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DistributionManagementDistribution ManagementDistributionManagement DistributionManagementDistribution ManagementDistributionManagement Ashwin Health Care Sales and Distribution Management DistributionManagementDistribution ManagementDistributionManagement DistributionManagementDistribution ManagementDistributionManagement

DistributionManagementDistribution ManagementDistributionManagement DistributionManagementDistribution ManagementDistributionManagement DistributionManagementDistribution ManagementDistributionManagement DistributionManagementDistribution ManagementDistributionManagement


Abhinav Gogia 2010005 Amrita Pandey 2010026 Ankita Agrawal 2010038 Dolly Khatri 2010069 Pradyumna Mohanty 2010290

Introduction
Ashwin Healthcare limited (AHL) is a pharmaceutical company. Its product portfolio consists of prescription drugs, OTC (over the counter products) and diagnostic reagents used for laboratories. It has about 600 distributors who are managed by a sales team.

Sales team: -

PSR Customers:-

General sales manager Regional Manager Assistant sales manager Professional service representatives(PSR)

1 4 15 150

Hospitals Chemists Laboratories Doctors General Stores

The major problem faced by AHL was decreasing productivity of PSRs.PSR had to deal with each of the five customers listed. Each one required a different plan of action which would convince them to use AHL products. To overcome this problem the top management divided the PSR into 3 groups serving: Hospitals, Nursing homes and laboratories Doctors only Chemists and general stores

Key findings
In case of Hospitals there is a high waiting time. The Procedure to complete the calls i.e. meeting the purchase people and on their advice meeting some doctors required lot of time. But this time needs to be spent as these customers were critical and big.

Laboratories are easier to call and there is a less time spent. The procedure followed was same as in case of doctors but the time spent on calling was relatively lower.

Doctors mostly used to be on duty with different hospitals. They were available in evening in their clinics. It was a difficult task to call on doctors, since some of them were working in their own clinic as well as in hospitals. The meeting time stretched up to 10pm in the night. Moreover there were other PSR of different companies waiting. So, a PSR needed lot of persuasion skills so that he can manage to convert his call in so much competition.

Chemists followed the timing dictated by the market. Chemists followed the market norms for meeting the PSRs. Anytime after 11am was convenient to most of them. But some were not available between 2 to 4pm.

Case Analysis
The case highlights the varied job responsibilities being carried out by the PSRs of Ashwin Healthcare Pvt. Ltd. (AHL). Medical sales representatives, or reps as they often called, are a key link between pharmaceutical companies and medical and healthcare professionals. They work strategically to increase the awareness and use of a company's pharmaceutical and medical products in settings such as general practices, primary care trusts and hospitals.

Based in a specific geographical location, and usually specializing in a particular product or medical area, they try to ensure that formularies contain their product. They may also make presentations and organize group events for healthcare professionals, as well as working with contacts on a one-to-one basis. Typical work activities of the PSRs Arranging appointments with doctors, pharmacists and hospital medical teams, which could include prearranged appointments or regular 'cold' calling; making presentations to doctors, practice staff and nurses in GP surgeries, hospital doctors, and pharmacists in the retail sector; building and maintaining positive working relationships with medical staff and supporting administration staff e.g. receptionists; keeping detailed records of all contacts, which may involve database management; planning work, schedules and weekly and monthly timetables. This may involve working with the area sales team or discussing future targets with the area sales manager. The appointments with doctors having their private practice had to be scheduled in the evening during clinic hours where the PSRs would have to jostle for the physicians attention as there would be other patients and reps from other companies too. Their job description also entailed checking physical stocks of medicines carried and collecting outstanding payments if any, getting fresh orders and arranging with distributors to take back expired stock. Most of the chemists wouldnt appreciate being called upon in the morning and would only be available later in the day. Generally, PSRs would have their own regional area of responsibility and plan how and when to target health professions in that area; regularly attending company meetings, technical data presentations and briefings; keeping up with the latest clinical data supplied by the company and interpreting, presenting and discussing this data with health professionals during presentations; monitoring competitor activity and competitors' products;, anticipating potential negative and positive impacts on the business and adapting strategy accordingly; developing strategies for increasing opportunities to meet and talk to contacts in the medical and healthcare sector; staying informed about the activities of health services in a particular area; working with team managers to plan how to approach contacts and creating effective business plans for making sales in a particular area. Taking into account, the varied demand on their schedule from a diverse set of clientele, the PSRs work patterns and schedules were getting adversely affected.

Pharmaceutical marketing is a specialized field where PSRs would form the backbone of the entire marketing effort. Pharmaceutical companies also appoint medical representatives and assign them defined territories. PSRs would meet doctors, chemists and stockiest as per company norms. PSRs would try to influence prescription pattern of doctors in favour of their brands. The pharmaceutical distribution channel is indirect with usually three channel members i.e. pharmaceutical company, distributor and chemist. Retail chemists would buy medicines on daily or weekly basis from authorized distributor as per demand. Patients would visit chemists for buying medicines either prescribed by a doctor or advertised in the media. Here patient is end customer and doctor is direct customer for any pharmaceutical company. But for doctor, customer is more important so he wants an effective supply chain management from prescribed company. And for pharmaceutical companies their customer that is doctor is more important thats why they emphasize more on supply chain management. Ultimately end-customer is benefited out of this. For marketing of these kinds of products companies require more and more skilled field force to develop good rapport with their direct customer (doctor). Moreover field force should have good product knowledge and USP of their products over other so as to convince doctors and PULL the demand for their products i.e. from Doctor to Retailer to distributor to company. For marketing of these types of products companies require more and more field force to remind their products on daily basis to their direct customer (doctor). Moreover field force should have good knowledge of product schemes and offers. Also field force is required to have a good rapport with retailers. Field force also required to ensure good availability of their products to convince doctors and PUSH their products i.e. from distributor to Retailer to Doctor. Doctors and retailers are the core customers and the major thrust is given to build and retain these customers. Here retailers are also core customer as most of the times they are substituting the products based on their own discretion. For retaining and developing customers, the companies normally provide gifts like sponsorship for various conferences like small gifts & sponsorship to remind the products on daily basis. Hence, to solve this problem the management decided to split PSRs into three group servicing three different sets of clients; hospitals and diagnostic labs only, doctors only and chemists and general stores only. It was expected that such differentiation would improve the call productivity and the clients would be better satisfied.

Concepts Used
Sales Skills Index
The Sales Skills Index (SSI) is an objective analysis of an individuals understanding of their strategies to sell successfully. It essentially answers the question, Does this person understand relationship selling? Like any profession, selling has a body of knowledge related to its successful execution. It is this knowledge that the SSI measures. Knowledge of the sales process and successful strategy is only one component that leads to sales success. Sales behavior, attitude, personal interests, product knowledge and more are all part of the picture. With the information provided by the SSI, an organization can internally validate how a solid understanding of the sales process can lead to success.

Channel Information System


Information technology has made a big difference to channel operations and management. Information systems have revolutionized the way information is collected, stored and transmitted between channel members. They add value to the distribution function and enable channel members to integrate different channel functions, which was not possible in conventional distribution systems. Channel information systems have also influenced the structure of distribution channels. Lengthy channels have given way to shorter and highly efficient distribution systems.

Channel information systems comprise an information database and the hardware and networks that help in the collection, processing and transmission of information. The hardware, software and networks vary depending on the application requirements of channel members. They vary for businessto-business applications, retailing applications, business to consumer applications and interactive applications for consumers. Channel Information Systems (CIS) have influenced the way in which different channel functions are performed. It has streamlined operations leading to improved channel flow. CIS has also changed the order in which different functions are performed. CIS has influenced the physical distribution of products or distribution flow. Transaction flow, promotion flow, inventory flow and negotiation flow have improved with the advent of information technology in channel management.

Information systems have a profound impact on channel member relationships. They influence the balance of power, intensity of conflict and the extent of cooperation and coordination among channel members. CIS has changed the dynamics of power among channel members. EDI systems have reduced asset specificity, complexity of product specifications and coordination costs. This has led to a shift in the balance of power among channel members. Many retailers like Wal-Mart have developed efficient information systems that offer them substantial leverage over their suppliers. Even manufacturers like Philip Morris have conducted extensive programmes to build an exhaustive database about consumer

preferences, which allowed them to influence downstream channel members. CIS reduce conflicts that may arise between supplier and retailer due to differences in different channel functions. Some common issues that give rise to conflicts are minimum order size, retail assortment, speed of delivery, retail inventory levels, retail promotion and performance management and the issue of retailers carrying competitors products. However, the use of channel information systems minimizes the chances of conflicts.

Coordination and cooperation among channel members have greatly improved due to CIS. Channel members have opted for collective goals over individual goals and have started looking for benefits to the channel as a whole. Information is easily available to all channel members, resulting in an increase in trust and commitment. Channels differ based on the type of channel members involved in cooperation and the extent to which members cooperate. Different channel systems include consensus systems, vertical systems, horizontal systems and inter-type systems. Channel cooperation and coordination have led to successful and profitable relationships at different levels in the channel - between manufacturers and suppliers, suppliers and retailers and between manufacturers and retailers.

Incentive Management
Incentive management is the process of offering benefits to employees who achieve specific goals. A common form of this management technique is offering bonuses to commission-based employees. For example, an employee who achieves a specific sales goal in dollars may earn a bonus or additional commission percentage. A flaw with incentive management is that it may only be limited to employees who directly influence the firms sales. This creates an inequity among employees, and other employees may not work as hard if no incentives exist. To rectify the inequality found with incentive management, firms can create specific goals for each employee or department. The chief financial officer may receive a bonus if the accounting department achieves a current ratio more than 1.0, indicating the company is in good financial standing. Bonus incentives may increase as the ratio climbs, achieving levels over 1.5 and 2.0, for example. Other departments may also have their own specific measurements. This allows for increased focus by every department on improving the companys operations. Companies should create an incentives program with measurable goals. Common standards for incentive management should include a definition of the targeted performance, how to measure the incentive, performance of employees achieving the incentive, and a definition of the specific return on investment expected. This leaves little doubt as to whether a department or employee actually achieved the goal. Companies should work with department managers to properly institute the incentives program and get all employees on board with the new system.

Recommendations and Solutions


Distribution Management
Regional distribution of ASM The 15 Assistant sales manager needs to be distributed on the basis of regions. The cities with large amount of customers need to have more than one ASM, whereas the ones with lower number can keep it to one ASM. Channel distribution of ASM ASM are divided based on the regions. If a region contains more than one ASM, we need to distribute the ASM channel wise as well i.e. dividing the hospitals, doctors, laboratories, chemists and general stores; based on the area in which he will be operating. Regional distribution of PSR For 150 PSRs there should be a regional distribution. Permanent journey plan

Permanent journey plan should be used by PSRs. It is a day by day report of what the plan was and what actual calls were been done by PSRs. It need to be submitted to ASM monthly so that he can track where the gap exactly lies and can then plan accordingly.

Integration of distribution Channel


Active Use of Distribution Information System

Distribution Information System is one that is used to keep all the information regarding the customers, their current status, profiles of the PSRs, whether the targets have been met. It helps in effective planning and decision making of various tasks that need to be performed to fulfill the targets.
Timely Reporting and meetings of ASMs The permanent journey plan filled by PSRs need to be reported to ASM regularly; Moreover arranging of personal meetings where in the PSR could interact with ASM and solve the problems, if any faced by them.

Driving the employees motivation for better communication and integration


Motivating the employees to follow the Permanent journey plan would lead to better integration of data. Employee should be provided with incentive plans as well as monthly informal meeting

of employees should take place wherein the employees interact with each other; there is a bond formation amongst them. Also, training some employees if needed.
Help in increasing operational efficiency The integration of distribution channel helps in increasing the operational efficiency i.e. the task of performing the call and then converting the same has increased. Since the sales team is integrated together to perform the job.

Incentive Management
Analyzing the scope and business potential of each channel The business potential of each channel need to be analyzed , so that a fair incentive can be given to a PSRs who has converted the call of a channel where the business potential was very low and the one where business potential is very high. Balancing the incentives of ASMs, PSRs ASMs and PSRs incentive needs to be balanced based on the targets they have fulfilled. A high incentive to one and a lower to another who have performed the same task as in the number of customers may lead to employee demotivation.

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