DENDRITE

INTERNATIONAL
 About Company

• Started in 1985 to develop software to assist with call planning and

reporting task.
• Decided from the outset to be a global supplier of both software and
service.
• Dendrite International is one of the world’s leading software supplier
to Pharmaceutical Industry.
• Presence of 15000 sales people in 40 companies in 11 countries,
revenue for 1993 $ 33 Million.
• As the market scenario is changing, Dendrite is looking at another
way to go to market.
• Currently they had established subsidiaries in Belgium, England,
France, Germany, Italy, Japan and Spain.
Initial Strategy

• Decided to be global supplier of both software & services

since beginning.
• Unlike prevalence of ‘turnkey’ basis of software automation,
it decided to provide continuous support to maintain and
operate technology
• Used venture capital funds to establish subsidiaries & offices.
• Sales rose from $250,000 in 1987 to $23million in 1992.
• 60% from software licencing & product customization while
40% from Services, Maintenance & facilities Mgt.
 Product & Pricing

• Electronic Territory Mgt (ETM) & other sales automation product

gained popularity in 1980s.
• Dendrite’s product was a mix of software & services.
• Helped Sales reps in retrieving info, constructing lists for call plans,
time-record, types & no. of calls, email, analyzing & tracking
progress etc.
• Client received regular reports from Dendrite’s host computer for
detailed analysis & new idea generation.
• Software sold in two forms: Base System and Added Value Modules.
• Pricing involved license fee, maintenance & support agreement, and
service contract.
• In US service pricing based on no. of System Users while in Europe
it was a fixed annual fee.
Competitors

Dun & Bradstreet subsidiary Sales Tech.Inc(STI)

■ 1992 Sales-$48m, 40% share of installed reps in US.
■ Had lost two key accounts during last 18months.
■ Not all well there as a no. of top executives of STI removed in late 1992.
Walsh International
■ Sales-$100million, mainly from paper-based call reporting and data services.
■ Main business is sales & analysis of industry data.
■ Rigid ETM system, difficulty in integration.

Pharma Systems
■ UK based, focus on ETM & management reporting system.
■ Sales $1million with only one major client.
■ Firms expressed interest in its PS system because of its compatibility with a database called
Express.
Cornet
■ US based, 13% of pharma reps worldwide.
■ Needed to develop a product-service package to be a big player.
 Customers

• Dendrite’s selling cycle 18months or more.

• Usually arranged full day software demo for clients.
• Clients usually ranked vendors on Ease of use, Functionality,
Connectivity, Financial strength and Commitment to full support.
• Dendrites sales: US(60% of its Sales), Western Europe, and Japan. Each
countries differed in sales force organization, healthcare system,
customization, legal aspects of providing service, Doctor’s practice etc.
 Recent Developments

• US healthcare moving towards managed-care facilities.

• This will result in pharma sales force downsizing in US. Target of
activities to reduce from 300000 individual physicians to about 35000
committees.
• European countries were imposing price control on drugs. Pharma
firms may move towards smaller, more specialized sales force focused
on given product or therapeutic area.
• In Japan, fixed-invoice pricing mandated and wholesaler rebating
abolished. It was also moving towards seperation of Prescribing &
dispensing for pharmaceuticals, which would alter pharmaceutical sales
task.
 Dendrite’s Sales Organization
• Two types of sales activities: Initial sales to clients and follow-on sales
to existing accounts.
• 20 Business Managers(BMs) responsible for business development at
existing accounts.
• Initial sales handled by salespeople, supplemented by area Vice
Presidents.
• Compensation involved base salary & commission (it averaged 30% in
1993).
CLIENT TEAMS
• Team size ranged from 3 to 50, with average of 22.
• Each team headed by a BM and included one CS and one TS Managers.
• After roll out, CS managers focused on Helplines.
• BMs role changed from consultant during project development &
installation phase to service provider & account manager..
 Road Ahead
• Role of customization for the client team will increase. CSS and
TSS team should be strengthened with more trained personnel.
• BMs role should start earlier and should terminate after rollout.
The regular stuff after rollout should be handled by an Operations
Manger.
• Role of US pharma’s sales rep will change from influencing
Doctors to administrators. Since no. of users per firm will decline
(400-700 instead of 1500 odd in US), this necessitate no. of
Dendrite client team to shrink.
• Japanese sales rep are least automated(6.6%) and also the no. will
go up now, there is a need to shift focus to Japan where Dendrite
holds lion’s share(83.5%). Additional re-enforcement should go
from US.
• Develop specialized software for European sales force, focused on
a given product or therapeutic area.