Sales Report

IIPM SALES & DISTRIBUTION MANAGEMENT PROJECT

SALES AND DISTRIBUTION PROJECT Sales (Pre & Post) & Distribution’ effectiveness:

A comparative study of DAIICHI SANKYO

&

ABBOTT LABORATORIES

PREPARED BY

Name Section Group No. Signature

Pradipna lodh F-41

Ranu Parmar

Yogendar singh

tomar

Madhumita

Tripathi

Rishab Goel

IIPMIIPM TOWER,SATBARI,

CHANDANHAULA,CHATTARPUR-BHATIMINESROADNEW DELHI

GROUP-SS 10-12 PHARMACEUTICAL SECTOR- ABBOTT& DAIICHII1


EXECUTIVE SUMMARY

This project aims to study the distribution channels, sales network and service patterns of the

pharmaceutical sector through an analytical and comparative study of two leading companies-

DAIICHI SANKYO and Abbott Laboratories . The project also tries to bring out the shortcomings,

if any, in the present system and thus recommends suggestions to improve the same. The project

also gives insights into the various financial terms, norms of the sales and service departments as

per the guidelines of the pharmaceutical industry.

The project was designed after detailed discussion with the company officials on three parameters

i.e. distribution network, service network and sales functioning. The project also includes the

insights given by the dealers and officials of the company. “The sample size of 15 for channel

members and that for the sales people was 2, for each company”.

Firstly, the project discusses the distribution network of the two companies and the functions

carried out by the channel members. ABBOTT being the largest pharmaceutical manufacturer in

India definitely has a wider reach and more number of dealers than .

The project also covers the financial terms of the company with the dealers and that of the dealers

with the customers.

Secondly, the project discusses the sales functioning of the two companies, which includes aspects

such as the hierarchy of the sales department prevalent in the company; the responsibilities and

functions of the sales force, their performance appraisal structure etc.

Finally the project covers the service network of the two companies which deals with the after sale

services and their effectiveness provided by both the companies and various complaints and

queries are handled by them.



ACKNOWLEDGEMENTS

We are very thankful to the entire dealer, service, and sales network of DAIICHIand Abbott

Laboratories for their cooperation, without which completion of this project would not have been

possible.



CONTENTS

1. Executive Summary 2

2. Acknowledgement 3

3. Methodology 5

4. Indian Pharmaceutical Market 7

5. Company Background(Abbott PHARMACEUTICAL S) 12

6. Distribution Network 13

7. Selection of Dealers 15

8. Service Network 23

9. Company Background(DAIICHII PHARMACEUTICAL S) 25

10. Distribution Network 27

11. Selection Of Dealers 27

12. Service Network 31

13. Analysis 39

14. Recommendations 40

15. Annexure 43



METHODOLOGY

The objective of this project on sales and distribution is to do an analytical and comparative study

of the sales, service and distribution function of two players from the chosen business sector.

The business sector chosen for this purpose is the fast growing pharmaceutical sector, and the

players chosen for study from this sector are:

DAIICHI SANKYO

ABBOTT LABORATORIES

INFORMATION SOURCES

PRIMARY DATA SOURCES-

DAIICHII INDIA LIMITED- Head, Corporate Sales

DAIICHII AUTHORISED DEALERS

ABBOTT LABORATORIES – Area Sales Manager

ABBOTTAUTHORISED DEALERS

SECONDARY DATA SOURCES-

THE INTERNET

www.DAIICHII.com

www.abbott pharmaceutical s.com

www.google.com

www.askjeeves.com

www.indiainfoline.com


http://www.abbott/


DATA COLLECTION TOOLS

Interviews & Discussions with the company officials, dealers and Sales people. Questionnaires

were used to record data.

SAMPLE SIZE USED

The sample size for the dealers was 10 in number while the sample size for sales people was 4.

ABBOTT(dealers) - 8

ABBOTT(sales people) – 1

DAIICHII India (dealers) – 10

DAIICHII India (sales people) – 1

LIMITATIONS:

It was difficult to ask for time required for a detailed discussion on the questionnaire & therefore

several aspects of the questionnaire were answered briefly.

The company officials did not divulge details about competitive sales policies, strategies & certain

financial terms with dealers as they find it to be a confidential piece of information of the

company.



Indian Pharmaceutical Market“The Indian pharmaceutical industry is a success story providing employment for millions and

ensuring that essential drugs at affordable prices are available to the vast population of this sub-

continent.”

(Richard Gerster)

The Indian pharmaceutical industry in recent years has grown in stature from an industry that

copies patent drugs and manufactures them cheAbbotty. It’s now counted among the industries

that are fueling India’s economic growth and holds vast potential. India-based pharmaceutical

companies are also predicted to gain considerable market share in the world by the end of this

decade. The industry is estimated to have generated revenue worth US$13.1 billion in FY 2011,

according to a new Research and Market’s report, “Indian Pharma Sector Forecast 2014.”

India-based companies fulfill around 70 percent of the country’s demand for bulk drugs, drug

intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles.

Development economist, Richard Gerster, said that the Indian pharmaceutical industry is a

“success story providing employment for millions and ensuring that essential drugs at affordable

prices are available to the vast population of this sub-continent.”

“

The Indian pharmaceutical sector has come a long way, being almost non-existent before 1970 to

a prominent provider of healthcare products, meeting almost 95 per cent of the country's

pharmaceuticals needs.

The Industry today is in the front rank of India’s science-based industries with wide ranging

capabilities in the complex field of drug manufacture and technology. It ranks very high in the

third world, in terms of technology, quality and range of medicines manufactured. From simple

headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of

medicine is now made indigenously.

Playing a key role in promoting and sustaining development in the vital field of medicines,

Indian Pharma Industry boasts of quality producers and many units approved by



regulatory authorities in USA and UK. International companies associated with this sector have

stimulated, assisted and spearheaded this dynamic development in the past 53 years and helped to

put India on the pharmaceutical map of the world.

The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units with

severe price competition and government price control. It has expanded drastically in the last two

decades.

There are about 250 large units that control 70 per cent of the market with market leader holding

nearly 7 per cent of the market share and about 8000 Small Scale Units together which form the

core of the pharmaceutical industry in India (including 5 Central Public Sector Units). These units

produce the complete range of pharmaceutical formulations, i.e., medicines ready for consumption

by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for

production of pharmaceutical formulations.

Following the de-licensing of the pharmaceutical industry, industrial licensing for most of the

drugs and pharmaceutical products has been done away with. Manufacturers are free to produce

any drug duly approved by the Drug Control Authority. Technologically strong and totally self-

reliant, the pharmaceutical industry in India has low costs of production, low R&D costs,

innovative scientific manpower, strength of national laboratories and an increasing balance of

trade. Corporate Catalyst India India’s Pharmaceutical Industry The total Indian production

constitutes about 13 per cent of the world market in value terms and, 8 per cent in volume terms.

The per capita consumption of drugs in India, stands at US$3, is amongst the lowest in the world,

as compared to Japan- US$412, Germany- US$222 and USA- US$191.

Current Status.

India's US$ 9.4 billion pharmaceutical industry is growing at the rate of 14 percent per year. It is one of the largest and most advanced among the developing countries. The Indian pharmaceutical industry can reach a market size of US$ 11.6 billion by 2009.



A beginning has been made with the signing of General Agreement on Tariffs and Trade in

January 2005 with which India began recognizing global patents. Soon after, the Indian pharmacy

market became a sought after destination for foreign players. Foreign direct investment into the

country’s pharmacy industry touched US$ 172 million during 2005-06 having grown at a CAGR

of 62.6 per cent during the period beginning 2002-06.

The sector recorded strong growth in the second quarter ended September 2006, driven by launch

of new generic drugs with 180 days exclusivity period in the US market. The top ten pharmacy

companies reported an impressive 57 per cent growth in consolidated net profit at US$ 314.3

million, as against US$ 200.7 million in the same quarter of the previous year, while consolidated

net sales were up 51 per cent at US$ 1.7 billion.



Provision to boost demand

The plan would have increased the demand for prescription drugs in two ways. First it would have

created have a universal entitlement to a comprehensives package of health benefits thatincluded

coverage of outpatient prescription drugs. Second it would have added an outpatient prescription

drug benift to medicare which is the primary soure of health insurance for American 65 and older

The Changing Prescription

As per WTO, from the year 2005, India granted product patent recognition to all new chemical

entities (NCEs) i.e., bulk drugs developed then onwards. This introduction of product patent

regime from January 2005 is leading into long-term growth for the future which mandated patent

protection on both products and processes for a period of 20 years.

Under this new law, India will be forced to recognize not only new patents but also any patents

filed after January 1, 1995. Under changed environment, the industry is being forced

to adapt its business model to recent changes in the operating environment.Corporate Catalyst

India India’s Pharmaceutical Industry Indian pharmaceutical industry is mounting up the value

chain. From being a pure reverse

engineering industry focused on the domestic market, the industry is moving towards basic

research driven, export oriented global presence, providing wide range of value added quality

products and services, innovation, product life cycle management and enlarging their market

reach. The old and mature categories like anti-infectives, vitamins, analgesics are de-growing



while, new lifestyle categories like Cardiovascular, Central Nervous System (CNS), Anti Diabetic

are expanding at double-digit growth rates.

The Indian companies are putting their act together to tap the generic drugs markets in the

regulated high margin markets of the developed countries. The US market remains to be the most

lucrative market for the Indian companies led by its market size and the intensity of blockbuster

drugs going off patent. An estimated US$45 billion of drugs expected to go off patent by 2007 in

US alone. The Indian pharmaceutical industry is also getting increasingly U.S. FDI compliant to

harness the growth opportunities in areas of contract manufacturing and research. Indian

companies such as Ranbaxy, Sun Pharma, and Dr. Reddy's are increasingly focusing on tapping

the U.S. generic market.

Outsourcing in the fields of R&D and manufacturing is the next best event in the

pharmaceutical industry. Spiraling cost, expiring patents, low R&D cost and market

dynamics are driving the MNCs to outsource both manufacturing and research activities.

India with its apt chemistry skills and low cost advantages, both in research and

manufacturing coupled with skilled manpower will attract a lot of business in the days to

come.

The Indian Government's decision to allow 100 percent foreign direct investment into the

drugs and pharmaceutical industry is expected to aid the growth of contract research in the

country.

MNCs in India is facing the problem of having a very high Drugs Price Control Order

(DPCO) coverage, weakening their bottom lines as well as hindering their growth through

the launch of new products. DPCO coverage is expected to be diluted further in the near

future benefiting the MNCs.

.



COMPANY BACKGROUND

Abbott Laboratories

Abbott Laboratories is an American-based global, diversified (multi-division) pharmaceuticals and health

care products company. It has 90,000 employees and operates in over 130 countries.. The company

headquarters are in Abbott Park, North Chicago, Illinois. The company was founded by Chicago physician

Dr. Wallace Calvin Abbott in 1888. In 2010, Abbott had over $35 billion in revenue.

In 1985, the company developed the first HIV blood screening test. The company's drug portfolio

includes HUMIRA a drug for rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis , Crohn's

disease, moderate to severe chronic psoriasis and juvenile idiopathic arthritis; Norvir, a treatment for

HIV;Depakote, an anticonvulsant drug; and Synthroid, a synthetic thyroid hormone. Abbott also has a broad

range of medical devices, diagnostics andimmunoassay products as well as nutritional products,

including Ensure, a line of well known meal replacement shakes, and EAS, the largest producer of

performance based nutritional supplements.

Abbott's in vitro diagnostics business is a world leader in immunoassays and blood screening. Abbott's

broad range of medical tests and diagnostic instrument systems are used worldwide by hospitals,

laboratories, blood banks, and physician offices to diagnose and monitor diseases such as HIV, hepatitis,

cancer, heart failure and metabolic disorders, as well as assess other important indicators of general health.

Abbott Point-of-Care manufactures diagnostic products for blood analysis to provide health care GROUP-SS 10-12 PHARMACEUTICAL SECTOR- ABBOTT& DAIICHII12


professionals critical diagnostics information accurately and immediately at the point of patient care. Abbott

also provides point-of-care cardiac assays to the emergency room.

In 2011, the company was ranked as Top 20 BioPharma employers by the Science Magazine. The

company has been on the list for 8 times

Distribution network

Channel structure, members and their selection

The reach of the channel structure of pharmacy is all over world . The channel structure is very

simple and effective. Complications are kept out in order to make the overall process very

effective and efficient.

Channel structure

ABBOTT Laboratories

Company Warehouse

Dealer/ distributor Warehouse

Dealer shops(chemist)

End customer

Product

Our diverse family of pharmaceutical, medical, and nutritional products includes a broad range of specialized medicines; medical diagnostic instruments and tests; minimally invasive surgical devices; a spectrum of nutritional supplements for infants, children and adults; and products for veterinary care.

The links below offer a few ways to browse through our product offerings. Many of the trademark names link to product Web sites, which contain more detailed information.


http://en.wikipedia.org/wiki/Science_Magazine


Products by Category

Pharmaceutical Products

Nutritional Products

Diagnostic Instruments & Tests

Medical & Surgical Devices

Animal Health

Vision Technologies

List of Products

Alitra QAlphaTRAKAluviaAvonexFoxCross .035 PTA CatheterFreeStyleMULTI-LINKMyoplex


http://www.abbott.com/global/url/content/en_US/product/Product_Master_0134.htm








http://www.abbott.com/global/url/content/en_US/20.20.60:60/product/product_category/Product_Category_Profile_0006.htm








Selection of dealers

ABBOTT follows a strict policy in selection of the dealers, since dealers are the first impression a

customer has about the company and therefore it is necessary to fulfill the following pre- requisites

to be eligible to become a dealer:

1) The dealer should have a sound financial background. The financial capability of a dealer is

solely depended on the discretion of the company officials.

2) The dealers’ current business goodwill, measured in terms of dealer goodwill which covers

areas such as infrastructure, manpower etc. and individual goodwill i.e. the persons’ educational

qualification, social status etc.

3) The dealer should have his own infrastructure and logistics, since he is completely responsible

for the inventory and transportation of the goods to the shop from his warehouse.





Responsibilities and Functions of the dealers

ABBOTT believes in “Customer Loyalty” and thus ABBOTT expects that their dealers apart from

selling pharmaceutical products should perform the following functions for better customer

relations’ management:

1) Sales promotion through regular promotional schemes, road shows, campaigns etc. the

expenses incurred by the dealers is shared by the company only if these activities are for

promotion of the company and not of the dealer.

2) Recruitment- done under the guidance of certain ABBOTT officials

3) Training and development of manpower with company assistance

4) Servicing according to the size of orders

5) Customer relation management

6) Promote other products of the company

The dealer should be in regular touch with the customer, keep taking his feedback and ensure

maximum customer satisfaction. The dealer should also try and convince the customer to try newer

product’s of the company.

The dealer has to thus cater to 3 major areas:

Pre sale



Selling

Post sale services

SALES KIT:

A dealer should carry the following in his sales kit:

All products leaflets (adequate quantities)

List of prospects with their addresses

Information about the competition in the market

Price list of ABBOTT products and corresponding prices of competitor products

Shade cards

Financial terms

The various modes of payment through which the dealer pays for the products, he has to receive

are:

1) Cash/ cheques/ DD

2) Credit cards

3) Letter of credit

Margins

The dealers collect their margins at the time of sale of the product. The margin varies according to

the type of the product.

Performance Appraisal

For the dealers-

ABBOTT appoints HR managers with various dealers, who are responsible to layout, the

company’s guidelines which the dealers are supposed to follow. Dealers have a company

appointed business development manager to advise them from time to time.



The company through calculation of the Sales Satisfaction Index conducts the performance

appraisal for dealers.

ABBOTT. maintains a Balance Scorecard for each dealer, in which benchmarks are listed

regarding certain aspects such as shops, infrastructure, sales promotion, qualifications and

eligibility criteria of the staff recruited.

These appraisals are conducted yearly and on the basis of these results certain monetary incentives

are provided to the dealers. The dealership of any dealer can be cancelled for violation of company

norms.

The order processing system is as follows:

Walk in

Demand

Customer requirement

Quotation

Payment

Delivery

ABBOTThas invested huge sums of money to implement and maintain state of the art materials,

inventory and stock to their correct levels in the whole process of production and right up to the

level of the point of sale. With the implementation in “i2 technologies” from the USA the

company’s capabilities to manage the supply chain has become very efficient and effective. The

overall work processes and the business units interact with each other to balance the processes and

integrate all the business units into one consolidated unit with the help of the use of a popular

enterprise resource planning software called S.A.P.



RESPONSIBILITIES OF A SALES PERSON

PRE-SALES

Cold calling – prospect generation

Creation of customer card

Generation of prospect base

Update knowledge of company’s products and it’s competitors

Update knowledge of the company’s new business and products

Update knowledge about the entire product line and accessories

Update knowledge about warranty and service

SALES RELATED

Visit the prospect

Understand his needs and create interest

Give an appropriate solution

Give demo and offer test drive

Handle objections

Follow up with the prospect

Secure order

DELIVERY

Help customers in:

Knowledge about warranty (very specific in pharmaceutical industry- only manufacturing

defects)

Knowledge about service requirement

Complete demonstration if required in big/ bulk orders

Suggest accessories



POST DELIVERY

Help customers in:

On time service

Proactive problem solving

RELATIONSHIP MANAGEMENT

Keeping in touch with the customers

Wishing channel members (B2B) on special days

Proactive feedback

PERFORMANCE APPRAISAL OF SALES PERSON

The company according to the CUSTOMER SATISFACTION INDEX monitors the performance

of a sales person qualitatively and quantitatively. The incentives given to the salesperson varies

according to the price of the product he successfully sells. This report is then used by the company

to further decide the incentives to be given. The company also provides training and development

to the sales force, which is done either by the company or by a third party consulting firm.

FEEDBACK FROM CUSTOMERS

Customer feedback is obtained not only after servicing as mentioned earlier, but post sales too.

There are 2 types of feedback forms customers can fill:



1) Direct feedback to the sales people.

2) A feedback to company through questionnaires and cards

All these feedback cards are sent to the corporate office of the company where the required

action is taken.



Market Research:

The company undertakes Market Research activity to measure its performance in different fields, like after sales service, customer satisfaction etc. It also follows SSI and Customer Satisfaction Index (CSI) study to measure its performance.

SSI (Sales Satisfaction Index)

The J.D. Power SSI Study is a consumer-driven measure of customer satisfaction with the product

sales and delivery process. According to the study, there are six major factors impacting

satisfaction with the dealership at the time of purchase. They are Sales Experience, Explanation at

Delivery, Price Evaluation, Delivery Timing, Salesperson Knowledge and Post-Delivery Contact.

CSI (Customer Satisfaction Index)

The CSI study examines customer satisfaction with quality delivery and dealer service at 12-18

months of ownership. CSI performance factors are problems experienced, service advisor, service

performance, service timing and facility appearance.



Service Network

Structure:

Group Head

Service Support Field Support

On the job Training

Backend T&D Dealer CRM Day to day activities

Development Warranty

ABBOTT Closely monitors each and every aspect of the organisatisation and ensures that each

factor contributing to it’s organisations’ growth is monitored



DAIICHII

Daiichi Sankyo Co., Ltd is a global pharmaceutical company and the second largest pharmaceutical

company in Japan. It achieved JPY 970 billion in revenue in 2010 and is currently ranked number 17 in

world sales. Its headquarter is based in Tokyo. The company also owns the American biotechnology

company Plexxikon, the German biotechnology company U3 and Ranbaxy Laboratories in India. Daiichi

Sankyo is the producer of Benicar (Olmesartan), an angiotensin II receptor antagonist and top selling drug

in the U.S. with total sales of USD 2.7 billion.

Daiichi Sankyo, Inc. (DSI) began operating in the U.S. in 2006. It is the U.S. subsidiary of Daiichi Sankyo,

Co., Ltd. and a member of the Daiichi Sankyo Group. The organization, which includes U.S. commercial

operations and global clinical development (Daiichi Sankyo Pharma Development), is headquartered

in New Jersey.

Daiichi Sankyo Europe, GmbH (DSE), the European subsidiary, is headquartered in Munich, Germany. The

organization is responsible for development and manufacturing for 12 European countries.

Daiichi Sankyo Co., Ltd. is a full member of the European Federation of Pharmaceutical Industries and

Associations (EFPIA) and of the International Federation of Pharmaceutical Manufacturers and

Associations (IFPMA).

In 2009, the highly respected magazine R&D Direction honoured Daiichi Sankyo with its "Best

Cardiovascular Pipeline Award".

Daiichi Sankyo was established in 2005 through the merger of Sankyo Co., Ltd. and Daiichi

Pharmaceutical Co., Ltd. which were century-old pharmaceutical companies based in Japan.

Acquisitions

In 2006, Daiichi Sankyo acquired Zepharma, the OTC drugs unit of Astellas Pharma.

On June 10, 2008, Daiichi Sankyo agreed to take a majority (35%) stake in Indian generic drug

maker Ranbaxy, with a deal valued at about $4.6 billion.

In June 2008, Daiichi Sankyo acquired U3 Pharma, which would contribute a therapeutic anti-

HER3 antibody to the company's anticancer portfolio.

On April 4, 2011 Daiichi Sankyo completed the acquisition of Plexxikon, a Berkeley CA-based

pharmaceutical start-up company for $805 Million and an additional $130 Million in milestone payments,

pending on the success of Vemurafenib (Plexxikon’s lead program) an oral, novel drug that targets the

oncogenic BRAF mutation present in about half of melanoma cancers and about eight percent of all solid

tumors. Daiichi Sankyo is retaining US co-promotion right of the (GSK licensed) drug.



PRODUCT OF DAIICHI SANKYO

Sankyo

Benicar (olmesartan medoxomil)

Mevalotin (pravastatin)

Loxonin (loxoprofen)

Hirudoid

Olmetec (olmesartan)

Captopril

WelChol (colesevelam HC)

Effient (Prasugrel) (co-marketed with Eli Lilly and Company)

win bp piramal (olmesartan medoxomil)

Panipenem

Daiichi Pharmaceutical

Cravit (levofloxacin)

Evoxac (cevimeline)

FloxinOtic (ofloxacin)

Gracevit (sitafloxacin, only sold in Japan)


http://en.wikipedia.org/wiki/Prasugrel


Distribution network

Channel structure, members and their selection

The reach of the channel structure of Daiichi sankyo is all over world . The channel structure is

very simple and effective. Complications are kept out in order to make the overall process very

effective and efficient.

Channel structure

DAIICHI SANKYO

Dealer/ distributor Warehouse

Dealer shops (Chemist)

End customer

Selection of dealers

DAIICHI India as well as out of india follows a strict policy in selection of the dealers, since

dealers are the first impression a customer has about the company and therefore it is necessary to

fulfill the following pre- requisites to be eligible to become a dealer:

1) The dealers’ shop should be centrally located. The proximity to another DAIICHI dealer should

be taken into consideration. An already authorized dealer is taken into consideration when

providing a newer dealer registration.



2) The dealers’ goodwill, measured in terms of areas such as infrastructure, manpower etc. and

individual goodwill i.e. the persons’ investment capability etc.

3) The dealer should have his own infrastructure and logistics, since he is completely responsible

for the inventory and transportation of the goods to the shop from his warehouse.

The company communicates with the dealers on a regular basis. All the strategies and plans are

formulated at the corporate office of DAIICHI SANKYO ., which are then communicated to the

dealers online through the extranet of the company. DAIICHI SANKYO has a DEALERSHIP

MANAGEMENT SYSTEM through which all the regional offices, dealers etc. all over the country

are connected. Any important notice, schemes or policies that needs to be implemented across all

the offices and dealer network of the country, are updated through this system and in a matter of

few seconds, all the dealers are informed about it.

4) The visibility of the shop and the shop area, shelf area, numbers of counter personnel are taken

into account. The warehouse and the warehouse space and location from the actual shop is taken

into account.

Responsibilities and Functions of the dealers

DAIICHI SANKYO . believes in “Customer Loyalty” and thus expects that their dealers apart

from selling pharmaceutical products should perform the following functions for better customer

relations’ management:

1) Sales promotion through regular promotional schemes, road shows, campaigns etc. the

expenses incurred by the dealers is shared by the company only if these activities are for

promotion of the company and not of the dealer.

2) Training and development of manpower with company assistance



3) Servicing according to the size of orders

4) Customer relation management

5) Promote other products of the company

6) Create goodwill for the company

The dealer should be in regular touch with the customers, pharmaceutical ers and architects keep

taking their feedback and ensure maximum customer satisfaction. The dealer should also try and

convince the customer to try newer products of the company.

The dealer has to thus cater to 3 major areas:

Pre sale

Selling

Post sale services

SALES KIT:

A dealer should carry the following in his sales kit:

All products leaflets (adequate quantities)

List of prospects with their addresses

Information about the competition in the market

Price list of ABBOTT products and corresponding prices of competitor products

Shade cards

Financial terms

The various modes of payment through which the dealer pays for the products, he has to receive

are:

1) Cash/ Cheques/ Demand drafts

2) Credit cards

3) Letter of credit



Margins

The dealers collect their margins at the time of sale of the product. The margin varies according to

the type of the product.

Performance Appraisal

For the dealers-

DAIICHI SANKYO appoints HR managers with various dealers, who are responsible to layout,

the company’s guidelines which the dealers are supposed to follow. Dealers have a company

appointed business development manager (BDM) to advise them from time to time.

The company through calculation of the Sales Index conducts the performance appraisal for

dealers. The company appoints a third party research firm who is actually responsible for the

market surveys, research, analysis and interpretation of the figures

DAIICHI SANKYO . maintains a Scorecard for each dealer, in which guidelines are listed

regarding certain aspects such as shops, infrastructure, sales promotion, qualifications and

eligibility criteria of the staff recruited.

These appraisals are conducted yearly and on the basis of these results certain monetary incentives

or trips to various destinations, gifts, vouchers etc. are provided to the dealers. The dealership of

any dealer can be cancelled for violation of company norms.

The order processing system is as follows:

Walk in

Demand

Customer requirement

Quotation

Payment

DeliveryGROUP-SS 10-12 PHARMACEUTICAL SECTOR- ABBOTT& DAIICHII30


DAIICHII India uses various materials management software to improve the efficiency of the

overall process, right from the beginning of the inputs of the raw materials to the final product

which reaches the dealer. The process uses “push and pull technology to achieve excellence. This

technology actually uses the pull protocol to pull in the raw materials in the manufacturing process

and the order management process. The push protocol is used to push the finished products to the

warehouses. Similarly the pull protocol is used to pull the finished products to the shops and dealer

networks by the dealer.

RESPONSIBILITIES OF A SALES PERSON

PRE-SALES

Cold calling – prospect generation

Creation of customer card

Generation of prospect base

Update knowledge of company’s products and it’s competitors

Update knowledge of the company’s new business and products

Update knowledge about the entire product line and accessories

Update knowledge about warranty and service

SALES RELATED

Visit the prospect

Understand his needs and create interest

Give an appropriate solution

Give demo and offer test drive

Handle objections

Follow up with the prospect

Secure order



DELIVERY

Help customers in:

Knowledge about warranty (very specific in pharmaceutical industry- only manufacturing

defects)

Knowledge about service requirement

Complete demonstration if required in big/ bulk orders

Suggest accessories

POST DELIVERY

Help customers in:

On time service

Proactive problem solving

RELATIONSHIP MANAGEMENT

Keeping in touch with the customers

Wishing channel members (B2B) on special days

Proactive feedback

PERFORMANCE APPRAISAL OF SALES PERSON

The company according to the Sales satisfaction index monitors the performance of a sales person

qualitatively and quantitatively. The incentives given to the salesperson varies according to the

price of the product he successfully sells. This report is then used by the company to further decide

the incentives to be given. The company also provides training and development to the sales force,

which is done either by the company or by a third party consulting firm.



FEEDBACK FROM CUSTOMERS

Customer feedback is obtained not only after servicing as mentioned earlier, but post sales too.

There are 2 types of feedback forms customers can fill:

1) Direct feedback to the sales people.

3) A feedback to company through questionnaires and cards

All these feedback cards are sent to the corporate office of the company where the required

action is taken.

Corporate organization



Corporate (the global corporate office and Japan Company Administration Division) will be

integrated and divided by category based on function into the Corporate Strategy Division, the

Corporate Management Division, the General Affairs & Human Resources Division and the

Legal Affairs & CSR Division to consolidate organizational functions and enhance closer

cooperation. By increasing coordination of local/global and short/mid to long-term, Daiichi

Sankyo seeks to ensure high-level linkage among the four divisions and realize the full

application of Corporate’s resources.

1) Corporate Strategy Division

The Corporate Strategy Division will be created to consolidate mid to long-term business

planning and the strategic planning and promotion functions. The division will comprise

the Corporate Strategy Department (new), the Business Development & Licensing

Department, the Global Brand Strategy Department (new), and the Intellectual Property

Department.

① Creation of the Corporate Strategy Department

This department will plan Group management and business strategy and provide

unified strategic support for corporate heads to improve coordination within the Group.

② Creation of the Global Brand Strategy Department

This department will integrate product strategy and the function of the current Global

Marketing Department. It will seek to optimize the value of global products with a

wide-ranging business plan that includes strategic planning and promotion beyond

marketing. With the creation of this new department, the current Global Marketing

Department will be phased out.

2) Corporate Management Division

The Corporate Management Division will consolidate the functions, centered around

annual corporate planning and business strategy, which promote effective management of

the challenges faced by the Group in addition to effective utilization of Group resources .

The unit will comprise the Corporate Business Management Department (reorganized), the

Finance & Accounting Department, the Corporate Communications Department and the IT



Strategy Department (reorganized).

① Reorganization of the Corporate Business Management Department

The current Business Management Staff and Japan Company Administration Division

functions will be reorganized with the aim of controlling budget and performance

management for each business in and outside of Japan and ensuring comprehensive

management of Group companies in and outside of Japan.

② Reorganization of the IT Strategy Department

The current IT Strategy Staff and Japan Company IT Strategy Department functions

will be integrated and reorganized into the IT Strategy Department.

3) General Affairs & Human Resources Division

The General Affairs & Human Resources Division will be set up to consolidate promotion

of personnel management to support implementation of corporate planning and business

strategy, and organizational functions dealing with planning facilities and sourcing. The

division will comprise the Human Resources Department (reorganized), the General

Affairs & Procurement Department (reorganized), and the Secretariat Department.

① Reorganization of the Human Resources Department

This department will integrate and reorganize the current Human Resources Strategy

Staff function and Japan Company’s Human Resources Department.

② Reorganization of the General Affairs & Procurement

This department will integrate and reorganize the current Corporate Business

Management Staff function and Japan Company’s Administration Division

Procurement Planning Group.

3) Legal Affairs & CSR Division

The Legal Affairs & CSR Division will be created to consolidate the functions of legal,

contracting, internal control, compliance and CSR implementation. The new division

consists of the Legal Affairs Department and the CSR Department. The Internal Audit



Department, which is directly supervised by the CEO, will coordinate as necessary with this

department in order to ensure information sharing for smooth business operations.

① Creation of the CSR Department

The CSR Department will integrate the functions of the current CSR Staff, CSR

Management Group of the General Affairs Department, and the Legal & Compliance

Group of the Legal Affairs Department to enhance total management of CSR.

II. Japan Company

Japan Company is specialized for sales of innovative pharmaceuticals in Japan. The sales

structure will include domestic pharmaceuticals, established drugs (DSEP) and the vaccine

businesses.

1) Creation of the Japan Business Management Department

With the integration of the global corporate office and Japan Company’s Corporate

Management Division, this department will be created as a staff organization for the

company president to perform operations planning, budget procurement and management

2) Business Intelligence Division

① Restructuring of the Post Marketing Studies Management Department

The function of the Product Lifecycle Management Department will be transferred to

the Post Marketing Studies Management Department, and the Product Lifecycle

Management will be phased out.

3) Sales and Marketing Division

The current functions of the Sales Planning Department, Product Marketing Department

and Promotion Management Department will be organized into the Sales Planning

Department and the Marketing Department. Also, the Training & Information Department

will be created to enhance the corporate function which carries out advanced promotion of

MR activities and deal with increasing regulations on sales.

① Creation of the Training & Information Department

The Training & Information Department will handle human resources training,

product-related training, and media communications.



4) Creation of the Vaccine Business Development Office

The Vaccine Business Development Office will be created to handle planning and

promotion for the growing vaccine business.

5) Creation of the Vaccine Business Strategy Department

The Vaccine Business Strategy Department will be created to coordinate the growing

vaccine business with Group companies.

① Name change for Vaccine Business Strategy Department

The Vaccine Business Planning Department will be transferred from the Business

Intelligence Division and renamed the Vaccine Business Strategy Department.

III. ASCA Company

1) Name change for the Business Planning Department

The name of the current Japanese Business Management Department will be changed to

the Business Planning Department in line with added focus on ASCA regional business

Market Research:

R&D Division

The current research head and Japan development head will be reorganized as the

Research Oversight Function and the Japan Development Oversight Function to separate

and clarify the responsibilities of the research and development fields in the R&D Division

while boosting autonomy and ability to respond quickly.

2. DAIICHI SANKYO ESPHA CO., LTD.

1) Dissolution of the Sales & Marketing Division With the strengthened authority of corporate,

the Sales & Marketing Division will be phased out to speed up decision making, flatten out the

organizational hierarchy and strengthen upper management.

2) Creation of the Corporate Management Department

The Japanese Business Management Department and Sales Administration Department

will be combined to form the Corporate Management Department to remove overlap in

responsibilities, boost efficiency, and ensure functional enhancement. GROUP-SS 10-12 PHARMACEUTICAL SECTOR- ABBOTT& DAIICHII37


3. DAIICHI SANKYO HEALTHCARE CO., LTD.

1) Creation of Direct Marketing Office

With the start of the direct marketing business, the Direct Marketing Office will be created

with different functions from the retail marketing business to ensure rapid strategy

formulation and implementation.

Service Network

Structure:

Group Head

Service Support Field Support

On the job Training

Backend T&D Dealer CRM Day to day activities

Development Warranty

DAIICHI world closely monitors each and every aspect of the entire process in the business

organization. The service network is similar to that of ABBOTTbut the CRN and training and

development is not that developed. The technical support in the business units is different as we

have already discussed earlier that ABBOTTuses SAP and i2 technologies while DAIICHI uses

push and pull protocol.

ANALYSIS

The total size of the sample used was 15 each for ABBOTTand that for DAIICHI India. For the

sales people the total size of the sample was 2 for each company. GROUP-SS 10-12 PHARMACEUTICAL SECTOR- ABBOTT& DAIICHII38


The parameters that were taken to check the effectiveness and the rating scale are as follows:

Scale 1

Very satisfied- 4

Satisfied- 3

Not satisfied- 2

Not at all satisfied- 1

Scale 2

Excellent- 4

Good- 3

Average- 2

Poor- 1

Scale 3

Weekly- 4

Bi- monthly- 3

Quarterly- 2

Others- 1

Scale 4

Strongly agree- 4

Agree- 3

Neutral- 2

Disagree- 1

Scale 5

Always- 4 Sometimes- 3 Rarely- 2 Never- 1



Recommendations ON DAIICHI SANKYO and ABBOTT

Daiichi Sankyo:

Just two days after Takeda Pharmaceutical Co. Ltd. unveiled more details about the global

expansion of its new vaccine business – which it expects to become the top vaccine supplier in

Japan - Daiichi Sankyo announced March a vaccines joint venture with GSK that would create the

number one vaccines business in Japan. The 50-50 joint venture Japan Vaccine Co., Ltd. will be

led by co-CEO representatives from each company. The JV’s stated goal is to join GSK's extensive

vaccine pipeline with Daiichi Sankyo's domestic manufacturing, sales and development presence.

Keeping all things equal, the companies will sell their prophylactic vaccines into the JV, and will

earn for 50-50 profits. Daiichi Sankyo and GSK will also split the ¥100 million start-up capital for

the venture, and each will send three executives to sit on the six-member board. Each company

will be responsible for their own research, preclinical and pre-proof-of-concept and ultimately

manufacturing of their own products. Japan Vaccine will step in for development after proof-of-

concept. GSK has been vocal about growth opportunities in Japan. The firm's Japan business grew

30% from 2010 to 2011, largely on the back of the human papillomavirus vaccine Cervarix

(human papillomavirus types 16,18), which was added to a government reimbursement program

for vaccines in 2010. Since then, Japan has leapfrogged to become Cervarix' largest market. The

joint venture will begin operations July 2.—Dan Poppy

ABBOTT

Abbott is readying for two major steps in its evolution. Most prominently, it’s preparing to split its

pharma division from its diversified medical products business this year, creating two public

companies from one. But it’s also preparing for December 2016, when its best-selling drug loses

patent protection. Abbott’s injectableHumira (adalimumab) for rheumatoid arthritis and other GROUP-SS 10-12 PHARMACEUTICAL SECTOR- ABBOTT& DAIICHII40

http://invivoblog.blogspot.com/2011/12/2011-m-of-year-nominee-abbottabbott.html

http://www.elsevierbi.com/publications/the-pink-sheet-daily/2011/10/19/abbott-to-split-into-two-publicly-traded-companies-over-next-12-months

http://www.daiichisankyo.com/news/20120302_367_E.pdf


autoimmune diseases is currently among the world’s top sellers, with $7.9 billion in 2011 sales,

representing more than 46% of Abbott’s global sales of proprietary drugs. With less than five

years’ time left on the clock, not to mention a looming threat of competition from oral drugs or

lower-priced alternatives, Abbott is already looking for a successor.

With that evolution in mind, Abbott made like the HMS Beagle and set sail for the Galapagos this

week – specificially Galapagos NV of Belgium, where among the tortoises and finches lay the

crown jewel GLPG0634, a selective JAK1 inhibitor that’s already shown promising data in a

Phase IIa study in rheumatoid arthritis, and is expected to enter a Phase IIb dose-range-finding

study soon. In an extremely rich deal for a mid-stage candidate, Abbott paid $150 million up-front

to claim worldwide rights to the drug, and will pay a second $200 million licensing fee if the Phase

IIb study yields data that satisfy a set of pre-determined but undisclosed criteria. Additional

milestone payments could add $1 billion more to the deal, while Abbott remains on the hook for

double-digit royalty payments if GLPG0634 is ever commercialized.

For Abbott, it’s a way to make doubly sure that its autoimmune franchise is extended. Last

summer, the company paid $85 million up-front to license German biotech Biotest’s BT-061, a

Phase II antibody that binds to the CD4 protein and slows overreactions of the immune system.

That gives it two potential successors to the same blockbuster drug, providing insurance that its

sales force will have something else to sell once Humira begins to fade. And it gives Abbott

another promising molecule to talk up on its current road shows, in anticipation of the looming

split and the public offering that will accompany it.

It’s also just the latest in a series of deals in which Abbott has outbid and outspent its peers for

assets that still carry plenty of risk. The company has twice paid Reata Pharmaceuticals top dollar

for its compounds, buying ex-U.S. rights to chronic kidney disease treatment bardoxolone for $450

million in 2010 and nabbing a group of pre-clinical antioxidant inflammation modulators for $400

million late last year. If it’s going to be an independent company, Abbott’s pharma division would

do well to be better-balanced, with a diverse group of revenue-generating products. Without the

diversified medical products business to balance things out, its weaker quarters on the pharma side

may be all the more obvious – and damaging.

That’s one reason why Galapagos’s drug seemed like a natural selection for Abbott and why we

hope you’ll join us on another pun-filled voyage of…


http://en.wikipedia.org/wiki/Oh_My_God,_Charlie_Darwin

http://en.wikipedia.org/wiki/Lou_Costello

http://invivoblog.blogspot.com/2011/12/deals-of-week-notes-holiday-generosity.html

http://invivoblog.blogspot.com/2010/09/deals-of-week-meets-outlier.html

http://invivoblog.blogspot.com/2011/06/deals-of-weeks-summer-song.html

http://www.abbott.com/news-media/press-releases/abbott-and-galapagos-announce-global-collaboration-for-novel-oral-therapy-glpg0634-in-phase-ii-to.htm


ANNEXURE

Questionnaire for Channel Members

Name : Phone no :

Address: Organization:

1) What are the expectations of the channel members from the company?



2) What is the distribution network of the company?

3) What do you think about the distribution network of the company? Excellent Good Average Poor

4) Whether the company is able to provide material in time or not?

Excellent Good Average Poor

Reasons-

5) What is the credit policy of company to its channel members?

6) What is the attitude of company sales representatives?

Very satisfied Satisfied Not satisfied Not at all satisfied

7) Whether company’s sales representatives are really help them in getting big orders?

8) What is the frequency of sales people visit to its channel members?

Weekly Bi monthly Quarterly Others (please specify)

9) What kind of promotion company is doing to increase their sales?

10) What percent of margin they are getting for selling the product?



2% - 5% 5%- 10% 10%- 15% Above15%

11) What kind of reward company is providing to you, if they achieved their target?

12) Which product lines from major companies are you distributing?

13) Who bears the cost of transportation/?

14) What is your storage Capacity?

15) Did the company meet the expectations of delivering the product on time?

Always Sometimes Rarely Never

16) Are you satisfied with the availability of product at warehouses of company?


17) What is the condition of product at the time of delivery?


18) How do you relate the behaviour of transporters?




19) Does the company show flexibility in its delivery and quantity operations?


20) Whether company’s sales people are able to explain product features clearly or not?


21) Whether company’s sales people able to explain company policies to you?


22) Whether salespeople able to handle the complaints efficiently?


23) What is the response time of salespeople?

24) How frequently does the company take the feedback from you?

Very Frequently Frequently Sometimes Never



Questionnaire for Company’s Sales People

Name : Phone :

Address: Organization:

1) What is the sales hierarchy of the Sales Department?

2) What are the expectations of company from its channel members?

3) What are the objectives of company sales’s people?

4) What is the distribution network of company?

5) How they are able to make co-ordination between channel members?

6) What criterion they used for the selection of channel members?

7) How they maintain performance appraisal system for Sales People?

8) Who does the performance appraisal for the sales people?



9) What is the frequency of the performance appraisal?

10) What format that is used for the performance appraisal?

11) What are the criterions of performance appraisal of salespeople?

12) What kind of rewards they generally give to their channel members for achieving the target?

13) What is the frequency of visits to channel members?

Very Frequently Frequently Sometimes Rarely

14) What kind of relation they maintain with their channel members?

15) How they are able to motivate their channel members for achieving the target?

16) How company is motivating the sales people for achieving the objectives of business?



17) Which of your IT infrastructure do you share with your distributions?

18) Do you have your own distribution network?

19) Which trade shows you generally participate in?

20) How empowered are salespeople to solve the problems of channel members?

Strongly Agree Agree Disagree Strongly Disagree

21) Are you satisfied with numbers of promotion activities undertaken by the company?


22) Who bears the cost of transportation?

23) What are the modes of transportation?

24) What are the various cost involved in transportation?



25) What type of market research being carried out by the organizations with respect to customers?

26) What type of targets company sets for it’s sales people?

27) What factors are taken into account while finalizing and assigning targets?

28) What factors are taken into account while assigning territories to salespeople?

29) What are the payment terms for the sales people?

30) What percentage of discount are you authorized to give to the company channel members?

1% - 5% 5%- 10% 10%- 15% Above15%

31) What percentage of margin the sales people get for selling the product?

1% - 5% 5%- 10% 10%- 15% Above15%

32) Do you think your company is providing you with the best infrastructure?




34) How frequently does the company take feedback from you?

Very Frequently Frequently Sometimes Rarely

35) How often does company respond to the customers view?

Always Often Sometimes Never

36) How do you rate the company’s customer orientation process?


37) How do you relate the behaviour of transporters?


38) What is the condition of product at the time of delivery?


39) Does the company show flexibility in its delivery and quantity operations?


40) What is the frequency of sales people visit to its channel members?

Weekly Bi monthly Quarterly Others (please specify)

41) Are you satisfied with the quality and quantity of promotions?


42) Do you agree with timing of promotions and distribution?

Strongly Agree Agree Neutral Disagree


Sales Report

Documents

sales functioning

sales force

distribution network

corporate sales daiichii

daiichii india sales

competitive sales policies

sales department prevalent

service network