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CURRENT PRACTICES FOR THE SALE AND DISTRIBUTION OF VETERINARY DRUGS IN AFRICA TO FARMERS CURRENT PRACTICES FOR THE SALE AND DISTRIBUTION OF VETERINARY DRUGS IN AFRICA TO FARMERS Chris van Dijk

Introduction n n The livestock sector is of fundamental importance to present and future Introduction n n The livestock sector is of fundamental importance to present and future food security in Africa Losses due to preventable livestock diseases amount to about one quarter of the total annual productive value of livestock in Africa

Introduction n n Commercial livestock sectors – Highly developed veterinary systems – Supported by Introduction n n Commercial livestock sectors – Highly developed veterinary systems – Supported by numerous Animal Health companies – Infrastructure for distribution of veterinary products and services Nomadic or pastoral farmers and Communal farmers – No or very low key distribution and supply of veterinary products and services

Objective n Overview – Sale – Distribution n Constraints n Critical requirements Objective n Overview – Sale – Distribution n Constraints n Critical requirements

THE MARKETING PERSPECTIVE Marketing consists of management tasks and decisions directed at successfully meeting THE MARKETING PERSPECTIVE Marketing consists of management tasks and decisions directed at successfully meeting opportunities and threats in a dynamic environment by effectively developing and transferring a needsatisfying market offering to consumers, in such a way that the objectives of the enterprise, the consumer and society will be achieved.

THE MARKETING PERSPECTIVE n n Product (Solution) n – Product/packaging – Quality – Features THE MARKETING PERSPECTIVE n n Product (Solution) n – Product/packaging – Quality – Features n – Brand name – Services Price (Cost) – Pricing Place (Convenience) – Distribution channels – Transport Promotion (Communication) – Advertising – Sales force – Training

PRODUCT (CUSTOMER SOLUTION) PRODUCT (CUSTOMER SOLUTION)

Product and packaging variety n Commercial farmers – Antimicrobials including mastitis remedies – Ectoparasiticides Product and packaging variety n Commercial farmers – Antimicrobials including mastitis remedies – Ectoparasiticides – Endectocides – Anti-inflammatory (steroid and nonsteroid) – Reproductive hormones – Biologicals

Product and packaging variety n Nomadic/Pastoral or Communal – Antimicrobials including mastitis remedies – Product and packaging variety n Nomadic/Pastoral or Communal – Antimicrobials including mastitis remedies – Ectoparasiticides – Endectocides – Anti-inflammatory (steroid and nonsteroid) – Reproductive hormones – Biologicals

Quality n n Innovator products – Patent protection expired (generics) – Intellectual property – Quality n n Innovator products – Patent protection expired (generics) – Intellectual property – poor enforcement – Disincentive – new/existing products not marketed Generic products – High quality generic drugs – Low quality generic products n Resistance n Residues n Chronic disease n Death

Features n n In countries with commercial herds most of the needs and wants Features n n In countries with commercial herds most of the needs and wants have been addressed Compared to this we have only a small number of product groups in the countries with communal or pastoral farmers – Subclinical/erosive diseases such as BVD need to be addressed – Preventing and treating for external and internal parasites only will not improve productivity

Brand name n n Certain brand names are well established in Africa Farmers tend Brand name n n Certain brand names are well established in Africa Farmers tend to be relatively brand loyal but price does play a role in the decision to buy

Services n Southern Africa – State extension services – Co-operatives – Veterinarians – Animal Services n Southern Africa – State extension services – Co-operatives – Veterinarians – Animal health companies

Services n Other parts of Africa – Veterinarians and extension officers as distributors – Services n Other parts of Africa – Veterinarians and extension officers as distributors – Commercial business not focusing on their strength: knowledge transfer

PRICE (CUSTOMER COST) PRICE (CUSTOMER COST)

Pricing n Southern Africa – Pricing from standardised price lists, with bulk discounts and Pricing n Southern Africa – Pricing from standardised price lists, with bulk discounts and sliding scales on products n Rest of Africa – Agents importing products into a country – Supply chain n Main distributor Distributor Outlet – There is no or little regulation on the mark up or margins in this supply chain – Smaller pastoral type of farmer will be especially affected by this pricing structure as large scale commercial farmers usually buy direct from the main distributor

PLACE (CUSTOMER CONVENIENCE) PLACE (CUSTOMER CONVENIENCE)

DISTRIBUTION CHANNELS Southern Africa Co-op’s OTC 60% Wholesalers OTC/POM 25% Vets POM /OTC 15% DISTRIBUTION CHANNELS Southern Africa Co-op’s OTC 60% Wholesalers OTC/POM 25% Vets POM /OTC 15%

DISTRIBUTION CHANNELS Rest of Africa Distributors Pharmacies Agrovets Private Vets Van or Truck Based DISTRIBUTION CHANNELS Rest of Africa Distributors Pharmacies Agrovets Private Vets Van or Truck Based Sales • Insecurities • Political • Weather • Large Geographical areas Large • Poor Transport Scale farmers • Lack of outlets • Cold Chain Van/Truck Sales only legal for Ecto- and • Poor cash flow Endoparasiticides. Cold chain as well as advice questionable

PROMOTION (CUSTOMER COMMUNICATION) PROMOTION (CUSTOMER COMMUNICATION)

Advertising n Southern Africa – Extensive advertising and sales promotions n Magazines to Vets Advertising n Southern Africa – Extensive advertising and sales promotions n Magazines to Vets and Farmers n Television and radio n Rest of Africa – Advertising to clients by distributors – Advertising over regional radio in the language or dialect of the region

Sales force n n Commercial farmers – Major animal health companies have sales forces Sales force n n Commercial farmers – Major animal health companies have sales forces either operating on a salary basis or as commission agents n Salaried representatives - value added service - involved in the day to day management decisions on the farms n Commission agents - some instances solely driven by sales – Sales people are trained to communicate the cost-benefit value of products to the end user Nomadic/Pastoral or Communal farmers – Many situations a case of "sell and go" with minimal or no input from the sellers side as well as no or minimal after sales support if for example adverse drug reactions or lack of efficacy is experienced

Training n n SAAHA – Mission: To promote ethical marketing practices, client and environmental Training n n SAAHA – Mission: To promote ethical marketing practices, client and environmental care of high standing quality at all times, supported by knowledgeable, experienced sales personnel who have completed accredited courses 2 compulsory modules – Industry – Anatomy/Physiology 3 modules of choice – Ectoparasites – Endoparasites – Biologicals – Mastitis – Antimicrobials – Nutrition and growth stimulants Ensures an uniform knowledge base across the industry

Training n n n In-house company training Product related training Vendor vs. consultant Assisting Training n n n In-house company training Product related training Vendor vs. consultant Assisting the end user to make the correct decision on where, when and how to use the correct product for a specific animal health related problem Veterinarians are generally well trained and are well versed in diseases and problems in their regions or countries, but as with veterinarians almost world-wide they are not well trained in business skills This needs to be addressed as it is in almost all cases being identified as the reason for veterinarians not being successful in the commercial world

Conclusion n n The availability of the correct product, in the correct packaging at Conclusion n n The availability of the correct product, in the correct packaging at the correct time and place is usually good to excellent for commercial farmers in Africa In rural Africa however, the availability, quality and distribution to communal farmers and pastoralists is far from the ideal and needs attention

Conclusion n Extension services on the continent of Africa have declined over the past Conclusion n Extension services on the continent of Africa have declined over the past decade or two and needs to be addressed Veterinarians can play an important role in this, but they will require extra training in business skills and acumen Farmers are prepared to pay market prices for reliable drugs, treatments as well as transfer of information to support the health of their animals and herds

Conclusion n n Industry representatives will play an ever increasing role in bringing quality Conclusion n n Industry representatives will play an ever increasing role in bringing quality products and knowledge to the end user Imperative will also be the training of private and government officials as well as so called paravets and community animal health workers to establish a distribution network that not only distributes veterinary pharmaceuticals, but also helps to ensure the dissemination of knowledge to the end user

Educated, enthusiastic sellers, who understand their customers are the key to the successful distribution Educated, enthusiastic sellers, who understand their customers are the key to the successful distribution of veterinary pharmaceuticals in Africa