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Sales Force Effectiveness

Chinese Pharmaceutical Market has become the 3rd biggest market globally, the fast growth in last two decades was unique and may not be copied ever by any other country in future.

Many multinational pharmaceutical companies are expanding their investments in China. For years, they have taken a bigger-is-better approach on the sales field force and marketing programs. However, the discrepancy between growth in investment and increase in prescription has made the return of investment one of the most important challenges.

Other challenges confronting the industry are weak product pipelines, product withdrawals, external regulatory changes, cost constraints and financial pressure from investors.

In the past ten years Loudon China has worked in the Chinese market to provide SFE services to major pharmaceutical companies in order to improve their effectiveness in sales and marketing.

Key services we provide include:

KPI Measurement

Share Of Voice (SOV) Measurement

Targeting and Segmentation

Sales Force Reallocation and Optimization

KPI Measurement

Since 2001 Loudon China has conducted SFE survey to help multinational companies' to benchmark their performance regarding Key Performance Indicators (KPIs). The data were applied by key companies for strategy planning, refinement of implementation, sales and marketing performance appraisal, and prioritization of KPI improvement plans.

The process of screening and decision making on KPIs is well designed and validated. With reference to various products in the markets, clients' requests and advice from key clients, Loudon China developed a pool of KPIs. The KPIs were analysed in each wave by correlation with company market shares, factor analysis and screened to the current set of parameters. The chosen KPIs correlate with market performance.

KPI measurements includes the following three parts,

Perceived Corporate Image

Sales Force

Marketing Programs

In addition, we analyse the data by rating the specialties to balance any sampling bias.

Share Of Voice (SOV) Measurement

The Share Of Voice measurement comparative sales force noises, mainly through the integrated analysis of key statistics of sales activities.

The SOV model showed good response in China. The experience of expanding the sales force size brought good return, and medical reps' productivity was maintained. The liner response window has been much larger than people estimated, but this needs to be carefully monitored.

Targeting and Segmentation

Loudon China has experience in providing TA sales potential assessments for each hospital and city.

About 140 Chinese cities have a population of more than 500,000 citizens. A typical large MNC has sales reps physically in about 250 cities, and cover about 500 cities' hospitals. There is a strategic decision to be made regarding how many cities’ of hospitals to cover in short term, mid term and long term.

According to MOH statistics, in 2006 China has about 18,000 hospitals at county level or above. When introducing a new product, it is important to decide, which hospitals to target, and the goal regarding percentage of market in terms of TA sales.

For marketing management, the key issue would be what size of sale force is appropriate for each TA to get the maximum return of the sales force investment.

Loudon China provides our solution to this issue from a new perspective and adopted cost-effective methodology. We simulate and project each hospital and city TA sales potential of specific TA, and suggest options for pharmaceutical companies targeting of hospitals in general and individual hospitals in the targeted segments.

To integrate with our consulting service, we provide relevant information and data to management, scenarios by broadness (number of hospitals or hospital groups) and depth (number of cities) of target hospitals and cities, and resources needed. Options of market entry strategies could be compared, and the sales force allocation strategy could also be fine-tuned.

Sales Force Reallocation and Optimization

The sales force is a pharmaceutical company's most important investment and resource. For many companies, it is the most valuable and expensive asset. Sales force design deserves our close attention, as it can easily influence the marketing effectiveness, and therefore the sales.

Determining the size of a sales force is not easy. The implications of downsizing or upsizing the sales organization must also be carefully considered. Developing the right solution requires a process that combines evidence-based analysis with the collective experience of the sales people.

The optimization of the sales force depends on clients' business strategy as well. Whether the size of the team will increase or decrease, and if it increases will the clients' be market share oriented, productivity oriented, or focus on the bottom line margin.

LFE has worked with several pharmaceutical companies to design or optimize its sales force. We would be happy to discuss and share with you our knowledge and know-how, key success factors, and proven methodologies.