrice Premium Pricing Strategy
High prices is interpreted as high quality product High prices reflect the exclusiveness of the product

Price Breaks:
Volume quantity discounts are available to distributors at $50 per pack for an order of 50 packs of the same product.

Target the middle-upper class

Retail: $90+$15 (shipping) = $105
4705 rupees

Wholesale: $70+$15 (shipping)=$85

3809 rupees

Local Marketing Strategy

vPromotion Direct/personal Selling Sales Promotion
Lifestyle Store Give a free trial/sample patch

No advertising as it does not fit company budget/ structure Testimonials: From people and show the celebrities that use it Word of mouth: If the product is good it will sell itself Have a athletes in India try it
Cricket Field Hockey

Local Marketing Strategy

vPlace Direct Distribution
Goes from Distributor to Consumer Small stock of inventory

Distribution Center Mumbai

Have airport and sea port Metropolis

Nanotech

Distribution Center in India

Consu mer

Management & Supply Chain

vOrganizational Structure
Assistant

U.S Indian Distributor

Local Distributor Network Marketing

Supply Chain System

US Warehouse

Distributors

LAX US Freight

Indian Online Website

3 days

30-35 days

BOM airport Bonded warehouse

India Distribution Center

Logistic/Distribution
vMode of Transportation Ocean
U.S Freight Forwarder- takes 30-35 days
Quarterly

Air
Cargo Airline- takes 3 days

Rush
Courier- takes 1-3 days
USPS, Fedex, DHL, UPS

vLocal Indian Post Office

Financial Requirements
Total legal costs involved in setting up the business in India

USD1 = INR44.90

20 days (min)

INR 31,073 (max) = USD 692

Source: International Finance Corporation (2010). Doing Business in India. http://www.doingbusiness.org/data/exploreeconomies/india. Accessed on Nov 20, 2010

Financial Requirements
Product Registration Costs with Central Drugs Standard Control Organization (CDSCO) Item Registration Fee* Registration of Medical Devices for Import* Total Cost $1500 $1000

Total $2500

*One time fee while filing TR6 Chalan, unless if there are additional medical device in different shape and size.

Source: Guidelines for Import and Manufacture of Medical Devices(2006),Registration for medical devices for import http://cdsco.nic.in/medical%20device%20A42.html. Accessed on Dec 4th 2010.

Financial Requirements
Total Promotion and Marketing Cost
Promotion and Marketing Cost Free Samples Training Seminars Marketing Materials (DVD, brochures, information kit) Costs 0 (at Distributor's own cost) Free $500 Total $500

Financial Requirements
Total Shipping/Transportation Costs Analysis
Ocean Freight Port Item Ocean Freight Handling Fee US* Export AES Custom Pier P ass Clean Truck Fee THC for 2 0' Non Haz Cntr Document Charges Mumbai** Service Tax of 1 0.3% Clearance Charges Handling Fee - - Total Costs $1,984 $65 $85 $50 $35 $133 $35 $17 $125 $25 - $2,554 BOM** LAX* Air Freight (based on SQ airline) Airport Item 45kg of products ($4.95/kg) Security ($0.15/kg with $ 15min) Fuel ($0.90/kg with $ 15min) LAX Airport Cargo Transfer Export Document Export AES c ustoms Local Trucking Fee Document Charges Service Tax of 1 0.3% Clearance Charges Handling Charges Total Costs $223 $15 $41 $25 $65 $85 $160 $35 $4 $125 $25 $802

*Quotes obtained from The Ultimate Freight Management, Inc **Quotes obtained from Global Logistics Solutions (India) Pvt. Ltd.

Financial Requirements
Total Shipping/Transportation Costs Analysis
Ocean Freight Container Dimension (LxWxH) Assumed No. of packs in 1 Container Ocean Freight Cost/container Import Duty Tax (10% of Product Value) Ocean Freight Cost/Pack Air Freight Total Weight for Air Shipment Assumed No. of packs in 45kg = 99lbs Air Freight Cost/45kg Import Duty Tax (10% of Product Value) Air Freight Cost/Pack Courier Service Large Flat Rate Box Dimension (LxWxH) Assumed No. of packs in 1 above Flat Rate Box USPS Priority Mail Large Flat Rate Box (up to 20lbs) Ocean Freight Cost/Pack 12x 12x 5-1/2 40 $55.95 $1.40 45kg = 99lbs 198 $802 $1,386 $11.00 20 x 8 x 8 252,700 (=38x14x475) $2554 $1,768,900 $7.00

Assume: 1 pack weights 0.5lbs Pack Dimension (LxWxH) = 6x6x0.2

Financial Requirements
Total Channel/Distribution Costs
Item Wholesale Price/pack Recruiting Bonus Cost/Unit $70.00 Up to $100 Qty Needed 240 (48x5 products) 50 Total Cost $16,800 $5,000 Total $21,800

Financial Requirements
Total Management & Operational Costs
Management & Operational items
1Office 2Airtel 3Clerk

Costs/month $1,115 $25 $190 $135 $15 $40

Rental (500sqt) in Mumbai Fixed Line Bill (Fresh/Entry Level) Salary

Estimated Electric Bill Estimated Water Bill

4Airtel

speed)

Broadband Bill(2Mbps download

Total $1,520
Source 1: Commercial: Office Space/IT park for Rent in East Vidyavihar (2010). Sulekha.com Classifieds & Yellow pages. < http://classifieds.sulekha.com/mumbai/vidyavihar-e/rentals/commercial-office-space-it-park/adlistings.aspx>. Accessed on Dec 4th 2010 Source 2: Home fixed line plans from Airtel (2010). Airtel India. < http://www.airtel.in/wps/wcm/connect/airtel.in/airtel.in/home/foryou/broadband+and+fixed+line/fixed+line/tariffs/>. Accessed on Dec 4th 2010. Source 3: Salary Report for Clerk @ Jobstreet.com (2010). Jobstreet.com. <http://myjobstreet.jobstreet.com/career-enhancer/basic-salary-report.php>. Accessed on Dec 4th 2010 Source 4: Broadband Internet Plans in India (2010). Airtel India. < http://www.airtel.in/wps/wcm/connect/airtel.in/airtel.in/home/forme_newuser/broadband+and+fixed+Line/broadband/>. Accessed on Dec 4th 2010

Financial Requirements
Total Financial Requirements
Costs Total Legal Costs in Setting up Business in India Total CDSCO Registration Fee Total Promotion and Marketing Costs Total Shipping/ Transportation Costs (1st batch, 240packs using Courier Service) Total Channel/Distribution Costs Total Management & Operational Costs Total Balance Cash on Hand: Amount (USD) $692 $2,500 $500 $336 $21,800 $1,520 $27,348 $22,652

Strategic Plan to Launch Nanotech Patches into

INDIA

Nanotechs Vision and Mission

Our Vision
To enhance human health and well being all over the world through nanotechnology One patch at a time.

Our Mission
To help transform health care by bringing together the basic principles of science and technology for the purpose of living life to its fullest!

Nanotech Goal and Objective

Goal
Nanotech patches to be accepted, purchased and enjoyed by everyone in India.

Objective
To become one of the top 3 network marketing companies in India within 3 years by increasing sales 30% - 50% per year.

Evaluation of Strategies
Strategies
Export strategy

Pros
Least effort approach to enter foreign market -Product customization -Avoiding potential risks due to unfamiliarity -A good way to occupy foreign market with unique technology -Minimum capital involved -Simple transaction -Powerful strategy -Everyone could be the top -No money investment, but profitable

Cons
Least development of market potential -Potential loss of trademark, patent -May create a potential competitor -Must share profits & relationship with partner -different standards -More people involved -Illegal way in some countries -Hard to start -Depends highly on the product quality

Licensing strategy

Foreign Investment

Network Marketing

Optimal Strategy
vNetwork Marketing Strategy with distribution center in Mumbai
Assistant

U.S Indian Distributor

Local Distributor Network Marketing

Timeline

(January 2011 June 2011)

LAUNCH PRODUCT JUNE 2011 MAY

JAN MAR
Prepare comprehensive business plan Acquire facility and shipping mechanisms Recruit key staff USA & India

FEB

Develop & implement accelerated market entry and deployment plans

Proactive Consultants

Angel Huang, Annie Ting, Cynthia Wang, Helen Miao, Pockey Wu, Jeffrey Shih, Oliver Hament, Peong-Tat Ong

Resources
Articles / Reports v Doing Business in India, 2010, Ernst & Young, India v Doing Business in India, Strategic and Practical Considerations, January 2010, IVG Partners v Doing Business in India, January 24, 2008, Citibank v Transdermal Patches: What Pharmacists Need to Know?, The Pharma Review June 2006, Subal C. Basak v Indias market Opportunities for imported fresh & processed foods, May 2009, Dept. Agriculture & Food v Is the Health and Wellness Industry Recession Proof?, www.zpryme.com,

Resources
Websites v National Council of Applied Economic Research www.ncaer.org v http://www.wikipedia.com v http://www.wikiinvest.com v http://www.nytimes.com v http://www.ahrq.gov/ v http://cdsco.nic.in/index.html v http://cdsco.nic.in/Medical_div/General%20Formats.htm v http://cdsco.nic.in/Guidance%20Document%20on%20Common%20%20%20Submission%20Format%20for %20Registration%20of%20Medical%20Devices%20in%20India.Pdf v http://www.fda.gov.tw/files/list/PMF_Checklist_en.pdf v http://business.mapsofindia.com/india-company/pharmaceutical.html v http://www.dare.co.in/news/others/indias-wellness-industry-seen-growing-30-35-percent.htm v http://www.wyff4.com/r/25676048/detail.html v http://www.tradeindia.com/manufacturers/indianmanufacturers/energy-drinks.html v http://www.rediff.com/money/2006/may/24drink.htm v http://www.rediff.com/money/2006/apr/19spec.htm v http://medicinemadeinindia.com/siddha.html v http://lifestyle.iloveindia.com/lounge/herbal-sleep-aids-8848.html v http://www.herbalcureindia.com/products/wheat-grass.htm v http://www.healthylivingindia.org/2010/06/ayurvedic-weight-loss-pills-dont-work.html v http://www.made-from-india.com/Categories/Medicine_Health_Products/?page=8&vc=product&sortby v http://www.cosmeticsdesign.com/Products-Markets/Anti-aging-prestige-skincare-market-set-to-return-to-growth

Appendix I

http://cdsco.nic.in/Medical_div/General%20Formats.htm

Appendix II

http://cdsco.nic.in/Medical_div/General%20Formats.htm

Appendix III

http://cdsco.nic.in/Medical_div/General%20Formats.htm

Appendix IV

Guidance Document on Common Submission Format for Registration of Medical Devices in India http://cdsco.nic.in/Guidance%20Document%20on%20Common%20%20%20Submission%20Format%20for %20Registration%20of%20Medical%20Devices%20in%20India.Pdf

Appendix V

http://www.fda.gov.tw/files/list/PMF_Checklist_en.pdf