PCD, short for Propaganda Cum Distribution, is a pharma model in which the pharmaceutical company allows individuals or other companies to market and sell under their brand name. The company provides the required products, promotional material, and sometimes training to the distributor, and he executes sales of those products in an assigned area.
Business Model of PCD Pharma
PCD Pharma business is straightforward to comprehend. To enter into this business, here is how it works:
- Franchise Agreement: The pharmaceutical company, in writing, agrees to the proposal of a distributor or franchisee partner. This generally covers areas such as territory rights, product portfolio, and minimum sales targets.
- Product Supply: The pharma company supplies its products to the distributor at a pre-agreed price. These supplied products are expected to be marketed and sold by the distributor within their respective territory.
- Promotional Support: It offers marketing materials like brochures, visual aids, and on occasion, samples. This enables the distributor to promote the products at a better pace.
- Revenue Model: Distributor gains on a profit margin that the sales are done. The margins are, at large, better than in any other model of distribution and that's why this model seems appropriate and a thing of desire for small to medium entrepreneurs.
Merit of PCD Pharma Model
Following are some of the advantages of the PCD Pharma model, both to the company and to the distributor:
- Low Investment: Among the best things that happen with a PCD Pharma model is that it needs low investment. This opens the bars for more and more entrepreneurs.
- Exclusive Rights: They usually give distributors exclusive rights to market the products within a certain territory. Competition will be low, allowing better market penetration.
- Support from a Pharma Company: The parent company, in general, extends full support regarding marketing materials, samples, and sometimes even training, which helps in faster growth of the business.
Ways to Choose the Right PCD Pharma Company
Choosing the right partner is appropriately something of essence if one is considering entering the PCD Pharma business. Here are some factors to consider:
- Product Range: The firm has to deal with a broad product range of various therapeutic segments. A diversified portfolio will help you in fulfilling the demands for more customers.
- Brand Reputation: It will be easy for you to win health professional confidence and customers if the company you partnered with is reputed.
- Quality Assurance: The partnered company should maintain severe quality control measures and adhere to all the regulatory requirements.
- Terms and Conditions of Agreement: Pay extra heed to the terms and conditions mentioned in the franchise agreement. This is especially so in respect of territory rights and pricing.
Challenges in the PCD Pharma Model
Though there are several advantages to the PCD Pharma model, it too has its set of challenges:
- Competitions in the Market: Although exclusive rights are given to one distributor in a particular territory, competition from similar products provided by other companies might occur.
- Regulation Compliance: The pharmaceutical industry is one of the most regulated industries. It requires the distributor at all times to be in full compliance with local laws and regulations, which is often very cumbersome and time-consuming.
- Dependence on Parent Company: The distributor is dependent upon the parent company for supplies of products and promotional support. Issues at the company's end can directly impact the business of the distributor.
