Own Marketing setup:

Pharma SMEs market their product by themselves by establish a sales set up to identify consumers -domestic and international.  Establish contacts with the identified customers. Finalize technical and commercial terms to manufacture and supply. Direct consumer contact will be on long term and helps the company to build strong relationship and consistent business.  In many cases the profit realization is more than other mode of marketing.

Through Indenting Agents:

Pharma SMEs identify an indenting agent who can guarantee a specified business on mutually agreed terms.  Indenting agent books orders on behalf of the company and material will be dispatched to the consumer directly by SME.  Based on the projections of indenting agent, SME manufactures the product.  In this mode the SMEs without spending on marketing resources, gets assured business.

Through Traders

Pharma SMEs will identify traders who can guarantee a specified business on mutually agreed terms.  Based on projections of traders SME will manufacture and supply to the trader.  The traders stock the material in their warehouse and markets in his jurisdiction. In this mode the SMEs without spending on marketing resources, gets assured business, but the fund realization takes long and margins are low comparative to other two modes.

Third Party manufacturing

In third party manufacturing, the SME manufactures the product as per the specifications of third party and supplies. The SME will charge the third party on mutually agreed terms, normally the conversion charges and small margin.

Propaganda-Cum-Distribution
Pharma SMEs appoints region wise propaganda cum distributing agents.  SME manufactures the product as per the agreed formulation.  It is the responsibility of the propaganda cum distributor to promote the product and generate the sale in his jurisdiction.  In this mode SME gets assured sale and margins are low.

Contract manufacturing

Ethical Marketing

In this mode of marketing the pharma SMEs shall employ their own marketing personnel to promote their products.  Sales personnel visit the Doctors and provide product information.  Sales will be based on Doctor’s prescription.  Product is distributed from the manufacturer to the stockiest and finally to the retailer (Medical shop). In this mode initial investment is high, returns are high and relationships with the direct users are better

Through Traders

Pharma SMEs will identify traders who can guarantee a specified volume of business on mutually agreed terms.  Based on projections of traders, SME manufactures and supply.  In this mode the SMEs without spending on marketing resources gets assured business.  Normally the payment realization will be delayed and margins are low.

Third Party 

In third party manufacturing the SME manufactures the product as per the specifications of third party and supplies to them.  The SME apart from conversion cost and some % extra is paid. Any liability is to the account of the SME.

Propaganda-Cum-Distribution

Pharma SMEs appoints region wise propaganda cum distributing agents.  SME manufactures the product as per the agreed formulation.  It is the responsibility of the propaganda cum distributor to promote the product and generate the sale in his jurisdiction.  In this mode SME gets assured sale and margins are low.

Institutional Sales

Institutional marketing comprises of: 

To participate in State and Central Govt. tenders, the pharma SME should have made the products for a minimum of three years.  Pharma SME entrepreneur with marketing background would prefer to set up their own market activities and enter into ethical marketing. Entrepreneurs with long stand of manufacturing activities would opt for institutional marketing.

For the development of pharma the marketing consultancy service providers are required to advise the pharma SMEs in identifying the product, packing, area(s) where it can be launched. And these service providers will also advise pharma SMEs in products and marketing.

Bulk Drugs SMEs, who wish to export to other countries, has to prepare and submit a technical document – Drug Master File (DMF), depending upon the country. Preparation of DMF involves lot of cost and require technically competent person in preparation and subsequent activities.  Many pharma SMEs are unable to undertake the same due to high cost, in spite of having necessary technical capabilities to manufacture the final drug substance to meet target country’s quality requirement. For that, frequent interaction meets with regulatory bodies can helps SMEs.  Hence there is need for financing.