DISTRIBUTION / CHANNEL MANAGEMENT

FINAL PROJECT REPORT ON BRISTOL PAK

SUBMITTED BY:

FOUAD AHMED LONGI

MUDASSER ALI KHAN

SUBMITTED TO:

DR. NADIR MAZHAR

 INTRODUCTION OF THE COMPANY

BRISTOL-MYERS SQUIBB

Bristol-Myers Squibb is a global pharmaceutical and related health care products company
whose mission is to extend and enhance human life. Bristol-Myers Squibb's 42,000 employees
are dedicated to discovering, developing and providing innovative medicines that address
significant unmet medical needs of patients worldwide. By living our mission and building our
company for well over a century, we are also making a difference in the lives of our
shareholders, employees and neighbors.

 Chief Executive Officer: James M. Cornelius

 Stock Exchange Listing : BMY (NYSE)
 Number of Employees : 42,000
 Global Sales: $19.2 billion

 Businesses
 Pharmaceuticals
 Mead Johnson Nutritionals
 ConvaTec (Ostomy Care and Wound Therapeutics)
 Medical Imaging
 Patient Assistance
Bristol-Myers Squibb provided more than $600 million in free medicines to more than
800,000 people in the U.S. through donations to the Bristol-Myers Squibb Patient
Assistance Foundation, Inc. and to the Bristol-Myers Squibb/Americares
Oncology/Virology Access Program.

 Address
o 345 Park Avenue, New York, USA 10154-0037, 212-546-4000
o Plot # 5, Sector - 21, Korangi Industrial Area Karachi 74900
Phone: (021) 5015007 – 11, Fax: (021) 5013291

URL: www.bms.com Email: umar.farooq@bms.com

 MISSION STATEMENT

The Bristol Myers Squibb Pledge

“Our company’s mission is to extend and enhance human life by providing the highest-quality
pharmaceutical and related health care products.”

“We pledge -- to our patients and customers, to our employees and partners, to our
shareholders and neighbors, and to the world we serve -- to act on our belief that the priceless
ingredient of every product is the honor and integrity of its maker.”

To our Customers

“We pledge excellence in everything we make and market, providing the safest, most effective
and highest-quality medicines and health care products. We promise to continually improve our
products through innovation, diligent research and development, and an unyielding commitment
to be the very best.”

To our Colleagues

“We pledge personal respect, fair compensation and honest and equitable treatment. To all who
qualify for advancement, we will make every effort to provide opportunity. We affirm our
commitment to foster a globally diverse workforce and a companywide culture that encourages
excellence, leadership, innovation and a balance between our personal and professional lives.
We acknowledge our obligation to provide able and humane leadership and a clean and safe
work environment.”
 To our Suppliers & Supply Chain Partners

“We pledge courteous, efficient and ethical behavior and practices; respect for your interests;
and an open door. We pledge to build and uphold the trust and goodwill that are the foundation
of successful business relationships.”

To our Shareholders

“We pledge our dedication to responsibly increasing the shareholder value of your company
based upon continued growth, strong finances, productive collaborations and innovation in
research and development.”

To the Communities where we live and work, the countries where we

do business and the World we serve

“We pledge conscientious citizenship, a helping hand for worthwhile causes and constructive
action that supports a clean and healthy environment. We pledge Bristol-Myers Squibb to the
highest standard of moral and ethical behavior and to policies and practices that fully embody
the responsibility, integrity and decency required of free enterprise if it is to merit and maintain
the confidence of our society.”
 MAJOR LINES OF BUSINESS

Bristol-Myers Squibb core businesses include:

 Pharmaceuticals
 Mead Johnson Nutritionals

 Other Health Care

These businesses have key alliances with different research, medical, clinical, NGO,
and social equity groups and with other companies, including a worldwide external
network of academic and biotech research collaborations. Our drug discovery and
development programs include many biotechnology alliances and other licensing and
collaborative agreements. Many of our partnerships produce new drug candidates for
active development in our pipeline, while others provide us with cutting edge discovery
and development technology.

Bristol-Myers Squibb manufactures hundreds of different products and is a leader in the

discovery and manufacture of innovative therapies for cardiovascular disease, central
nervous system disorders, oncology, virology, metabolics, and immunology. The
Company also manufactures and markets ostomy care, advanced wound care,
nutritional supplements, and infant formulas.
 DISTRIBUTION NETWORK (BRISTOL PAK)

Bristol-Myers Squibb operates approximately 60 research and development, manufacturing, and

distribution facilities in more than 20 countries on six continents. We have people working in
nearly 200 countries around the globe.

Australia Brazil Finland Indonesia

Egypt Giza
Noble Park São Paulo Cimanggis

Canada China Denmark France Ireland

Cruiserath
Boucherville, Guangzhou Ecuador Agen
Swords
Québec Shanghai Guayaquil Épernon
Candiac, Québec Fontenay
Meymac

Italy Anagni Japan Aichi Netherlands Norway

Latina México Delicias Nijmegen
San Angel
Tlalpan

Panamá Colón Philippines Poland Spain Barcelona Sweden

(Esplugues)
Makati Slovakia Barcelona Switzerland
(Gavá) Madrid

Thailand Bangkok United States Indiana Michigan

United Kingdom Evansville / Mt.  Zeeland
Deeside Connecticut Vernon
Ickenham  Wallingford
Moreton
Rhymney
New Jersey New York
Hamilton Lawrenceville       New York Puerto Rico Massachusetts
Hopewell     Nassau Park       Syracuse  Barceloneta Billerica
New Brunswick  Cataño
North Plainsboro  Humacao
Carolina      Skillman    Manati
Greensboro         Mayaguez
 DISTRIBUTOR BACKGROUND

Muller & Phipps Pakistan (Pvt) Ltd.

Is a leading distribution company in Pakistan. It specializes in the distribution of pharmaceuticals

and consumer goods. We represent approximately twenty leading companies in Pakistan,
mostly multinational, including such names as Bristol Myers Squibb, Parke-Davis, Roche, and
Merck Sharp and Dohme, whose pharmaceutical products we distribute nationally.

Our Consumer Products Division handles major national and international brands in a wide
range of products including Personal Care, Confectionary, Food Products and Household
goods. There is also a specialized sub-division dealing with Infant Milk Formulae.

Our Diagnostics Division deals in instruments and reagents, and the Marketing Services Unit
handles the marketing, promotion and sales detailing of pharmaceuticals and other products.

We have a staff of about 1200 full-time employees located in eighteen locations throughout
Pakistan, over 150 Company owned vans and trucks, and a computerized information system.
We serve over 33,000 retail outlets directly, and thousands more through our stockist and
wholesaler network. We are proud of the fact that we provide the best coverage, both in terms
of frequency and number, possible from any independent distributor.

(M&P) is an associate company of the Getz Brothers Corporation of San Francisco, California,
which in turn is a part of the Marmon Group, a $6 billion corporation based in Chicago, Illinois, in
the USA
 MAJOR LINES OF BUSINESS
M&P operates 2 Business Units, Pharmaceutical and Consumer Products with 19 full sales and
service branches across the country and a fleet of over 150 vehicles, enabling M&P to provide
direct distribution to the retail trade.

Organization Two main Units

 Pharmaceutical Distribution
 Consumer Products & Allied business
 Consumer Product Distribution
 Hospital Care
 Contract marketing services
 ORGANIZATION STRUCTURE

Muller & Phipps Pakistan (Pvt) Limited

Corporate Organogram
Chairman
Zain A. Alavi

Managing Director
Chief Int. Auditor
A. Qadri

Director - Pharma Director - Finance Director – CP & AB

Najeeb-ur- Rehman Kamran Nishat Abdul Wahid

Sr.AM – Zone I Mktg Svc. Mgr HR Mrg, Sr. Mgr. Fin. Svc. Mgr Accounts Sr. NSM - CPD Sr Mgr Cont. Mktg
Masood .A Tariq .Khan Tanveer.Q R. Y. Shroff Kazim Nasar I. A. Khan

Sr. AM – Zone II Mktg Svc. Mgr Mgr Corp. Relation Mgr Treasury Svc. Depot Accntg. Mgr. Gp. Brand Mgr. Sr. A.S.M. ZoneII Mgr. Specialty Prd.
M. Hameed Hasan Masud Zaheer Ahmed M. Naeem Ahmed Asif M. Alavi H. J. Khan

AM – Zone III Mktg Svc. Mgr Mgr Financial Svc. Mgr Gen. Accountg. Business Dev. Mgr. Sr. A.S.M. Zone III Sales Mgr Nutrimed
Kamran Mirza S. Alavi Zubair Ahmed Abdul Hafiz S. S. Masud Iftikhar Ahmed S. Tasneem

Sr. AM – Zone IV Trg, Mrg Mgr Principal Svc. Sr.Mgr I.S Business Dev. Mgr. Sr. A.S.M. Zone I
Shahid .M A. Qadiri Ghufran Dilawar Yasmeen. S. A. Khan Jamil Ahmed

Mgr Admin & Pers Mrq,Ra Mrg,,Log

M. Batool M .A .Hasimi Javed A A
 Chapter 1 - MARKETING CHANNEL CONCEPTS
Marketing channels that make products and services readily available to customers when,
where, and how they are needed had for some time taken a “back seat” to the other strategic
variables of the marketing mix. Five factors account for the growing emphasis on marketing
channel strategy: (1) the greater difficulty of attaining a sustainable competitive advantage; (2)
the growing power of distributors, especially large retailers; (3) the need to reduce distribution
costs; (4) the new stress on growth; and (5) the increasing role of technology.

The marketing channel is defined as the external contractual organization that management
operates to achieve its distribution objectives.

Channel manager is referred to anyone in a firm or organization who is involved in marketing

channel decision making.

Marketing channel strategy as one of the major strategic areas of marketing management fits
under the distribution variable in the marketing mix.
 DISTRIBUTION FACILITIES IN PAKISTAN

19 Depots in 16 Cities:

 Zone 1: Karachi & Hyderabad

 Zone 2: Sukkur, Quetta, Bahawalpur & Multan
 Zone 3: Lahore, Gujranwala, Faisalabad, Sargodha & Shaiwal
 Zone 4: Rawalpindi, Islamabad, Mardan, Peshawar & D.I. Khan

DISTRIBUTION CYCLE / COVERAGE CYCLE

• 19 DEPOT TOWNS 8 DAYS CYCLE

• 41 MAJOR UP-COUNTRY TOWNS 8 DAYS CYCLE

• 530 SMALL UP-COUNTRY TOWNS 14-16 DAYS CYCLE

• DELIVERY IN DEPOT TOWNS NEXT DAY

• DELIVERY IN UP-COUNTRY TOWNS 3-4 DAY CYCLE

 Chapter 5 – Strategy in Marketing Channels

Marketing channel strategy is defined as the broad principles by which the firm expects
to achieve its distribution objectives. It is concern on place factor from the four P’s of
marketing. Channel strategy is applicable to all six of the basic distribution decisions
faced by companies:

1. The role of distribution in the company’s overall objectives and strategies

2. The role of distribution in the marketing mix

3. The layout of marketing channels

4. Channel members selection

5. Chanel member performance’s evaluation

Taking into consideration the function of distribution in marketing mix, if any of the
following four criteria exist, a strong case for emphasize distribution can be made:

1. Distribution is the most applicable variable in the marketing mix for the
satisfaction of target market demand
2. Competitive parity exists for the other marketing mix variables

3. There is a high level of competitive exposure because of neglect distribution

4. Distribution can create synergy

Our Principals are the lifeblood of business success at M&P. We proudly believe M&P to be the
largest national distributing house in Pakistan, with the most diverse and customized marketing
service options available for all principals.

We present here the current list of our valued principals with their products:

Pharmaceutical Division

Bristol Myers Squibb

Getz Pharma

Merck Sharp and Dohme

Parke-Davis

Pharmatec

Roche

Reckitt & Colman

Pharmaceuticals

The Company is implementing a new strategy to discover and develop innovative medicines
that address areas of significant unmet medical need. These areas include: affective
(psychiatric) disorders, Alzheimer’s/dementia, atherosclerosis/thrombosis, diabetes, hepatitis,
HIV/AIDS, obesity, oncology, rheumatoid arthritis and related diseases, and solid organ
transplant. The Company continuously strives to create better treatments for patients by building
a high quality drug discovery and development pipeline.

"We’re executing our company strategy by focusing R&D in areas of significant unmet medical
need. Since 2002, we have launched eight new pharmaceutical products, including four since
the beginning of 2006. Our R&D organization continues to be productive, thanks to the talent,
dedication and commitment of thousands of scientists and other research staff. This productivity
is also tied to our increased investments in R&D in recent years. Over the past three years, we
have boosted companywide R&D expenditures 11 percent per year on a compounded annual
growth rate basis. This commitment of people and resources drives our R&D efforts to develop
the innovative medicines and health care products that patients need."

Elliott Sigal
Chief Scientific Officer and President, Pharmaceutical Research Institute
 CHAPTER 6 – DESIGNING THE MARKETING
CHANNEL
Channel design refers to those decisions involving the development of new marketing channels
where none had existed before or to the modification of existing channels.

Channel design is a very important aspect of the firm’s overall marketing strategy because it can
be a key factor in helping the firm gain a differential advantage (sustainable competitive
advantage).

Channel design can be viewed as a seven-phase process.

 Phase 1 involves recognizing the need for a channel design decision.

 Phase 2 is the setting and coordinating of distribution objectives.

 Phase 3 is the specification of the distribution tasks that will have to be performed in
order to achieve the distribution objectives.

 Phase 4 consists of the development of alternative channel structures.

The channel structures should be specified in terms of three basic dimensions:

1. number of levels,

2. intensity at the various levels, and

3. the types of intermediaries to be used at each level.

 Phase 5 involves the evaluation of the many variables affecting channel structure.

Six major categories:

1. Market variables

2. Product variables

3. Company variables

4. Intermediary variables

5. Environmental variables

6. Behavioral variables
Channel Levels
Since Muller & Phipps is a distributor for pharmaceutical products. The Channel levels would be
in the form of one level which is from a manufacturer to the final consumer. The intensity would
be selective because of pharmaceutical products would be available at every pharmacy,
hospitals and small general stores and the number of intermediaries are few because since it is
a distributor.

Channel Levels

Manufacturers

Consumers

Intensity dimension: Selective

Number of intermediaries (Retail level): Few

 CHAPTER 7 – SELECTING THE CHANNEL MEMBERS

The selection of channel members is the last (seventh) phase of channel design. Selection
decisions can also be made independently of channel design decisions when new channel
members are added to the channel or when those who have left are replaced. The selection
process consists of three steps: (1) finding prospective channel members, (2) applying selection
criteria to determine whether they are suitable, and (3) securing the prospective members for
the channel.

Securing the Channel Members

These businesses have key alliances with different research, medical, clinical, NGO, and social
equity groups and with other companies, including a worldwide external network of academic
and biotech research collaborations. Our drug discovery and development programs include
many biotechnology alliances and other licensing and collaborative agreements. Many of our
partnerships produce new drug candidates for active development in our pipeline, while others
provide us with cutting edge discovery and development technology.

Diagnostic Business Unit & Contract Marketing

Diagnostics Business Unit

ABX Hematologie

ConvaTec

Johnson & Johnson

Organon Teknika

Contract Marketing Services

Rhone Poulenc Rorer

 CHAPTER 10 – PRODUCT ISSUES IN CHANNEL
MANAGEMENT
New Product Planning and Channel Management

The development of new products is a challenge faced by virtually all producers and
manufacturers serving both consumer and industrial markets. New technologies, changing
customer preferences, and competitive forces all contribute to the need to introduce new
products. Achieving success for new products is dependent on many factors, such as
innovativeness and quality of the product itself, its price, how effectively it is promoted, the
nature of customer demand, competitive factors, timing, and may others.

TYPE OF COMPANY

The Company has maintained a competitive position in the market and strives to uphold this
position, which is dependent on its success in discovering and developing innovative, cost-
effective products that serve unmet medical needs. The Company and its subsidiaries are the
subject of a number of significant pending lawsuits, claims, proceedings and investigations. It is
not possible at this time reasonably to assess the final outcome of these investigations or
litigations. Management continues to believe, as previously disclosed, that during the next few
years, the aggregate impact, beyond current reserves, of these and other legal matters affecting
the Company is reasonably likely to be material to the Company’s results of operations and
cash flows, and may be material to its financial condition and liquidity
Consumer Products and Allied Business Division

PRINCIPALS TYPE OF PRODUCTS

Nutricia Cow & Gate Infant Milk Formulae

Mouthwash
Parke-Davis
Toothpaste

Mayonnaise
Seville Products
Tomato Ketchup

Men’s Hair Cream

Toothpastes
Smith Kline Beecham
Digestive aids
Toothbrushes

Scourer
Gloves
3M
Cleaning Cloths
Mops

Hair Oil
Redrock
Digestive Aids

Van Melle Candy Rolls

 CHAPTER 13 – LOGISTICS AND CHANNEL
MANAGEMENT
Logistics is defined as a systematic process of “Planning, implementing, and controlling the
physical flow of resources and final products from point of origin to point of destination in order
to meet customers’ needs at a profit.” Supply Chain Management has played an important role
in describing logistics systems that has a huge emphasis on close collaboration of inter-
organizational management to incorporate the logistical operations of the different firms in the
channel. Function of having logistics systems is that it is able to deliver the right goods to the
right location at the right time.

The logistics system consists of six basic mechanisms:

1) transportation 2) materials handling 3) order processing 4) inventory control

5) warehousing 6) packaging

WAREHOUSE FACILITY

Central Warehouses-Karachi

 Warehouse space
40,000 sq ft.
 Cool Area
10,500 sq ft
 Cold Storage 2,200 sq ft

 Sales Offices/Satelitte warehouses Eighteen locations countrywide

 Warehouse Area
171,000 sq ft
 DISTRIBUTION NETWORK (MULLER & PHIPPS PVT
LIMITED)

Delivery Vans & Trucks (All Pharmaceutical Vans are equipped with
A/Cs)

Consumer Products Division 43

Pharmaceutical Division 125

Delivery Vans 204

• Mazda 3500 16
• Mazda E2200 19
• Toyota Hiace 36
• Toyota Hilux 19
• Shehzore 48
• Suzuki Bolan 65

ZONE WISE COVERAGE CYCLE

Zone I Zone II Zone III Zone IV

Nawabshah Jacobabad Sheikhupura Abbotabad

Mora Shikarpur Sahiwal Haripur

Dad Rahimyar Okara Mansehra

Khan

Daulatpur Sadiqabad Gujarat Jhelum

TandoAllayar Larkana Daska Mir Pur A.

Digri D.G. Khan Sialkot Attock

Judo Jhang Chakwal

Tando Jan Kasur Kohat

Mohammad

Mir Purkha Hangu

Thal

Sadda

Parachanar

Mingora

Batkhala

Naushera

Bannu

Sri Naruan

Tank

9 Towns 6 Towns 8 Towns 18 Towns