dhjddfnklgggkl Case Study Kramer Pharmaceuticals, Inc. Presented by Debi Prasad

Bagria Kishor Chandwani Nandini Mudgil Mrinmoy Kanti Das Rahul Agarwal Ritesh Kumar Singh

2. Case Backgroundo Company : Kramer Pharmaceuticals, Inco Business : Pharmaceuticals (Manufacturero of Prescription Drugs)o Country : U.S.o Year : 1978o Competitors: Abbott, Lilly, Merck, Upjohn &o Schering

3. Case Backgroundo 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.

o 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.

o This case is extremely rare. Irate customers (Physicians) complained on Bob Marsh's behalf making the termination of Bob an issue.

o 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. Kramer’s Value Chain Manufacturer Wholesalers Drug stores General Public by Prescriptions Hospitals Physicians

5. Kramer’s Sales Forceo Over 500 Detailerso Considered second to none in the businesso Job details:o To call regularly on hospital personnel, doctors & dentists to

describe the product line & to persuade these medical personnel to use and prescribe Kramer drugs

o 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. Kramer’s Sales Force 7. Kramer’s Sales Force

o Employee Attrition :o Much lower than Industry averageo Only about 8% lost each year from resignations, discharges,

retirements & deaths 8. Kramer’s 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. Kramer’s Sales Force - Trainingo Mostly Pharmacy School Graduate with a few years’

experience as registered pharmacists in retail drugstoreso Receives a month’s training in product characteristics and

selling (detailing) skills at the company’s Denver headquarters.

o 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

o All Kramer representatives returned to headquarters regularly for continued training throughout their careers

10. Kramer’s Sales Force – Detailers’ remunerationso All detailers are salaried – receives annual bonus based on

Corporate Performanceo Corporate Bonus amounts to about 15% of total annual

earningso In 1978, Total annual earnings by a Detailer was from $20k to

$36k 11. Cramer’s Sales Force – Detailers’ Performance Evaluation

o Performance Evaluation done by District Managero Formal Performance Evaluation – once a yearo Informal Evaluations – whenever necessaryo Detailers are evaluated in terms of

Sales volume & Improvement in relationships with

Customerso Yearly quota system for each of the dozen or so major product

categories to stimulate proper concentration of detailing efforts

12. Bob Marsho Graduate from Top-flight pharmacy schoolo Experienced U.S. Naval Pilot with fine officer service recordo Good academic record & successful drugstore experienceo After a few rewarding but unexcited years in retail pharmacy,

decided to join Kramer ( at a lower starting salary )o John Meredith, District Manager of Toledo, who interviewed

Marsh for Kramer rated him very high.o 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

o Rehabilitation blueprint of Marsh by Franlin & new Zone Manager Pete Mallick – Weekly reports, reading assignments, questionnaire forms.

o July’78 – At age 44 years, Marsh asked to resign which he accepted without resistance or comment

’ 78 Tom Franklin (Young – one year supervisory experience)o No salary increase in Jan’78o But Probation status evaporated by default

Sept’76 to ’78 Tom Wilkens (Background comparable to Reed)o In ’77 : Initially recommended for salary hike, but later rated

Complete unsatisfactory : Again put on probation of 90 daysAug’76 to Sept’77 Vince Reed (Young, Competent Detailer & Promising Manager - 1 st supervisory experience)

o No Salary Increase in Jan’75 : Put on probation of 90 dayso Probation removed : Performance found Satisfactoryo In Jan’76 : Salary Increased to $25k

Sept’74 to Aug’76 Jim Rathbun (Bright, young, energetic with many new ideas)

o In ’71 – 73 : Performance Rating Satisfactoryo In ’74 :

Performance : Well above average Attitude : Well above average

March’71 to Sept’74 Bill Couch Experienced & Highly regarded supervisor)

o in ’67 & ’68 Work Performance : Below Standard Attitude : Standard

o In ’69 : Overall performance : Standardo In ’70 : Rated Completely satisfactory

From ‘66 to March’71 John Meredith (Took entry interview of Bob, highly recommended him) Observations Period Supervisor

14. Bob Marsh – In the eyes of Supervisorso Quickly grasped all facets of the job, including product

characteristics & basic selling skillso Exceptionally well received by Physicians, Office Receptionists

& Hospital personnelo Training Report on Marsh - Excellento Increased Kramer prescriptions by Physicianso Increased in number of Physicians buying Kramer Products for

office useo Hospital sales showing gainso Lack of attention to organization, planning & follow-upo Unplanned approacheso Tendency to question logic of some of company’s major

promotion programso More interest in developing his own promotion programs than

in following plans outlined at district meetingso Deciding himself which products to promoteo Tendency to pre-judge customers’ interestso 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

o Frequent changes in supervisors – Younger/Less experiencedo Bob started to loose ground – Lacked initial enthusiasm

18. Bob’s way of sellingo More personalized sellingo Hardworkingo Outstanding Detailer’s image among Clients - Perceived to be

the finest & most helpful detailerso Excellent references and credentialso His selling methods a little unconventional but have worked

well for 12 yearso Shown excellent improvement under Meredith & Bill Couch on

his short-comings/weaknesses 19. Management’s handling of Bob

o “ Rules are rules, and that’s the way it’s going to be”.o More focus on weaknesses than Strengths. Continuous

increase in Sales ignored.o Lacked HR approacheso Annual Increment system – used as tool of punishment but not

as an effective tool for motivationo 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)

o Did not anticipate the reaction of the Clients’ base built up over the years through ‘personal selling’

o Did not anticipate that Competitors might take advantages by recruiting Bob & using his close contacts & credentials

20. Our suggestiono 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