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MAYADERM

A report submitted to
Instructor: Prof. Mukund R. Dixit

For Orientation to Learning Methods at IIMA

By
Sriharsha Vavilala
Ref No: 15364
Section: B

On
18 June 2015

INDIAN INSTITUTE OF MANAGEMENT, AHMEDABAD

Executive Summary
Dr. Shah wishes to commercialise Mayaderm and ensure effective support to reach out to its
large customer base. He aims at a 30% margin after meeting all the costs.
Mayaderm faces two major issues: a lack of a proper supply chain system to ensure doctors,
retailors and customers receive the product whenever necessary, and sole dependence Dr.
Shahs reputation to sell the product,
After analysing the options of another self-run distribution network and outsourcing of the
same I recommend that the latter will be more beneficial as it will increase the sales and
provide a better scope for marketing the brand.
Number of Words: 101

Table of Contents

Contents
Executive Summary........................................................................................... 2
Situational Analysis........................................................................................... 4
The Problem........................................................................................................ 5
The Options......................................................................................................... 5
Criteria for Evaluation....................................................................................... 5
Evaluation of Options........................................................................................ 5
Option 1:............................................................................................................. 5
Option 2:............................................................................................................. 6
Recommendation............................................................................................... 6
Action Plan.......................................................................................................... 6

Situational Analysis
Mayaderm is able to cure problems where many other well-funded drugs and creams have
failed. Even though they provide unique results for a variety of diseases its sales have been
limited and restricted to mainly Gujarat.

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There was also a lot of apprehension shown by

pharmaceutical companies to sell the product under their name. This was due to the lack of
branding for herbal medicines or Mayaderm in addition as the risk involved in endorsing a
new, untested product. The medicines initial success wasnt mainly due to its results but due
to Dr. Shahs credentials as a doctor and researcher. The good will he had brought Mayaderm
its initial test subjects, marketing and sales.
Even in Gujarat Dr. Shahs market share hasnt gone up due to a lack of any proper
distribution system. His efforts to make the brand grow beyond his name came to a standstill
when a team of medical representatives quit in 2001 leading to a void in the Sales and
Distribution Network. 2 Following this incident the marketing was solely by word of mouth
and past results.
Mayaderm has to grow out of Dr. Shahs reputation through its own branding. This can be
achieved through various advertisement programs targeting the customers who are unable to
find, and are adjusting for mediocre or unsuccessful replacements. This would require a
revenue that an individual might not possess considering that various big brands such as
Vicco and GD Labs are branding their products in the same market.
An initial solution has to be framed where in enough revenue and sales are generated so that a
brand can be created out of Mayaderm. This market is untapped even in Gujarat where Dr.
Shahs reputation as well as Mayaderms success have led to doctors recommending the
cream. This is due to the unavailability of stock with retailers. Dr. Shah, due to lack of
revenue and distribution infrastructure is unable to capture the market that he is right now
branded in.

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22 Considering the low number of products and sales of Maya Medicines might
have led to underpayment of the medical representatives considering that they
were most likely earning on commission.
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The Problem
How does Mayaderm improve its sales and distribution system to expands its current
customer base?

The Options
1. Remake the distribution infrastructure and ensure their loyalty by increasing their
salaries and/or commissions through an initial investment.
2. Outsource the entire production to retailor chain to a bigger Pharmaceutical
company so that they can incorporate the cream into their sales and distribution
network.

Criteria for Evaluation


Criteria in decreasing order of importance
a) Increasing sales and reaching out to its current market potential
b) Improve the marketing of the product to create a brand value and sell its speciality in
the market.

Evaluation of Options
Option 1:
a) It would require investments big enough to hold back the team irrespective of the
probably low sales initially. Lacking this will result in a repeat of the 2001 incident of
mass quitting. But with this, Mayaderm can reach out its initial target customers,
whoever is prescribed a drug by a doctor. The team can also focus on area and city level
marketing in the state of Gujarat to increase non-prescription usage. A freedom to market
and sell the drugs best features will be there if the unit is self-governed.
b) The sale of the initial stock will automatically create a brand amongst the retailors,
chemists and customers that might provide for an increase in sales.
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Option 2:
a) Outsourcing the sales and distribution network similar to how they successfully
contracted with Atra Pharmaceuticals for manufacturing the products will reduce the
initial investments by a huge margin considering that the company already has its own
network and chain of medicines, distributors and satisfied retailors. Such distribution
networks while requiring more commission need not spend excessively on free samples
and other initial networking as they will possess an already part of a well-established
chain of products being supplied to retailors.
b) This will help in increases the brand amongst retailers and chemists as a large firm is
endorsing the product. At the same time it will not result in any loss of brand amongst
Doctors as the product is still manufactured under Dr. Shahs name and banner. In
addition to this any advantages that exist with a unit headed by Dr. Shah himself will
mostly be applicable in this case too.

Recommendation
It is recommended that Dr. Shah contract or outsource the sales and distribution chain to an
existing and well established Pharmaceutical company. While it might reduce immediate
profits, it doesnt require any high investments and will enable in an easier brand making
process.

Action Plan
1) Contact various well established Pharmaceutical industries not involved in the skin
disease business to take up the contract of sales.
2) Ensure that the company selected has a well-established network and brand in place.
3) Facilitate the increase in sales through the previously followed word to mouth
marketing with doctors
4) As the sales increase, expand outside Gujarat as well and try to make the current
system national.
5) Start advertising at the same time to ensure that Mayaderm by itself stands as a brand
6) Consider diversification of the product, and manufacture of various such creams to
take control of the sales and distribution network.
Number of Words: 956

i April 10 March 12 Sales have been 30,000 and March 12 March 14 Sales have
been 70,830.
Per annum sales have risen by only 20% in these two time periods whereas Mayaderm
went national, and expanded outside Gujarat market as well during this period. This
shows that Mayaderm while, has a decent brand value in Gujarat due to Dr. Shah
doesnt possess the same outside the state.