SMECTA Integrated marketing and communication analysis and recommendations to rejuvenate the brand to be back the leader

TRệễỉNG ẹAẽI HOẽC Mễ TP. HCM
HO CHI MINH CITY OPEN UNIVERSITY
UNIVERSITE LIBRE DE BRUXELLES
SOLVAY BRUSSELS SCHOOL
ECONOMICS & MANAGEMENT
MMA6


Author: TRAN TRUNG HAU
NGUYEN LE THAI HOA





SMECTA
đ
Integrated Marketing & Communication
Analysis and Recommendations
to rejuvenate the brand to be back the leader.



MASTER PROJECT
MASTER IN MARKETING & ADVERTISING

Tutors Name: SERGE BYWALSKI




Ho Chi Minh City

(2013)
2
COMMITMENTS

We, Nguyen Le Thai Hoa and Tran Trung Hau commit that we have
done this project by ourselves based on the information collected either from
The public’s or IPSEN PHARMA VIETNAM’s sources.

This paper is designed only for the academic purpose of the completion
of our Master in Marketing and Advertising. It is not expected for any other
uses.

3
ACKNOWLEDGEMENTS

We would like to express our deep gratitude to Mr. Serge Bywalski for
his first guideline of the structure of this project.

Prof. Alain and Prof. Biltiau deserve a special note of thanks for their
comments, advice and approval on this paper.

Our thanks also go out to all doctors, pharmacists and patients who had

good cooperation with us in “Focus Group” discussion as well as In-depth
interviews.

We are indebted to Mr. Huynh Dinh De and his staffs in IPSEN
PHARMA VIETNAM for their continued encouragement and useful
documents.

Finally, we must express our deep appreciation to all of my colleagues,
friends, and our family, who have, as always, given us their support
throughout.



4
TABLE OF CONTENTS

COMMITMENTS 2
ACKNOWLEDGEMENTS 3
LIST OF ABBREVIATIONS 6
GLOSSARY 8
INTRODUCTION 9
CHAPTER I:
VIET NAM PHARMACEUTICAL MARKET OVERVIEW &
CURRENT MARKETING & COMMUNICATION
ACTIVITIES OF
SMECTA
®

1 - Overview of Vietnam Pharmaceutical market: 10
2 - Overview of Vietnam Pharmaceutical brands and branding: 11

3 - Ipsen Global History & Milestones 13
4 - Ipsen Pharma in Vietnam: 14
5 - SMECTA
®
: 15
6 - Target customer & segmentation 18
7- Marketing activities in last 03 years: 18
8-Project Objectives: 19
CHAPTER II:
ASSESSMENT/CRITICAL ANALYSIS OF SMECTA
®
‟S
MARKETING AND COMMUNICATION CAMPAIGN IN THE LAST
THREE YEARS (2009 -2012)
A.General Analysis 20
1 -Macro-Environmental Analysis (SLEPT): 20
2- Vietnam pharmaceutical SWOT analysis: 21
3- Market Analysis: 23
4 - Competitor Analysis: 27
5– Internal Sales Analysis: 29

5
B.Evaluation of SMECTA
®
Marketing & Communication Activities 33
1.Doctors and hospitals: 33
2.Pharmacies: 34
3.Public communication: 36
CHAPTER III: RECOMMENDATIONS &IMPLEMENTATION PLAN
FOR 2013-2015

1 - Recommendations in Hospital/doctors: 40
2 - Recommendations in Pharmacy: 42
3 - Recommendations in Public Communication/End-users/patients: 43
4 - Marketing & Communication plan in 2013: 44
CHARTER IV:
CONCLUSION 46
REFERENCES 47
APPENDIX 48
APPENDIX A: Profiling Excellent Example: 48
APPENDIX B: The “9” Technique 54
APPENDIX C: Smecta® concept in 2003-2007 55
APPENDIX D: Brands Positioning by target patient 55
APPENDIX E: Questionnaire Sampleof mini research 56





6
LIST OF ABBREVIATIONS

A&P: Advertising and Promotion budget
BMS: Bristol - Myers Squibb Corporation
BOEH. INGEL.: Boehringer Ingelheim
BoNT A: Botulinum Toxin Type A
CEO: Chief Executive Officer
CME: Continuing Medical Education
CP: Cerebral Palsy
DTC: Direct To Consumers
DM: Development Manager

DHG: Hau Giang Pharmaceutical company
ENT: Ear Nose and Throat specialist
EU: European Union
FDA: US Food and Drug Administration
FMCGs: Fast Moving Consumer Goods
GMP: Good Manufacturing Practices certification
GSK: GlaxoSmithKline Corporation
GP: General Practitioners
GI: Gastroenterologist
KOLs: Key Opinion Leaders
HCMC: Ho Chi Minh City
IPG: Pharma Group Index
IMS: International Medical Statistics
IBS: Irritable Bowel Syndrome.
MM: Marketing Manager
MOH: Ministry of Health
MD: Mekong Delta
7
MR: Medical Representative
OTC: Over the Counter
PM: Product Manager
Rep. Office: Representative Office of Pharmaceutical
R&D: Research and Development
RTM: Round table Meeting
SOP: Standard of Procedure
SWOT: Strengths Weaknesses Opportunities and Threats
SFE: Sales Force Effectiveness
TOM: Top of mind
ZP: Zuellig Pharma (a distributor for SMECTA® products)
UNDP: United Nation of Developing Program

WTO: World Trade Organization

8
GLOSSARY

Diarrhea: Diarrhea is defined by the World Health Organization as having three or
more loose or liquid stools per day, or as having more stools than is normal for that
person.
Smecta
®
: Diosmectite is a natural silicate of aluminum and magnesium used as an
intestinal adsorbent in the treatment of diarrhea and of painful symptoms associated
with esophageal-gastric and intestinal diseases. It is insoluble in water.
OTC: Over the counter products, or non-prescription products, that the drug can be
delivered, sold or used without prescription.
Ethical: Prescription product can affect the life, health when use without following
up prescription from doctors. Therefore, when using or delivering it, you must have
prescription from doctors.
Brand name product: A drug that has a trade name and is protected by a patent
(can be produced and sold only by the company holding the patent).
Generic product: Generic drugs are copies of brand-name drugs (when the patent
protection for a brand-name drug expires) that have exactly the same dosage,
intended use, effects, side effects, route of administration, risks, safety, and strength
as the original drug. In other words, their pharmacological effects are exactly the
same as those of their brand-name counterparts.
Active ingredient: An active ingredient (AI) is the substance in a pharmaceutical
drug or a pesticide that is biologically active. The similar terms active
pharmaceutical ingredient (API) and bulk active are also used in medicine, and the
term active substance may be used for pesticide formulations. Some medications
and pesticide products may contain more than one active ingredient. The traditional

word for the API is pharmacon or pharmakon, adapted from pharmacos which
originally denoted a magical substance or drug.

9
INTRODUCTION


SMECTA
®
is a very famous Brand name drug for diarrhea treatment,
researched and developed and produced by Ipsen Pharma – A French
Pharmaceutical company.

SMECTA
®
has been launched to Vietnam market since 1989. With very
effective integrated marketing and communication campaigns at the time being,
SMECTA
®
gradually conquered Vietnamese doctors’, pharmacists’ and patients’
faith and became a market leader for a long period (2003-2009). SMECTA
®
was
considered as the first priority for diarrhea treatment for Vietnamese
consumers/patients. It becomes OTC product and a very familiar word to talk about
diarrhea.

However, since 2009 till now, SMECTA
®
could not keep its leading position

in the market due to several reasons such as strongly competition among
pharmaceutical companies, Vietnam new laws, changing trend of prescription
within doctors, habits of self-treatment… and so on. But most importantly,
SMECTA
®
itself slowly react to changing market, does not rejuvenate its image and
lacks of market follow-ups. As a result, SMECTA
®
created opportunities for other
competitors to seize the market shares.

In this project, we will make our efforts to analyze critically SMECTA
®

marketing and communication activities and give out recommendations in order to
help SMECTA
®
to get back its leading position in Vietnam pharmaceutical market
of diarrhea treatment.

Some desk researches have been done and a lot of secondary information has
been processed for market, competitor or internal sales analysis. An in-depth
interview has also been undertaken to find out some expectations from SMECTA
®
’s
target audiences, ie. Key drivers for doctors’ prescription and pharmacists’
recommendation; brand awareness; self-treatment of diarrhea patients and so on.
Through some findings, the full evaluation of current marketing and communication
activities has been made to show which ones are still effective and which ones are
out of dated.

Some suggestions, in this paper, are quite appropriate with modern marketing
strategy. They are grouped in accordance with three target groups:
Doctors/Hospitals – Pharmacies – Patients/Public. They are considered as effective,
popular and up-dated tools in new tendency which SMECTA
®
is able to implement
to increase sales volume, brand awareness and especially to get back the leading
position in the market.






10
CHAPTER I:

VIET NAM PHARMACEUTICAL MARKET OVERVIEW &
CURRENT MARKETING & COMMUNICATION
ACTIVITIES OF SMECTA
®


1 - Overview of Vietnam Pharmaceutical market:
Market size:
In the year 2012, a market research company - IMS has carried out a market survey on
total of 8,086 retail pharmacies and 180 hospitals in urban regions in Vietnam, excluding
wholesales pharmacies. Among those cities, Ho Chi Minh is the biggest share and has
tremendous market contribution 32.9% with market growth 8% (figure 1 - 1). The total

pharmaceutical market size in year 2012 is around US $1,936 million, which 10% growth.
(Source: IMS report, MAT Q02 2012).
Figure 1 -1: Vietnam Pharmaceutical market size:











(Source: IMS report, MAT Q02 2009. G: Growth (%). EI: Evaluation index)

Market growth:
In recent years, Vietnam's pharmaceutical market increased constantly. On this picture,
pharmaceutical market was growth impressive 28.4% in year 2007 which achieved the
highest growth rate during the period of year 2003 and year 2009 (Figure 1 - 2). Based on
this IMS report, the VN pharmaceutical market will reach $2B by 2011, with an annual
growth rate of 17%-18% in next 5 years

11
Figure 1 - 2: Vietnam Pharmaceutical market and growth rate

(Source: IMS report, Q2-2012)

2 - Overview of Vietnam Pharmaceutical brands and branding:
Leading manufacturers:
Continuing on analysis of the IMS report in 2012, with the ranking of TOP-20
pharmaceutical manufacturers in Vietnam market, Sanofi - Aventis is the leader. The
revenue of this corporation is around US$ 68.5 million. Second leader is Glaxo SmithKline
with its revenue of US$ 59.9 million. Among these TOP-30 manufacturers, Ipsen Pharma
is ranked at position 28 with its revenue of US $ 12.9 million (figure 1 - 3).
However, the TOP-20 shows that the leading pharmaceutical manufacturers in
Vietnamese market are almost foreign companies and corporations. They are called
pharmaceutical multi-national corporations and predominant manufactures are from France
or European countries, of course, it is explained why French medicines are important to
Vietnam market. There are some Vietnam local firms, Hau Giang Pharma (DHG Pharma)
with 3
rd
position (biggest in Vietnam) and Traphaco in the 13
th
position.

1.73
1.81
1.80
1.87
1.93
2.03
1.93
2.12
2.20
2.12
2.39
2.19
2.20
2.21
2.20
2.31
2.36
2.35
2.43
2.56
0
1
2
3
4
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
10
40

70
100
130
160
190
220
250
280
310
340
370
400
430
460
490
520
550
Weighted Avg. Price
Value Million US$
Pack Million
US$ Per PACK
Million
US$ or PACK
12
Figure 1 - 3: Leading manufacturer in Vietnam pharmaceutical market in year 2012

(Source: IMS Meridian report, MAT Q02 2012, million US$)
Besides the analysis of the leading manufacturers in the market, the IMS has
investigated on the leading ethical or OTC brands. This is important view because the
company will see not only the leading brands, the therapeutic class but also the trend of
therapeutic treatment because ethical brands play a key role in market and its significant
contribution for the revenue of the company.
Continuing more deeply on OTC market only, follow the IMS report in 2012, we can
see Ipsen Pharma is ranked in better position (position no.6) with its revenue of US $ 11.5
million (figure 1 - 4).


13
Figure 1 - 4: Leading manufacturer in Vietnam pharmaceutical OTC market in year 2012

(Source: IMS Meridian report, year MAT Q22012, million US$)

3 - Ipsen Global History & Milestones
Ipsen is a global specialty-driven pharmaceutical company with total sales
exceeding €1.1 billion in 2011. Ipsen’s ambition is to become a leader in specialty
healthcare solutions for targeted debilitating diseases. Its development strategy is
supported by four franchises: neurology / Dysport®, endocrinology / Somatuline®, uro-
oncology / Decapeptyl® and hemophilia. Moreover, the Group has an active policy of
partnerships. R&D is focused on innovative and differentiated technological patient driven
platforms, peptides and toxins. In 2011, R&D expenditure totaled more than €250 million,
above 21% of Group sales. The Group has total worldwide staff of close to 4,500
employees.

14
Figure 1 – 5: Sales by geographical area & R-D investment

4 - Ipsen Pharma in Vietnam:

Ipsen Pharma Representative Office in Vietnam was established since 1996. At the
beginning, Ipsen marketed and promoted around ten core products with strategic products
are Smecta
®
and Tanakan
®
. The main mission of the Representative office is commercial
operation in both sales and marketing activities. One majority objective is profitable. The
strategy for long run business is developing the biotech products (such as Dysport
®
and
Diphereline
®
) while consolidating the primary care products like Smecta
®
and Tanakan
®
.
Now, Ipsen Pharma Representative Office in Vietnam has covered in 54 cities and
provinces with total 78 employees. There are 16 brands including Primary care and
Biotech products. The turnover of the Ipsen Pharma Vietnam in 2012 was about US $12
millions.
Product porforlio:

- Primary care product: Tanakan
®
, Smecta
®
, Gastropulgite
®
, Ginkor Fort
®
, Forlax
®
,
Fortrans
®
, Actapulgite
®
, Intetrix
®
,Spasfon
®
.
- Biotech product: Diphereline
®
, Dysport
®

R&D INVESTMENT (IN M€)

SALES BY GEOGRAPHICAL AREA
in € million - variation at constant currency (%)


15
Figure 1 – 6: Ipsen Leading products info.

5 - SMECTA
®
:
SMECTA
®
is a powder composed of very small particles ranging from 1 to 3 µm.
Each particle has a layered leaf-like structure, with one layer of alumina between two
layers of silica. The small size of the particles, their positioning, and stacked leaf-like
structure provide SMECTA
®
with special physicochemical characteristics, a high
adsorption capacity, and an exceptional covering power.
According to pharmacological study, the particles of SMECTA
®
integrate within
the mucus, to which they are chemically related, and persist over 6 hours after ingestion.
Through its interactions with mucus molecules, SMECTA
®
increases the cohesion, viscos-

elasticity and lifetime of the mucus. Therefore, SMECTA
®
reinforces the mucous barrier
and protects the apical pole of enterocytes and intercellular spaces from aggressors present
in the intestinal lumen. Another pharmacological property is the neutralization of
aggressive microorganisms. SMECTA
®
protects the mucosa from aggressions by
pathogens, whether toxicogenic bacteria, invasive bacteria, or viruses. With these
characteristics, SMECTA
®
is suitable for both children and adult.
Composition:
The active substance is: Diosmectite 3 g, in each sachet. The other ingredients are: Glucose
monohydrate, saccharin sodium, orange-vanilla flavor (containing sucrose).

Pharmaceutical form:
Powder for oral suspension. Box of 10 sachets.
16
Indications:
This drug is indicated in the treatment of diarrhea and of painful symptoms associated with
esophageal-gastric and intestinal diseases.

Dosage and directions for use:
Children:
•
Under 1 year:
1 sachet per day
•
Between 1 and

2 years: 1 to 2 sachets per day
•
Over 2 years:
2 to 3 sachets per day
Contents of one sachet should be suspended in half a glass of water.
With the baby: can add to the baby’s bottle containing 50 mL of water to be given during
the day or can be mixed with a semi liquid food: pap, compote, purée, baby food.
Adult:
An average of 3 sachets per day, mixed with half a glass of water. In case of acute, the
daily dosage can be doubled at the beginning of treatment.
Figure 1 – 7:Smecta
®
sales trend


y = 14.038x + 7092.2
0
5,000
10,000
15,000
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
2009 2010 2011 2012
SMEOR _ Value Mil Vnd
SMEOR_Value_Mil Vnd
SMEOR_Value_Mil Vnd FC
Linear (SMEOR_Value_Mil Vnd)
y = -44.932x + 76950
0
20,000
40,000

60,000
80,000
100,000
120,000
140,000
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
2009 2010 2011 2012
SMEOR _ Volume Box
SMEOR_Quantity Actual SMEOR_Quantity FC Linear (SMEOR_Quantity Actual)
-1 %
-3 %
+1 %
+6 %
+3 %
+1 %
YTD Oct.:
17
Figure 1 – 8: Leading products in A07 Group
Figure 1 – 9: Market share of products in A07 group by channel
8% 4%
22% 53%
-16% -14%
-5% -7%
14% 46%
-16% -25%
3% 14%
-11% 60%
-7% 8%
3% 20%
-25% -95%

ENTEROGERMINA - SANOFI
SMECTA - IPSEN
ANTIBIO - MSD
TRANG VI KHANG - HAI KHAU HAI NAM
BIO-ACIMIN - MELIPHAR CO.
PROBIO - DPF (IMEXPHARM)
LACTOMIN PLUS - REXGENE BIOTECH
LACTEOL - AXCAN PHARMA
HIDRASEC - ABBOTT PHAR
BIOBABY - IL DONG
62.6%
77.7%
67.2%
80.7%
62.4%
92.3%
24.4%
87.2%
43.2%
42.1%
99.2%
37.4%
22.3%
32.8%
19.3%
37.6%
7.7%
75.6%
12.8%
56.8%

57.9%
0.8%
Pharmacy
Hospital
79.6%
77.8%
67.4%
80.9%
64.9%
92.4%
26.9%
85.8%
37.6%
42.2%
99.2%
32.6%
35.1%
7.6%
73.1%
14.2%
62.4%
57.8%
0.8%
19.1%
22.2%
20.4%
1
2
3
4

5
6
7
8
9
10
4% 11%
23% 51%
-15% -12%
-4% -12%
11% 41%
-5% -11%
-2% 4%
-12% 56%
8% 9%
-1% 15%
-25% -95%
% Share by UNIT
Rank
MAT
Pharmacy vs Hospital
Product Form
% Share by US$
% Growth by US$
Pharmacy Hospital
% Growth by UNIT
Pharmacy Hospital
Q2 12
Panel - IMS
MARKET SHARE BY CHANNEL

18
6 - Target customer & segmentation
 Doctors & Hospitals
 Pharmacies
 Public or End-users

7- Marketing activities in last 03 years:

TARGET
ACTIVITIES
NO. OF
DRS.
OBJECTIVE
COST
DESCRIPTION
Doctor
Scientific symposia
(Speaker: Dr. Helen Mathiex)
300 Drs
Reinforce Smecta®
leading image, increase
loyalty to Smecta®
27,000
Drs prescription is strong impact
to patients, increase impact
endorsement of deputy GE KoL
by sharing experiences & using
Smecta®
Drs scientific meetings & RTM
national wide

800 Drs
(A & B)
Increase Rx & loyalty
to Smecta®
54,000
National Gastroenterology
Congress at BacNinh (sponsor
for congress & Drs to join)
75 Drs
Increase relationship
&KoLs support
20,000
Enhancing relationship & loyalty
of Drs (GE& GPs) and GE
Association
Hospital presentations
20 hos.
Increase Rx & loyalty
to Smecta®
7,000
Approached target doctors at
their working to increase the
cover age
Pharmacy
Visibility (poster) at pharmacies
Top 200
pharmacies
Public awareness.
Reinforce Smecta®
leading image

16,000
Need stronger message via new
image & key messages
Pharmacies meetings & RTM
700 sellers
Reinforce Smecta®
leading image
78,000
Deliver key messages of
Smecta® with differentiate
competitors & increase selling
Smecta®
Mystery shopper
800
pharmacies
Encourage pharmacist’s
recommended Smecta®
14,000
Need follow up closely with
training to get the expected
result.
Public
Media Adv. & advertorial
Public
Increase Smecta®
image & lead patients
to buy Smecta® as auto
medication
20,000
Need stronger key messages

More investment
Radio diarrhea consulting by GE
Drs.
Public
Increase Smecta®
image & lead patients
to buy Smecta® as auto
medication
14,000
Total
250,000




19
8-Project Objectives:
While the pharmaceutical market size and growth rate are increasing year by year the sales
figures of SMECTA
®
are stand still and trend decreasing. As a result, SMECTA
®
is
encountering losing its leading position in recent years. With SMECTA
®
’s current
obstacles, the aim of this project is to analyze in details all relevant sides of the market
situation and especially its marketing and communication activities in order to find out
reasons and then suggest some recommendations to rejuvenate SMECTA
®

brand and get
back the leading position. In other words, the objective of this paper is to help SMECTA
®

to optimize marketing investment, to re-allocate resources for three main target audiences
appropriately and to adjust communication strategy accordingly.




20
CHAPTER II:
ASSESSMENT/CRITICAL ANALYSIS OF SMECTA
®
‟S MARKETING
AND COMMUNICATION CAMPAIGN IN THE LAST THREE YEARS
(2009 -2012)
A. General Analysis
1 -Macro-Environmental Analysis (SLEPT):
Socio-Cultural factor: The rapid population growth with better education makes higher
demand for the branded medicine. The more patients are able to do self-treatment for
popular diseases such as headache, running nose or diarrhea. As a result, Pharmacy will be
a very important channel for medicine distribution. Furthermore, with better living
standard, everybody is aware of hygiene in eating, drinking and living environment for
disease prevention. Trendy products/medicines are more favorable.
Legal factor: Hospital tender gets difficulties due to protectionism policies for Vietnam
local products. (See further at Inter-Ministerial Circular, Guidelines on Bidding for
Purchase of Drugs in Health Facilities).
Economic Factor: The Gross Domestic Product (GDP) growth is declining in the last year
(2010: 6.78%, 2011: 5.98% and estimated in 2012: 5.43%), the inflation rate was so high

last year, but this figure just slightly increase this year due to drastic cut in spending in the
economic recession period.
Political Factor: The government encourages the Vietnamese people use Vietnamese
medicines to boost national pharmaceutical sector. Several decrees as well as circulars
have been released to medical centers, hospitals especially Social Health Insurance
Companies to make priority to use domestic medicines. Also, doctors are encouraged to
write prescription with “Made in Vietnam” medicines. SMECTA® is, more or less,
effected by all these policies.

Technological factor: There are several ways in diarrhea treatment including: Anti-
infective (antiseptic); intestinal adsorbent, microorganism (Probiotic); Motility Inhibitor.
SMECTA® belongs to Intestinal adsorbent Group. SMECTA® helps to cover the
Consumers of mucosa, and the mucus protein binding in terms of quality and
quantity, the need to enhance mucus barrier; the injury may promote gastrointestinal
mucosal epithelial regeneration; may gastrointestinal absorption of gases and
various attacks factor; balance normal flora; to promote the absorption of intestinal
cell function; local hemostatic effect.
Currently, Probiotics is still trendy growing products thanks to their larger spectrum of
indications like dyspepsia and the well-known combination with antibiotics and good
positioning to treat in Children Diarrhea
21
2- Vietnam pharmaceutical SWOT analysis:
Regarding to define the right strategy and activities support for Smecta®
marketing & communication, the following analysis will summary and add-in more
factors in the strengths, weaknesses, opportunities and threats of Vietnam pharmaceutical
environment.
The strengths:
• As mentioned in previous parts, the strengths of Vietnam market for
pharmaceuticals are growing fast in the background of economic recession.
Nowadays, in the trend of economic integration, Vietnam pharmaceutical industry

will continue growth in terms of more investment, more multinational enterprises
come and plenty of medicines for better choice in treatment the diseases.
• The fact that, the market predomination is foreign imported medicines. This
situation will remain for a long time whenever local manufacturers are strong
enough in terms of modernization and reform. From now to this, foreign medicines
will play a leading role in this market.
• In Vietnam, Ho Chi Minh City is still leading market with the highest contribution
for GDP. In the pharmaceutical point of view, Ho Chi Minh City market is also the
important one. Focus on this market and then stretching the activities to other cities
is the current strategies for many pharmaceutical Rep. Offices and private
enterprises.
The weaknesses:
• The health care expenditure increase continuously at least 10% each year but this
level is still low so it will restrict the drug consumption, especially for expensive
medicine.
• Because local medicine brands are still small and lacking of powerful for
competitiveness, the government and MOH currently have many policies
motivation for its growth. In the National Essential Drug list and hospital drug list,
Vietnam MOH would like to increase the percentage of presence and usage of local
brands. With these policies, the competitive of the market in listing in hospital is
higher and higher. It's not small impact on the foreign brands which also need to be
present in the same list. Besides that, government and MOH banned to stretch the
import license for those products that local manufacturers can produce. This makes
more difficulty for current ethical brands in re-submit documents for getting the
new visa. Nevertheless, the advertising licenses and advertising fees for all local
products are always lower than those apply for foreign brands.
Opportunities:
• The first opportunity for all pharmaceutical is based on the good economic growth
rate. This impacted much on the growth of pharmaceutical industry, of the health-
care expenditure level. As the result, the Vietnam pharmaceutical market growth

continuously at least 12% each year as forecasted and drug expenditures will
increase minimum 10% per year. This environment is not only a good chance for
22
both local and foreign manufacturers but also for the growth of any ethical and
OTC brands.
• Vietnam with high population 86 million in 2009 is the huge potential market for
pharmaceutical growth. As estimated, the market will increase at least 17% every
year from now to 2013 one again to confirm the potential of this market. With this
good opportunity; the company with an adaptive strategy will be able to catch the
chance for growing up in the near future.
• In Vietnam, market predomination now belongs to foreign players. That's a reason
why the TOP-20 manufactures showed the answer about this situation. In this
market trend, the Rep. Offices with its foreign imported medicines especially
ethical brands will be the essential medicines in the national drug list because of no
substitute ones from local manufacturer.
Threats:
• Price control is the most important task of MOH now when there are many
concerns from public about medicine price in the market. Vietnam government and
MOH have issued regulations to strictly control the price, particularly stressed on
the foreign brands. So, in this situation premium price issue of foreign
pharmaceuticals is also their weakness in competition. To compare with local
products which are in the same therapeutic class, there is a price war within brands.
The local private enterprises have not affordable to apply the business ethics, so
they have flexibility in promotional activities such as sales promotion, sales
discount for prescribers. These factors seem to synergize to increase the usage of
local products by increased their prescriptions that both doctors and company have
benefits together.
• Vietnam on the way of integration world economy, of course it is the chance for
more pharmaceutical multinational come, however, the market is likely to be higher
and higher competition. Besides that, MOH have policies to focus much on the way

to promote the ethical brand in the market. They allow for promoting these brands
to doctors and pharmacists but no accepted to communicate to public. In this case,
how to improve or increase brands awareness among public are the challenges for
branding of ethical brands. From now on, the company must think over to find the
legal way to approach the end users. The more getting involved this target company
focuses the more improvement of brands Awareness Company get.







23
3- Market Analysis:
Anti-Diarrhea Market has the growth of +7% in volume; + 6% in value according to IMS
report - Q2.2012. Enterogermina – Sanofi is leading the market with 9.3% of market share,
SMECTA® is positioned the second of 8.8% of market share and Antibio – MSD is the
third with 6.0% of market share.
Food infection, poor hygiene of living environment is one of the main cause of diarrhea
was noticed by mass media created a favorable environment for anti-infective groups,
especially Berberin which use for Adult diarrhea. (50% Unit share), growth +11% in Unit.
Probiotics are both promoted by pharmaceutical & milk companies. It is trendy product
with some evidence in digestive disorders prevention mainly due to antibiotic (huge
consumption in Vietnam). Good performance of Int’l. Branded as Enterogermina. Sanofi.
Furthermore, the market also has some following characteristics:
 Products which invest in OTC get good growth in volume vs others
 Opportunities of developing Adult market in early onset of diarrhea include
abdominal pain, nausea, light diarrhea due to food problem.
 Market driven by local products & generics with low price in both Unit &

Value.
 Adult diarrhea market have a good growth & market also show dynamism in
Child sector via good performance of probiotics
 Probiotics keeps growth in both unit & value with high market price
 In the 5 key cities which contribute 50% market share, Smecta® is market
leader in HCM, CanTho & Haiphong while Enterogermina lead in Hanoi &
Danang.
 Hochiminh & Hanoi contribute 41% market share.
 There are only 50% pharmacies in Hanoi & Hochiminh buy Smecta® direct via
Zuellig Pharma Vietnam & 50% pharmacies coverage by our Sales Forces in
HCM & Hanoi.

In the diarrhea treatment market, there are five sub-groups with particular
treatment for different symptoms. Each sub-groups with specific characteristics
makes the market more dynamic and competitive.

24
Figure 2 – 1: Unit & value market share of Sub-group in A07-Anti-diarrhea
A07 A: Anti-infective (antiseptic):
* 50% MS in Unit, grow + 10%
* 5% MS in Value, grow +17%
- Berberin (an herbal antiseptic for Adult diarrhea treatment, well-known Vietnamese
traditional product) growth: +11% in Unit & + 23% in Value.
- From TNS Study : Berberin have been reported as the most requested brand after
Smecta® by Adult patients
- More than 100 local Berberin brands with a very cheap price: 50 vnd/tab vs
Smecta® 3500vnd/sachet
- Behind the noticed diarrhea peak, buzz in media around food hygiene and safety +
the strengthen to usage local products might create a favorable environment for
anti-infective groups, especially Berberin

25
A07 B: Intestinal adsorbent
* 13% MS in Unit, decrease -5%
* 16% MS in Value, decrease -9%
Smecta® is leader in this group in with 54% Value share & 19% in Unit.
 Charcoal & Carbomin (50% MS in units)
 Smecta® (-16% in Unit & -10% in Value in IMS Audit), Diosmectite generics (-
24%), Attapulgite (-38%)….except GRAFORT (a diosmectite Ready To Use-
RTU).
 However accurate data of Smecta®, as reported in PGI, on same period show a
slowdown at -3% in units, and +3% in USD value, +6% in VND (thanks to price
increase in Oct 11)

Discrepancies might be explained by a bad performance of
Smecta® in Hanoi in 2012 and moderated in HCMC

A07 F: Microorganism (Probiotic):
* 22% MS in Unit, grow + 7%
* 58% MS in Value, grow +13%
Flat market in volume (+3% Q2.2011)
 Probiotics still trendy growing products :
 Thanks to their larger spectrum of indications like dyspepsia and the well-known
combination with antibiotics
 Good positioning to treat in Children Diarrhea
 High promotion supported by pharma and milk company
 Enterogermina (Sanofi) is a leader market with good growth +27% in Unit &
+34% in Value thanks to a strong promotion in Pharmacies
 Many other local products have good growth like Probio (Imexpharm) surfing on
the market tendency to use Probiotics and in line government policy to push local
products

A07 H: Motility Inhibitor (Loperamide) :
* 7% MS in Unit, grow + 9%
* 3% MS in Value, grow -4%
Motility inhibitor (Loperamide group) focus on adult, perceived as fast action use in first
days of diarrhea, reach 7% MS in unit, +9% growth.  Adult market growth
In this group, Imodium® of Janssen Cilag-market leader decrease (-43%) due to its
production problem in Thailand from Mar.2011 due to flood, they have stopped their MKT
promotion.