Problems of Marketing of Medicinal Plants in Pakistan by Mr. Allah Dad Khan, Ex. Director General Agriculture Extension
Problems in Marketing of Medicinal PlantsIn Pakistan By Mr Allah Dad [email protected]
Medicinal plants in Pakistan Pakistan is endowed with the wealth of medicinal plants. These are the natural botanical source of medicines being manufactured by indigenous pharmaceutical houses in Pakistan. These are also the basic source of modern pharmaceutical market, although today it has become an entire medical world of synthetics, with elevated prices a common man cannot afford. It is therefore the most appropriate time to consider development and organization of our medicinal plants industry to become independent in the provision of common indigenous natural drugs that are being used to treat diseases in most of our rural areas
Medicinal plants in Pakistan contd In our country there are grown wild or cultivated medicinal plants species which possess great potentialities not only in the light of their use from centuries in the sub- content in Greco-Arab (Unani or Eastern) system of medicine but also in the light of active principles or biodynamic compounds being isolated from them using ultra modern screening techniques available in our country. Peppermint is an example of such useful and effective medicinal plant.
Marketing Strategies:The current increase in the worldwide consumption and use of 'greenproducts, especially drugs, flavors and fragrances of natural origin, has indeed amplified the scope of the use of indigenous flora and collection & trade of exotic species.2.The identification of the ultimate suppliers and buyers is also big issue in this sector.3.The gaps between the producers/collectors and traders or buyers need to be minimized as these are at present very wide and often inequitable.
Marketing Strategies:contd4.Linkages should be developed in order to have better understanding about the NTFPs business & between the businesses and the producers/collectors.5. A holistic management action plan is necessary to formulate forassessment and management of resource base; best harvesting and processing practices; trade issues and aspects dealing with the intellectual property rights on the Traditional medicines by the tribal people.6. Investments are needed for the development of appropriate conversation,cultivation Harvesting strategies, which will simultaneously meet the demand for low-cost and locally Available medicines.7.At the same time, there must be immediate efforts to ensure the conservation of Diverse biological resources and the preservation and application of local and cultural knowledge on the use of these resources.
7 P Market mix
The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives7Ps Price, Product, Promotion, Place, People, Process, Physical EnvironmentTraditional 4Ps extended to encompass growth of service industry
Price
Pricing Strategy
What is the value of the product or service to the buyer?Are there established price points for products or services in this area?Is the customer price sensitive? Will a small decrease in price gain you extra market share? Or will a small increase be indiscernible, and so gain you extra profit margin?What discounts should be offered to trade customers, or to other specific segments of your market?How will your price compare with your competitors.
Product
ProductProduct/ServiceWhat does the customer want from the product/service? What needs does it satisfy?What features does it have to meet these needs?
Are there any features you've missed out?Are you including costly features that the customer won't actually use?How and where will the customer use it?What does it look like? How will customers experience it?What size(s), color(s), and so on, should it be?What is it to be called?How is it branded?How is it differentiated versus your competitors?What is the most it can cost to provide, and still be sold sufficiently profitably? (See also Price, below).- See more at: http://www.mindtools.com/pages/article/newSTR_94.htm#sthash.WcaQTm22.dpuf
PromotionPromotionWhere and when can you get across your marketing messages to your target market?Will you reach your audience by advertising in the press, or on TV, or radio, or on billboards? By using direct marketing mailshot? Through PR? On the Internet?When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the timing of your market launch, or the timing of subsequent promotions?How do your competitors do their promotions? And how does that influence your choice of promotional activity?The 4Ps model is just one of many marketing mix lists that have been developed over the years. And, whilst the questions we have listed above are key, they are just a subset of the detailed probing that may be required to optimize your marketing mix.Amongst the other marketing mix models have been developed over the years is Boom and Bitner's 7Ps, sometimes called the extended marketing mix, which include the first 4 Ps, plus people, processes and physical layout decisions.Another marketing mix approach is Lauterborn's 4Cs, which presents the elements of the marketing mix from the buyer's, rather than the seller's, perspective. It is made up of Customer needs and wants (the equivalent of product), Cost (price), Convenience (place) and Communication (promotion). In this article, we focus on the 4Ps model as it is the most well-recognized, and contains the core elements of a good marketing mix- See more at: http://www.mindtools.com/pages/article/newSTR_94.htm#sthash.WcaQTm22.dpuf
Place
Where do buyers look for your product or service?If they look in a store, what kind? A specialist boutique or in a supermarket, or both? Or online? Or direct, via a catalogue?How can you access the right distribution channels?Do you need to use a sales force? Or attend trade fairs? Or make online submissions? Or send samples to catalogue companies?What do you competitors do, and how can you learn from that and/or differentiate?
peoplePeople represent the businessThe image they present can be importantFirst contact often human what is the lasting image they provide to the customer?Extent of training and knowledge of the product/service concernedMission statement how relevant?Do staff represent the desired culture of the business?
ProcessHow do people consume services?What processes do they have to go through to acquire the services?Where do they find the availability of the service?ContactRemindersRegistrationSubscriptionForm fillingDegree of technology
Physical Environment The ambience, mood or physical presentation of the environmentSmart/shabby?Trendy/retro/modern/old fashioned?Light/dark/bright/subdued?Romantic/chic/loud?Clean/dirty/unkempt/neat?Music?Smell?
The Marketing Mix Blend of the mix depends upon:Marketing objectivesType of productTarget marketMarket structureRivals behaviourGlobal issues culture/religion, etc.Marketing positionProduct portfolioProduct lifecycleBoston Matrix
Marketing
Products: must be plannedPrices: must be determinedPromoting: products is essentialPlacing: products must be accessible to customers
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The Marketing ConceptConsumersMarketing ResearchMarketing Segmentation
Product
Price
Place
Promotion
Marketing of Medicinal HerbsMost medicinal plants are harvested from wild, As the trade has become market oriented and inter national , the growing number of wild crafters is out stripping natural population. Hence there is need to establish this trade on sustainable basis.Most of the medicinal herb species are collected form the wild but some of these are also grown particularly by small farmers to diversify their cropping system and to earn some additional income for their sustenanceThe organic farming is a basic philosophy for production of medicinal herbs. Organic farming methods are based on natures principles of production. Organically produced medicinal herbs are believed to be living in harmony with the natural system by cooperating rather than competing
Threats to Medicinal PlantsDeforestation Over and improper collection Overgrazing Conversion of forest land into agriculture Land
Identification of MarketsThe process of identifying different market segmentsThe process of identifying different markets would help the farmers to focus on which types of herbs to be grown and how marketing should be made.
largest global markets in WorldThe largest global markets for medicinal plants exist in China, Germany, France, Japan, Italy, UK and USA. In the United States, the trade of medicinal plants is observed with 10% increase annually and more people are attracting towards herbal medicines.
Marketing Structure Trade of crude vegetable drugs is very erratic in Pakistan. Prices fluctuate greatly due to variations in external and internal demands within the country. Traders frequently underpay collectors of the raw materials and sell the products at a large profit. Hence the availability of particular crude drugs remains very unstable and market trends cannot be easily determined.
Marketing Channels of Medicinal PlantsThe main driver for the cultivation of medicinal plants could be located in two component , namely pull and push effects.In pull effect , are the factors that attract farmers to cultivate medicinal plants rather than traditional crops incuding 1.Attractive Price , fixed market channel , price assurance by agents .2.Monopoly of the group of producers
Whereas Push effects are dominated by1.Uncertainity of net income.2.Well established market channel There are two marketing routes that operate in field 1.Gather /Cultivator -----= Pharmacy 2.Gather/Cultivator ----=Trader ----= Pharmacy
International MarketingExport Promotion Bureau may guide about some of the plants that are currently demanded . The publication of data about medicinal herbs in this regard will be of great value to different stake holders
MARKETING STRUCTURETrade of crude vegetable drugs is very erratic in Pakistan. Prices fluctuate greatly due to variations in external and internal demands within the country. Traders frequently underpay collectors of the raw materials and sell the products at a large profit. Hencethe availability of particular crude drugs remains very unstable and market trends cannot be easily determined.
Reasons for fluctuation in price:The margin of profit earned by the traders is very large since they purchase the crude drugs at nominal rates and obtain the maximum price from the consumers.
The export of crude drugs from Pakistan is very erratic due to the "Standards restrictions" imposed by the developed countries of the world. Essential Oils of Anise, Caraway, Coriander, Fennel, Lavender, Sperarmint and Rosemary are extensively used as flavors both in domestic consumption and abroad. Raw material for these culinary herbs is cultivated to obtain the product.
The opportunities on the supply side of the indigenous medicine market include
1.Availability of scarce medicinal plants in remote locations,availability of medicinal plants on commercial farmlands,2. Availability of plant supply from changing land-use,3.Availability of medicinal plants on managed communal lands,Availability of a wide range of cultivation, processing, and Marketing expertise in other sectors,5. Access to international examples of medicine production for traditional markets,Large demand for new agricultural opportunities on commercial farms, subsistence farms, and redistributed farms,
The opportunities on the supply side of the indigenous medicine market include contd 7. Availability of progressive farmers with access to resources,8.Robust nature of indigenous medicinal plants which require few agricultural inputs,9.wide range of sites for product distribution, ranging from the farm gate to urban processing factories,10.bility to supply specific species at times of the year when they are usually not available,11. A large number of plant gatherers with appropriate knowledge that could promote the cultivation of plants for the market,12. Documentation and establishment of accepted guidelines for use and dosages of medicinal plants, and13. Several organizations have experience in indigenous medicine markets and in the cultivation of medicinal plant species in farming and nursery systems.
Features of Marketing Market TrendsPrice informationMarket newsBotanical product specificationsMeetings and trade showsDirectory of global herb trade associationsSpecial features (e.g. company profiles, regulations)
Problems in Marketing of Medicinal Plants
S.NoProblemSolution 1. Poor agricultural practicesGood agriculture Practices specific to area and climate 2.Poor harvesting (indiscriminate) and post-harvest treatment practicesProper harvesting and practices to minimize Post Harvest losses in storage3.Lack of research on development of high-yielding varieties, domestication Enhancement of Research And Development Projects 4Inefficient processing techniques leading to low yields and poor quality products, Insufficient data on the peak and lean raw drug collection periodsIntroduction of new processing techniques and preparation of data for products both in yield and use.5Lack of Poor propagation methodsPromotion of new propagation methods
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Problems in Marketing of Medicinal Plants contd
S.NoProblemSolution 6 Poor quality control proceduresStandardization of Products 7.High energy losses during processingLow consuming energy machineries8.Lack of current good manufacturing practicesPromotion of Good Manufacturing Practices , Traditional medicines manufacturers and scientists should be encouraged to carry out research into the cultivation of medicinal plants.9 Lack of R & D on product and process development- Difficulties in marketingStrengthening of rural development infrastructure .10Lack of local market for primary processed productsProvision of Local Market to farmers and linkage of collectors with market 11Lack of trained personnel and equipmentHuman Resource Development through Training to different stake holders in collection, cultivation, processing and marketing of medicines.
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Problems in Marketing of Medicinal Plants contd
S.NoProblemSolution 12Lack of facilities to fabricate equipment locallyProvision of facilities 13Lack of access to latest Technological and market informationProvision of access to Latest Technology 14The lack of traceability of the path of the raw drug back to it sourcePaving a Path as desired by Farming Community 15Owing to the lack of information on the market size and identification of all market sites in Pakistan .Establishment of Market Information System marketing strategies by the companies dealing in herbal medicine.16Absence of comparative studies of price structure and lack of time series data on pricesInitiation of studies in this respect.17Ineffective regulatory body, ineffective regulation by the government in their crucial role in the prevention of illegal trade.Legislation for drugs Sale and Use . legislation improving the status of herbal medicine industry
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Problems in Marketing of Medicinal Plants contd
S.NoProblemSolution 18Lack of attitudes toward Medicinal Plants Cultivation and market managementCreation of Attitude through awareness programme on mass media 19No Training to collectorThe plant collectors are needed to be trained in proper harvesting methods. 20Lack of correct identification of medicinal plants Proper identification through with the collaboration among the taxonomists and the local Herbalists is vital. 21The price and quality of medicinal plants in the market is not uniform. Necessary measures should be taken in this regard for the uniformity
22No proper Selection of Plants Introduction of selected medicinal plants as minor crops will not only reduce the pressure on the natural vegetation but will also improve the Socio economical conditions of the farmers.
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Problems in Marketing of Medicinal Plants contd
S.NoProblemSolution 23Collectors, processors and traders face problems in finding favorable markets due to price factors, quality and quantity considerations.Training 24Financial and logistic constraints make it difficult for local producers and collectors to interact more closely with prospective clientsFinancial help 25Inadequate knowledge and incomplete Information on products, markets and prices on the part of collectors/producersAwareness26Difficult to No proper recognition access appropriate markets and market information.of environmentally and commercially sound MPs.Allowed Access 27Lack of standardization and consistency in quality for international marketingProper standardization 28Astringent phyto-sanitary regulations such as requirement of microbiological test, pesticides and heavy metal test by international marketsLegislation
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Suggestion and recommendations for Marketing 1.Recommendation of Medicinal Plants in different Ecolological zones in Country special reference to KPK .one village one product . 2. Creation of awareness about medicinal plants both wild and cultivated Through mass media .in production and marketing 3. Marketing of medicinal plants in local and national as well as in international markets through exposure by different stake holders .4. Local Community should be trained regarding methods of collection and drying, and sustainable harvesting Demonstration of the cultivation packages and R & D in marketing .5. Plant collectors should be encouraged and educated in order to increase their bargaining power , thus increasing their revenues from medicinal plants.6. Seed bank for the arrangement of MP seed , plants . Through farmers bodies.
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Suggestion and recommendations for Marketing 7. Organic products and value addition through capacity building , the role of women to be included in activities. review of local knowledge and harvest practices8. A holistic management action plan is necessary to formulate for assessment and management of resource base; best harvesting and processing practices; trade issues and aspects dealing with the intellectual property rights on the traditional medicines .9. Investments are needed for the development of appropriate conversation, cultivation harvesting strategies, which will simultaneously meet the demand for low-cost and locally available medicines10. At the same time, there must be immediate efforts to ensure the conservation of Diverse biological resources and the preservation and application of local and cultural knowledge On the use of these resources. biological studies (growth and regeneration rates, pollination system, seed dispersal, potential for confusion with similar species, etc.) and assessment of harvest impact on viability of individuals11. design and implementation of management scheme: annual harvesting quota, seasonal or regional restriction and on certain plant parts or size classes, domestication programme12. Research to investigate the sustainability of production systems is lacking and needs to be stimulated for a better understanding of the biological dynamics of the resource in the wild and in domestication.13. Eco-labelling and other social and economic incentives to strengthen market credibility and competitiveness of biodiversity-friendly products need to be promoted14. On the issue of intellectual property rights it needs to be elaborated how the country, the local user or other entity can be adequately compensated for use of the resource by outsiders.
Urban Markets for Medicinal Plants Three cities are the main final markets for traded MAPs once they are moved out of District Swat. Our surveys (described below) included interviews with agents in these markets. The three cities are: Peshawar The species of MAPs sold in Peshawar herbal markets are generally obtained from District Swat, Lahore, and Afghanistan. Peshawar market also supplies some imported MAPs to District Swat and Afghanistan for local uses. The market receives large quantities of herbal materials from District Swat which is then supplied to Lahore. Lahore Most of the dealers in Lahore herbal market are trading crude herbs imported from India, directly or indirectly. Over 50% of materials traded in Lahore are of Indian origin, and this is mainly due to cross border trade via train. The Lahore herbal market acts as a hub of national trade of MAPs. It is not only catering to the needs of smaller markets in various cities and towns of the province of Punjab but also supplies considerable quantities of materials to the Karachi market. The middlemen of the MAPs trade usually bring the materials from District Swat to Lahore.Karachi However, a few agents also bring the material directly from up-country, including District Swat. Prices of various items in Karachi market are generally 10-20% higher than Lahore, reflecting higher transportation, higher labor costs, and profits of additional middlemen.
Islamabad Islamabad is another final market for MAP from District Swat but we did not conduct interviews there. Both the Lahore and Karachi herbals markets are the major source of materials to the large national herbal pharmaceutical companies. These companies generally purchase materials through middlemen or so-called suppliers
Global Marketing Opportunities:
Global Marketing Opportunities:Export opportunities of natural products are tremendous, as the world market is looking towards natural sources for the purposes of therapeutic use as well as nutritional dietary supplements. The global herbal remedies market can be classified into five strategic areas: Phyto-Pharmaceuticals -the plant based drugs containing isolated pure active compounds used to treat diseases; ii) Medicinal Botanicals / Dietary Supplements -the whole plant or plant-part extracts used for maintenance of health by affecting a body structure and its function; iii) Nutraceuticals the food containing supplements from natural (botanical) sources, that deliver a specific health benefit, including prevention and treatment of disease; iv) Cosmeceuticals -the cosmetic products which contain biologically active ingredients having an effect on the user and v) Herbal raw material. Supporting small farmers to grow and market non-traditional agricultural commodities, like medicinal plants and herbs, has a very positive impact on agricultural growth, rural employment and leads to poverty reduction in rural areas
AREAS FOR IMPROVEMENT
In the light of this review, a number of actions are considered important at a country level for improving the medicinal plant industry and enhancing the development of a more effective trade in medicinal plants and their products in developing countries. 1.Establish a critical mass of cultivable land in order to guarantee larger consistent supply. Promote farmer cooperation at village or regional level to guarantee a critical mass of cultivable land. Collectors should be organized into associations and clusters so that changes can be introduced in an effective and efficient manner.
2 Reduce the number of intermediaries involved in the distribution and marketing chain, and increase the negotiating power of the producers and collectors. This would enhance the profit of primary farmers and collectors, many of whom are among the poorest of the population. 3. Improvements are needed in the areas of post collection handling, value addition and product presentation
AREAS FOR IMPROVEMENT contd 4.Research and development on the chemical composition and the effect of poor practices on the active ingredients of the selected species. These efforts would be facilitated by improved cooperation and coordination between many of the groups with an interest in this subject namely those involved in education, research, production, distribution and marketing. Greater cooperation between researchers and farmers Needs to be encouraged. Associated with these efforts, there is a need for improved product development. 5. Country authorities to develop effective strategies to support improved cultivation, quality controls systems, provision of high quality planting materials, and the encouragement of investments in new technologies.
6. Undertake a more in-depth global overview of the demand and supply of medicinal plants, herbal products and herbal drugs in order to clarify market issues, and consider more effective solutions. Many of the issues require more country and market-specific analysis because of the differing market conditions, approaches used, and materials and products being focussed on. Case studies of successful marketing approaches being used may assist other organizations or countries. 7.Developing countries should aim to cultivate their resources in a sustainable manner and enter markets at the early stages of the value chain by first supplying developed country manufacturers with unprocessed raw materials. They can then move towards providing herbal supplements before tackling the highly regulated market for herbal remedies.
8. Identify products which would be most amenable to sustainable commercial development and industrial processing in the supplying countries.
AREAS FOR IMPROVEMENT contd 9. Value-addition through processing, and improved marketing of the medicinal plants. It is also important that the benefits of the expanded interest in medicinal plants be More equitably shared. 10. Enterprise development and promotion of the complete market chain. A strong Market orientation is essential for the development of the sector. A holistic approach needs to be adopted for the promotion of trade. Specific interventions which only target the collectors are insufficient. 11. The organic nature of the produce should be explored and capitalized on for export marketing.
Suggestion and recommendations in Marketing 15. The gaps between the producers/collectors and traders or buyers need to be minimized as these are at present very wide and often inequitable16. A holistic management action plan is necessary to formulate for assessment and management of resource base; best harvesting and processing practices; trade issues and aspects dealing with the intellectual property rights on the traditional medicines17.A ll-our efforts should be made to adopt a package of best practices encompassing conservation, cultivation, quality control and standardization and research and development for medicinal and herbals for improving its marketing performance efficiently.18. Research should identify genotypes with high potential for commercial purposes, and then conduct trials for the selection of high yielding varieties. here should be a reorientation of research investment regarding medicinal plants, with a shift from pharmacological studies to research which identifies effective methods of sustaining market supply and improving the quality of products currently consumed.
