Unlike traditional models, PCD operates on a franchise-based system, creating a direct link between pharmaceutical companies and local distributors.
What sets the PCD pharma business model apart is its ability to combine the strengths of established pharmaceutical companies with the local market knowledge of individual entrepreneurs. This association creates a powerful distribution network that can reach even the most remote markets.
The PCD Pharma business model is beneficial out of other pharmaceutical distributions. Here’s a detailed overview:
- From Pharmaceutical Companies Perspective:
- Reduced marketing and distribution costs
- Faster market penetration
- Focus on core competency of drug manufacturing
- Opportunity to work with multiple PCD partners
- More company’s presence in tier-2 and tier-3 cities
- From PCD Partner’s Perspective:
- Lower initial investment compared to starting a pharma company
- Exclusive rights to sell products in a specific area
- Access to established product lines
- Marketing and promotional support from the manufacturer
- For Consumers:
- Improved availability of medicines in remote areas
- Lower drug prices due to less distribution costs
- Wider variety of products available locally
- Revenue Model:
- PCD partners purchase products at a discounted rate
- Partners sell products at MRP (Maximum Retail Price)
- Profit is the difference between purchase price and selling price
- Geographical Exclusivity:
- Partners are assigned specific territories
- Exclusive rights to sell in these areas reduce direct competition
- Marketing and Branding:
- Manufacturers provide marketing materials
- PCD partners can sometimes co-brand products
- Local marketing efforts are the responsibility of PCD partners
Comparison of PCD Pharma Business Model with Traditional Models:
Aspect | PCD Pharma Model | Traditional Ethical Model | Generic Model |
---|
Distribution | Through franchisees | Company’s field team | Various channels |
Promotion | By franchisees | Company representatives | Minimal |
Brand Association | Strong | Strong | None |
Market Reach | Wide, including rural | Limited to urban centers | Widespread |
Investment for Distributors | Low | High | Varies |