Supplements: Institutions (government, IGOs, nursing homes, gyms)

| 7 minutes

Overview

Institutions are a minor distribution channel for the AdvaLife product range in terms of a percentage of our total sales, but we do infact have products going to these channels. - -

● Government and IGO institutions typically do not purchase bulk supplements unless there is a major nutritional deficiency in a specific country, instead focusing their budgets on pharmaceuticals for treatments and cures for disease and illness. However, in some countries the national insurance system or private insurance might cover supplements if recommended, or “prescribed” by a doctor. In such a case, the doctor would prescribe a supplement for a specific treatment, such as to supplement medications or for a specific vitamin, mineral or other nutrient deficiency. Government and IGOs purchase by both tenders or private orders.
● Nursing homes and other care facilities that are not hospitals or clinics could have a program for purchasing and supplying supplements for their elderly guests, especially as elderly require more nutritional supplementation. Although this is not a large market, especially in developing countries in which nursing homes are less common, it still does exist. For some distributors, it could be a possible distribution channel, depending on the country of course. This channel does not purchase through tender, but rather only private order.
● Gyms and fitness centers are technically considered institutions, although a store inside of the facilities could also be considered a “retail store” even if not stand-alone, the same as a pharmacy inside a hospital is still a pharmacy. The sales volume of supplements in a gym would not be substantial, and the products carried by such establishments would be focused on fitness supplements, which we do have some supplements that apply to fitness, but generally the fitness demographic is not one of our target audiences. This channel does not purchase through tender, but rather only private order.

We have both advantages and disadvantages for our AdvaLife product range for institutions in the supply chain.

SUPPLEMENTS FOR INSTITUTIONS

ADVANTAGES

DISADVANTAGES

  • USA brand and reputation.
  • Wider product range than any single supplement manufacturer, especially the dosage forms available which can cover a wide range of ages and preferences. More specifically, we have a strong range of dosage forms well suited for the elderly (syrups, powders, drops, etc.) and kids (gummies, syrups, drops).
  • While difficult to compete with manufacturers based on price alone, we are still cheaper than US, EU and other expensive alternatives.
  • Our distributor might have a special relationship with the institution.
  • Institutions have many options for supplement suppliers.
  • Manufacturers can often provide lower prices as they have more control over the raw material and production cost. However, MOQ will usually be an issue for institutions to purchase directly.
  • Supplements are generally not common for institutional purchases, a reality we cannot control but also makes it difficult to build such a distribution channel.

Tenders are not common for supplements, but if and when these exist, it can be largely dependent on our distributor’s capability and relationship with the Institution. A major deciding factor in our ability to submit for a tender depends if the tendered products require registration in the importing country or not. In many countries, supplements will not require registration given these are classified as good products, but if registration is infact required, then we would have to have our products already registered as there would not be enough time to complete the registration process. Otherwise, some tenders might not require product registration, but in this case it is more likely that such tenders would be issued by the government health agency as they would have the power to do so.

Product Range: Which products apply to this channel and why?

Our entire supplement range is positioned for institutional orders, meaning we can cover most of the products that would be included in a tender or private order. However, the more common products will be better positioned for such institutional orders given that such orders are catering to specific, common nutritional deficiencies. Institutions can issue a tender for any supplement products, but given that most of the products tendered will be administered through the hospital or pharmacy channels by a doctor or pharmacist, the dosage forms are more likely to be tablets, capsules, softgels, and possibly powders and syrups for specific products and age groups, but unlikely to be gummies which are more suited for the retail sector.

See:

Pharmaceuticals: Hospitals/Clinics > Product Range: Which products apply to this channel and why?

Supplements: Pharmacies > Product Range: Which products apply to this channel and why?

Target Audience

B2B: Primary Target Audience

As institutional orders, especially for supplements, will usually be submitted through our distributors, our distributors are our customers. However, the terms of every tender or private order will dictate the payment arrangement, meaning our distributor will most likely be the buyer of our products and then deliver to the institution, or in some cases the terms might dictate that the institution is the buyer and in such a case would have to provide a commission to the distributor, but this case is rare. Regardless, our distributor, given their role in between us and the institution, will be the primary target audience.

See:

Distribution Channels: An Overview > Distributors

B2B: Secondary Target Audience

Government

The government health agency, which goes by varying names depending on the country MOH (Ministry of Health), FDA (Food & Drug Administration), DOH (Department of Health), etc.), whom our distributors sell our supplements to, are the secondary target audience - a later stage in the supply chain. The decision makers of the government health agency decide which suppliers get awarded which products in the tenders, unless it is a direct order given without tendering which does occur in some countries.

In order of importance, the deciding factors for winning government tenders are:

1. Product prices
2. Relationship of distributor with government decision makers
3. Product quality
4. Product availability

Government orders can include those for the national insurance (healthcare) system, although it is possible that private insurance might somehow be involved depending on the structure of the country’s health system, although it is unlikely.

Inter-Governmental Organizations (IGOs)

IGOs are international or national government-related organizations that have a budget for health initiatives in lower income countries. The larger IGOs that regularly issue tenders for supplements include UNICEF, WHO, World Bank, etc. Such organizations can be more difficult to work with given their oversight, and therefore we rely on our distributor to have the necessary connections to facilitate such tenders.

In order of importance, the deciding factors for winning IGO tenders are:

1. Product availability and regulatory compliance (if product requires registration for importation)
2. Relationship of distributor with government decision makers
3. Product price
4. Product quality
Non-Governmental Organizations (NGOs)

NGOs are usually international organizations that focus health initiatives on lower income countries. These institutions are the smallest and least likely to issue tenders given budgets are smaller than IGOs and government institutions.

B2C

Patients are the end users of our supplement products for this specific channel, unlike if the same products are purchased in a pharmacy or other retail store, then the end buyer would be a consumer opposed to a patient. These people are usually given the prescribed supplements by a doctor in the hospital channel or could also be given the supplement through a pharmacy. Branding awareness and messaging are less important, but still relevant if the same people come to trust our products, they might buy the same or other AdvaLife products in the future from the pharmacy/retail channel.

Supply Chain

Institutions are the third to last stage in the supply chain before the product is distributed to a hospital or pharmacy and ultimately used by a patient or consumer:

API Manufacturer > Finished Manufacturer > AdvaCare > Distributor/Importer > Institution > Hospital/Clinic OR Pharmacy > End Consumer (patient/consumer)

See:

Distribution Channels: Introduction > Understanding Supply Chains

Promotional Materials: Which materials apply to this channel and why?

Institutions do not advertise specific brands or products as they are not in the business of selling specific brands, but rather best allocating an assigned budget to secure pre-determined pharmaceuticals that address specific health objectives that are inline with a health initiative.

The kind of promotional materials we produce for our distributors to provide to hospitals should be based on materials that can be provided to:

● The institution with the main purpose of proving credibility.
● Hospitals and pharmacies that can use the related promotional materials.

The promotional materials we provide for institutions, and by proxy hospitals and pharmacies, must meet the intended purpose:

See:

Pharmaceuticals: Hospitals/Clinics > Promotional Materials: Which materials apply to this channel and why?

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