FULL CYCLE OUTSOURCING

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FULL CYCLE OUTSOURCING AS NEW SERVICES
CATEGORY IN THE RUSSIAN MARKET FOR FOREIGN
MANUFACTURERS Ralf Vaintrub President INVAR
LTD MarcusEvans Conference Vienna, 2005
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PATTERNS OF PERFORMANCE IN THE RUSSIAN MARKET
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THE RUSSIAN PHARMACEUTICAL MARKET SEPARATE
OUTSOURCING SERVICES ON OFFER BY DIFFERENT
COMPANIES

• MARKET RESEARCH

• MARKET FORECASTING

• REGISTRATION AND CLINICAL STUDIES

• ADVERTISING PROMOTION

• MANAGEMENT SERVICES

• CONSULTING ON PRODUCT STRATEGIES

• DISTRIBUTION

• LEASE OF MEDICAL REPRESENTATIVES

• MANUFACTURER AND PRODUCT BRAND
• BUILDING

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PROBLEMS WHEN PURCHASING SEPARATE SERVICES FROM
DIFFERENT COMPANIES

• FINAL RESULTS, I.E. SALES, ARENT GUARANTEED
• SEPARATE ACTIONS ARENT COORDINATED
• MANUFACTURER AND PRODUCT BRANDS ARE DIFFICULT TO
  BUILD
• THE EFFECTIVENESS OF SEPARATE SERVICES IS
  COMPLICATED TO EVALUATE
• YOU PAY FOR THE SERVICES RENDERED AND NOT FOR
  THE RESULTS ACHIEVED
• THE MANUFACTURERS COSTS AND RISKS ARE INCREASED
• INFRASTRUCTURE AND OVERALL MANAGEMENT ARE
  NECESSARY TO BE ESTABLISHED

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THE ADVANTAGES OF A FULL CYCLE OUTSOURCING
COMPANY

• FULL RANGE OF SERVICES STARTING WITH THE PRODUCT
  POSITIONING TILL SALES IN THE RUSSIAN MARKET
• RISK MINIMIZATION
• COSTS OPTIMIZATION FOR LAUNCHING AND PROMOTING A
  PRODUCT IN THE MARKET
• EFFECTIVE AND RELIABLE LAUNCH OF PRODUCTS INTO
  THE MARKET
• AGREED SALES
• MANUFACTURER AND PRODUCT BRAND BUILDING
• LEGAL SUPPORT

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FULL CYCLE OUTSOURCING FOR WHOM IT MAY BE
INTERESTING

• SMALL OR MEDIUM PHARMACEUTICAL MANUFACTURERS OF
  ONE OR MORE ORIGINAL PRODUCTS
• PHARMACEUTICAL MANUFACTURERS OF BRANDED
  GENERICS
• MULTINATIONAL PHARMACEUTICAL MANUFACTURERS OF
  ORIGINAL PRODUCTS

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ACTUAL MANUFACTURERS REQUIREMENTS TO A PARTNER
IN RUSSIA

• 1. COMPANY
• small to medium-size
• autonomous ? not part of a multi-national
  company
• good references regarding principals and
  financial status
• owner-driven ? quick decisions, better
  motivation
• hungry for turnover, rather growth-minded
  than profit- minded, ready to invest
• pharmaceutical background
• business language English or French
• invoicing in Euro

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ACTUAL MANUFACTURERS REQUIREMENTS TO A PARTNER
IN RUSSIA

• 2. SALES FORCE
• most preferably, an exclusive sales force to
  work with each manufacturers products
• double-track sales force for pharmacies/drugstor
  es as well as medical specialists
• dynamic, motivated with strong faith in the
  success potential of the manufacturer

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ACTUAL MANUFACTURERS REQUIREMENTS TO A PARTNER
IN RUSSIA

• 3. EXPERIENCE
• in importing finished products
• in product registration procedures (e.g. with
  health authorities)
• in logistics, i.e. healthy stock-keeping, good
  order forecasting (delivery time ex premises
  minimum 12 weeks after receipt of firm order)
• in marketing and sale of OTC products

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ACTUAL MANUFACTURERS REQUIREMENTS TO A PARTNER
IN RUSSIA

• 4. MARKETING
• ideally, strong and marketing-minded product
  manager for branded products
• advertising and promotion to be financed out of
  the distributors gross margin (AP support by
  the manufacturer on a voluntary basis)

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ACTUAL MANUFACTURERS REQUIREMENTS TO A PARTNER
IN RUSSIA

• 5. EXCLUSIVITY
• A 5-years exclusive distribution agreement is
  usually granted

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DISTINCTIVE CHARACTERISTICS AND PERFORMANCE OF
FULL CYCLE OUTSOURCING COMPANY

• SPECIFIC STRATEGY-ORIENTED ORGANIZATIONAL
  STRUCTURE
• PROJECT (PRODUCT) MANAGEMENT APPROACH
• PARTICIPATIVE CORPORATE CULTURE
• EXCLUSIVE LONG-TERM AGREEMENT
• TERMS OF PAYMENT
• ?) Manufacturer shall pay the percentage of sales
  to Company. The marketing costs are to be borne
  by Manufacturer
• OR
• B) Company shall obtain profit on its own by
  means of selling the product purchased from
  Manufacturer. The marketing costs are to be
  shared between Manufacturer and Company

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PROJECT MANAGEMENT
FUNCTIONAL STRUCTURES
Public Promotion
Medical Promotion
B2B Promotion
PRGR
Sales
Financial Management
Market Research
Registration Certification
IT
PROJECT 1
PROJECT 2
PROJECT 3
REGIONAL REPRESENTATIVE OFFICES, etc
REGIONAL STRUCTURES
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FULL CYCLE OUTSOURCING
FOREIGN MARKET
PRODUCT
MARKETING RESEARCH phase I
REGISTRATION
MARKETING RESEARCH phase II
DISTRIBUTION
PROMOTION
RUSSIAN MARKET
SALES
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MARKETING RESEARCH phase I
PRODUCT
REGISTRATION
MARKETING RESEARCH phase II
DISTRIBUTION
PROMOTION
SALES

• PRODUCT POSITIONING IN THE MARKET
• IDENTIFICATION OF COMPETITIVE ENVIRONMENT
• PRODUCT PERSPECTIVES MARKET CAPACITY, SALES
  FORECASTS, MARKETING SCENARIOS, INVESTMENT
  PLANNING, ETC.

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REGISTRATION
PRODUCT
MARKETING RESEARCH phase I
MARKETING RESEARCH phase II
DISTRIBUTION
PROMOTION
SALES

• PRE- AND POST-REGISTRATION CLINICAL STUDIES
• REGISTRATION AND RE-REGISTRATION

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PRODUCT
MARKETING RESEARCH phase II
MARKETING RESEARCH phase I
REGISTRATION
DISTRIBUTION
PROMOTION
SALES

• IDENTIFICATION OF COMMUNICATION STRATEGY
• IDENTIFICATION OF COMMUNICATION MESSAGES TAKING
  INTO CONSIDERATION THE RUSSIAN PHENOMENA
• DEVELOPMENT OF VISUALS AND CREATIVE MATERIALS,
  etc

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PRODUCT
MARKETING RESEARCH phase I
DISTRIBUTION
REGISTRATION
MARKETING RESEARCH phase II
PROMOTION
SALES

• FORMATION OF DISTRIBUTION NETWORK FOR EACH
  PRODUCT

• FORMATION OF EFFECTIVE
• SALES NETWORK
• MAX. DISTRIBUTION INDEX
• PRICE CONTROL

NOTE Direct Sales means Sales to pharmacies,
pharmacy chains and medical institutions omitting
distributors
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PRODUCT
MARKETING RESEARCH phase I
REGISTRATION
PROMOTION
MARKETING RESEARCH phase II
DISTRIBUTION
SALES
PR GR
BRANDING
B2B PROMOTION
MEDICAL PROMOTION
PUBLIC PROMOTION
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FULL SPECTRUM OF SERVICES THAT PROVIDES A
MANUFACTURER WITH FORECAST SALES,MANUFACTURER
AND PRODUCT BRAND FORMATION, RISK
MINIMIZATION, COST OPTIMIZATION.
FULL CYCLE OUTSOURCING IN THE RUSSIAN
PHARMACEUTICAL MARKET
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THANK YOU FOR YOUR ATTENTION!Contact
infoweb-site www.invar.rue-mail
vaintrub_at_invar.ruinfo_at_invar.ru