1. Business Development in Clinical Research Sem-II Author Prof. K. RAVINDRAN

2. Business Development 2Contents1 Pharmaceutical and Clinical Research Business Overview 2 Developing and Managing CRO 3 Services Mix for CR 4 Business Dev.in a CRO & Health Economics 5 Pricing of Services 6 Marketing Budget and Cost 7 Training and Development of a CR team 8 Time & Territory Management in a CRO 9 Development of a Project Proposal

3. Sn Chapter Name Topics Covered No. of Session 1 Pharmaceutical and Clinical Research Business Overview Pharma Industry, Indian Pharma Industry, Pharma Marketing, Clinical Research overview 3 2 Developing and Managing CRO Developing and Managing Marketing Department and Organization 3 3 Services Mix for CR The 7 Ps 2 4 Business Development in a CRO & Health Economics Business Development and Health Economics 2 5 Pricing of Services Importance of Pricing, The process of setting Prices, Pricing objectives, Effects of price changes 2 6 Marketing Budget and Cost Marketing Cost analysis, Customer profitability analysis, Budgeting for Sales force 2 7 Training and Development of a CR Team Field force management, Training and Development 2 8 Time and Territory Management in a CRO Time and Territory Management 2 9 Development of a Project Proposal Dr.2

4. Business Development 4 Pharmaceutical and CR Business Overview

5. Business Development 5 Pharma Industry

6. Business Development 6 A is a commercial business whose focus is to: A pharmaceutical or drug company, is a commercial business whose focus is to: ResearchResearch DevelopDevelop Market and/orMarket and/or DistributeDistribute in the context of healthcare drugs in the context of healthcare They deal in generic as well as branded medications They deal in generic as well as branded medications

7. Business Development 7 Pharma Companies are subject to a variety of laws and regulations regarding: Pharma Companies are subject to a variety of laws and regulations regarding: PatentingPatenting Testing andTesting and Marketing of drugsMarketing of drugs

8. Business Development 8 They ensure essential drugs and provide employments to millions world over They ensure essential drugs and provide employments to millions world over It is one of the most successful and influential industry It is one of the most successful and influential industry The pharmaceutical industry is intimately linked with healthcare The pharmaceutical industry is intimately linked with healthcare

9. Business Development 9 Most of today's major pharmaceutic al companies were founded in the late 19th and early 20th centuries. Most of today's major pharmaceutic al companies were founded in the late 19th and early 20th centuries.

10. Business Development 10 Insulin (1920) and Penicillin (1930), became the mass- manufactured and distributed products Insulin (1920) and Penicillin (1930), became the mass- manufactured and distributed products

11. Business Development 11 The industry got underway in earnest from the 1950s, due to: The industry got underway in earnest from the 1950s, due to: The development of systematic scientific approaches The development of systematic scientific approaches The understanding of human biology (including DNA) and The understanding of human biology (including DNA) andDNA Sophisticated manufacturing techniques. Sophisticated manufacturing techniques.

12. Business Development 12 With relentless efforts numerous new drugs were developed, mass-produced and marketed through the 1960s. With relentless efforts numerous new drugs were developed, mass-produced and marketed through the 1960s. Legislation was enacted to test and approve drugs and to require appropriate labeling. Legislation was enacted to test and approve drugs and to require appropriate labeling.

13. Business Development 13 Pharmaceutical manufacturing became concentrated, with a few large companies holding a dominant position throughout the world and with a few companies producing medicines within each country Pharmaceutical manufacturing became concentrated, with a few large companies holding a dominant position throughout the world and with a few companies producing medicines within each country

14. Business Development 14 Switzerland, Germany and Italy had particularly strong industries, with the UK and US following suit. Switzerland, Germany and Italy had particularly strong industries, with the UK and US following suit.

15. Business Development 15 Drug development progressed from a hit-and-miss approach to rational drug discovery Drug development progressed from a hit-and-miss approach to rational drug discovery Demand for nutritional supplements and alternative medicines created new opportunities and increased competition in the industry Demand for nutritional supplements and alternative medicines created new opportunities and increased competition in the industry

16. Business Development 16 Controversies emerged around adverse effects, notably regarding Vioxx in the US. Controversies emerged around adverse effects, notably regarding Vioxx in the US. So also the overzealous marketing tactics invited more trouble for the pharmaceutical companies So also the overzealous marketing tactics invited more trouble for the pharmaceutical companies

17. Business Development 17 After the thalidomide tragedy, in 1964, the WMA in its Helsinki declaration set standards for clinical research and demanded that subjects give their informed consent before enrolling in an experiment After the thalidomide tragedy, in 1964, the WMA in its Helsinki declaration set standards for clinical research and demanded that subjects give their informed consent before enrolling in an experiment

18. Business Development 18 Further Phamaceutical companies became required to prove efficacy in clinical trials before marketing drugs Further Phamaceutical companies became required to prove efficacy in clinical trials before marketing drugsefficacy

19. Business Development 19 Pressured by economics and a host of new regulations, both safety and environmental, Pharma companies have compelled to contain rising medical costs, and the development of preventative and maintenance medications. Pressured by economics and a host of new regulations, both safety and environmental, Pharma companies have compelled to contain rising medical costs, and the development of preventative and maintenance medications.

20. Business Development 20 This has open out new business climate and companies became institutionalized, characterized by mergers and aquistions. This has open out new business climate and companies became institutionalized, characterized by mergers and aquistions. So also the use of contract research organizations for clinical development and even for basic R&D. So also the use of contract research organizations for clinical development and even for basic R&D.

21. Business Development 21 Global Revenue For the first time ever, in 2006, global spending on prescription drugs topped $600 billion plus as against $550 billion in 2004 For the first time ever, in 2006, global spending on prescription drugs topped $600 billion plus as against $550 billion in 2004 Sales of prescription medicines worldwide rose 7 percent to $602 billion Sales of prescription medicines worldwide rose 7 percent to $602 billion

22. Business Development 22 The United States alone accounts for almost with $252 billion in annual sales. The United States alone accounts for almost with $252 billion in annual sales. Emerging markets such as China, India, Russia, South Korea and Mexico outpaced the US growth Emerging markets such as China, India, Russia, South Korea and Mexico outpaced the US growth

23. Business Development 23 In 2004, the pharmaceutical market worldwide comprised roughly: In 2004, the pharmaceutical market worldwide comprised roughly: Country Market Share U S 45% Europe25% Others30%

24. Business Development 24 Pfizer's cholesterol pill Lipitor with an annual sales of $12.9 billion remains the best-selling drug in the world for the fifth year in a row. Pfizer's cholesterol pill Lipitor with an annual sales of $12.9 billion remains the best-selling drug in the world for the fifth year in a row.

25. Business Development 25 Followed by Plavix, the blood thinner from Bristol-Myers Squibb and Sanofi-Aventis Followed by Plavix, the blood thinner from Bristol-Myers Squibb and Sanofi-Aventis Nexium, the heartburn pill from AstraZeneca and Advair, the asthma inhaler from GSK Nexium, the heartburn pill from AstraZeneca and Advair, the asthma inhaler from GSK

26. Business Development 26 Then the prediction, by 2007, $40 billion in U.S. sales could be lost at the top 10 pharma companies as a result of: Then the prediction, by 2007, $40 billion in U.S. sales could be lost at the top 10 pharma companies as a result of: Slowdown in R&D innovationSlowdown in R&D innovation Expiry of patents on major products (19 blockbuster going off-patent)Expiry of patents on major products (19 blockbuster going off-patent)

27. Business Development 27 New drugs hitting the market have fallen drastically, also the period of exclusivity has shrunk. New drugs hitting the market have fallen drastically, also the period of exclusivity has shrunk.

28. Business Development 28 This has made the brand name drug makers in the US to focus on marketing than in research This has made the brand name drug makers in the US to focus on marketing than in research Staff in marketing increased to 81%, while the number of research staff declined by 2% – the gap is growing Staff in marketing increased to 81%, while the number of research staff declined by 2% – the gap is growing

29. Business Development 29 It’s quite clear, drug companies are taking their marketing activities seriously than ever before

30. Business Development 30 Typically, a Pharma company spends between $450 and $800 million over 12 to 14 years to being a single drug into market. Typically, a Pharma company spends between $450 and $800 million over 12 to 14 years to being a single drug into market.

31. Business Development 31 The chances of any one drug eventually making to the market after successfully completing all phases of clinical trials and regulatory scrutiny are ONE in 10 The chances of any one drug eventually making to the market after successfully completing all phases of clinical trials and regulatory scrutiny are ONE in 10

32. Business Development 32 Research suggest, a company would need to launch at least 4 new drugs every year in order to maintain their growth Research suggest, a company would need to launch at least 4 new drugs every year in order to maintain their growth

33. Business Development 33 Therefore, in order to meet the challenges of decreasing revenue and increasing R&D costs, the global drug companies have to fine-tune their efforts on: Therefore, in order to meet the challenges of decreasing revenue and increasing R&D costs, the global drug companies have to fine-tune their efforts on: R&D spends andR&D spends and Marketing efforts to boost salesMarketing efforts to boost sales

34. Business Development 34 Future trend Analysis suggests that 150 mid- sized new compounds will be needed by 2007-2008 in the U.S. alone to plug the gap." Future trend Analysis suggests that 150 mid- sized new compounds will be needed by 2007-2008 in the U.S. alone to plug the gap." While pharmaceutical companies today focus on blockbusters, in seven years' time they will focus on thousands of drugs While pharmaceutical companies today focus on blockbusters, in seven years' time they will focus on thousands of drugs

35. 35 Top 10 Pharma Companies by Sales 2006 Rank Company Name Sales $Bn Market share(%) 1Pfizer45.087.2 2GlaxoSmithKline37.035.9 3Sanofi-Aventis35.645.7 4Novartis28.884.6 5 Hoffmann–La Roche 26.604.2 6AstraZeneca25.744.1 7 Johnson & Johnson 23.273.7 8 Merck & Co. 22.643.6 9Wyeth15.682.5 10 Eli Lilly and Company 14.812.4

36. Business Development 36 Indian Pharmaceutical Industry

37. Business Development 37 The Indian pharmaceutical industry, has been contributing to the social well-being of the county by playing a multi-faceted role of: The Indian pharmaceutical industry, has been contributing to the social well-being of the county by playing a multi-faceted role of: DiscoveringDiscovering DevelopingDeveloping Manufacturing andManufacturing and Distributing quality medicines.Distributing quality medicines.

38. Business Development 38 This is explicit from the improvement of country’s: This is explicit from the improvement of country’s: Life expectancyLife expectancy Health andHealth and Economic indicatorEconomic indicator

39. Business Development 39 The industry is providing: The industry is providing: Employment for millionsEmployment for millions Ensuring essential drugs at affordable pricesEnsuring essential drugs at affordable prices Available to the vast population of this sub-continentAvailable to the vast population of this sub-continent

40. Business Development 40 It ranks very high in the third world, in terms of: It ranks very high in the third world, in terms of: TechnologyTechnology Quality andQuality and Range of medicines manufacturedRange of medicines manufactured

41. Business Development 41 Almost every type of medicine from simple headache pills to sophisticated antibiotics and complex cardiac compounds is now made indigenously Almost every type of medicine from simple headache pills to sophisticated antibiotics and complex cardiac compounds is now made indigenously

42. Business Development 42 Indian Pharma Industry boasts of quality producers and many units approved by regulatory authorities in USA and UK. Indian Pharma Industry boasts of quality producers and many units approved by regulatory authorities in USA and UK.

43. Business Development 43 The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. The leading 250 pharmaceutical companies control 70% of the market. The leading 250 pharmaceutical companies control 70% of the market. The market leader holding nearly 7% of the market share. The market leader holding nearly 7% of the market share.

44. Business Development 44 The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles. The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles.

45. Business Development 45 Indian Pharma Industry is estimated to be worth $ 8 billion, growing at about 8 to 9 percent annually Indian Pharma Industry is estimated to be worth $ 8 billion, growing at about 8 to 9 percent annually It can touch $25 billion in revenues by 2010 It can touch $25 billion in revenues by 2010

46. Business Development 46 It is an extremely fragmented market with severe price competition and government price control. It is an extremely fragmented market with severe price competition and government price control.

47. Business Development 47 The pharma industry is changing so fast. The pharma industry is changing so fast. The concept today is ‘adapt or die’ The concept today is ‘adapt or die’

48. Business Development 48 Product patent has replaced with process patent (WTO 2005) Product patent has replaced with process patent (WTO 2005) Companies will need strong R&D capabilities as well as innovative marketing strategies to emerge as winner Companies will need strong R&D capabilities as well as innovative marketing strategies to emerge as winner

49. Business Development 49 Top 10 Pharma Companies in India Sl. No. Company Name Market share(%) 1Ranbaxy5.87 2Glaxo India3.26 3Cipla2.59 4Lupin Laboratories2.47 5Dabur India2.42 6Aurobindo Pharma2.38 7Aventis Pharma1.76 8Dr. Reddy’s Labs1.64 9Sun Pharma Industries1.62 10Wockhardt1.56

50. Business Development 50 Major Export Markets Export accounts for nearly 32% of the total revenues Export accounts for nearly 32% of the total revenues Generic drugs constitute 90% of the exports Generic drugs constitute 90% of the exports USA is the largest export market (13%), followed by Russia (8%), Nigeria (7%) USA is the largest export market (13%), followed by Russia (8%), Nigeria (7%)

51. Business Development 51 Germany is the country from where largest drugs and pharmaceutical imports are made, followed by Switzerland and USA Germany is the country from where largest drugs and pharmaceutical imports are made, followed by Switzerland and USA

52. Business Development 52 Pharmaceutical Marketing

53. Business Development 53 Drug marketing has changed considerably since 1990’s partly because of: Drug marketing has changed considerably since 1990’s partly because of: ConsumerismConsumerism Direct purchaseDirect purchase DTC advertisingDTC advertising

54. Business Development 54 Since new drugs hitting the market have fallen drastically, companies have intensified their marketing activities to boost sales. Since new drugs hitting the market have fallen drastically, companies have intensified their marketing activities to boost sales. They allocated more budgetThey allocated more budget Expanded the marketExpanded the market Increased the marketing forceIncreased the marketing force To great extent, this has cost the research To great extent, this has cost the research

55. Business Development 55 Marketing is obviously a dynamic field of course, the drug companies have its share of challenges in the formulation and implementation of marketing strategies are: Marketing is obviously a dynamic field of course, the drug companies have its share of challenges in the formulation and implementation of marketing strategies are:

56. Business Development 56 Defining the target group (physicians, consumers, wholesalers, pharmacy chains, independent pharmacists, hospital personnel and HMOs)Defining the target group (physicians, consumers, wholesalers, pharmacy chains, independent pharmacists, hospital personnel and HMOs) Pressure to control drug pricing (Public, Govt. and Insurance Companies)Pressure to control drug pricing (Public, Govt. and Insurance Companies) Government Regulation (with respect to what marketing tactics are permissible)Government Regulation (with respect to what marketing tactics are permissible)

57. Business Development 57 Targeting Doctors Companies have attempted to promote their products to doctors in various ways. Companies have attempted to promote their products to doctors in various ways. Free samplesFree samples Array of giftsArray of gifts Doctors are paid to attend or speak on their behalfDoctors are paid to attend or speak on their behalf

58. Business Development 58 Targeting Patients Today drug-makers are pitching their prescription products directly to consumers instead of relying on doctors to spread the word. Today drug-makers are pitching their prescription products directly to consumers instead of relying on doctors to spread the word. This is called Direct-to- Consumer (DTC) advertising This is called Direct-to- Consumer (DTC) advertising

59. Business Development 59 The benefits of DTC for the drug makers is often patients requests to try their brand. The benefits of DTC for the drug makers is often patients requests to try their brand.

60. Business Development 60 DTC marketing efforts have been credited with: DTC marketing efforts have been credited with: Driving patient inquiriesDriving patient inquiries Encouraging better doctor- patient dialogues andEncouraging better doctor- patient dialogues and Increasing consumer health awarenessIncreasing consumer health awareness

61. Business Development 61 Targeting Health Maintenance Organizations (HMOs) HMOs are the companies who provide high-quality drug care at the lowest possible cost. HMOs are the companies who provide high-quality drug care at the lowest possible cost. It’s a billion dollar Industry, have almost tens of millions of patients It’s a billion dollar Industry, have almost tens of millions of patients

62. Business Development 62 Creating Disease Awareness The most recent trend in drug marketing is to create an awareness of a particular disease. The most recent trend in drug marketing is to create an awareness of a particular disease. Companies use ads to raise awareness Companies use ads to raise awareness

63. Business Development 63 Pharmacia, for example, tied-up with the American Cancer Society to educate public about colon cancer Pharmacia, for example, tied-up with the American Cancer Society to educate public about colon cancer

64. Business Development 64 Target Specific Segments Pfizer offered drugs to low income elderly people for flat fee of $15 a month for each prescription compared to the existing price of $65 Pfizer offered drugs to low income elderly people for flat fee of $15 a month for each prescription compared to the existing price of $65 An estimated 7 million people could qualify for this program An estimated 7 million people could qualify for this program GSK and Novartis also announced similar programs GSK and Novartis also announced similar programs

65. Business Development 65 Partnering with Advocacy Groups like American Heart Association, American Diabetes Association is another way of Drug Marketing Partnering with Advocacy Groups like American Heart Association, American Diabetes Association is another way of Drug Marketing

66. Business Development 66 Online Marketing Online Marketing Website like ‘managing MS website of Teva NeuroScience for Multiple Sclerosis Website like ‘managing MS website of Teva NeuroScience for Multiple Sclerosis thinhair.com thinhair.com

67. Business Development 67 Indian Scenario In the 60 years since independence, the Indian pharmaceuticals industry has evolved significantly. In the 60 years since independence, the Indian pharmaceuticals industry has evolved significantly.

68. Business Development 68 MNCs had a near monopoly, as they imported and marketed formulations in India. MNCs had a near monopoly, as they imported and marketed formulations in India.

69. Business Development 69 With Government increasing pressure against imports, the MNCs set up formulating units With Government increasing pressure against imports, the MNCs set up formulating units

70. Business Development 70 Government later promoted Hindustan Antibiotic Limited (HAL) and Indian Drugs and Pharmaceuticals Limited (IDPL) for manufacture of bulk drugs Government later promoted Hindustan Antibiotic Limited (HAL) and Indian Drugs and Pharmaceuticals Limited (IDPL) for manufacture of bulk drugs

71. Business Development 71 However, MNCs maintained a lead due to the backing of their global R&D However, MNCs maintained a lead due to the backing of their global R&D

72. Business Development 72 High cost for basic research deterred local players High cost for basic research deterred local players

73. Business Development 73 The market share of MNCs has fallen from 75% in 1971 to around 30% The market share of MNCs has fallen from 75% in 1971 to around 30% While the share of Indian companies has increased from 20% to 70% While the share of Indian companies has increased from 20% to 70%

74. Business Development 74 The Pharma industry is changing so fast. The Pharma industry is changing so fast. The concept today is ‘adapt or die’ The concept today is ‘adapt or die’ Product patent has replaced with process patent (WTO 2005) Product patent has replaced with process patent (WTO 2005)

75. Business Development 75 Companies will need strong R&D capabilities as well as innovative marketing strategies to emerge as winner Companies will need strong R&D capabilities as well as innovative marketing strategies to emerge as winner

76. 76 Top 10 Pharma Companies in India Sl. No. Company Name Market share(%) 1Glaxo5.7 2Cipla4.7 3Ranbaxy4.0 4Hoechst2.8 5 Sun Pharma 2.5 6Zydus-Cadila2.4 7 Knoll Pharma 2.3 8Wockhardt2.3 9Pfizer2.1 10 Nicholas Piramal 2.1

77. 77 Top 10 Pharma Products in India Sl. No. ProductCompanyCategory 1BecosulesPrizer Vitamin B Complex 2CorexPfizer Cough preparation 3AlthrocinAlembicMacrolides 4VoveranNovartisAnti-rheumatic 5SporidexRanbaxyCephalosporins 6TaximAlkemCephalosporins 7CifranRanbaxyQuinolones 8ZinetacGlaxo Antipeptic ulcerants 9DigeneKnollAntacids 10BetnesolGlaxoSystemic-corticosteroids

78. Business Development 78 Pharmaceutical Marketing in India Indian pharmaceutical market is unique in many respects and this uniqueness poses a lot of challenges for the marketers: Indian pharmaceutical market is unique in many respects and this uniqueness poses a lot of challenges for the marketers: FragmentationFragmentation Low per-capita healthcare expenditureLow per-capita healthcare expenditure DPCODPCO Reliance on person-to-person marketingReliance on person-to-person marketing Fast paced changes in the global pharmaceutical industryFast paced changes in the global pharmaceutical industry

79. Business Development 79 Top 10 Pharma companies covers 31% of the total market Top 10 Pharma companies covers 31% of the total market Market in India is prescription- driven and branded generic Market in India is prescription- driven and branded generic Prescription market is around 80%. Rest are institutions/ hospitals and dispensing doctors Prescription market is around 80%. Rest are institutions/ hospitals and dispensing doctors

80. Business Development 80 In India, anti-biotic segment accounts for the largest market share (19.4) followed by multi- vitamins (7.6), anti- inflammatory (5.4) and Cough and cold preparations (5.3) segments. In India, anti-biotic segment accounts for the largest market share (19.4) followed by multi- vitamins (7.6), anti- inflammatory (5.4) and Cough and cold preparations (5.3) segments.

81. Business Development 81 The greatest market potential exists in interior and rural markets The greatest market potential exists in interior and rural markets Where growth is estimated at 25% per annum Where growth is estimated at 25% per annum

82. Business Development 82 A successful marketing program must have the following: A successful marketing program must have the following: Right marketing mixRight marketing mix Market researchMarket research A quality productA quality product An extensive distribution networkAn extensive distribution network Strong dose of promotionStrong dose of promotion Right priceRight price

83. Business Development 83 Marketing Strategies in India Marketing Strategies in India Manufacturer Patient Doctor - The producer - The consumer - The intermediary

84. Business Development 84 India has over more than 39 million doctors India has over more than 39 million doctors A doctor on an average may meet 15 MRs, each discussing four or more products in a single day. A doctor on an average may meet 15 MRs, each discussing four or more products in a single day.

85. Business Development 85 In this scenario, getting the doctor to remember – let alone prescribe – a company’s product, can be difficult. In this scenario, getting the doctor to remember – let alone prescribe – a company’s product, can be difficult.

86. Business Development 86 The easiest way of creating brand awareness / loyalty among physicians is through MR’s visits and persuasion to doctors on a regular basis The easiest way of creating brand awareness / loyalty among physicians is through MR’s visits and persuasion to doctors on a regular basis Sustained promotion pays

87. Business Development 87 Doctors are the key decision-makers and the success of a drug depends upon its level of acceptance among the doctors Doctors are the key decision-makers and the success of a drug depends upon its level of acceptance among the doctors

88. Business Development 88 Of the total expenditure, about half spent on promotional activities through medical representatives Of the total expenditure, about half spent on promotional activities through medical representatives Marketing expenses of a Pharma companies vary between 5 – 15 percent Marketing expenses of a Pharma companies vary between 5 – 15 percent

89. Business Development 89 In India, marketing of prescription pharmaceuticals through mass media is not permissible In India, marketing of prescription pharmaceuticals through mass media is not permissible The company’s MR becomes the chief link between the company and the doctor, often being described as the company’s “ambassador” The company’s MR becomes the chief link between the company and the doctor, often being described as the company’s “ambassador”

90. Business Development 90 Marketing includes both bulk drugs and formulations. Marketing includes both bulk drugs and formulations. Marketing of bulk drugs is totally different from that of formulations Marketing of bulk drugs is totally different from that of formulations

91. Business Development 91 In case of bulk drugs, the buyers are few in numbers and manufacturer builds and maintains good relations. In case of bulk drugs, the buyers are few in numbers and manufacturer builds and maintains good relations. This makes selling of bulk drugs relatively simple This makes selling of bulk drugs relatively simple

92. Business Development 92 As regards marketing of formulations, the company has to have a vast net-work of trained medical reps to sell its products As regards marketing of formulations, the company has to have a vast net-work of trained medical reps to sell its products Brand preferences need to be created because it is widely distributed Brand preferences need to be created because it is widely distributed

93. Business Development 93 Pharma distribution net-work in India Manufacturers Stockists C&FAs/ Dealers/ Distributors Chemists

94. Business Development 94 There are almost 60,000 stockists available in India, compared to less than 4000 in some developed countries. There are almost 60,000 stockists available in India, compared to less than 4000 in some developed countries. The distribution net-work is organized either: The distribution net-work is organized either: Region-wise orRegion-wise or Product-wiseProduct-wise

95. Business Development 95 Marketing Alliances Co-marketing is the latest buzzword for pharmaceutical industry. Co-marketing is the latest buzzword for pharmaceutical industry. Strategic alliances between firms with complementary sales forces can be a more cost– effective means of expanding sales coverage. Strategic alliances between firms with complementary sales forces can be a more cost– effective means of expanding sales coverage.

96. Business Development 96 For example, Ranbaxy (with 2149 field force) tied-up with Cipla (600MRs) to market its Cipro – OD drug in the domestic market For example, Ranbaxy (with 2149 field force) tied-up with Cipla (600MRs) to market its Cipro – OD drug in the domestic market Shantha Biotech tied-up with Pfizer to market its Hepatitis B vaccine. Shantha Biotech tied-up with Pfizer to market its Hepatitis B vaccine. Wockhardt formed alliance with Bayer AG for anti-diabetic drug. Wockhardt formed alliance with Bayer AG for anti-diabetic drug.

97. Business Development 97 OTC Marketing OTC market has tremendous opportunities, and it is growing at a rate of 30% p.a. OTC market has tremendous opportunities, and it is growing at a rate of 30% p.a. Global market for OTC products accounts $49.2 billion Global market for OTC products accounts $49.2 billion Indian OTC market is estimated to be $600 million Indian OTC market is estimated to be $600 million

98. Business Development 98 Some of the established OTC players are: Some of the established OTC players are: Paras PharmaParas Pharma GlaxoGlaxo Nicholas PiramalNicholas Piramal KopranKopran

99. Business Development 99 DTC Channel Many companies are exploring the option of interactive websites. Many companies are exploring the option of interactive websites. Orchid Pharmaceuticals has a special website: www.healthorchid.com Orchid Pharmaceuticals has a special website: www.healthorchid.com www.healthorchid.com Ranbaxy’s portal: www.ranbaxyfordoctors.com Ranbaxy’s portal: www.ranbaxyfordoctors.com www.ranbaxyfordoctors.com Dr. Reddy sponsored www.livizi.com Dr. Reddy sponsored www.livizi.com www.livizi.com

100. Business Development 100 These websites offer a platform for communication between healthcare professional, medical practitioners and patients These websites offer a platform for communication between healthcare professional, medical practitioners and patients

101. Business Development 101 Generic Marketing Most market is branded prescription market, the term “generic drug” can be interpreted as unbranded drug sold by the name of molecule or internationally known propriety name. Most market is branded prescription market, the term “generic drug” can be interpreted as unbranded drug sold by the name of molecule or internationally known propriety name.

102. Business Development 102 The generic market ($76 million) contributes to only 2% of the industry turnover. The generic market ($76 million) contributes to only 2% of the industry turnover. Around 100 companies manufacture about 828 generics. Around 100 companies manufacture about 828 generics.

103. Business Development 103 Amoxycillin, Ciprofloxacin, Ibuprofen and some combination drugs have a strong presence in the generic segment Amoxycillin, Ciprofloxacin, Ibuprofen and some combination drugs have a strong presence in the generic segment High margins in this segment is the key influencing factor High margins in this segment is the key influencing factor

104. Business Development 104 Traders gets a heft trade margin of 40% or more and the consumer does not get the price benefit Traders gets a heft trade margin of 40% or more and the consumer does not get the price benefit Generics market has potential to grow if the price benefit reaches the consumer Generics market has potential to grow if the price benefit reaches the consumer Health insurance sector will welcome it Health insurance sector will welcome it

105. Business Development 105 Ranbaxy, Cipla, FDC, Rhone-Poulenc are some of the established giant player in this segment Ranbaxy, Cipla, FDC, Rhone-Poulenc are some of the established giant player in this segment

106. Business Development 106 Clinical Research Overview

107. Business Development 107 Contract research organization A Contract Research Organization (CRO) is an independent contractor with one or more of the obligations of a sponsor, offers a wide range of pharmaceutical drug biologic and device development services. A Contract Research Organization (CRO) is an independent contractor with one or more of the obligations of a sponsor, offers a wide range of pharmaceutical drug biologic and device development services.

108. Business Development 108 These services include: These services include: Product and process developmentProduct and process development ToxicologyToxicology Clinical trial management from Phase 1 to Phase 4Clinical trial management from Phase 1 to Phase 4 Data management and biostatisticsData management and biostatistics Medical writing andMedical writing and Regulatory affairsRegulatory affairs

109. Business Development 109 The Outsourcing Business Over the last few years, the pharmaceutical industry has been under tremendous pressure to maintain their existing revenue and margins Over the last few years, the pharmaceutical industry has been under tremendous pressure to maintain their existing revenue and margins Companies seek to develop unique competencies, initiated change in their business strategies to focus on theire core skills Companies seek to develop unique competencies, initiated change in their business strategies to focus on theire core skills

110. Business Development 110 They introduced various measures in their operation: They introduced various measures in their operation: DownsizingDownsizing ExpandingExpanding ReengineeringReengineering RestructuringRestructuring Innovation andInnovation and OutsourcingOutsourcing

111. Business Development 111 CROs became more and more important strategic partners in their clinical research outsourcing and making the drug companies strong and profitable. CROs became more and more important strategic partners in their clinical research outsourcing and making the drug companies strong and profitable.

112. Business Development 112 Contract research, though relatively young at just over 20 years, has evolved from providing limited preclinical and clinical trial services in the 1970s to a full-service industry today. Contract research, though relatively young at just over 20 years, has evolved from providing limited preclinical and clinical trial services in the 1970s to a full-service industry today.

113. Business Development 113 The CRO market is growing at steady pace from $1 billion in 1992 to more than $10 billion in 2002 The CRO market is growing at steady pace from $1 billion in 1992 to more than $10 billion in 2002 According to Frost and Sullivan (F&S), the total market revenues for the CRO industry is estimated at $14.37 billion in 2007. According to Frost and Sullivan (F&S), the total market revenues for the CRO industry is estimated at $14.37 billion in 2007. CRO market size and growth

114. Business Development 114 It is estimated that pharma and biotech companies spent approximately $57 billion on R & D in 2005 It is estimated that pharma and biotech companies spent approximately $57 billion on R & D in 2005 Of the total: Of the total: USA accounted $4.18 billionUSA accounted $4.18 billion Europe $2.6bnEurope $2.6bn Asia $0.8bnAsia $0.8bn

115. Business Development 115 Based on a report by Market Researchers, the total CRO market size is estimated to grow at an annual rate of 14-16% to reach $24bn through 2010 Based on a report by Market Researchers, the total CRO market size is estimated to grow at an annual rate of 14-16% to reach $24bn through 2010

116. Business Development 116 The market is highly fragmented and the number of CRO’s worldwide has reached over 1,100 despite continued consolidation The market is highly fragmented and the number of CRO’s worldwide has reached over 1,100 despite continued consolidation

117. Business Development 117

118. Business Development 118 The CRO market is dominated by four companies, which hold over 50 percent of the total market. The CRO market is dominated by four companies, which hold over 50 percent of the total market. 1.Quintiles with market share of 28% 2.Covance with 17% 3.Parexel with 7% and 4.PPDI with 6%

119. Business Development 119 The other CROs include: The other CROs include: 5.ClinTrials Research 6.Kendle International 7.Applied Analytical Industries and 8.Phoenix International Life Sciences. The major companies grew by over 20 percent in 1997-98, a figure higher than for the market as a whole. The major companies grew by over 20 percent in 1997-98, a figure higher than for the market as a whole.

120. Business Development 120 CROs will continue to increase their share in the next five years, but the mix of non-CRO players is a dynamic one, and their slice of the pie will be worth close to $6 billion in 2008 CROs will continue to increase their share in the next five years, but the mix of non-CRO players is a dynamic one, and their slice of the pie will be worth close to $6 billion in 2008

121. Business Development 121

122. Business Development 122 Europe Europe is poised to maintain its current position as the second largest market for CRO services globally, and is estimated to be worth $4.3 billion with a growth rate of 10.4 per cent. Europe is poised to maintain its current position as the second largest market for CRO services globally, and is estimated to be worth $4.3 billion with a growth rate of 10.4 per cent.

123. Business Development 123 Eastern Europe claims to be the new Mecca for low-cost clinical trials and ease of patient recruitment, combinded with excellent patient compliance, quality of research, project competion timelines, and price are the key drivers behind the region’s growth. Eastern Europe claims to be the new Mecca for low-cost clinical trials and ease of patient recruitment, combinded with excellent patient compliance, quality of research, project competion timelines, and price are the key drivers behind the region’s growth.

124. Business Development 124 Asia With a population of over 4 billion, Asia is a lucrative market for sponsors With a population of over 4 billion, Asia is a lucrative market for sponsors India, China, Australia, Hong Kong, South Korea and Taiwan pose as viable options India, China, Australia, Hong Kong, South Korea and Taiwan pose as viable options

125. Business Development 125 India and China pose the greatest opportunity due to improvements in research infrastructure, regulations on intellectual property, and a large patient pool for conducting trials. India and China pose the greatest opportunity due to improvements in research infrastructure, regulations on intellectual property, and a large patient pool for conducting trials.

126. Business Development 126 As the outsourced services to China and India move up the value chain to cover phase 1/2 trials, the total contracts value may go up to $20 billion by 2010. As the outsourced services to China and India move up the value chain to cover phase 1/2 trials, the total contracts value may go up to $20 billion by 2010. Around 80,000 clinical trials are being conducted globally each year.

127. Business Development 127 According to PharmaAsia, India’s clinical research industry is currently valued at US$100 million, expected to grow at a phenomenal rate of 80% in the coming years According to PharmaAsia, India’s clinical research industry is currently valued at US$100 million, expected to grow at a phenomenal rate of 80% in the coming years

128. Business Development 128 The forces attracting players include: The forces attracting players include: The large pool of patient populationThe large pool of patient population English-speaking scientific and healthcare professionalsEnglish-speaking scientific and healthcare professionals Adequate healthcare facilitiesAdequate healthcare facilities Lower costs of conducting trialsLower costs of conducting trials Improved intellectual property lawsImproved intellectual property laws Better research standards to meet international levelsBetter research standards to meet international levels

129. Business Development 129 Drivers of Outsourcing These are some of the major reasons why companies outsource their services: These are some of the major reasons why companies outsource their services: Lack of capacityLack of capacity Skill deficiency andSkill deficiency and Cost control.Cost control. Vigorous products promotion in the changing healthcare arena.Vigorous products promotion in the changing healthcare arena. Maximize the sales through geographic expansion.Maximize the sales through geographic expansion. Increase research, development and production to remain competitive.Increase research, development and production to remain competitive.

130. Business Development 130 Advantages for outsourcing Cost reductionCost reduction Reduces the time gap (Each day’s delay can cost an estimated revenue loss of a $1 million- plus)Reduces the time gap (Each day’s delay can cost an estimated revenue loss of a $1 million- plus) Non-availability of services in-houseNon-availability of services in-house Capabilities and resource utilizationCapabilities and resource utilization Knowledge of regulatory affairs in a particular country of interestKnowledge of regulatory affairs in a particular country of interest Increased complexity of clinical trialsIncreased complexity of clinical trials Increased amount of data managementIncreased amount of data management Multinational and multi-center nature of current clinical trialsMultinational and multi-center nature of current clinical trials Large requirement of patient populationsLarge requirement of patient populations Regionalized diseasesRegionalized diseases

131. Business Development 131 According to an independent analyst, clinical trials conducted by CRO’s are completed on an average of 30 percent more quickly than those conducted in-house. According to an independent analyst, clinical trials conducted by CRO’s are completed on an average of 30 percent more quickly than those conducted in-house. It results in an average savings of 4 – 5 months and a revenue potential of $120 - $150 million It results in an average savings of 4 – 5 months and a revenue potential of $120 - $150 million The industry is evolving toward a full- service model from the earliest stages of clinical trials to post-approval research The industry is evolving toward a full- service model from the earliest stages of clinical trials to post-approval research

132. 132 Outsourcing Process *Quality*Cost*Speed = Efficiency = Productivity

133. Business Development 133 Why do companies outsource?Why do companies outsource? Moving from outsourcing non-core activities to outsourcing core activities as well…Moving from outsourcing non-core activities to outsourcing core activities as well…

134. Business Development 134

135. Business Development 135 What it takes to succeed

136. 136 AMRI AMRI Accovion GmbH, Eschborn, Germany Accovion GmbH, Eschborn, Germany Allphase Clinical Research Allphase Clinical Research Anaclim Anaclim AnaSpec AnaSpec Arianne Arianne BRT - Burleson Research Technologies, Inc. BRT - Burleson Research Technologies, Inc. Cetero Research Cetero Research CHEMBIOTEK CHEMBIOTEK Chiltern Chiltern Clinetica Biosciences International Clinetica Biosciences International Covance Covance CRS Clinical Research Services Germany CRS Clinical Research Services Germany Encorium Encorium Gleneagles CRC Pte Ltd Gleneagles CRC Pte Ltd Health Decisions Health Decisions Icon Clinical Research Icon Clinical Research INC Research INC Research wIris Pharma - ophthalmology wIris Pharma - ophthalmology IPRCIPRC KendleKendle MedpaceMedpace MDS Pharma ServicesMDS Pharma Services NEPTUN-CroNEPTUN-Cro PAREXEL InternationalPAREXEL International Pharmaceutical Product Development (PPD)Pharmaceutical Product Development (PPD) ProloguePrologue Omega-CROOmega-CRO QuintilesQuintiles Sanmour Pharma, Mumbai, IndiaSanmour Pharma, Mumbai, India Spaulding ClinicalSpaulding Clinical Tandem LabsTandem Labs TCG Lifesciences Ltd, IndiaTCG Lifesciences Ltd, India ToxikonToxikon Target Health IncTarget Health Inc Vedic Lifesciences]Vedic Lifesciences] Wuxi Pharmatech, Shanghai, China]Wuxi Pharmatech, Shanghai, China] eweeweweeweewewe Major CROs in the world

137. Business Development 137 Developing and Managing CRO

138. Business Development 138 What is Organization Organization is social unit with a purpose. Organization is social unit with a purpose. It is established for the achievement of certain goals It is established for the achievement of certain goals The goals are attained only with the efforts of a group of people working together. The goals are attained only with the efforts of a group of people working together.

139. Business Development 139 Thus the organizations are a system of social, technical and economic elements and co- ordinate human and material resources to attain multiple objectives Thus the organizations are a system of social, technical and economic elements and co- ordinate human and material resources to attain multiple objectives In other words, organizations are a system of consciously coordinated activities In other words, organizations are a system of consciously coordinated activities

140. Business Development 140 These three elements integrates with each other enabling the management to function and attain the Organizational Objectives

141. Business Development 141 Organizational functions forms as a Formal System Informal System represents an individual’s constitutional make up A manager bridge / narrow the distance by integrating the FORMAL with INFORMAL system Many times this FORMAL Systems comes in friction with the INFORMAL system. This creates a distance between the EMPLOYEES and the ORGANISATION

142. Business Development 142 The problems encountered by the organization are:   Human behavior - is complex enough Social values Social values Customs and Customs and Traditions etc Traditions etc

143. Business Development 143 Structure AuthorityAuthority ResponsibilityResponsibility Relationships between the various positions in the organizationRelationships between the various positions in the organization

144. LINE AND STAFF ORGANISATION VP Marketing SalesManager ZSM RSM ASM SALESMAN MarketingManagerResearchManagerAdvertisingManager Line and staff concept is based on the assumption that they should support each other and work unitedly for the achievement of enterprise objectives Staff Functions Line Functions

145. Business Development 145 Technology  Technology provides the physical and economic resources with which people work, allow people to do more and better work

146. Business Development 146  Further more  Globalization of Business  Information explosion  Quality service revolution  The cut-throat competition  Technological Development  Eroding bottom-line  Switch of Customer loyalty  Pressure to deliver the best

147. Business Development 147 This three elements interact with each other enabling organization to attain of its objective along with external social system

148. Business Development 148 Vision mission Objectives Plans Policies Goals Strategies & Tactics Organizational Direction

149. Business Development 149 Vision What the organization is trying to do and become. A powerful motivator and keeps an organization moving forward in the intended direction Mission It identifies the scope of operation, values and priorities set in by the decision makers Company Profile Company’s financial, human, physical resources and capabilities. The structure, strengths and weaknesses External Environm ent Consists of all the conditions and forces that affect an organization viz. operating, industry and the remote environment

150. Business Development 150 Strategic Analysis and Choice Identification of potential options or the most effective strategic choices in order to place the firm in an optimal position Annual Objectives It is the most specific short-term objectives based on the long-term objectives to be achieved in one year Long-term Objectives Objectives seeks to achieve over a number of years, typically set in terms of profitability, ROI, Technical leadership, productivity and public responsibility etc.

151. Business Development 151 Functional or operational Strategies It’s split down grand strategy for each business division or function. An integrated action plan for every function Policies These are directives or guidelines (SOP) given to managers and their subordinates to implement strategy Institutionali zing the Strategy Making implementation of the strategy as a part of day-to-day activities of the company Evaluation and Control Employ monitoring and control methods, check the progress and make modification if needed

152. 152 An organization’s most fundamental Ends and Means Plan Policies Strategic intent, Vision, Mission, Goals and Objectives MEANSENDS Intended Strategy Realized Strategy Action Taken Results observed

153. Business Development 153 Developing a Marketing Department in an Organization Marketing is the heart of any organization and our focus would be on how a marketing department in an organization is developed and managed. Marketing is the heart of any organization and our focus would be on how a marketing department in an organization is developed and managed.

154. Business Development 154  Managing marketing function is a difficult task due to its dynamic nature  Changing business environment  Liberalization and Globalization of market  Severe competition  Integrated approach  Life cycle of products’ reduced significantly  On-line technology, e-commerce

155. Business Development 155 Trends in Business Environment Companies are now increasingly changing their business processes with the help of techniques like: Companies are now increasingly changing their business processes with the help of techniques like: ReengineeringReengineering Benchmarking andBenchmarking and OutsourcingOutsourcing

156. Business Development 156 Outsourcing Here the companies buy goods or services from external suppliers, this will enables them to focus on improving their core competency and also to reduce the costs that are involved in in-house processes Here the companies buy goods or services from external suppliers, this will enables them to focus on improving their core competency and also to reduce the costs that are involved in in-house processes E.g. if a company’s area of strength is marketing its products, but lacks the requisite skills for research, it employs an outside agency that will do the clinical research job effectively for it.E.g. if a company’s area of strength is marketing its products, but lacks the requisite skills for research, it employs an outside agency that will do the clinical research job effectively for it.

157. Business Development 157 India is rapidly becoming a prime destination for outsourcing on various areas for countries in the West. India is rapidly becoming a prime destination for outsourcing on various areas for countries in the West. BPOBPO KPOKPO Clinical ResearchClinical Research Automobile componentsAutomobile components Legal outsourcingLegal outsourcing Teaching outsourcing etc.,Teaching outsourcing etc.,

158. Business Development 158 Another trends that we have been witnessing in the marketing and business process areas are: Another trends that we have been witnessing in the marketing and business process areas are: Collaborating with SuppliersCollaborating with Suppliers Customer relationshipsCustomer relationships MergersMergers GlobalizingGlobalizing DownsizingDownsizing FocusFocus EmpoweringEmpowering

159. Business Development 159 Marketing Organization Marketing has undergone immense transformation and the complexity is increasing. Marketing has undergone immense transformation and the complexity is increasing. It no longer function in isolation, but linked to every department in the organization It no longer function in isolation, but linked to every department in the organization

160. Business Development 160 The Designing of Marketing Organization The structural form of an organization plays a role in the way it develop/conduct marketing activities. The structural form of an organization plays a role in the way it develop/conduct marketing activities. The different types of structural forms are: The different types of structural forms are: Functional organizationFunctional organization Geographical organizationGeographical organization Product and brand management organizationProduct and brand management organization

161. Business Development 161 Functional Organization An organization usually divided into different functional area like: An organization usually divided into different functional area like: Sales managerSales manager Marketing managerMarketing manager Marketing research managerMarketing research manager Advertising and sales promotion managerAdvertising and sales promotion manager Product managerProduct manager Customer service manager and so on …Customer service manager and so on …

162. Business Development 162 They are specialist in their domain area and help marketing do an effective job They are specialist in their domain area and help marketing do an effective job The idea behind establishing a functional marketing organization is to make its management simpler and also improve the efficiency The idea behind establishing a functional marketing organization is to make its management simpler and also improve the efficiency

163. Business Development 163 Geographical Organization Here the marketing activities are arranged on the basis of geographical regions namely: Here the marketing activities are arranged on the basis of geographical regions namely: National Manager In-charge of the entire countryNational Manager In-charge of the entire country Regional Manager South / North / West / EastRegional Manager South / North / West / East Zonal Manager will head district managerZonal Manager will head district manager District Manager Will coordinate SalespeopleDistrict Manager Will coordinate Salespeople Salespeople they are last in the hierarchySalespeople they are last in the hierarchy

164. Business Development 164 Product based organization The product management organization has a product manager controlling all activities pertaining to particular product The product management organization has a product manager controlling all activities pertaining to particular product A typical product manager has to perform various functions like: A typical product manager has to perform various functions like: PlanningPlanning Implementing andImplementing and Controlling the product strategiesControlling the product strategies

165. Business Development 165 Other functions include: Other functions include: Developing effective long-term strategies for the productDeveloping effective long-term strategies for the product Forecasting its salesForecasting its sales Developing an effective marketing planDeveloping an effective marketing plan Coordinating with various functional departmentsCoordinating with various functional departments Regularly collecting relevant information about the products from customers and markets and making product modifications whenever requiredRegularly collecting relevant information about the products from customers and markets and making product modifications whenever required

166. Business Development 166 Linkages with other Departments The marketing manager need to coordinate with all other departments to achieve customer satisfaction namely: The marketing manager need to coordinate with all other departments to achieve customer satisfaction namely: HR department to hire proper sales staffHR department to hire proper sales staff R&D department to give inputs to help in developing the right productsR&D department to give inputs to help in developing the right products Production department to ensure production of the right quantity at the right timeProduction department to ensure production of the right quantity at the right time Finance department in fixing the price of product etc.,Finance department in fixing the price of product etc.,

167. Business Development 167 Because every employee has a duty to contribute towards the organization’s goal of satisfying the customer. Because every employee has a duty to contribute towards the organization’s goal of satisfying the customer. Organization can survive only if there is satisfied customers. Organization can survive only if there is satisfied customers. The modern integrated marketing has evolved from this notion. The modern integrated marketing has evolved from this notion.

168. Business Development 168 Marketing Implementation Marketing implementation is the process by which the objectives and strategies of a company are converted into actionable programs for the successful achievement. Marketing implementation is the process by which the objectives and strategies of a company are converted into actionable programs for the successful achievement. Identifying and analyzing a problem situationIdentifying and analyzing a problem situation Proper implementation of the plansProper implementation of the plans Measuring / benchmarking the performanceMeasuring / benchmarking the performance Controlling the system andControlling the system and Taking corrective action if there is any deviation from the planTaking corrective action if there is any deviation from the plan

169. Business Development 169 Evaluation and Control They constantly assess and adjust the marketing programs according to the market needs They constantly assess and adjust the marketing programs according to the market needs The techniques used to evaluate the marketing implementation process and corrective measures are: The techniques used to evaluate the marketing implementation process and corrective measures are: Annual plan controlAnnual plan control Sales analysisSales analysis Sales variance analysisSales variance analysis Market share analysisMarket share analysis Financial analysisFinancial analysis Market based score card analysis (360 0 assessment)Market based score card analysis (360 0 assessment)

170. Business Development 170 Profitability control Profitability control Efficiency control Efficiency control Sales force efficiencySales force efficiency Advertising efficiencyAdvertising efficiency Sales promotion efficiencySales promotion efficiency Distribution efficiencyDistribution efficiency Strategy Control Strategy Control Marketing effectiveness reviewMarketing effectiveness review Marketing auditMarketing audit Marketing excellence reviewMarketing excellence review

171. Business Development 171 The Service Mix Elements

172. 172 Too much marketing today is 1P marketing i.e. marketing dealing only with P romotion whereas other departments determine the product, the price and the place” Philip Kotler

173. Business Development 173 A traditional marketing mix of 4P’s are adequate for marketing product. A traditional marketing mix of 4P’s are adequate for marketing product. 1. Product 2. Price 3. Place 4. Promotion

174. Business Development 174 However, marketing mix for services consist of 4+3 = 7P’s However, marketing mix for services consist of 4+3 = 7P’s 1. Product (in this case, the service) 2. Price 3. Place 4. Promotion 5. People 6. Physical evidence and 7. Process

175. Business Development 175 The expanded 3 Ps plays a greater role in marketing of services than in the marketing of products The expanded 3 Ps plays a greater role in marketing of services than in the marketing of products It helps in understanding and designing better marketing strategy for services It helps in understanding and designing better marketing strategy for services

176. Business Development 176 Product The service has three levels : The service has three levels : Core Service LevelCore Service Level Augmented Service LevelAugmented Service Level Tangible Service LevelTangible Service Level

177. Business Development 177 Core Service Level This is the basic service, which aims to satisfy the important needs of the customer Core Service Level This is the basic service, which aims to satisfy the important needs of the customer

178. Business Development 178 Tangible Service Level While the tangible level manages the appearance of the product Tangible Service Level While the tangible level manages the appearance of the product

179. Business Development 179 Augmented Service Level It is the addition of supplementary services to the basic offering (accessibility, interaction and customer participation is of prime importance) Augmented Service Level It is the addition of supplementary services to the basic offering (accessibility, interaction and customer participation is of prime importance)

180. Business Development 180 Thus, the core level that caters to the basic benefits Thus, the core level that caters to the basic benefits Tangible as well as the augmented service levels deals mostly with the delivery of service. Tangible as well as the augmented service levels deals mostly with the delivery of service. E.g. the core service of a restaurant is to serve good food to the customers while the secondary service includes providing them with a good ambianceE.g. the core service of a restaurant is to serve good food to the customers while the secondary service includes providing them with a good ambiance

181. Business Development 181 Price The pricing of services is very different from the pricing of goods for various reasons The pricing of services is very different from the pricing of goods for various reasons Cost based or Market basedCost based or Market based Profit oriented or Customer orientedProfit oriented or Customer oriented Open competition or government administeredOpen competition or government administered Price can also be used as a quality indicator (high price is generally associated with better quality) Price can also be used as a quality indicator (high price is generally associated with better quality)

182. Business Development 182 Promotion Consumers will not purchase service without adequate information and the reputation of service provider. So promote service as well as the service provider E.g. a bank customer can identify and relate to a service offer in a better way when the service provider is known

183. Business Development 183 Positive word-of-mouth publicity is the potent weapon especially in services Positive word-of-mouth publicity is the potent weapon especially in services The institution’s image must go beyond the total offer. The institution’s image must go beyond the total offer. Develop strong brands Develop strong brands

184. Business Development 184 Therefore the emphasis must be laid on: Therefore the emphasis must be laid on: Competency, honesty, and sincerity, promptness, packaging, ambience, class, customer satisfaction, repeat pull, fine and positive experience, continuity, value, promise, well trained and empowered staff, acceptable time periods, waiting area, etcCompetency, honesty, and sincerity, promptness, packaging, ambience, class, customer satisfaction, repeat pull, fine and positive experience, continuity, value, promise, well trained and empowered staff, acceptable time periods, waiting area, etc

185. Business Development 185 Place The inseparability of services makes it impossible for service providers to produce the service at a place where the costs are low and sell at a place where there is a high demand for it. The inseparability of services makes it impossible for service providers to produce the service at a place where the costs are low and sell at a place where there is a high demand for it.

186. Business Development 186 Therefore there is limited chances of using marketing channel. Therefore there is limited chances of using marketing channel. The focus must be on self- promotion by being the best on Time, Speed, Quality and cost. The focus must be on self- promotion by being the best on Time, Speed, Quality and cost. E.g. Banks providing ATMsE.g. Banks providing ATMs RTO mobile tax collection centers etc.RTO mobile tax collection centers etc. Hairdressing saloons, beauty parlors, banks that are open on SundaysHairdressing saloons, beauty parlors, banks that are open on Sundays

187. Business Development 187 People People management as an important aspect of the service delivery People management as an important aspect of the service delivery The front-line staff is the first interactive point of a service organization (receptionist/ telephone operator or staff at the ticket counter)The front-line staff is the first interactive point of a service organization (receptionist/ telephone operator or staff at the ticket counter)

188. Business Development 188 And customer become an inseparable part of the service delivery process and they play an active role in production and consumption. And customer become an inseparable part of the service delivery process and they play an active role in production and consumption.

189. Business Development 189 Since people are essential contact point for the customer, they invest in: Since people are essential contact point for the customer, they invest in: AttractingAttracting Training andTraining and Retaining the best talent.Retaining the best talent. Here, internal marketing will help a great extent in successful service operations. Here, internal marketing will help a great extent in successful service operations.

190. Business Development 190 Other important attributes to an outstanding service outfits are: Other important attributes to an outstanding service outfits are: Customer orientationCustomer orientation Employee MotivationEmployee Motivation Service mindednessService mindedness Consistent service andConsistent service and Uniform qualityUniform quality

191. Business Development 191 Process Process management is essential to ensure consistent quality of service delivery Process management is essential to ensure consistent quality of service delivery It is the process of delivery that differentiates one service firm from another It is the process of delivery that differentiates one service firm from another E.g. FedEx, MacDonald, Airlines, BankingE.g. FedEx, MacDonald, Airlines, Banking

192. Business Development 192 The efficiency with which the service delivery process is executed determines the quality of the services, its value and customer satisfaction The efficiency with which the service delivery process is executed determines the quality of the services, its value and customer satisfaction

193. Business Development 193 The process must assure, consistent quality, reliability and standard. The process must assure, consistent quality, reliability and standard. Firm need to specify and constantly update their delivery process for absolute satisfaction of its customers Firm need to specify and constantly update their delivery process for absolute satisfaction of its customers

194. Business Development 194 Physical Evidence The intangibility element associated with services makes it difficult for customers to evaluate the quality of a service. The intangibility element associated with services makes it difficult for customers to evaluate the quality of a service.

195. Business Development 195 Hence the marketers attempt to offer something tangible (a physical evidence) Hence the marketers attempt to offer something tangible (a physical evidence) Uniform worn by the staffUniform worn by the staff AmbianceAmbiance Company logoCompany logo Certificate of appreciationCertificate of appreciation

196. Business Development 196 Customers cannot see service, but can definitely see various tangibles of the service Customers cannot see service, but can definitely see various tangibles of the service Therefore these identities in the form of: Therefore these identities in the form of: Logos, labels, carry bags, tickets, cash memos, colour of interiors, design of office- interiors as well as exteriors.Logos, labels, carry bags, tickets, cash memos, colour of interiors, design of office- interiors as well as exteriors.

197. Business Development 197 Customers can see these identities which is: Customers can see these identities which is: AttractiveAttractive Distinctive, andDistinctive, and MemorableMemorable that leads to customer Recall, retention, and recognition of the imageRecall, retention, and recognition of the image

198. Business Development 198 E.g. In car rental services, car type and model, cleanliness and driver are some of the elements. E.g. In car rental services, car type and model, cleanliness and driver are some of the elements. While, some hotels give away complimentary items of use with the name and logo of the unit written prominently. While, some hotels give away complimentary items of use with the name and logo of the unit written prominently.

199. Business Development 199 The evidence is therefore visibility for the customer and evidence by the company. The evidence is therefore visibility for the customer and evidence by the company. On the basis of his perceptions on the tangible clues, customers makes the purchase decision. On the basis of his perceptions on the tangible clues, customers makes the purchase decision.

200. Business Development 200 Business Development in CR

201. Business Development 201 Business Development in CR Business need growth and it pass through several stages due to number of reasons: Business need growth and it pass through several stages due to number of reasons: Change in the commercial marketChange in the commercial market Improved economic conditionImproved economic condition Increased customers demandIncreased customers demand

202. Business Development 202 A business can develop its business by way of introducing: A business can develop its business by way of introducing: New product in the existing marketNew product in the existing market An existing product in the new marketAn existing product in the new market Diversifying and entering either related or unrelated businessDiversifying and entering either related or unrelated business

203. Business Development 203 Business Development shows as how to make the most of this growth and also how to deal with the different types of problems that are encountered along the way Business Development shows as how to make the most of this growth and also how to deal with the different types of problems that are encountered along the way

204. Business Development 204 The key to future growth and expansion requires a basic change in attitude and thinking - a veritable cultural shift – by owner- managers The key to future growth and expansion requires a basic change in attitude and thinking - a veritable cultural shift – by owner- managers

205. Business Development 205 Where are we now? The ExternalThe External Internal andInternal and Market environmental factorsMarket environmental factors

206. Business Development 206 External Environmental Factors (Outside the organizational on which you have no control) External Environmental Factors (Outside the organizational on which you have no control) CompetitionCompetition Political factors (i.e. national & international)Political factors (i.e. national & international) Economic factorsEconomic factors Social factorsSocial factors Technological factors (the changing nature of the technology)Technological factors (the changing nature of the technology) Environmental issuesEnvironmental issues Legal issuesLegal issues Changing legislation (Government rules and regulations)Changing legislation (Government rules and regulations)

207. Business Development 207 Internal Environmental Factors (i.e. within the organization that affect the business) Internal Environmental Factors (i.e. within the organization that affect the business) The organizationThe organization Its peopleIts people Its productsIts products ResourcesResources Finance Finance Raw materials Raw materials People (Staff Skills) People (Staff Skills) Internal politicsInternal politics

208. Business Development 208 The organization (the way it has been organized and managed) The organization (the way it has been organized and managed) Culture Culture Management style Management style Structure Structure Systems Systems Process Process (operation and delivery systems)

209. Business Development 209 Its People Its People The Staff working in the organization and their various qualitiesThe Staff working in the organization and their various qualities Attitudes Attitudes Skills Skills Knowledge Knowledge Interest Interest Involvement Involvement Motivation Motivation

210. Business Development 210 Its Products Its Products The product features and benefits offered to the customers. It includes:The product features and benefits offered to the customers. It includes: Quality Quality Reliability Reliability Availability Availability Price Price Services Services Warranty Warranty Guarantee Guarantee Packaging Packaging Usage Usage Style etc., etc., Style etc., etc.,

211. Business Development 211 Resources Resources Finance Finance Technology (products and delivery techs) Technology (products and delivery techs) Raw materials Raw materials Skills available Skills available Business skills and Staff skillsBusiness skills and Staff skills Trading status Trading status The current market standingThe current market standing

212. Business Development 212 Market Environment Market Environment CompetitorsCompetitors CustomersCustomers SuppliersSuppliers WholesalersWholesalers RetailersRetailers BankersBankers MediaMedia Trade unionsTrade unions General publicGeneral public

213. Business Development 213 Where do we want to go?

214. Business Development 214 Mission statementsMission statements What do you want to achieve?What do you want to achieve? Long-term objectives for the businessLong-term objectives for the business Short-term objectives for the businessShort-term objectives for the business

215. Business Development 215 What sales and marketing policies do we need to develop?

216. Business Development 216 The strategic marketing planThe strategic marketing plan Market Segmentation and positioningMarket Segmentation and positioning Pricing policy andPricing policy and The Marketing auditThe Marketing audit

217. Business Development 217 Expanding Market Expanding Market Developing and advertising and promotion strategyDeveloping and advertising and promotion strategy SellingSelling ExportingExporting Internet marketingInternet marketing

218. Business Development 218 Understanding Customers Understanding Customers The importance of customer retentionThe importance of customer retention Customer careCustomer care Customer perception and expectationsCustomer perception and expectations Quality standards for customer careQuality standards for customer care Customer communicationsCustomer communications

219. Business Development 219 Implementation and control of the strategic plan Implementation and control of the strategic plan The chicken and egg situationThe chicken and egg situation Change managementChange management Getting the systems rightGetting the systems right Critical evens and stages of implementationCritical evens and stages of implementation Corrective stepsCorrective steps

220. Business Development 220 Pricing in Services

221. Business Development 221 “ The key to making the sale is to communicate VALUE! Do it so strongly … that the price seems reasonable in relation to the product or service you are offering.” Noel Peebles

222. Business Development 222 “ A customer perception of what is a ‘reasonable price’ is more important than what you want to charge for your product or service. And the customer decides what’s reasonable based on perceived value for money, not price. It’s creating this perception of value that tells the customer – the price is right” Noel Peebles, Author, “Sell your Business the Easy Way

223. Business Development 223 Importance of pricing Adopting a right pricing strategy helps a company achieve its objectives. Adopting a right pricing strategy helps a company achieve its objectives. At the same time, an ineffective pricing impacts the company’s growth and sustainability, may eventually wipe out companies from the market At the same time, an ineffective pricing impacts the company’s growth and sustainability, may eventually wipe out companies from the market E.g. Polaroid, Indian Airlines, BPL, Onida, Godrej etc.E.g. Polaroid, Indian Airlines, BPL, Onida, Godrej etc.

224. Business Development 224 What the marketers need to know before adopting a pricing strategy What the marketers need to know before adopting a pricing strategy The market demandThe market demand Customer’s perceptionCustomer’s perception Expenditure incurrent for producing the goodsExpenditure incurrent for producing the goods How much margin is adequate to sustain in the marketHow much margin is adequate to sustain in the market The organizational objectiveThe organizational objective The image of the company in the marketThe image of the company in the market Finally, the intensity of competitionFinally, the intensity of competition

225. Business Development 225 The process of setting prices Setting the price involves the following steps: Setting the price involves the following steps: Setting pricing objectivesSetting pricing objectives Factors affecting demand determinationFactors affecting demand determination Price sensitivity Price sensitivity E.g. Airtel’s prepaid offer of Rs.999/- for life time connectionE.g. Airtel’s prepaid offer of Rs.999/- for life time connection Analyzing the pricing of the competitorsAnalyzing the pricing of the competitors Selection of a pricing methodSelection of a pricing method The selection of pricing policyThe selection of pricing policy

226. Business Development 226 Selection of a Pricing Method A firm can adopt any of the following pricing methods: A firm can adopt any of the following pricing methods: Mark-up pricing (e.g. 85+15= 100)Mark-up pricing (e.g. 85+15= 100) Target return pricing (return on their investment)Target return pricing (return on their investment) Perceived value pricing (perceived value in the mind of the customers)Perceived value pricing (perceived value in the mind of the customers) Going rate pricing (prevailing pricing pattern in the market)Going rate pricing (prevailing pricing pattern in the market) Sealed bid pricing (suitable for industrial products)Sealed bid pricing (suitable for industrial products) Differentiated pricing and (different customers, different location and different prices)Differentiated pricing and (different customers, different location and different prices) Value pricing (low prices for high quality)Value pricing (low prices for high quality)

227. Business Development 227 Effects of price changes Any price change require careful study in the light of perceptions of the buyers as well as the competitors’ reactions Any price change require careful study in the light of perceptions of the buyers as well as the competitors’ reactions Buyers’ perceptions on the price changes Buyers’ perceptions on the price changes Take care the buyers’ sensitivity on when it change priceTake care the buyers’ sensitivity on when it change price Convince the customers about the necessity of making price changes or may face the threat of losing customer loyalty foreverConvince the customers about the necessity of making price changes or may face the threat of losing customer loyalty forever

228. Business Development 228 Service Pricing The pricing of services is different from the pricing goods in many ways The pricing of services is different from the pricing goods in many ways For example, the price changed for:For example, the price changed for: AdvertisingCommission Boarding & Lodging Tariff Legal & Healthcare Fees Share & Stock service Brokerage & commission

229. Business Development 229 Price is the most sensitive issue for a consumer. Price is controlled by different bodies, for example: Price is the most sensitive issue for a consumer. Price is controlled by different bodies, for example: Railways Completely controlled by Govt. Medicines Partially regulated by Govt. Hotels, Auto, personal care service and recreation As per market demand. No Govt. interference Advertising, Hospitals, Lawyer etc. Determined by the service providers

230. Business Development 230 Pricing Objectives The pricing strategies of a firm depend largely on the objectives of the firm and the way it wants to position itself in the market. The pricing strategies of a firm depend largely on the objectives of the firm and the way it wants to position itself in the market.

231. Business Development 231 Some of the common objectives are: Some of the common objectives are: SurvivalSurvival Present profit maximizationPresent profit maximization Present revenue maximizationPresent revenue maximization PrestigePrestige Product quality leadershipProduct quality leadership

232. Business Development 232 The pricing objectives are basically dependent on various factors like: The pricing objectives are basically dependent on various factors like: How would a company like to position its servicesHow would a company like to position its services Are the prices chosen are compatible with the corporate objectivesAre the prices chosen are compatible with the corporate objectives How do the competitors react to the price changes made by a companyHow do the competitors react to the price changes made by a company What is the duration of the lifecycle of the servicesWhat is the duration of the lifecycle of the services How does the elasticity of demand fluctuateHow does the elasticity of demand fluctuate Is the service capacity over utilized or underutilizedIs the service capacity over utilized or underutilized

233. Business Development 233 Value Strategies in Pricing of Services There are four strategies that can be used to create and communicate value to the customers There are four strategies that can be used to create and communicate value to the customers Satisfaction based pricingSatisfaction based pricing Relationship pricingRelationship pricing Efficiency pricingEfficiency pricing

234. Business Development 234 Satisfaction Based Pricing This pricing method removes the uncertainty associated with the intangible nature of the services by adopting the strategies of: This pricing method removes the uncertainty associated with the intangible nature of the services by adopting the strategies of: Service guaranteesService guarantees Benefit driven pricing andBenefit driven pricing and Flat rate pricingFlat rate pricing Convenience pricingConvenience pricing

235. Business Development 235 Relationship Pricing Long term contracts and price bundling are two methods that are followed by service providers under this strategy: Long term contracts and price bundling are two methods that are followed by service providers under this strategy: Long term contractsLong term contracts Price bundlingPrice bundling

236. Business Development 236 Efficiency Pricing It’s purely an activity based costing wherein each activity from production to delivery is analyzed to get the best value for the customers. It’s purely an activity based costing wherein each activity from production to delivery is analyzed to get the best value for the customers. E.g. Air Deccan offers a no-frills service to its passengersE.g. Air Deccan offers a no-frills service to its passengers

237. Business Development 237 Issues in Pricing of Services Pricing is very important, very sensitive and the sales and profits of a firm depend to a large extent on the pricing structure. Pricing is very important, very sensitive and the sales and profits of a firm depend to a large extent on the pricing structure. Company should develop its pricing structure after careful consideration of: Company should develop its pricing structure after careful consideration of: Customer preferences and buying pattersCustomer preferences and buying patters Legal factorsLegal factors Competitor's pricingCompetitor's pricing Company objectives etcCompany objectives etc

238. Business Development 238 In addition, the following factors that should be considered when developing a pricing strategy. In addition, the following factors that should be considered when developing a pricing strategy. Costs of production and break even analysisCosts of production and break even analysis Demand levelDemand level Competitor pricingCompetitor pricing Marketing mixMarketing mix Regulatory factorsRegulatory factors PositioningPositioning

239. Business Development 239 Marketing Budget & Cost

240. Business Development 240 In this chapter we will discuss: In this chapter we will discuss: Marketing cost analysisMarketing cost analysis Importance of marketing costs analysis Importance of marketing costs analysis Steps in marketing costs analysis Steps in marketing costs analysis Costs versus contribution Costs versus contribution

241. Business Development 241 Customer profitability analysisCustomer profitability analysis Steps in customer profitability analysis Steps in customer profitability analysis Financial situation analysis Financial situation analysis Contribution analysis Contribution analysis

242. Business Development 242 Budgeting for the field force departmentBudgeting for the field force department Field force cost Field force cost Expense pattern Expense pattern

243. Business Development 243

244. Business Development 244 What is training Training is considered as an effective tools for: Training is considered as an effective tools for: Improving the performance of poor performersImproving the performance of poor performers Also enhancing the performance of good performersAlso enhancing the performance of good performers

245. Business Development 245 Why training is required Training is required because: Training is required because: Very few people have an inborn talent and all are not effective.Very few people have an inborn talent and all are not effective. Many acquire the art of selling through proper trainingMany acquire the art of selling through proper training Business executive personify the company to the outside world, they project the image of the companyBusiness executive personify the company to the outside world, they project the image of the company You cannot do business with yesterday’s methods / techniques and be in tomorrow’s businessYou cannot do business with yesterday’s methods / techniques and be in tomorrow’s business

246. Business Development 246 New recruits require extensive training before they are sent to the field New recruits require extensive training before they are sent to the field Those existing also need training because Those existing also need training because a. Complexity of market / products b. New product introduction c. Changing markets scenario d. New ways of doing business

247. Business Development 247 Purpose of Training The purpose of imparting training to Field force helps them convert prospects into an effective customers The purpose of imparting training to Field force helps them convert prospects into an effective customers

248. Business Development 248 The advantages of training:- The advantages of training:- 1.Training helps field persons develop personal selling skills, time management skills and forecasting skills that increases revenue and reduce the cost of operation 2.Training also helps in bringing down the cost of recruitment, selection and the rate of attrition 3.Supervision becomes easier and the top management can attend priory tasks 4.Only a trained employee can give complete satisfaction to their customers

249. Business Development 249 5.Ruthless competition, can’t afford to go without properly trained staff 6.Training helps to lessen the time that otherwise a newly selected person normally takes in picking up his job. 7.Relation with customers are pleasant when it is a trained employee 8.Training help selling technical products better and more convincingly E.g. Computer, Refrigerator, Mobile phones, T.V. sets etc., E.g. Computer, Refrigerator, Mobile phones, T.V. sets etc.,

250. Business Development 250 9.Better utilization time, I mean no wastage of time. 10.All employees are required to be trained in the policies and views of his company 11.Training in turn produce excellent control over any work situation 12.It is much better to have a few trained employees than having a large number who don’t have any training. This proves the importance of training salesman.

251. Business Development 251 Common Training Topics 1. Company (History, Organization, Policies, Promotion) 2. Procedures (Credit, Shipping, Expenses, Complaints) 3. Products (Manufacturing, Features, Prices, Uses) 4. Market (Territory, Routing, Business conditions, Competition) 5. Selling (Presentation, Demonstration, Objections, Closing) 6. Non-selling duties (Planning, Prospecting, Customer service, Reports)

252. Business Development 252 Training Techniques Used Techniques used in training are: Techniques used in training are: 1.Class room lecture 2.On-the-job methods 3.Video / Audio visual presentation 4.Reading assignments – Group discussion 5.Sales shows – (play act) 6.Role play and critique 7.Case study method 8.Gaming and simulation 9.Coaching and counseling /mentoring 10.Team grouping- brain storming session 11.Instrumented training 12.Programmed instruction 13.e-learning

253. Business Development 253 Sales Training Programs Sales training is partly educational and partly developmental and should form a continuous feature of a salesman’s life Sales training is partly educational and partly developmental and should form a continuous feature of a salesman’s life

254. Business Development 254 A sales training program consists of three components: A sales training program consists of three components: Designing ProgramDesigning Program Implementing the Training ProgramImplementing the Training Program Evaluating the training programEvaluating the training program

255. Components of a Sales Training Program Sales Training Program Designing the Training Program Implementing the Training Program Evaluating the Training Program Determine objectives of the training program Review sales activities of the organization Determine who should be trained Identify training needs Determine how much training is required Selecting the right trainer Timing of training Place of training Salesperson’s reaction Knowledge acquisition Behavioral change/ Transfer of learning Organizational outcomes

256. Business Development 256 Negotiations Negotiation is a process where two parties discuss an issue, and then agree upon some terms and conditions to close the deal. Negotiation is a process where two parties discuss an issue, and then agree upon some terms and conditions to close the deal. It helps satisfy the buyer in terms of: It helps satisfy the buyer in terms of: Price, quality, quantity, services offered, credit terms, order processing and delivery time etc.Price, quality, quantity, services offered, credit terms, order processing and delivery time etc. It’s a win-win situation. It’s a win-win situation.

257. Business Development 257 Negotiations are done based on the strength of person’s: Negotiations are done based on the strength of person’s: Bargaining powerBargaining power SkillsSkills Superior product qualitySuperior product quality Satisfying customer needsSatisfying customer needs

258. Business Development 258 Field executives are trained to develop skills like ability to: Field executives are trained to develop skills like ability to: Think clearly under pressure and uncertaintyThink clearly under pressure and uncertainty Ability to persuadeAbility to persuade Listening skills etc.,Listening skills etc., Negotiation skills help field personnel strike deals and make the buyer feel that he has got the best deal. Negotiation skills help field personnel strike deals and make the buyer feel that he has got the best deal.

259. Business Development 259 Relationship Marketing The objective is to build lasting relationships with customers and enhance the quality of future interactions The objective is to build lasting relationships with customers and enhance the quality of future interactions Identify or investigate the customer problems, needs and wantsIdentify or investigate the customer problems, needs and wants Gather adequate informationGather adequate information Come up with suitable solution that reinforces the customers choice of the productCome up with suitable solution that reinforces the customers choice of the product Allow companies to display their superiority over their rivalsAllow companies to display their superiority over their rivals

260. Business Development 260 It is far more profitable for a company to retain the existing customer than to attract new ones. It is far more profitable for a company to retain the existing customer than to attract new ones. Some of the methods used to build lasting relationships with customers are: Some of the methods used to build lasting relationships with customers are: Sending thanks card when place orders etc.,Sending thanks card when place orders etc., Providing articles or informationProviding articles or information Keeping updated with product information, special offersKeeping updated with product information, special offers Sending reminders about issues on customer’s interestSending reminders about issues on customer’s interest

261. Business Development 261 Which step to success?

262. Business Development 262 Which step to success? When faced with Adversity, you subconsciously decide immediately either to: (1) “Flee It!” (2) “Fight It!” (3) “Forget It!” (4) “Face It!” When faced with Adversity, you subconsciously decide immediately either to: (1) “Flee It!” (2) “Fight It!” (3) “Forget It!” (4) “Face It!” The first three end in failure ! … number four opens the Door to Success ! The first three end in failure ! … number four opens the Door to Success ! The first step to handling any situation is to face the facts. The tendency to avoid the issue, to run, or even to fight is an enemy of your full potential. The first step to handling any situation is to face the facts. The tendency to avoid the issue, to run, or even to fight is an enemy of your full potential. Don’t confuse humility with timidity or discretion with a negative attitude Don’t confuse humility with timidity or discretion with a negative attitude

263. Business Development 263 Look your difficulty in the face! See it for what it is! Never be satisfied to excuse it, defend it, explain it away, or rationalize it. Meet it head-on … FACE IT seize it … and the sweetness of success will be yours

264. Business Development 264Motivation What is Motivation Motivation is a developmental part of an individual’s progress Motivation is a developmental part of an individual’s progress It is an inner drive that triggers people to achieve their goals. It is an inner drive that triggers people to achieve their goals. It aids an individual to move in a direction, at a certain speed and in a certain manner. It aids an individual to move in a direction, at a certain speed and in a certain manner.

265. Business Development 265 Motivation encourage field executive to be positive and to be successful their activities Motivation encourage field executive to be positive and to be successful their activities Motivation is the process of getting other people to do what you want them to do it. Motivation is the process of getting other people to do what you want them to do it.

266. Business Development 266 Motivating field personnel are a must because they are almost all the time away in the filed attending sales calls, which generally leads to their lacking a sense of belongingness and loyalty towards their team and the organization. Motivating field personnel are a must because they are almost all the time away in the filed attending sales calls, which generally leads to their lacking a sense of belongingness and loyalty towards their team and the organization.

267. Business Development 267 Some of the motivating tools are: Some of the motivating tools are: Financial incentives andFinancial incentives and Non-financial incentivesNon-financial incentives Financial incentives Financial incentives Salaries, bonus and commissionSalaries, bonus and commission Non-financial incentives Non-financial incentives Job security, appreciation, training and education, flexibility, power and authority, prizes, recognition for achievement, promotion etc.,Job security, appreciation, training and education, flexibility, power and authority, prizes, recognition for achievement, promotion etc.,

268. Business Development 268 A small gesture of recognition like being publicly praised for an accomplishment or a pat on the back, can act as a perfect motivator for an employee. A small gesture of recognition like being publicly praised for an accomplishment or a pat on the back, can act as a perfect motivator for an employee. A personal call from the top boss or a small personal gift can be the most memorable event in his life. A personal call from the top boss or a small personal gift can be the most memorable event in his life.

269. Business Development 269 This is an interesting classification of salesmen which is amusing but true This is an interesting classification of salesmen which is amusing but true Wheelbarrow Has to be pushed Canoe Has to be paddled along Kite Has to be kept on the string and given sufficient freedom Kitten Has to be patted and cuddled Football Has to be kicked around Trailer Has to be tagged along Motivation at work, in different field

270. Business Development 270  The whole theory of motivation can be summarized into this inverted triangle. I am proud of you What is your opinion? Will you please? Thank you “I” is the least important word

271. Business Development 271 Invisible Barriers

272. Business Development 272 Invisible Barriers At a coastal aquarium, a savage barracuda and a Spanish Mackerel were placed in the same glass tank with a glass partition separating them At a coastal aquarium, a savage barracuda and a Spanish Mackerel were placed in the same glass tank with a glass partition separating them Unaware of the transparent barrier, the Barracuda quickly attacked the Mackerel but was stopped by the partition. Unaware of the transparent barrier, the Barracuda quickly attacked the Mackerel but was stopped by the partition. After repeatedly bumping his nose he finally quit trying. Later, the partition was removed, but the Barracuda would swim only to the point where the barrier had been and stop … because he thought it was still there! After repeatedly bumping his nose he finally quit trying. Later, the partition was removed, but the Barracuda would swim only to the point where the barrier had been and stop … because he thought it was still there! Many people are like this. They move forward until they reach an imaginary barrier but then stop because of a self-imposed attitude of limitation Many people are like this. They move forward until they reach an imaginary barrier but then stop because of a self-imposed attitude of limitation

273. Business Development 273 The only limit of any man’s growth and progress is the limit he placed on himself by his own thinking

274. Business Development 274 Time & Territory Management

275. Business Development 275 “ Time is the scarcest resource of the manager, if it is not managed, nothing else can be managed” – Peter Drucker

276. Business Development 276 Time is precious, once lost cannot be regained. Whether it is a CEO of the company or a shoeshine boy, everyone has the same 24 hours to carry out his work Time is precious, once lost cannot be regained. Whether it is a CEO of the company or a shoeshine boy, everyone has the same 24 hours to carry out his work

277. Business Development 277 How the available time is utilized determines the success of an individual How the available time is utilized determines the success of an individual

278. Business Development 278 It is not the non- availability of time, but the management of time that will make the difference between success and failure It is not the non- availability of time, but the management of time that will make the difference between success and failure

279. Business Development 279 For businesses, time is money, therefore, managing time skillfully should be one of the most important activities of a salesperson For businesses, time is money, therefore, managing time skillfully should be one of the most important activities of a salesperson

280. Business Development 280 In order to manage time resourcefully, crucial and bigger tasks should be given more importance than smaller and less important ones In order to manage time resourcefully, crucial and bigger tasks should be given more importance than smaller and less important ones

281. Business Development 281 Let’s understand this concept more clearly: Let’s understand this concept more clearly: Take a bucket and fill it with big stones, then put in smaller pebbles and later sand, followed by water. By filling the bucket in this way, ultimately will be tightly packed with stones, pebbles, sand and water, without any gaps in between.Take a bucket and fill it with big stones, then put in smaller pebbles and later sand, followed by water. By filling the bucket in this way, ultimately will be tightly packed with stones, pebbles, sand and water, without any gaps in between. Now try filling the same bucket the other way round. First fill it with water, and then put in sand, pebbles and big stones. It will be easily seen that the bucket is not tightly filled using latter methodNow try filling the same bucket the other way round. First fill it with water, and then put in sand, pebbles and big stones. It will be easily seen that the bucket is not tightly filled using latter method

282. Business Development 282 From this analogy, we understand that larger tasks should be given priority over smaller ones for effective time management

283. Business Development 283 So let us analyze and find out where are we spending more time & less time So let us analyze and find out where are we spending more time & less time Travel timeTravel time Call-timeCall-time Waiting timeWaiting time Creative timeCreative time Preparation timePreparation time Follow-up timeFollow-up time Administrative timeAdministrative time Time to restTime to rest Time to playTime to play

284. Itinerary Plan While planning the route, care should be taken that: While planning the route, care should be taken that: 1.There is no back-tracking 2.Continuous principle should be followed 3.Work load and time required to be spent at each place, should be assessed 4.Effort should be made to combine jobs 5.Call plan and its’ frequency be decided 6.Call plan must clearly state the objectives of calling on a party and the task to be completed

285. Business Development 285 Spending Scrap Time effectively Scrap time is the time wasted in unproductive and unavoidable activities over which a person has very limited control such as: Scrap time is the time wasted in unproductive and unavoidable activities over which a person has very limited control such as: Time spent on waiting for a client or colleagueTime spent on waiting for a client or colleague For a meeting to beginFor a meeting to begin When caught in a traffic jam/ signalWhen caught in a traffic jam/ signal Time spent in getting fuel filledTime spent in getting fuel filled Time consumed by various miscellaneous activitiesTime consumed by various miscellaneous activities

286. Business Development 286 Usually, nothing worthwhile gets done during scrap time, however, salesperson can make effective use of his scrap time by the following way: Usually, nothing worthwhile gets done during scrap time, however, salesperson can make effective use of his scrap time by the following way: Make necessary phone calls to the office, client or prospectMake necessary phone calls to the office, client or prospect Review the requirements of customerReview the requirements of customer Prepare for the next sales callPrepare for the next sales call Do some paperworkDo some paperwork Assess the last sales callAssess the last sales call

287. Business Development 287 Listen to some inspirational audioListen to some inspirational audio Exercise to relaxExercise to relax Do yoga or meditationDo yoga or meditation Walk for a whileWalk for a while Clean up the workplaceClean up the workplace These activities can, however, be taken up only with some prior planning, since the necessary resources should be available for the salesman to utilize his scrap time effectively These activities can, however, be taken up only with some prior planning, since the necessary resources should be available for the salesman to utilize his scrap time effectively

288. Business Development 288 Time Management Tips A proven system for getting more done in less time than you ever thought possible: A proven system for getting more done in less time than you ever thought possible: 1.Use a time planner : plan activities for a year, month week and a day. Also maintain master copy of every task /action 2.List every small activity that need to be performed in a day: gives control over time and increases confidence

289. Business Development 289 3.Prioritize the task list : the order of importance 4.Make this practice becomes a daily habit 5.Finally, set-up a 45-file system, which helps in managing time and various activities intelligently. 31 files for the days of the month 12 files for the number of months and 2 files for the next two years 2 files for the next two years

290. Business Development 290 Those who manage their time well, manage their jobs and life well too Those who manage their time well, manage their jobs and life well too

291. 291 Take Time Take time to think; it is source of power Take time read; it is the foundation of wisdom Take time to play; it is the secret to staying young Take time be quiet; it is the opportunity to seek God Take time to love and be loved; it is God’s greatest gift Take time to laugh; it is the music of soul Take time to be friendly; it is the road to happiness Take time dream; it is what the future is made of Take time to pray; it s the greatest power on earth Take time to think; it is source of power

292. Business Development 292 Time Management is an attitude Time management should be imbibed in us as a good habit, or else it will not give good results

293. 293 Some related definition Time: Period during which action or process continues Management: Achieving objectiveness through self and others Effectiveness: Achieving objectives with maximum results and minimum cost Time waster: Anything preventing achieving objectives most effectively

294. Business Development 294 Efficient time management in a sales organization offers several benefits such as: Efficient time management in a sales organization offers several benefits such as: a.Better Market Coverage b.Reduced Selling Costs c.Improved Customer Service and d.More Accurate evaluation of the Sales Force

295. Business Development 295 Circus elephants and limitation

296. Business Development 296 Circus elephants and limitation No matter how large and strong the elephant becomes, he continues to believe he cannot move as long as he can see the stake in the ground beside him. No matter how large and strong the elephant becomes, he continues to believe he cannot move as long as he can see the stake in the ground beside him. Many intelligent adult humans are like the circus elephant. They are restrained in thoughts, actions and results. They never move out any further than the extent of their own self-imposed limitations. Many intelligent adult humans are like the circus elephant. They are restrained in thoughts, actions and results. They never move out any further than the extent of their own self-imposed limitations. If this is happening to you and to your life… Resolve now to uproot the stakes that hold you … Break the chains of hindering habit… If this is happening to you and to your life… Resolve now to uproot the stakes that hold you … Break the chains of hindering habit… Become the man you know you can become and should become!

297. Business Development 297 Territory Management A sales territory comprises a number of present and potential customers within a given geographical area. A sales territory comprises a number of present and potential customers within a given geographical area. It is assigned to a salesperson, branch, or intermediary It is assigned to a salesperson, branch, or intermediary By assigning specific territories to salesmen, the management can significantly bring down the cost of making sales calls By assigning specific territories to salesmen, the management can significantly bring down the cost of making sales calls

298. Business Development 298 SALES TERRITORIES AreaCityDistrictsStates Nation etc. Customers or Prospective Customers Geographical Area Group of buyers assigned to a Salesman (Sales Accounts)

299. Business Development 299 Sales Territories Find out your territory Find out your territory Find out potential customers Find out potential customers The loyal customers The loyal customers The loyal and potential customers The loyal and potential customers Redraw the time Redraw the time Re-align the territory to be most effective Re-align the territory to be most effective Show the scope and invest time on them Show the scope and invest time on them Potential clients and their saturation Potential clients and their saturation When will they saturate When will they saturate What’s the solution What’s the solution

300. Business Development 300 “Nothing can be more discouraging to a sales person than to see an associate milking a highly profitable territory”

301. Business Development 301 Benefits of Territory Management Designing and managing territories in a efficient and effective manner has the following benefits: Designing and managing territories in a efficient and effective manner has the following benefits: 1.Can budget appropriate amount of attention, time and selling effort for each customers 2.Better customer relation/ goodwill and increased sale 3.Clear responsibility of field executive 4.Reduce friction among field employees 5.Better customer care

302. Business Development 302 6.Planning and control can be more effective 7.Budgeting can be more precise 8.Profitable and unprofitable markets can be identified 9.Selling costs and time can be reduced through reductions in miles travelled 10.Morale of the employee will be favourable when it is his own territory, because he can work efficiently and effectively, his productivity will be greater

303. Business Development 303 Criteria for territory design While designing sales territories, the following criteria should be taken into consideration: While designing sales territories, the following criteria should be taken into consideration: 1. Sufficient Potential 2. Reasonable Size 3. Adequate Coverage 4. Minimum Impediments

304. Business Development 304 The other considerations to be looked in the territory are: The other considerations to be looked in the territory are: Prospects and customer groupsProspects and customer groups Transport facilitiesTransport facilities Determine number, location and size of customers and prospects in each tentative territory Determine number, location and size of customers and prospects in each tentative territory Estimate time required for each sales call. Estimate time required for each sales call. Determine length of time between calls, that is amount of time required to travel from one customer to the next Determine length of time between calls, that is amount of time required to travel from one customer to the next

305. Business Development 305 Decide call frequencies Decide call frequencies Calculate the number of calls possible within a given period Calculate the number of calls possible within a given period Adjust the number of calls possible during a given period by the desired call frequencies for the different classes of customers and prospects Adjust the number of calls possible during a given period by the desired call frequencies for the different classes of customers and prospects Check out those adjusted territory need any further adjustments as required. Check out those adjusted territory need any further adjustments as required. Finally the skills of the salesperson. Finally the skills of the salesperson.

306. Business Development 306 Routing and Scheduling Field Personnel Routing and scheduling plan aims to: Routing and scheduling plan aims to: Maintains lines of communicationMaintains lines of communication To optimize and improve territory coverageTo optimize and improve territory coverage Minimize wastage of time/ no backtracking non- selling time / travel timeMinimize wastage of time/ no backtracking non- selling time / travel time Minimize travel expenses and distance coveredMinimize travel expenses and distance covered Organize appointmentsOrganize appointments Set desired call frequency ratesSet desired call frequency rates Bring closer control (over sales personnel’s movement/time/expenditure)Bring closer control (over sales personnel’s movement/time/expenditure)

307. Business Development 307 There are basically three patterns which form the basis for effective sales call planning. There are basically three patterns which form the basis for effective sales call planning. These are: These are: Straight-line patternStraight-line pattern Cloverleaf Pattern andCloverleaf Pattern and Hopscotch MethodHopscotch Method

308. Business Development 308 Straight-line Method Sales person’s Office/ Residence Customer

309. Business Development 309 Cloverleaf Pattern Sales person’s Office/ Residence

310. Business Development 310 Hopscotch Method Sales person’s Office/ Residence

311. Business Development 311 Scheduling Scheduling refers to the allocation of appropriate time to call the activities that salespersons carryout during a day, week and a month. Scheduling refers to the allocation of appropriate time to call the activities that salespersons carryout during a day, week and a month. Schedule is a by-product of setting-up the route Schedule is a by-product of setting-up the route Effective routing and scheduling automatically builds up the size of average order (improve effectively and efficiency)

312. Business Development 312 However, plan should be flexible for one to make changes if necessary rather than restricting one’s selling efforts Call schedule required more planning than the route such as: Call schedule required more planning than the route such as: Customers & prospects are segregated as per the call frequency requiredCustomers & prospects are segregated as per the call frequency required Use detailed map, identifying locations/ customer’s trading area etc.Use detailed map, identifying locations/ customer’s trading area etc. Call frequency fit to customer needs Advance appointments

313. Business Development 313 THE END