SALES AND MARKETING
Social marketing is the application of commercial marketing techniques for popularizing and selling products and services that offer clear benefits to the people, at prices they can afford. Making high-quality health products and services widely available and highly affordably forms the key element of social marketing. SMC's social marketing model has three major components – demand creation and behavior change through multi pronged communications strategy; access to affordable and quality products and services that offer clear health benefits through the private sector; and financial sustainability through cross subsidy using revenues from higher priced products and services to subsidize for low income segments.
SMC has one of the most established, extensive and efficient distribution networks in Bangladesh. Nationwide coverage is carried out through twelve offices located in major division and district towns of the country. This enables SMC’s sales force of approximately 100 to distribute products to the far-flung outlets promptly and regularly. On an average, about 240,000 outlets are directly served by SMC each year of which roughly 40 percent are pharmacies and the rest are non-pharmacies, including grocery stores and kiosks. Stocks at the sales offices are replenished through regular supplies from SMC central warehouse in Bhaluka via delivery trucks. The sales force covers the territory using delivery vans either hired or owned by SMC.
Its widespread sales and distribution network allows SMC to make its products widely available at retail outlets across the country. A recent study on product availability showed that 84% of the retail pharmacy outlets in Bangladesh have at least one SMC brand of Oral Contraceptive Pill (OCP), 82% have at least one SMC condom and 91% stock SMC brand of ORS. In addition to pharmacy outlets, SMC distributes condoms and ORS through non-pharmacy outlets, as a strategy to increase accessibility and availability. One in every five non-pharmacy retail outlets of the country has SMC brand of condom and more than two in every five have SMC brand of ORS (Pathway, 2007).
Market segmentation, effective positioning and brand development efforts continue to be a major part of SMC’s strategies, and the company now provides a diverse range of pills and condoms targeted at specific market segments supported with brand-specific advertising and promotion. To meet the dual objective of making products affordable to the less privileged while at the same time improve the financial sustainability of the organization, SMC has designed a strategy that groups its brands into three different pricing categories:
Profitable and Self financed or brands that have a positive gross contribution margin. They are priced to earn a profit after recovery of their direct cost and financed using SMCs own funds. Brands under this category includes Hero, Panther, Sensation, U&Me (condoms), Femicon, Femipill, Noret 28, Minicon (Oral pills), ORSaline N, Joya sanitary napkins (2013), and an electrolyte drink (2014).
Break Even and Self Financed brands are priced to recover their commodity and packaging cost but fall short of providing a positive gross contribution margin. They are financed from SMC's own funds. These include MoniMix (micronutrient powder), Zinc tablets, safe delivery kit, and Norix (Emergency Contraceptive Pill)
Subsidized and donated brands are commodities that are donated and sold at below donor purchase price and prices are heavily subsidized. Brands under this category include Combination 3 (oral pill), Somaject (Injectable), Relax (CuT 380 IUD) and I Plant (Implant).
Because of its remarkable success and its sheer size, social marketing in Bangladesh has become a model of best practices and attracted international attention. Two premier USA based graduate schools of business have included the case study on social marketing program in Bangladesh in their curricula. In addition, an entire chapter of the renowned book titled “Let Every Child Be Wanted: How Social Marketing Is Revolutionizing Contraceptive Use Around the World,” written by Philip D. Harvey, is devoted to social marketing in Bangladesh. SMC’s success is also documented in the “Asian Marketing Casebook,” by Noel Capon and Wilferied R. Vanhonacker. SMC is an ISO 9001-2000 certified company. The company was awarded the International Star Award for Leadership in Quality (ISLQ) in 2008 by the Business Initiative Directions (BID), a Madrid-based business organization committed to building a better reputation for business worldwide.