PFIZER India PVT Ltd.

MANAGEMENT DEVELOPMENT INSTITUTE, GURGAON

2014
Pfizer
A Report On its Distribution Channel and Sales
Force Structure
[ T Y P E T H E C O M P A N Y A D D R E S S ]
Executive Summary

This report is a part of the project work for the Sales and Distribution Management course under
taken by the students of PGPM Batch 2013-2015 under the guidance of Prof. J N Godinho. This
report provides an insight into the structure of the channels of distribution employed by Pfizer, a
renowned pharmaceutical company in the world.
This report focuses on the channels of distribution employed by Pfizer for its various categories of
products and the marketing flows performed by the various channel partners involved. We also
analyze the effectiveness of these channels and highlight the drawbacks of the system if any and
provide recommendations for the same.

Table of Contents
Executive Summary ................................................................................................................................. 2
Channel Structure ................................................................................................................................... 5
Marketing Flows Performed by the Channel Partners ........................................................................... 8
Pros and Cons of the Channel Structure ............................................................................................... 10
Recommendations ................................................................................................................................ 12
References ............................................................................................................................................ 13



Introduction


Channel Structure
Pfizers distribution channel can be depicted simply using the following diagram:

The pharmaceutical major used to operate depots at an earlier point in time till 1995 but moved on
to the C&F model. Usually in a state there is only one appointed C&F agent. From the C&F agent the
drugs are moved on to the wholesalers or more popularly known as the Stockists. The Stockists are
responsible for providing the retailers with drugs. In this section we would analyze each of the
channel partners in details and describe the marketing flows performed by the channel partners.
Carry & Forwarding Agent (C&F Agent)
The existence of the C&F agent is justified by the division of the central and state sales tax system. In
India the interstate sale of goods attract central sales taxes (CST) but the interstate transfer of goods
does not entail any kind of taxes. For this reason most pharmaceutical companies have a C&F agent
and transfer goods as interstate stock transfer. Pfizer India has one C&F agent in most states with
more than one C&F agent in some of the larger states and some of the smaller north eastern states
might have none.
Manufacturer
/Plant
Carry &
Forwarding
Agent
Wholesaler 1
Retailer
Wholesaler 2
Retailer
Wholesalers
The wholesalers/Stockists usually market the products of 6-8 pharmaceutical companies. Getting the
wholesalers tag for a company as big as Pfizer is considered to be a catch and hence the company
has its own set of terms and conditions before appointing someone as a wholesaler. Usually the
agency interested in taking wholesale dealership has to deposit lump sum money with the company
The number of wholesalers in a city can be much higher in comparison to smaller towns. The
wholesalers in the big cities/metros compete against each other. Large number of wholesalers has
added to the bargaining power of retailers/pharmacists. Stockists do get discounts from the
manufacturers and also get free samples from the manufacturers.
Retailers/Pharmacists
The number of Retailers and Pharmacists also depends on the size of the population of the
city/town. The retailers mostly procure the drugs from the wholesalers. A new phenomenon in India
mostly coming up in metros is the establishment of Drug retail Chain Stores like Apollo Pharmacy.
These retain chains by pass the wholesalers and deal directly with the manufacturer through the
C&F agent.
Also prior to 2009 before the acquiring of Wyeth, Pfizers percentage of OTC (Over the Counter
Drugs, can be sold without prescription) was almost negligible. With the merger of Wyeth and many
other acquisitions Pfizer has a sizeable number of OTC products in its product portfolio. For these
Pfizer has entered into a talk with ITC to distribute its products along with their FMCG products.


Marketing Flows Performed by the Channel Partners



Pros and Cons of the Channel Structure





Recommendations


References