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Thursday, December 29, 2011

Pharma deals may come under scanner

Corporate affairs ministry mulls changes in Competition Act, may provide different threshold for various sectors.
Pharma deals may not escape the scrutiny of the Competition Commission of India (CCI) on the ground of higher threshold that is provided in the Competition Act to trigger such a vetting. For, the Ministry of Corporate Affairs is mulling amending the legislation.
The Ministry of Corporate Affairs (MCA) is planning to amend the Competition Act, 2002, to introduce sector-specific assets and turnover thresholds for merger and acquisition (M&A) scrutiny.
While the move is primarily meant to empower the CCI to take up the scrutiny of all M&As happening in the domestic pharmaceutical space, it will make sector-specific exemptions, if required, easy across industrial sectors.
The ministry is known to have accepted a suggestion from the CCI to include a new section in the Act which allows the government to notify different value of assets and turnover for any class of enterprises in future.
Under the current rule, only those companies with Rs 750 crore asset value, or Rs 2,250 crore turnover, need to approach the CCI for M&A approvals. A high-level committee headed by Planning Commission member Arun Maira had, in October, said that this clause would keep most of the pharmaceutical acquisitions out of M&A scrutiny as a majority of pharma companies have annual revenues less than Rs 1,500 crore.
Hence, the Maira committee proposed changes in the rules framed under the Competition Act to bring all pharma M&A under CCI scrutiny. At this, the government, which approved the committee’s recommendation on October 10, set a six-month deadline for making rules.
The six-month deadline may not be met as amendment to the Act involves parliamentary approval, and is not as easy as notifying changes in the rules framed under the Act.
The ministry feels that changes in regulations alone cannot empower the CCI to undertake scrutiny of all pharma M&As, as the Act does not have an enabling provision.
Following the acceptance of the Maira committee recommendations, the government decided that India would continue to allow foreign direct investment without any limits (100 per cent) under the automatic route for greenfield investments in the pharma sector.
In the case of brownfield investments in the pharma sector, the decision taken was to allow FDI after getting it vetted by the Foreign Investment Promotion Board for a period of up to six months. During this period, the MCA was asked to make necessary enabling regulations to empower CCI for effective oversight on M&As.
Interestingly, the CCI can handle only competition issues; it has no powers to take a view on the basis of public health concerns. The commission will, therefore, have a “Standing Advisory Committee on Health and Pharmaceutical Sciences” constituted to advise the commission on the public health impact of pharmaceuticals M&A proposals.
The move to amend the Competition Act has come at a time when the country’s competition watchdog is engaged in signing a memorandum of understanding on competition-related matters with its counterparts in Russia and America.

Tuesday, December 27, 2011

Customer Realtionship Management

CRM is a business strategy that maximizes profitability, revenue and customer satisfaction by organizing around customer segments, fostering behavior that satisfies customers and implementing customer centric processes.

Types of CRM
  1. Strategic CRM
  2. Operational CRM
  3. Analytical CRM
  4. Collaborative CRM

Saturday, December 24, 2011

Pharma news-Sanofi Aventis Acquire Universal Medicare’s Nutraceutical Business

Aventis Pharma Limited (part of the Sanofi Group) announced on 24th August, 2011 that it has entered into a definitive agreement to acquire Universal Medicare Private Limited’s business of marketing and distribution of branded nutraceutical formulations in India. Also, approximately 750 commercial employees will transition to Aventis Pharma Ltd. The transaction has been approved by the Boards of Directors of both companies. It is expected to close in the fourth quarter of 2011, subject to certain conditions precedent.

Universal Medicare, (headquartered in Mumbai, India) manufactures, markets and distributes branded nutraceutical formulations in India through their sales and marketing infrastructure. For the year ended March 31, 2011, Universal Medicare’s turnover of the business to be acquired was approximately Rs. 1100 million.
With this acquisition, Aventis Pharma will advance its sustainable growth strategy in India and facilitate the creation of a consumer healthcare and wellness platform. This move is also synergetic with the growth strategy of Sanofi, a majority stakeholder in Aventis Pharma Limited.
“India is one of our most important markets in the emerging world and this acquisition reinforces our commitment to invest and grow our presence in India through a diversified portfolio that is focused on patients’ needs,” said Antoine Ortoli, Senior Vice President, Intercontinental Region – Global Operations of Sanofi.
“This strategic acquisition will allow Aventis Pharma and Sanofi Group to reach out to large sections of India’s population through a broad offering comprising of pharmaceuticals, vaccines and now nutraceuticals,” said Dr. Shailesh Ayyangar, Managing Director – Aventis Pharma Limited and Vice President – South Asia, Sanofi.
Universal Medicare’s portfolio of over 40 branded formulations represent key categories within the nutraceutical market, that are primarily antioxidants, vitamins and mineral supplements, anti-arthritics, anti-osteoporotics, liver tonics, and other nutrients.
Universal Medicare’s Chairman and Managing Director, Vikram Tannan stated “In today’s rapidly changing healthcare scenario, I believe that Aventis Pharma with its track record of building strong brands is best suited to take on and strengthen what we have built over the years. They will not only add value by giving new life to this business but will also nurture our employees through best in class training and advanced marketing practices in a multinational environment."
Under the proposed transaction, Universal Medicare will manufacture the products that Aventis Pharma will be acquiring on mutually agreed terms.
Source: Aventis Pharma

Tuesday, December 6, 2011


The communication strategies used by both the companies are innovative showing the product in the ads that are shown on the websites.
The difference is that Nokia is trying to show the intangible or the part of ad concentrates on turning the phone into a wallet.It is focusing on the service part of the mobile phone.

Samsung placed its ad in economic times by  attracting the viewers with displaying the 'hot news' and issues on the screen.The image is from economic times website where the users are attracted to the latest and hot news and with the buttons similar to its product for sliding the news item on the screen.

Brands and Brand extension-article review

New Product launch has always been a popular strategy of the organisations to seek growth There are three broad strategies to launch a new product: (i) Line Extension; (ii) Brand Extension; and(iii) New Brand. 
Brand extension option has become an increasingly popular way to enhance the equity associated with well-known and well-respected brands Reduce introductory marketing expenses Reduce the risk of complicated buying decisions   Enhance the prospects of gaining access by helping retailer and consumer acceptance
Using an existing brand name to promote a product in a different category, is Brand Extension or
Brand extension is using the leverage of a well known brand name in one category to launch a new product in a different category.
The key difference between line and brand extension is the product category.
In line extension the Product Category remains same whereas in brand extensions product category changes.
Authors of the research article-Dhananjay Bapat and J. S. Panwar-CONSUMER EVALUATION OF BRAND EXTENSIONS

Results of the study:There are certain associations which will be relevant for ensuring success in the extension category.
Two brand affects :
Strong brand associations
Borrowed factors
The findings show that extensions into similar categories tend to be more readily accepted. These findings are consistent across various product and service categories. Based on regression analysis, the study identifies brand relevance success factors. The findings indicate that success of brand extensions depends not only on strong parent brand associations but also on extendable category borrowed brand association
Several implications for both brand management theory and practice
It underscores the importance of similarity in brand extension success evaluation
In the case of
Lux, Amul and Tata, there is a scope to leverage strong brand associations for ensuring success in the brand extension.
Extension advertisement emphasis
Brand associations help customers infer extension features and benefits.
Repeated exposure to appropriate brand association helps customers establish linkages between the brand and extension categories.
Brand associations play an important role in the brand extension success
Organizations must look into the parent brand and check the brand associations of the parent brand when launching a product leveraging the parent brand.
The consumers always try to connect and evaluate the extension brands keeping the associations that are formed in their minds of the parent brand.
The expectations of the consumer are also framed by them and expects the benefits which are physical as well as Intangible benefits.
so, Organizations have to look into all these aspects and must take a decision while launching a brand, whether to leverage the parent brand or they have to launch a new brand all together.

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