Topic: Key Account Management, Strategies & Practices in Pharmaceutical

Industry of India.
A Synopsis

1. Introduction

Faced with unprecedented levels of international competition and technological change in

industrial markets, many companies are seeking to achieve competitive advantage and
bring stability to their operations by forming strategic alliances with customers and
suppliers. One seller-initiated type of strategic alliance that has long proved popular
where centralized purchasing and supply-base rationalization has been a strong feature of
structural change is key account management (KAM).

Successful adoption of KAM relies heavily on the ability/willingness of individuals to

build close, long-term relationships. Yet, despite widespread implementation across a
range of industrial sectors, it is only recently that academic research on relational aspects
of KAM is showing signs of catching up with practice. Marketing academics, for
example, have laid claim to the concept of relationship marketing and are vigorously
constructing/testing integrative models of customer retention which encompass such
areas as customer service, branding, public relations, database management and, of
course, key account management (Millman, 1993). Similarly, purchasing academics are
examining relational aspects of supply chain management, supplier development, total
quality management, electronic data interchange, benchmarking, etc. While professional
self-interest is likely to perpetuate separate marketing and purchasing perspectives, it is to
be hoped that common sense will prevail and researchers will adhere to the true spirit of
the IMP (Industrial Marketing and Purchasing Initiative) by not losing sight of the
marketing/purchasing interface.

2. Research Aim

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The main aim of this research is to analyze the undergoing key account management
practices in the market. This is also, a study about the implementation of key account
management (KAM) program.

3. Objectives

➢ To understand the elements of successful key account management.

➢ To analyze the process of key account selection & analysis in Indian

Pharmaceutical industry.

➢ To analyze the relationship strategies being used for key accounts in Indian
Pharmaceutical market.

➢ To analyze the operational capabilities for profitable and long-lasting

relationships with customers in pharmaceutical market.

➢ To provide some reasonable suggestions and useful recommendations.

4. Background
The pharmaceutical industry is the world’s largest industry due to worldwide revenues of
approximately US$2.8 trillion. Pharma industry has seen major changes in the recent
years that place new demands on payers, providers and manufacturers. Customers now
demand the same choice and convenience from pharma industry that they find in other
segment. Indian Pharmaceutical Industry is poised for high consistent growth over the
next few years, driven by a multitude of factors. Top Indian Companies like Ranbaxy,
DRL, CIPLA and Dabur have already established their presence. The pharmaceutical
industry is a knowledge driven industry and is heavily dependent on Research and
Development for new products and growth. However, basic research (discovering new

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molecules) is a time consuming and expensive process and is thus, dominated by large
global multinationals.
Indian companies have only recently entered the area. The Indian pharmaceutical
industry came into existence in 1901, when Bengal Chemical & Pharmaceutical
Company started its maiden operation in Calcutta. The next few decades saw the
pharmaceutical industry moving through several phases, largely in accordance with
government policies. Commencing with repackaging and preparation of formulations
from imported bulk drugs, the Indian industry has moved on to become a net foreign
exchange earner, and has been able to underline its presence in the global pharmaceutical
arena as one of the top 35 drug producers worldwide. Currently, there are more than
2,400 registered pharmaceutical producers in India. There are 24,000 licensed
pharmaceutical companies. Of the 465 bulk drugs used in India, approximately 425 are
manufactured here. India has more drug-manufacturing facilities that have been approved
by the U.S. Food and Drug Administration than any country other than the US. Indian
generics companies supply 84% of the AIDS drugs that Doctors without Borders uses to
treat 60,000 patients in more than 30 countries.

5. Literature Review
There is no established body of literature covering the training and development of key
account managers. The vast number of textbooks on marketing and sales management
invariably refer to KAM activities under the guise of national account management; but
this is often rather fleeting coverage in view of its critical importance to company
performance, and the approach has tended to be largely descriptive (e.g. Dalrymple and
Cron, 1995; Gross et al., 1993; Hutt and Speh, 1985).

Literature relating specifically to KAM is fragmented, ranging from surveys carried out
by the US National Account Management Association, to prescriptive books of the “How
to do it” variety (e.g. Burnett, 1992), and more thoughtful process-based approaches with
conceptual, analytical and empirical underpinning (e.g. Araujo and Muzas, 1994;
Millman and Wilson, 1995; Pardo, 1994; Pardo et al., 1993). For linkages with
management development, it is necessary to turn to burgeoning literature in the field of

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management/ organizational learning and development (e.g. Garratt, 1990; Gouillart and
Kelly, 1995; Senge, 1990).

In the literature on sales management and selling, KAM has its origins in consultative
selling to major accounts in industrial and business-to-business markets (Melkman, 1979;
Miller et al., 1988; Rackham, 1991; Shapiro and Posner 1976). Adversarial approaches to
negotiation and “winning the sale” pervade much of the early writing and this continues
to be reflected in the course offerings of some sales training organizations. There are
signs that training providers are introducing relational approaches, especially in the areas
of sales development and systems selling; but most management development
programmes in the sales area await a catalyst to shift thinking and behaviour from
transactional to more collaborative forms of exchange.

6. Research Methodology
There are two types of sources available for data collection regarding research purpose:
primary and secondary data.
In this research study, both primary and secondary sources will be utilized. Secondary
data will be obtained from the books, journals, articles and internet while primary source
depends on the questionnaire survey.
In –depth interviews will be carried out with the help of an open ended leading
questionnaire with the senior level executives of tentatively two Indian and two foreign
(Multinational companies) Companies.

The survey questionnaire will be drafted while keeping all the considerations of research
objectives in mind.

7. Chapter Scheme
The chapter scheme of the project will be:
Chapter-1: Introduction
Chapter-2: Literature Review
Chapter-3: Research Methodology

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Chapter-4: Findings and Analysis
Chapter-5: Conclusion