DAFWFFFFhjdhjddfnklgggklghhmgff Case Study Kramer Pharmaceuticals, Inc. Presented by Debi Prasad Bagria Kishor Chandwani Nandini Mudgil Mrinmoy Kanti Das Rahul Agarwal Ritesh Kumar Singh 2.Case Background Company : Kramer Pharmaceuticals, Inc Business : Pharmaceuticals (Manufacturer of Prescription Drugs) Country : U.S. Year : 1978 Competitors: Abbott, Lilly, Merck, Upjohn & Schering 3.Case Background Bob Marsh, a former detailer, worked at Kramer Pharmaceutical for 12 years and was considered a hard working, well established detailer (product specialist and sales associate). He possessed excellent references and credentials. Bob was fired because of failure to comply with company protocol after failing to make several changes in his behavior. Although it was a little unconventional, his methods have worked well for him for 12 years. This case is extremely rare. Irate customers (Physicians) complained on Bob Marsh's behalf making the termination of Bob an issue. Sales Vice President decided to look into the case in detail, to determine whether Marsh's discharge was a management failure and, if so, what could be done to remedy this unfortunate situation . 4.Kramers Value Chain Manufacturer Wholesalers Drug stores General Public by Prescriptions Hospitals Physicians 5.Kramers Sales Force Over 500 Detailers Considered second to none in the business Job details: To call regularly on hospital personnel, doctors & dentists to describe the product line & to persuade these medical personnel to use and prescribe Kramer drugs A typical Kramer detailer is responsible for about 200 physician and hospital accounts within an assigned geographic territory & expected to make between six and nine doctor or hospital calls per day 6.Kramers Sales Force 7.Kramers Sales Force Employee Attrition : Much lower than Industry average Only about 8% lost each year from resignations, discharges, retirements & deaths 8.Kramers Sales Force - Structure Sales Vice President Zone Managers 1 Zone Managers 2 Zone Managers 3 Zone Managers 4 Zone Managers 5 Zone Managers 6 District Manager 1 District Manager 3 District Manager 4 Detailers Detailers Detailers Detailers District Manager 35 District Manager 2 9.Kramers Sales Force - Training Mostly Pharmacy School Graduate with a few years experience as registered pharmacists in retail drugstores Receives a months training in product characteristics and selling (detailing) skills at the companys Denver headquarters. Both new & experienced detailers receives regular on-the-job training from 35 district managers between 10 to 15 days of these field visits in a year, depending on his or her experience & performance All Kramer representatives returned to headquarters regularly for continued training throughout their careers 10.Kramers Sales Force Detailers remunerations All detailers are salaried receives annual bonus based on Corporate Performance Corporate Bonus amounts to about 15% of total annual earnings In 1978, Total annual earnings by a Detailer was from $20k to $36k 11.Cramers Sales Force Detailers Performance Evaluation Performance Evaluation done by District Manager Formal Performance Evaluation once a year Informal Evaluations whenever necessary Detailers are evaluated in terms of Sales volume & Improvement in relationships with Customers Yearly quota system for each of the dozen or so major product categories to stimulate proper concentration of detailing efforts 12.Bob Marsh Graduate from Top-flight pharmacy school Experienced U.S. Naval Pilot with fine officer service record Good academic record & successful drugstore experience After a few rewarding but unexcited years in retail pharmacy, decided to join Kramer ( at a lower starting salary ) John Meredith, District Manager of Toledo, who interviewed Marsh for Kramer rated him very high. In 1966, Marsh joined Kramer at Salary $14k pa & posted in a territory in Toledo where he belonged. 13.Bob Marsh Performance over the years Rehabilitation blueprint of Marsh by Franlin & new Zone Manager Pete Mallick Weekly reports, reading assignments, questionnaire forms. July78 At age 44 years, Marsh asked to resign which he accepted without resistance or comment 78 Tom Franklin (Young one year supervisory experience) No salary increase in Jan78 But Probation status evaporated by defaultSept76 to 78 Tom Wilkens (Background comparable to Reed) In 77 : Initially recommended for salary hike, but later rated Complete unsatisfactory : Again put on probation of 90 daysAug76 to Sept77 Vince Reed (Young, Competent Detailer & Promising Manager - 1 st supervisory experience) No Salary Increase in Jan75 : Put on probation of 90 days Probation removed : Performance found Satisfactory In Jan76 : Salary Increased to $25kSept74 to Aug76 Jim Rathbun (Bright, young, energetic with many new ideas) In 71 73 : Performance Rating Satisfactory In 74 : Performance : Well above average Attitude : Well above averageMarch71 to Sept74 Bill Couch Experienced & Highly regarded supervisor) in 67 & 68 Work Performance : Below Standard Attitude : Standard In 69 : Overall performance : Standard In 70 : Rated Completely satisfactoryFrom 66 to March71 John Meredith (Took entry interview of Bob, highly recommended him) Observations Period Supervisor 14.Bob Marsh In the eyes of Supervisors Quickly grasped all facets of the job, including product characteristics & basic selling skills Exceptionally well received by Physicians, Office Receptionists & Hospital personnel Training Report on Marsh - Excellent Increased Kramer prescriptions by Physicians Increased in number of Physicians buying Kramer Products for office use Hospital sales showing gains Lack of attention to organization, planning & follow-up Unplanned approaches Tendency to question logic of some of companys major promotion programs More interest in developing his own promotion programs than in following plans outlined at district meetings Deciding himself which products to promote Tendency to pre-judge customers interests Less focus on promotion of new products 15.Bob Marsh Life in Kramer 16.Bob Marsh Life in Kramer Bob showed continuous improvement under Meredith & Bill Couch 17.Bob Marsh Life in Kramer Frequent changes in supervisors Younger/Less experienced Bob started to loose ground Lacked initial enthusiasm 18.Bobs way of selling More personalized selling Hardworking Outstanding Detailers image among Clients - Perceived to be the finest & most helpful detailers Excellent references and credentials His selling methods a little unconventional but have worked well for 12 years Shown excellent improvement under Meredith & Bill Couch on his short-comings/weaknesses 19.Managements handling of Bob Rules are rules, and thats the way its going to be. More focus on weaknesses than Strengths. Continuous increase in Sales ignored. Lacked HR approaches Annual Increment system used as tool of punishment but not as an effective tool for motivation Did not consider other options like relocation of Bob to a new territory to break the monotony or put another fresh Detailer with Bob based on the increased workload (Overlooking Distributor in addition to his existing job) Did not anticipate the reaction of the Clients base built up over the years through personal selling Did not anticipate that Competitors might take advantages by recruiting Bob & using his close contacts & credentials 20.Our suggestion Considering the performances put up by Bob over the years and his excellent interpersonal skill building lasting relationships with prospects/clients, Company may reinstate Bob and may look for Imparting formal trainings to improve his record keeping & documentation skills and his level of understanding of promoting new products After some time, Bob may be relocated to a new territory where his effective Personal Selling method would yield benefits to the company 21.Thanks