British drugmaker Glaxo Smith Kline Pharmaceuticals is working on a strategy to reduce the number of brands in India to around 20 from 130, and bring in more patented products from the parent to the country.
This would not only enable the company to simplify its operations, analysts say this is a strategic move by the drugmaker to focus on high-price and high-margin products.
Talking to Business Standard, Annaswamy Vaidheesh, vice-president,' South Asia, and managing director for India, GSK Pharma, said: "We have decided to have fewer brands. This not only simplifies our operations but also enables us to put our energy where it matters. Each brand launch takes a lot of time and resources (from legal approvals to marketing push), and we have decided-against it."
The company will launch brand extensions whenever needed and focus on bringing in patented products. GSK has marquee brands such as Calpol, Augmentin, Zinetac, Eltroxin, and Celin.
The company did not say which brands would be phased out. In the last one year, it has reduced the number of brands from 130 to the current 70.
Vaidheesh said the target was to have at most 20 brands (over the next year and a half or so) and focus only on six or seven top brands.
"We are doing a lifecycle management of brands. We plan to bring in more intellectual property products to India, especially in the respiratory and anti-infective space."
The strategy is appropriate when one considers the fact that the top 10 brands contribute nearly 52.1 per cent of GSK India's sales.
Ranjit Kapadia, analyst with Centrum Broking, said it was a smart strategy. "The move is expected to boost GSK India's margins and also reduce its marketing costs. Some of GSK's brands are under price control and they,are not growing. The company will focus on bringing in new products (from the parent) that would be out of the price control purview," hesaid.