WORKING GROUP – O2

Case Analysis on Population Services International

Situation Analysis

PSI is a not-for-profit agency founded in 1970 with the objective to help control the population
explosion in many less developed countries. The agency is offering two products, Raja condoms and
Maya contraceptive pills, in Bangladesh.

PSI is currently running its operations in Bangladesh, one of the poorest countries in the world. It has
scarce resources, and a population of about 100 million with per-capita income of $120/annum.

The Bangladesh government, with no prediction for near-term improvement in the standard of living
given the devastating economic and social scenario, wants to achieve the goal of zero population growth
by 1995.

To capture the market, PSI has employed an intensive mass media campaign backed by extensive
product availability through the widely dispersed retail store network in Bangladesh.

Similar marketing strategies were used for both Raja and Maya, but PSI received a strong positive
response only for Raja. The sales of Raja increased steadily over the past 6 years to 50.4 million pieces in
1983, whereas Maya’s sales had declined from 1.1 million cycles in 1980 to 0.62 million in 1983.

Competitors:

Competitors (Maya) Market share (%) Competitors (Raja) Market share (%)
Bangladesh govt 38.462 Tahiti 29.412
Ovastat 25.641 Sultan 5.882
Lyndiol, Ovral, Nordette 25.641 Durex 3.529
Others 2.564 Others 2.353

Procurement & Distribution Flow

 USAID purchased contraceptives on contract from North American manufacturers

 Shipped them to the port city of Chittagong
 SMP receives contraceptives in bulk – unpackaged and unlabeled
 SMP transports them to a central warehouse at Dhaka for repackaging and labelling
 Both Raja & Maya are packed attractively – to get attention for the product and to add color &
appearance to the retail store
o Raja had 3 packages
 3 pcs. a pack
 12 pcs. a pack
  100 pcs. a pack – generally bought by Pan stores, to sell singles to customers
o Maya was packed 28 pills to a cycle – 21 birth control pills + 7 iron tablets
 Products are then sent to 7 sub-warehouses from where they are transported to 22 wholesalers
(managed b Area sales managers)
 Wholesalers then sell them to pharmacies, large general stores, and about 5000 semi-
wholesalers (or stockists).
 Semi-wholesalers will break the bulk and sell in smaller lots to pan stores & small general stores.

Problem Statement

Acute decline in sales of Maya contraceptive pills by Population Services International over the past six
years whereas sales of Raja condoms, a product of similar category launched at same time in similar
market experienced steady growth, even though both the products had been promoted with similar
marketing strategies.

Problem with 4 P’s and their respective recommended solutions-

Product- Word “Maya” was commonly interpreted to mean beauty due to which people were not able
to connect it to as contraceptive pills.

There was also a misconception that Maya is a poor drug. Even RMPs and doctors thought that Maya
was an inferior good and hence there was an image problem of maya as a drug.

As stated in the case, there was an instance when a woman complained of backache and nausea to
RMP. He advised her to discontinue Maya.

Recommended solution -

One of the recommended solutions would be to create a good image of maya in the market by getting
recommendations from doctors and RMPs.

Price- Perception of people towards the low product price of Maya was that it offered cheap quality.
Distributors & Traders didn’t get enough profit in sales of Maya and they were already getting very less
commission for promoting Maya

Recommended Solution - The company should opt “going-rate pricing” strategy to gain the trust of
people on the quality of the product.

Promotion- There was ignorance for birth control methods due to unawareness and low literacy rate in
the rural areas.

Maya used an intensive promotion strategy and did not have anyone trusted to promote their product.
RMPs were paid very less margins and so they never promoted Maya to local people.

Recommended Solution:
Involve medical practitioners such as gynecologists to reposition the image of Maya as a superior quality
drug.

Radio ads should also cover information on usability of Maya for people to whom the brand is a less
known.

RMPs are the trusted figures to whom the local turns to for medical attention. We should take that
route of RMPs and introduce them to our product and ask them to promote our product by offering
them enough margins.

Place- Maya was sold mainly through Pharmacies and general stores. Pan shops which had most
customer interaction, had very less supplies of Maya pills. Also, lesser number of pharmacies and retail
stores in rural areas provided people with very few options to buy Maya.

Recommended Solution – Increase the Maya pills supplies to Pan shops and retail stores.

Comparison between Different mediums based on Margin and ROI.

Maya Cost SP Margin Inventory ROI

Turnover
Wholesaler 0.45 0.49 8.1632 5.5 44.8979
Stockists 0.49 0.53 7.5471 5.5 41.5094
Retailer 0.53 0.7 24.2857 3.5 85
From the Margin and the ROI obtained for Maya, we can say that Retailer would be the most preferred
framework to be used.

Selling Strategy-

Pan Stores were 30,000 in number and were on every street corner in rural areas. It was a socializing
spot for men and hence it should be used to sell Maya in Rural areas.

Direct Selling methods should be preferred for educated people placed in urban areas

In rural areas, local doctors and nurses can be taken in confidence who can advise people to prefer
Maya and in this way word of mouth can work well for such places in increasing sales.