Case study

One September morning in 2017, as Manoj Chaudhary, director of Laurs & Bridz Pharmaceuticals Private Limited (Laurs & Bridz), sat finalizing the vision for the organization for 2020, he realized that he wanted a pan-Indian presence for his company and a sales revenue of ?1,500 million.1 The company already had a strong presence in India's northern states, and Manoj was considering entering the western part of India in January 2018, the southern part in 2019, and the eastern part in 2020. Laurs & Bridz was doing well in the pharmaceutical market. The company that had started in 2011 had ended 2016 with sales worth

?402.7 million, which represented a 44.4 per cent growth over the previous year (see Exhibit 1). Laurs & Bridz) was aiming for net revenue of ?550 million and growth of 36.6 per cent in 2017.

As of September 2017, the company had a field force of 80 employees who catered to around 15,000 physicians, pharmacy retailers, and stockists. Laurs & Bridz used traditional information systems, and most of its customer-related data was still maintained in Microsoft Excel files. Data had been easy to manage in the initial stages of the company, but now, with the increase in the number of customers, the company found it difficult to maintain such large amounts of client information. Manoj planned to invest ?50 million in customer relationship management (CRM) solutions to attune the company's sales processes and build customer relationships efficiently. He and other senior managers would be meeting that evening with Manu Chaudhary, the marketing manager of Laurs & Bridz, who had done initial screening for CRM solutions, to finalize a decision about a CRM solutions provider.

COMPANY BACKGROUND

Laurs & Bridz was a state-of-the-art generic pharmaceutical company that exported pharmaceutical products all over the world and specialized in providing combination drugs to the medical community. The company started in 2011 with an initial investment of ?10 million and seven employees. It manufactured

1 ? = INR = Indian rupee; all currency amounts are in ? unless otherwise specified; US$1.00 = ?63.88 on September 1, 2017.

and supplied a broad range of formulations such as tablets, injections, and new drugs. Laurs & Bridz's product line included analgesics, antibiotics, hematinics (used to treat iron-deficiency anemia), nutritional supplements, gastroprotective products, and medications to treat infections, colds, and allergies (see Exhibit 2). The products were certified high quality according to international regulatory standards. The company's marketing strategy was to sell these high-quality products at competitive prices. Its focused product portfolio and good distribution network had provided strategic advantages that allowed it to perform well in an increasingly competitive market. The firm's comprehensive network of eight carrying-and-forwarding agents and around 150 stockists distributed its products to pharmacy retailers (see Exhibit 3).

SALES MANAGEMENT AT LAURS & BRIDZ

Sales Organization

The sales force was Laurs & Bridz's biggest promotional investment. The key focus of the sales force was building customer relationships; it did this through targeting, enhancing call efficiencies, developing new business areas, and increasing the accountability of resources. As of March 2017, Laurs & Bridz's sales force included 70 medical representatives (MRs), who reported to area sales managers (ASMs). Eight MRs were grouped geographically under an ASM, who in turn reported to a zonal sales manager (ZSM). Laurs & Bridz had nine ASMs and two ZBMs. These ZBMs reported to Manoj.

Role of Medical Representatives

Pharmaceutical selling differed from regular selling in that MRs required both sound product knowledge and excellent selling skills to interact with physicians. The predominant style of selling in the pharmaceutical sector was known as missionary selling: an MR's role was to convince doctors of the effectiveness of a product they could prescribe for their patients. MRs were also referred to as "detailing salespersons." Detailing involved discussing the features and benefits of products with physicians and pharmacy retailers; it provided a platform for physicians to learn more about products' indications, dosages, side effects, and prices. MRs from various companies tried to persuade doctors to prescribe their branded medicines, and also acted as intermediaries between the company and its customers (that is, physicians, stockists, and pharmacy retailers). MRs were responsible for increasing the number of prescriptions from the physicians, and this, in turn, led to an increase in sales revenue and profits. MRs not only sold pharmaceutical products; they also analyzed sales statistics and prepared many reports, such as the daily call reports, stock and sales reports, expense reports, travel plans, and monthly reports. In addition, MRs were responsible for upgrading their product knowledge and selling skills and for monitoring their competitors' activities, such as launches of new products, sales, prices, and other promotional activities.

THE INDIAN PHARMACEUTICAL INDUSTRY

The pharmaceutical market in India had a compound annual growth rate (CAGR) of 17.5 per cent between 2005 and 2016, rising from US$6 billion in 2005 to US$36.7 billion in 2016. The market was predicted to reach approximately US$55 billion in sales by 2020, at a CAGR of around 16 per cent. In March 2017, an Equitymaster report ranked the Indian pharmaceuticals market as the third largest globally in terms of volume, and the 13th largest in terms of value. The market was expected to become the sixth largest in the world according to absolute value by 2020. This growth was primarily driven by factors like increasing consumer spending, rapid urbanization, greater acceptance of medical insurance, and an increased government focus on rural healthcare infrastructure. The ability of pharmaceutical companies to align their product portfolios with

therapies for chronic conditions (e.g., cardiovascular conditions, diabetes, depression, and cancer) was projected to drive future growth in the domestic market. Branded generics constituted nearly 80 per cent of the Indian pharmaceutical market share in terms of revenues.2 Unlike multinational pharmaceutical companies, which sold generic and low-priced versions of their popular medicines to increase their market share in the rapidly growing Indian pharmaceutical industry, Indian pharmaceutical companies capitalized on the low price and popularity of their products.

SALES CHALLENGES

Laurs & Bridz faced an increasingly difficult selling environment for its products. A government drug price control order had reduced the profitability of pharmaceutical companies,3 and the sales approach was changing. Many MRs could not meet their sales targets, and ASMs and ZBMs were frustrated with their lack of insight into the organization. Competition for market share in the Indian pharmaceutical sector was most intense in the first few seconds of MRs' pitches to physicians. As a result, many Indian pharmaceutical companies recruited MRs in hordes to increase their market share. The continued focus on sales force growth had resulted in aggressive product promotions to physicians. As companies shortened the time MRs spent with physicians, they used new technological devices to create more sophisticated detailing pitches, to promote "top-of-mind recall," and to generate more prescriptions. Relationship selling was gaining in importance in this competitive environment, and it was key for the sales force to build good relationships with physicians to increase the generation of prescriptions. It was also critical to maintain good relationships with pharmacy retailers and stockists to ensure better availability of the products.

Customer Relationship Management in the Pharmaceutical Industry

CRM was important in the pharmaceutical industry because it helped companies get more revenue from their major physicians. Regulatory reforms and increasing competition in the pharmaceutical industry had created many challenges to traditional missionary selling, leaving pharmaceutical companies desperately seeking new ways to measure and monitor promotional effectiveness, optimize campaign management, and improve overall sales and marketing intelligence. Pharmaceutical sales representatives had always leaned heavily on soft-dollar promotions to influence physicians. Taking physicians out to lunch, dinner, and medical conferences had long been standard practices in the industry; they helped the sales representatives secure business from the physicians. However, because of the changes in different regulations and laws banning gifts, most of these sales tactics were becoming obsolete. It was important for the pharmaceutical companies to stay relevant and find new ways to connect with physicians. These new developments and changes in the habits of prescribers had placed pressure on pharmaceutical companies to augment their existing sales and marketing strategies with increased efforts that would lead physicians toward online contact. Consequently, pharmaceutical companies had a strong need to increase the efficiency and effectiveness of their sales representatives.

In this industry, it was imperative to use technology to augment the traditional selling techniques of the MRs. Building strong relationships with physicians or key opinion leaders at multispecialty hospitals was critical. However, MRs had too little time at each sales call to develop and maintain relationships with opinion leaders and other important physicians. An increase in the number of companies and MRs also increased competition at the retail pharmacy and stockist levels. MRs needed to know influential stockists

2 "Indian Pharmaceutical Industry," Indian Brand Equity Foundation, March 2017, accessed March 15, 2017, https://www.ibef.org/industry/pharmaceutical-india.aspx.

3 "Implementation of New Drug Pricing Policy to Impact Profits: Wyeth," Hindu Business Line, August 5, 2013, accessed March 2, 2017, www.thehindubusinessline.com/companies/implementation-of-new-drug-pricing-policy-to-impact-profits-wyeth/article4991779.ece.

and pharmacies in their territories and build good relationships with them to ensure that there was an adequate inventory of their products in the market. It was crucial that MRs understand the purchasing patterns, stock cycles, and supply lines of the pharmacies and stockists in order to forecast demand accurately. These relationships played a significant role in the introduction of new products.

CRM SOLUTIONS IN THE PHARMACEUTICAL INDUSTRY

CRM solutions offered tools for companies to automate and integrate different business processes in marketing and sales. Many pharmaceutical companies deployed CRM solutions to increase their contact with physicians, retailers, stockists, and other healthcare providers such as nursing staff and hospital administrators. CRM solutions added significant functionality that enabled companies to track clients and map preferences. Further, this functionality allowed the sales force to optimize the time spent on each call, boosting productivity.

Sales force automation (SFA) was the starting point and core of many CRM solutions, which provided MRs and sales managers with tools to automate their workflow across the entire sales cycle. SFA tools could be used for opportunity analysis, prospecting, presentations, and collaboration; they also included analytical tools for pipeline management and sales forecasting.

Opportunity management and sales forecasting were two essential components of SFA. The opportunity management feature allowed pharmaceutical representatives to enter all customer-related information in a single location. This centralized customer information was available to the company's marketing and sales teams. For example, an MR could use an SFA program to manage information about a customer, beginning by entering information on the prospect into the SFA contact database. It would then be possible to record information about a physician's product awareness, use of competitors' products, prescription habits, preferred appointment times, and even personal details like birth and anniversary dates. Sales representatives could use templates from the CRM application to make product presentations. They could use different tools related to sales orders from retailers and stockists throughout the month, allowing their managers to see the likely impact of these sales orders on the revenue targets. Sales forecasting tools gave sales managers insights into the sales pipeline and helped to eliminate inventory issues. Many pharmaceutical companies used CRM applications to strengthen their sales and marketing efforts. For example, companies such as Abbott, AstraZeneca, Astellas Pharma Inc., Bayer AG, BD, Boehringer Ingelheim GmbH, Daiichi Sankyo Company Limited, Merck & Co. Inc., Mundipharma International, Novartis, and Pfizer Inc. had adopted CRM products from Veeva Systems Inc.4

CONCLUSION

Manu had shortlisted several probable CRM solutions after looking at their features: CRMNEXT, Prophet CRM, a pharmaceutical CRM product from ADAMI Systems GmbH, and Veeva CRM (see Exhibits 4-7). She had negotiated with three providers of mobile tablets, and the estimated cost was around ?8,000 per tablet. She had also negotiated an Internet data package with a telecommunication company at the monthly rate of ?500 per month per employee. Manu expected additional implementation costs of ?500,000 for training and related expenses.

Laurs & Bridz needed to deploy a CRM solution to strengthen its sales and marketing. The company had to build robust systems to better track customers, strengthen customer relationships, and enhance the

productivity of its sales force. Because earlier research on CRM solutions showed that 30-60 per cent of CRM projects failed,5 Laurs & Bridz planned to invest ?50 million in its CRM solution. Manoj and Manu were concerned about the different factors that could impact the implementation. Which of the CRM solutions would suit Laurs & Bridz best? What would be the direct and indirect effects of the implementation of such a CRM solution? With these questions in his mind, Manoj concentrated on the details of the different CRM solutions before him. He wondered if he should invest ?50 million in a CRM solution. If he did, what kind of approach should he use to implement the solution? What obstacles could interfere with that solution's successful implementation?

What's the Case Background & Current suaon? What are the Persons of interest in the Case? Who is the decision maker in this case? What's the Key organizational objectives relevant to the case . What are the Statement of key issues brought forward in this case. What's the Cause & Effect of problem you stated? Related to Customer relationship management Theory What are the Strengths and Weaknesses in this case