The business and marketing infrastructure needs to be developed in collaboration. Right from ingredients, product development, clinical trials, registration, distribution to promotion the entire value chain needs to be streamlined very well to have a nutraceuticals business up and running successfully!
In the book, ‘What Money Can’t Buy: The Moral Limits of Markets’, the author, Michael Sandel, takes into account the effects examples such as EU charging companies $10.50 for a right to emit a metric tonne of carbon-di-oxide, have had on the society. The process of marketisation is the tendency the author describes at the very heart of his book. Over the period, there has been a drift from market economy into market societies.
Organising a productive activity can be done using the valuable tool, the market economy, but in a place such as a market society all is up for sale. Here, the worry is that in a market society, more often than not every aspect of life is dominated by market values.
Paradigm shift
One of the important factors, out of seven factors, shifting the paradigm about Indian consumers is that the 15-34 years age group stands at about 435 million and is perhaps the largest demographic grouping in India at present. The group coming in next, with approximately 345 million, is 1-14 years age group. Lastly, the group accounting for about 27% at approximately 325 million of India’s population is 35-59 years. So with the changing demographic pattern, there is no surprise where a large majority of Indian consumers would emerge with new needs and aspirations and the group with these new aspirations is likely to expand by 2020.
The other six factors that are responsible for changing paradigm of Indian consumers are:
1. Increasing time – poverty being experienced by core-consuming community living in urban India leading to outsourcing much of the mundane buying.
2. Sustained double digit inflation impact on consuming prices slipping low growth.
3. Core-consumers are segregating their spending as per needs and aspirations.
4. Exponential connectivity through internet resulting in almost 50% of the population getting connected with the global community ensuring awareness exposure.
5. Emerging complex mix of media resulting in influencing different clusters at a time.
6. Increasing health consciousness to act in the initial stages of needs of correction and aspirations of not falling sick.
Rise of new needs and aspirations
This changing paradigm would give rise to absolutely new needs among the core consumers. These new needs have to be addressed. One of the most prominent needs that comes to notice is of ‘staying healthy and fit.’ So, consumers are more aware of all the aspirations for healthy living. Exercising, good diet and having a nutritional balance, as part of their regular diet, are taking precedence. An increasing number of people today consume dietary supplements, sports drinks, protein shakes and the likes. People want to improve their immunity and take steps to remain healthy longer. Hence, there is an overwhelming response seen in the wellness industry’s growth.
In wellness, the scope of nutraceuticals is enormous. Presently, the nutraceuticals market in India is witnessing a good double digit growth rate and is estimated to reach Rs 195 billion in the fiscal year. The Indian nutraceutical market is most likely to grow five times its current size at the end of ongoing decade.
Scientific advancements
The growth has been further spurring due to scientific development and advancements in the field of health, nutrition and genomics. However, in this market, bringing science to business is an essential link. It has been observed that science with (all financial, technical, scientific) investment if not properly converted into business becomes a liability. Many such companies suffer for want of consumers or buyers although market seems to be ready to consume! Why so?
Science has to initiate and business has to work. Even business can stimulate science! One of the recent breakthroughs in the healthcare technology is ‘cancer cartography’. To improve condition of human life, DNA mapping of thousands of tumours was done to understand them in a better way. Today, researchers have astonishing information on the molecular changes that propel cancer. For this purpose, from 11 traditionally defined types of cancer Dr Beroukhim examined 4,934 specimens. He also found 140 regions of DNA which were either multiplying repeatedly on being deleted completely. It was seen that only 35 regions have presence of genes that suppressed tumours or the ones known as oncogenes whose mutation led to the formation of cancer!
Also, Dr Sander’s research held one more surprise where a clear line could be drawn. Having numerous somatic mutations, cancer did not have many unusual copy numbers and vice versa. An observation was that even in the two main classes Dr Sander had 31 subclasses were seen. Just as cancer biologists have been suspecting, tumours from the same kind of tissue had differing genetic traits. On the other hand those from different tissues were very similar. An example of this would be a kind of lung cancer with similar characteristics as seen in a type of head and neck cancer!
These extraordinary insights from Dr Beroukhim and Dr Sander’s are result of more recent technological advancements. Similar efforts are being made in nutraceuticals industry where substantial research is being conducted to improve quality of products as well as creating new products. Now a few specific medical problems are being treated by nutrition based products or ingredients. FRUITFLOW was an excellent example of this wherein extracts from tomatoes could be added to yogurts, beverages and other products. The ingredient ensures platelet aggregation so that they remain smooth and also avoid aggregation in blood vessels.
Networking health economy
It is evident that scientific advancements, usage of technology and needs of patients have created a networking economy. A networking economy can be defined as an emerging economic order within the information society. The thought of network economy has its root in the idea that products/services are created and value is added to it through promotion and distribution. In this way, a business model is put in place which ensures ownership rights for values ingrained in the product/service by using the promotional means available, be it social media, distribution channels etc.
In a similar manner a ‘networking health economy’ is on the rise. Increasing number of companies, global and domestic, want to encash on this wave of health consciousness among Indian masses. The health economy is driven due to the rising need for health-related and nutraceutical products. It is a result of interdependency between dietary habits, health and spending power of the people. But this nutrition economy is not yet completely formed.
Science to business
As the value chain with substantial output of each chain in an econometrics way, you start realizing that you would do some business in reality. The idea is to create a sustainable business out of this upcoming economy, there is a need to have a fully functional business value chain. Currently, the value chain model is present but in a broken state.
The business and marketing infrastructure needs to be developed in collaboration. It may start with B2B and end up with branding! Also to put the products in the market collaboration needs everything from collaborations to markets.
So, right from ingredients, product development, clinical trials, registration, distribution to promotion through Over-The-Counter (OTC) or prescription mode, the entire value chain needs to be streamlined very well to have a nutraceuticals business up and running successfully!
References:
1. Business Standard 9th Oct’13 – A sixer for the Indian consumer – Arvind Singhal
2. The Economist 28th Sept’13 – Cancer cartography – Genetic Oncology
3. RSA Journal Summer 2013 – Taking Society to Market – Michael Sandel
4. http://downtoearth.danone.com/2013/05/10/what-is-nutrition-economics/
5. www.wikipedia.com
About the author:
Dr R B Smarta, Founder and Managing Director of Interlink Marketing Consultancy, has more than 40 years of experience in the industry including over 28 years in management and business consulting. Being a thought leader, he has helped number of organizations set up and grow through strategy consulting, sales and marketing effectiveness, organisational development interventions, successful mergers, acquisitions and innovative video based training packages for Indian pharmaceutical industry.