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 o Company : Kramer Pharmaceuticals, Inc o Business : Pharmaceuticals (Manufacturer o of Prescription Drugs) o Country : U.S. o Year : 1978 o Competitors: Abbott, Lilly, Merck, Upjohn & o Schering 3. Case Background o 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. Kramers Value Chain Manufacturer Wholesalers Drug stores General Public by Prescriptions Hospitals Physicians 5. Kramers Sales Force o Over 500 Detailers o Considered second to none in the business o 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. Kramers Sales Force 7. Kramers Sales Force o Employee Attrition : o Much lower than Industry average o 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 o Mostly Pharmacy School Graduate with a few years experience as registered pharmacists in retail drugstores o Receives a months training in product characteristics and selling (detailing) skills at the companys 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. Kramers Sales Force Detailers remunerations o All detailers are salaried receives annual bonus based on Corporate Performance o Corporate Bonus amounts to about 15% of total annual earnings o In 1978, Total annual earnings by a Detailer was from $20k to $36k 11. Cramers Sales Force Detailers Performance Evaluation o Performance Evaluation done by District Manager o Formal Performance Evaluation once a year o Informal Evaluations whenever necessary o Detailers are evaluated in terms of Sales volume & Improvement in relationships with Customers o Yearly quota system for each of the dozen or so major product categories to stimulate proper concentration of detailing efforts 12. Bob Marsh o Graduate from Top-flight pharmacy school o Experienced U.S. Naval Pilot with fine officer service record o Good academic record & successful drugstore experience o 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 July78 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 Jan78 o But Probation status evaporated by default Sept76 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 days Aug76 to Sept77 Vince Reed (Young, Competent Detailer & Promising Manager - 1 st supervisory experience) o No Salary Increase in Jan75 : Put on probation of 90 days o Probation removed : Performance found Satisfactory o In Jan76 : Salary Increased to $25k Sept74 to Aug76 Jim Rathbun (Bright, young, energetic with many new ideas) o In 71 73 : Performance Rating Satisfactory o In 74 : Performance : Well above average Attitude : Well above average March71 to Sept74 Bill Couch Experienced & Highly regarded supervisor) o in 67 & 68 Work Performance : Below Standard Attitude : Standard o In 69 : Overall performance : Standard o In 70 : Rated Completely satisfactory From 66 to March71 John Meredith (Took entry interview of Bob, highly recommended him) Observations Period Supervisor 14. Bob Marsh In the eyes of Supervisors o Quickly grasped all facets of the job, including product characteristics & basic selling skills o Exceptionally well received by Physicians, Office Receptionists & Hospital personnel o Training Report on Marsh - Excellent o Increased Kramer prescriptions by Physicians o Increased in number of Physicians buying Kramer Products for office use o Hospital sales showing gains o Lack of attention to organization, planning & follow-up o Unplanned approaches o Tendency to question logic of some of companys major promotion programs o More interest in developing his own promotion programs than in following plans outlined at district meetings o Deciding himself which products to promote
o Tendency to pre-judge customers interests
o 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 experienced o Bob started to loose ground Lacked initial enthusiasm 18. Bobs way of selling o More personalized selling o Hardworking o Outstanding Detailers image among Clients - Perceived to be the finest & most helpful detailers o Excellent references and credentials o His selling methods a little unconventional but have worked well for 12 years o Shown excellent improvement under Meredith & Bill Couch on his short-comings/weaknesses 19. Managements handling of Bob o Rules are rules, and thats the way its going to be. o More focus on weaknesses than Strengths. Continuous increase in Sales ignored. o Lacked HR approaches o Annual Increment system used as tool of punishment but not as an effective tool for motivation o 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 suggestion o 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
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