IJBMEIT: Vol. 4, No. 1, January-June 2012: 97-103

Sales Force Effectiveness of Pharmaceutical Industry C.R. SUNDARA RAJAN*1 AND K. SAKTHI SRINIVASAN2 1

VIT Business School, VIT University, Vellore 632014, Tamil Nadu, India, E-mail: [email protected]

2

VIT Business School, VIT University, Vellore 632014, Tamil Nadu, India, E-mail: [email protected]

Pharmaceutical industry in India during recent years is facing lot of challenges due to intensive competition, patent ruling and pricing policy dictated by court of law. All the companies in this industry are now trying to improve their market share by producing and selling their own patent drugs and also the OTC drugs. For selling these two types of medicines, companies are spending huge amount of money in training their sales force. Taking this as an issue, the present study tries to analyse and measure the sales people effectiveness of this industry. The findings of the study turns out to be interesting one, as many hidden abilities are to be nurtured in the minds of sales people to call them a real force behind the performance of a pharmaceutical company. JEL Code: M31, J24, L65, M12, M52, M53, M39. Keywords: Interpersonal Skills, Salesmanship, Sales Technique, Technical ability.

1. INTRODUCTION 1.1 Sales Introduction

facilitated the pharmaceutical organizations started focusing on alternative marketing and sales channels.

The pharmaceutical industry is highly organized than any other industry. The size of the Indian pharmaceutical industry is approximately US $20 billion. The country now ranks third worldwide by volume of production and 14th by value. (FICCI India in business Report, 2010). Today, the Increasing financial pressure, regulatory constraints and changes in buyer behavior are challenging the pharmaceutical industry in Asia. In earlier years the pharmaceutical industry reacted to similar developments by focusing on products for common chronic dieses that were typically marketed to general practitioners. The pharma companies focused on global presence of their products to maximize the sales in as many as country possible. To support these activities the organizations increased their sales forces and offers regular coaching and feed back to all sales representatives.

In examining academic research majority of the articles address sales performance and sales effectiveness (Leigh, Pullins and Comer, 2001). The increased competition and a demand for cost-cutting measures has prompted many health-care organizations to market their products through their trained sales force. The products have to be promoted by meeting the medical specialists/consultants at hospitals, nursing homes and private clinics. Since most of pharmaceutical products are scientific and highly competitive in nature. Moreover, the Sales force involvement in promotion of healthcare products are highly technical and intangible services. The pharmaceutical industry sales person uses her salesmanship skills, Interpersonal skills, technical skills and marketing skills in an effective manner to achieve the targets. (Joseph O.Rentz, et. al., 2002))

Identifying the exact need and provide the suitable training will help the organizations to improve the overall effectiveness; otherwise this will lead cost for the organization. In some companies the sales and marketing expenses touched 30% of their revenue and in few cases, the sales force cost the company more than R&D. Today, the sales force activities are more focused and marketing strategies have been implemented to individual stakeholders. This method

The personal characteristics towards these skills of a sales person lead for their success rate in achieving their sales targets. This paper aims to discover emerging trends and gain insights on Indian pharmaceutical organizations’ sales force effectiveness with reference to various sales related skills.

*

Corresponding Author: [email protected]

1.2 Statement of the Problem This study focused to investigate only on effectiveness of the sales force. Pharmaceutical industry is a well

98 / C.R. Sundara Rajan and K. Sakthi Srinivasan

orgainsed sector, which inculcates the much needed efficiency into its sales force. So, mere, sales performance is looked down by this industry, instead they need a person with a mixture of skills which accelerates the growth prospects of a company for a minimum of 15 years down the line. The purpose of this research paper is to trace this particular gap. Hence different attributes were selected and put to test. The following diagram clearly expresses the industry need in a sales person.

Figure 1: Sales Force Effectiveness Model

Based on the above parameters, the present study is being undertaken to evaluate the presence of these skills among the selected sample units. The issue that is under focus in this study is to disclose the existing skill sets of the currently employed sales force of the Indian and Multinational pharmaceutical industry. 1.3 Objectives This study is focused to bring out the relevant factors that are considered as efficiency measures of the sales people. Hence the prime objective of the present research is to find out the attributes which are necessary in a sales force of a pharmaceutical company. The influencing factors help pharmaceutical organizations to easily evaluate their sales force strength. Hence, by establishing standards on sales force effectiveness, necessary steps can be taken to solve the issues in achieving the effectiveness of their sales team. By identifying the specific needs of the sales force effectiveness, organizational expenses might be reduced to certain extent. 2. REVIEW OF LITERATURE The term sales performance has been discussed more than 100 years by various research authors. In sales literature, the performance has been expressed in various ways and there are inconsistencies in the conceptualization of the construct. Plank and Dempsey (1980) mentioned that the research study on ‘formula selling’ (William James, 1898), and need satisfaction by (Strong, 1925). Walker et al. (1979), define sales performance as ‘behavior that has been evaluated in terms of its contribution to the goals of the organization’ (pp. 33, 35).

Selling skills are the indicators for the sales performance. The selling skill consists of three main components of interpersonal skills, salesmanship skills and technical skills. (Joseph O. Rentz, et.al, 2002). Anderson and Oliver (1987) conceptualize sales performance as consisting of salesperson’s outcomes as well as their behaviors. The sales outcome includes revenue, new accounts, market share, sales units and profitability. The behavior includes selling skills such as team work, adaptive selling, communication and customer orientation which include sales calls, time management, and territory management. The study conducted by Challagalla and Shervani, 1996; Cravens et. Al., 1993; Oliver and Anderson, 1994 have also focused on salesperson’s outcomes and behavior. The great work done by Churchill et.al. (1985) to examine the influence of selling skills of sales person performance. The research by Spiro and Weitz 1990 has focused on the ability to adaptability in the selling situation which could be classified as salesmanship skill. Other research has focused on the aspects of interpersonal skills, such as effective listening skill(Comer and Drolhnger 1999; Castleberry and Shepherd 1993) and the technical skill like customer knowledge (Smith and Owens 1995). However, to date no research effort has attempted to isolate sales skills as a holistic construct (Bagozzi 1984). Szymanski and Churchill (1988) found significant differences in the structure of evaluation cues and in the weight placed on these cues by more and less effective salespeople. Leong, Busch, and Roedder John (1989) found that higher performing salespeople have more distinctive scripts and consider more contingencies in different selling situations than do those who do not perform as well. Sujan in 1999,” street-smart” salesperson conceptualization combined with optimism with perceptive observation of customers, supervisors and support staff (Interpersonal skill) and adaption (salesmanship skill). Instead of an individual skill focus, the research focused on identifying the mental processes and knowledge possessed by highly effective salespeople. Leong, Busch, and Roedder John (1989) found that higher performing salespeople have more distinctive scripts and consider more contingencies in different selling situations than do those who do not perform as well. 3. METHODOLOGY Front line sales executives were selected for the study. A random selection of both multi national and Indian Pharmaceutical company’s sales executives were taken

Sales Force Effectiveness of Pharmaceutical Industry/ 99

as sample unit. Sixty four front line sales executives have responded accurately out of 130 samples. Due to inappropriate answers, 66 respondents had to be removed to get a clear and reliable response. For this study, one metropolitan city (Chennai) and one corporation (Vellore) were selected for conducting the survey. The collected data were put to simple percentage analysis to get the relevant information. 4. DATA ANALYSIS AND INTERPRETATION The scale used to measure the sales force effectiveness covered the areas of interpersonal skills, salesmanship skills, technical skills and selling techniques. The respondents were asked to indicate their assessment in a five point scale rating. The factors were evaluated using response scale anchored by 1(poor) and 5(outstanding) at the two extremes. Table 4.1 Socio-economic Factors Personal Details Age 20 to 30 30 to 40 Total

No. of Respondents

Percentage (%)

30 34 64

46.9 53.1 100

61 3 64

95.3 4.7 100

2 32 30 64

3.1 50.0 46.9 100

21 43 64

32.8 67.2 100

Gender Male Female Total Education Diploma UG PG Total Marital Status Married Unmarried Total

The study measured the sales force effectiveness of front line sales executives of pharmaceutical industry. Out of 64 respondents, majority (53%) were under 31-40 age category and was followed by the age group of 20-30 who comprised about 47 per cent. Also, in the gender, male dominated the sample (95%) and only 5 per cent were female. Most of respondents (50%) were undergraduates and an almost equal (47%) were having post graduate degree. Unmarried executives formed the majority (67%) of the sample size, and 33 per cent married formed the next sample size.

Table 4.2 Interpersonal Skills S. Attribute No. 1 2 3

4

5

6

7

Poor

Ability to express yourself non-verbally Ability in general speaking skills Awareness and understanding of the nonverbal communications of others Ability to control and regulate nonverbal displays of emotion Ability to present yourself socially, possibly through acting Ability to manipulate others to control the situation Awareness and understanding the verbal communications of others.

Average

Good

Very Outstanding Good

0

7.8

35.9

40.6

15.6

0

6.2

28.1

56.2

9.4

0

4.7

37.5

37.5

20.3

0

6.2

31.2

51.6

10.9

0

3.1

21.9

42.2

32.8

0

4.7

25.0

46.9

23.4

0

3.1

29.7

45.3

21.9

The respondents were asked to measure their interpersonal skills in a five point scale rating. Here the highest percentage of response was given the first three rankings and those factors which received these rankings are considered as influencing skills of a sales person. Taking this as a reasonable method, the study considered the following scales as the determining one, viz., “good”, “very good” and “outstanding”. (Since, the calculated percentage were meager in the first two scale, viz., ‘Poor’ and ‘Average’, the scores were not taken for interpretation). Summing up these three scales have extracted the following results. It was found (Table 4.2) that “Ability to present yourself socially, possibly through acting” and “Awareness and understanding the verbal communi-cations of others” takes the maximum response (96.9%). These two could be considered as the first factor and be renamed as ‘personality & understanding skills’. The second factor was renamed as ‘Nor-verbal and Manipulative Skills’ based on the scored received by the following two attributes “Awareness and understanding of the nonverbal communications of others” and “Ability to manipulate others to control the situation” which took a score of 95.3 per cent. The third factor ‘Communication and Regulatory Skills’ were formed on the scores of “Ability in general speaking skills” and “Ability to control and regulate nonverbal displays of emotion” based on their overall score of 93.7 percentage. Table 4.3 Salesmanship Skills S. Attribute No.

Poor

Average

Good

Very Outstanding Good

1

Ability to prospect for customers.

0

3.1

48.4

34.4

14.1

2

Ability to qualify prospects

0

1.6

37.5

54.7

4.7 Table Cont’d

100 / C.R. Sundara Rajan and K. Sakthi Srinivasan Table 4.3 Cont’d 3.

Ability of open relationships with prospects.

0

3.1

32.8

43.8

20.3

4.

Ability to close the sale.

0

1.6

28.1

46.9

23.4

5.

Ability to present the sales message.

0

1.6

43.8

32.8

21.9

6.

Ability to service the account.

0

6.2

21.9

51.6

20.3

7.

Ability to handle the objections

1.6

6.2

25.0

42.2

25.0

8.

Ability to work with the team

0

1.6

23.4

48.4

26.6

When the respondents were asked to measure their salesmanship skills in a five point scale rating, yet again the analysis (Table 4.3) showed similar results as found in table 4.2. The response for the scales ‘Poor’ and ‘Average’ were not significant to be taken for further interpretation. This left the study to extract the factors from the remaining three scales. In this calculation, two factors were formulated based on the scores of six attributes. The maximum number of response in terms of percentage was found with three attributes, viz., “Ability to close the sale”, “Ability to present the sales message” and “Ability to work with the team”. These three put together received a score of 98.4 per cent, which could be considered as the first factor and can be renamed as ‘Selling Efficiency’. The second factor was extracted from another three attributes which got a lesser score of 96.9 per cent. The factor was named as ‘Developing Prospects’ on the “Ability to prospect for customers”, “Ability to qualify prospects” and “Ability to open relationships with prospects”. Table 4.4 Technical Skills S. Attribute No. 1. 2. 3.

4.

5.

6

7

Poor

Knowledge of customers’ 0 markets and products. Knowledge of your own 0 company’s procedures. Knowledge of competitors’1.6 products, services, and sales policies. Knowledge of product 0 line, including product features and benefits. Knowledge of customers’ 0 operations, such as store and shelf layout. Imagination in supplying 0 products and services that meet the customers’ needs. Timely reporting to 0 various levels

Average

Good

In this third category which determines the sales effectiveness, technical skills of the sales people were measured (Table 4.4) with seven attributes. Of these seven, only five turned out be attracting maximum number of scores among the respondents. As in the earlier analysis, the first two scales were ignored and the last three scales are considered for the study. “Knowledge of customers’ market and products” and “Knowledge of product line, including product features and benefits” were named as ‘Product Knowledge’ and taken as the first factor with a high score of 98.5 per cent. The second factor, ‘Procedure skills and reporting skills’ was coined by taking the next three attributes which had a combined score of 96.9 percent. That is, “Knowledge of your own company’s procedures”, “Knowledge of customers’ operations, such as store and shelf layout” and “Timely reporting to various levels” emerged as significant attributes which also determined the technical skills. Table 4.5 Selling Techniques S.No.Attribute

1

2

3

4

5

1.

I continually work to 0 improve my selling skills.

3.1

21.9

48.4

26.6

2.

I am always learning something about my customers.

0

1.6

31.2

43.3

21.9

3.

I am very flexible in the selling approach I use.

0

4.7

25.0

43.8

26.6

4.

I continually work to improve my product knowledge

0

0

21.9

50

28.1

5.

I try to understand how one customer differs from another

0

4.7

26.6

42.2

26.6

6.

Learning how to be a better salesperson is of fundamental importance to me

0

1.6

31.2

43.8

23.4

7.

I can easily use a wide variety of selling approaches

0

3.1

31.2

43.8

21.9

8.

I learn something from each selling experience.

0

3.1

26.6

46.9

23.4

9.

When I feel that my 0 sales approach is not working, I can easily change to another approach.

4.7

25.0

34.4

35.9

Very Outstanding Good

1.6

39.1

34.4

25.0

3.1

20.3

54.7

21.9

4.7

25.0

59.4

9.4

1.6

29.7

48.4

20.3

3.1

32.8

45.3

18.8

6.2

25.0

48.4

20.3

1.6

28.1

42.2

26.6

Rating

Sales Force Effectiveness of Pharmaceutical Industry/ 101

In this analysis (Table 4.5), the responses have been tabulated based on 5-point scale which measures the degree of acceptance for the stated attributes. Rating 1 is given to “strongly disagree” and 5 is given to “strongly agree”. In this analysis, only the favourable measures are summed up to arrive at the final response, for which rating 5 and 6 has been considered. Of the nine attributes, eight were observed to get the required numbers that might determine the sales effectiveness. ‘Improving Attitude’ was the first factor emerged from two attributes, viz., “I continually work to improve my selling skills” and “I continually work to improve my product knowledge” which received a score of 78 per cent. The second factor was formulated on the platform of three attributes, viz., “I am very flexible in the selling approach I use”, “I learn something from each selling experience” and, “When I feel that my sales approach is not working, I can easily change to another approach”. These three summed up to 70.3 per cent. Hence it could be called as ‘Experiential Learning’. “I am always learning something about my customers”, “Learning how to be a better salesperson is of fundamental importance to me” and, “I can easily use a wide variety of selling approaches” gave the study the third selling technique factor and was termed as ‘Keenness to adoption’ with a score of 65.7 per cent. 5. FINDINGS AND CONCLUSION The present study attempted to bring out the factors that are strong enough to strengthen the sales force effectiveness among front line sales persons of Indian pharmaceutical industry. For to filter out the real attributes, four different skill sets were measured on the sales people. Skill sets like 1) Interpersonal skills, 2) salesmanship skills, 3) technical skills and 4) sales techniques were found to be the most relevant one which could be measured upon. Simple percentage analysis was used to disseminate the relevant information. The major findings from the study were as under: 5.1 Interpersonal Skills Three factors were found (Table 4.2) to be prevalent in the sales person that sharpens their effectiveness. The factors that were extracted are (a) Personality & Understanding Skills, (b) Non-Verbal and Manipulative Skills and, (c) Communication & Regulatory Skills. The above factors were ordered according to their high scores. The meaning here is, a sales person who needs to excel in his profession should have the basis of social understanding and easy understanding of verbal communications(Personality & Understanding Skills), the next aspect which is to

be looked upon is the grasping nature of non-verbal communication and the skill to manipulate the opposite person(Non-verbal and Manipulative skills) and, the other aspect that are noted is the way sales person communicates and regulates the non-verbal emotions (Communication & Regulatory Skills). These three factors should be an integral part of the interpersonal skills that should be tested by a Pharmaceutical industry amongst the efficient sales people. 5.2 Salesmanship Skills For a Pharmaceutical company, entire performance depends on the efficiency of its sales people. Their efficiency is measured in terms of identifying the prospective customers; their skill in closing a sale; maintaining the same repute with the existing customers, to list few., these were taken as different attributes for the sample respondents. The analysis from table 4.2 disclosed that, two factors determined the salesmanship skills viz., (a) Selling Efficiency and, (b) Developing Prospects. Selling efficiency emerges from the sales peoples' ability in closing the sale, his ability in giving the correct sales message and, his ability and willingness to work with team. Developing Prospects emerged from the sales people efficiency in indentifying prospective customers, to nurture the qualified prospects as permanent customers and, his skill in building and maintaining relationships with new prospects. 5.3 Technical Skills Another foremost talent that is wanted by the industry is the technical ability of sales people. This skill is formulated around the sales people knowledge about a product and its consumers, competitors product, drawing plans to meet the customers needs etc. the major findings from table 4.4 was that, two important factors got extracted from the different attributes used for the study, (a) Product Knowledge and (b) Reporting & Procedure Efficiency. As expected, many respondents had the nag in understanding the company’s product as well as the competitors strength (Product Knowledge). Timely reporting to his immediate supervisor, continuous monitoring of customer shelf and sincerity in following the procedures (Reporting & Procedure Efficiency) were found to be prevalent among the sales persons. 5.4 Sales Techniques Techniques adopted in improving sales performance was another measure considered for the study. From the analysis (Table 4.5), three factors were extracted from the different attributes, viz., (a) Improving

102 / C.R. Sundara Rajan and K. Sakthi Srinivasan

Attitude, (b) Experiential Learning and, (c) Keenness to Adoption. Continuous learning process and thereby improving their skills is an important factor for sales efficiency, likewise the interest and enthusiasm in adopting new techniques and changes proves to be successful in closing an important sale with good customers. 6. CONCLUSION Sales force effectiveness in any type of industry depends on various skill levels of the sales people, but it necessitates more spirited and ready to act person in industries like pharmaceuticals. As observed from this study, overall efficiency in the person comes out with his attitude and ability. This is one of the important findings from the study. Down-to-earth people who have the attitude to change when it is much needed is always found successful in this type of industry. After the revolution, that has taken place in technology front and the ubiquitous internet, medical field may need more vigilant sales person with high level of knowledge to convince the medical officer and the retail front. Leave alone the patients who double check the web world for any prescription.

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