advanced sales force remodeling strategies in a multi-channel environment indonesia prospective

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Moch Kurniawan

Advanced Sales Force Remodeling Strategies in a Multi-Channel

Environment Indonesia Prospective

Potential of Emerging Markets

• Emerging markets have potential for companiesbut they have wide diversity in different stages ofdevelopment of healthcare infrastructure

• There are basically three clusters of markets withpotential ready to be tapped.– Brazil, Russia, India, China, Mexico and Turkey- the

BRICMT economies – Second tier countries such as those of South Asia e.g.

Vietnam, Thailand, Indonesia etc– African countries- South Africa, Egypt, Algeria and

Nigeria

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The global pharmaceutical market could be worth nearly $1.6 trillion by 2020

www.pwc.com/pharma2020

Importance of emerging markets in global scenario

Source: IMS Market Prognosis, September 2011; IMS Pharmerging Overview, 2011

Pharma market development 2006-16, in US$ billions

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Pharmaceutical market potential of emerging markets and mature markets

Source: IMS Health Market Prognosis; Global Insight; Strategy& analysis

Worldwide Prescription Drug Sales (2006-20)

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Global and Asia Pacific Trends

IMS Health Asia Pacific

Pharma has understood the need for radical change

• Share of voice driven

• Blockbuster model

• Economies of scale to maximize margins

• Patent lifetime as key indicator for profitability

• Making companies ever more focused

Pharma in 1990

•Cost-cutting across value chain

•Leverage nichebuster at best

•Leave GP segment

•Fill pipeline by M&A

•Diversify to OTC, devices, animal health, etc.

•Desperate fight to overcome R&D underperformance

Pharma in 2000 • instead of “renovation”

• Develop outcome instead of products

• Personalize offerings

Pharma beyond 2020

Dr. Michael C. Müller, Handelsblatt “Pharma 2012”

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The biggest mistakes in emerging markets

published by Booz & Company in 2013

Source: Strategy& analysis

Manufacturers have a chance to move to the center of the healthcare system, acting as a health solution

provider

Dr. Michael C. Müller, Handelsblatt “Pharma 2012”

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The provision of healthcare is moving closer to the patient

Source: PricewaterhouseCoopers, Pharma Vision 2020

In Asian emerging markets, the sheer size of the task ofimproving healthcare has expedited the rise in price pressures

The market partner issue 55 September 2012

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Fragmented & Heterogeneous Markets in Asia

Sanofi Aventis Emerging Markets IR Seminar July 2, 2009

Price cuts and reimbursement restrictions present in both developed and emerging markets

Source: Datamonitor, IMAP

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Recently, with growing budget pressures, markets are looking at new systemic approaches


Increasing consumer demand for more affordable drugs has driven rapid growth of high-quality generics across Asia-Pacific


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Measures most used in ASEAN are the less complex tools which are also easier to implement


What can we learn based on IMS survey in 2013

Over the next 12 months Over the next 3–5 years

©2013 IMS Health Incorporated and its affiliates. All rights reserved.

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The key trends now emerging and their implications for Pharma


The fully diversified model

Ethical Pharmaceuticals

• Mass-Market

• Primary-care

• products (including patches, inhalants and controlled-release implants)

• Poly-pills

• Specialised-Market

• Biologicals

• Orphan drugs

• Vaccines

Diagnostics & Devices

• Molecular testing

• Clinical biomarkers

• Medical devices

Generics

• Branded generics

• Commodity generics

• Super-generics

• Follow-on biologicals

Consumer Health

• Over-the-counter medicines

• Consumer diagnostics

• Nutraceuticals

Health Management

• Patient education

• Delivery and drug administration services

• Monitoring and counselling

• Physiotherapy

• Nutritional advice

• Wellness management

Source: PricewaterhouseCoopers, Pharma 2020: Challenging business models

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Emerging stakeholders in market access

Patients Pharmacies

Physicians and KOLs

Government bodies and

regulatory agencies

Journal of Market Access & Health Policy 2014, 2: 25302 - http://dx.doi.org/10.3402/jmahp.v2.25302

Sales force restructuring and innovation: State of the industry

Wait and watch players:

•Big Pharma companies with expanding portfolios, like Novartis and Roche, are mostly

taking a watch-and wait approach and collecting information on reps’ value and productivity in

doctors’ offices.

Slow movers:

•Companies with stable portfolios, like Glaxo

Smith Kline and Abbott Labs, are going a step

further, tweaking their field forces to increase

productivity.

Change setters:

•Several mid-size companies are also making critical sales force change using their small size to target specific physician groups, assigning more responsibility per rep through account management and also making changes in their first line management system

Change setters:

•Companies with declining portfolios, like Pfizer and Merck are seeking change and have the greatest willingness to pilot and experiment new approaches. And it is this group where the action is, in terms of sales model variation.

The progression of the pharmaceutical marketing and sales model, Deloitte

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Possible initiatives across pharmaceutical value chain


Pharmaceutical company go-to-market model


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Key Challenges in Emerging Markets: Shortage of Talent

Source: Sharpstream Life Sciences emerging markets talent survey 2008

FACT

• As a result, sales performance is suffering, with an estimated67% of sales reps not meeting their quotas.The customer is increasingly difficult to reach, leading to sales

productivity metrics dropping off a cliff.When sales reps finally speak with their target, they are viewed by

the customer as under-prepared, primarily because today’scustomer is privy to endless amounts of information andperspective prior to ever engaging with sales.

Customers who are underwhelmed by the initial sales outreach,aren’t inviting sales reps back to take the process forward, whichmeans the money and effort invested in reaching those customershas been wasted.

The highest performing sales teams are using new channels, such associal and digital – to reach, engage and convert customers.

www.market-bridge.com

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Results of Interview on the Pharma Industry

http://repository.upenn.edu/od_theses_msod/33

The Challenges Facing Sales Teams Today

www.market-bridge.com

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Decline in U.S. Pharmaceutical Reps

Source: Medical Marketing & Media, 2008.Source: Tracy Staton, “Sales Reps Earn More With Less,” Fierce Pharma, www.FiercePharma.com (August 14, 2008)

Selected differences in buyer-seller relationship styles

Adapted from Lewin, Jeffrey E.; Johnston, Wesley J. (1997); “International salesforce management: A relationship perspective”, Journal of Business & Industrial Marketing, Vol. 12, No. 3/4, pp. 236-252.

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Selected differences in buyer-seller relationship styles

Adapted from Lewin, Jeffrey E.; Johnston, Wesley J. (1997); “International salesforce management: A relationship perspective”, Journal of Business & Industrial Marketing, Vol. 12, No. 3/4, pp. 236-252.

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Understanding what Physicians value

Behaves in a professional manner

Know the BRAND market

Follows up as requested

Dresses professionally

Is able to answer my questions

Understands condition management

Asked you to prescribe/recommend(BRAND)

Presents information in a fair & unbiasedmanner

Understands the needs of my practice

Make good use of my time

0%

2%

2%

2%

3%

3%

18%

20%

25%

25%

http://blog.medismotech.com/pharma-sfe-sales-force-effectiveness/

Pharmaceutical companies focus


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Pharma 3.0 From drugs to healthy outcomes

Ernst & Young – Global Life Sciences Center, Pharma 3.0 Life Sciences Network Basel, 20 May 2010

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Volume Growth and Populations income Indonesia FC 2016

Source: Institute for Healthcare Informatics, IMS Market Prognosis, May 2012; Economist Intelligence Unit, Jan 2012

Indonesia Overview

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Indonesia real GDP

@ The Economist Intelligence Unit Limited 2012

Indonesia’s Social Economic Class Pyramid

Source: MarkPlus Insight Research

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Population in Indonesia, income demographics 2012 vs 2020

Source: Statistics Indonesia

The expansion of the Middle Class

Source: Goldman Sachs, in PwC, From Vision to Decision 2020, 2012

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Indonesia Pharmaceutical Overview

From 2007 to 2013 grew by 85 %

7% in 2014 with valued $6 billion

Growth is forecasted to rise to 12% in 2015 and to continue through 2018

200 pharmaceutical manufacturers, of which 70 % are domestic companies and 30 % are multinational companies

95 % of Indonesia’s drug volume comes from domestic companies

75 % of the industry’s value comes from domestic companies and 25 % comes from multinationals

A Global Business Reports Publication, Indonesia Pharmaceutical Report 2015

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Prescription vs Over-the-Counter drugs

61.50%

38.50%

Prescription CAGR 11.23% Over-the-Counter CAGR 6.23%


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Healthcare spending

© The Economist Intelligence Unit Limited 2012

Indonesia Social Security and Healthcare Programs

The goal of JKN is to merge Indonesia’s from 122 million people in 2014 become 257.5 million in 2019

19 % of total healthcare expenditure will be attributed to pharmaceuticals

92 % of drugs on the Essential Drugs List will be low-cost generics


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Contribution details for private employers and employees

KPMG Advisory Indonesia, BPJS Kesehatan: A new medicare system ?

Source: MarkPlus Insight 2015 WOW Brand Report - Health Insurance; n=402

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Indonesia Social Security and Healthcare Programs Up Date

Member

• 142.711.701 (24/4/15)

Healthy Facilities

• Central of Healthy People 9798

• Army Clinic 750

• Police Clinic 570

• Basic Clinic 2712

• Hospital D Class 1675

• Primary Clinic 79

• Pharmacy 1679

• Optic 870

Doctor

• Dentist 1050

• Private Practice 4222

•Demand for low-cost drugs to increase with the continuing expansion of the healthcare sector and rising cost awareness.

•Trade liberalisation within the Association of South East Asian Nations (ASEAN) regional group to potentially speed up growth, as could government subsidies of healthcare costs.

•Ability to increase its role in the global market for halal drug manufacturing.

•Exports likely to increase as more producers meet GMP standards.

•The proposed privatisation of the local manufacturing industry holds considerable benefits for the industry from private control and funding.

•Rising attractiveness of Indonesia as a clinical trials base.

•Taxes on raw materials lowered as part of free trade agreements.

•Inadequate healthcare coverage and lack of disease monitoring leading to epidemics.

•Potential removal of the pharmaceutical industry from the 'negative investment' list

•Significant market growth potential, with a large and fast-growing population.

•Well-established local industry, with domestic players prominent in manufacturing.

•Sizeable and strong generic drug market, largely owing to the low-income population.

•Introduction of good manufacturing practice (GMP) standards.

•The market is among the least developed in Asia.

•Lack of formal price controls leading to delays or rejections of marketing applications if the proposed price is deemed too high.

•Low purchasing power of large section of the population.

•Regulatory system biased in favour of local drug producers.

•Reliance on imports, in value terms, placing considerable pressure on already strained government healthcare finances.

•No comprehensive reimbursement coverage, nor private insurance schemes.

•Pharmaceutical sales through illegal channels.

•Reliance on imported active pharmaceutical ingredients, which makes the industry sensitive to currency fluctuations

•Poor efficacy of counterfeit drugs leading to a distrust of pharmaceuticals.

•Recent expansion of compulsory licensing for ARVs.

•Uncertainty regarding the speed and the exact details of the rollout of the new health insurance scheme, with companies fearful that it would cost them more.

•Escalating raw material cost and local currency weakness resulting in rising prices of pharmaceutical products.

•Widespread corruption continuing to deter foreign investment.

•Reduction of tariffs on drugs under ASEAN harmonisation programme posing threat to local industry.

Strengths Threats

WeaknessesOpportunities

Indonesia Pharmaceuticals & Healthcare Report, Published by: Business Monitor International

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Battle strategies for consumer healthcare

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Customer Value Proposition from the Customer’s Point of View

The Executive Issue No. 38 | 2012

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Companies need to weigh decisions on the building blocks for business models

Copyright © 2015 McKinsey & Company. All rights reserved.

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Companies have significant room to improve

Customer Buying Cycle

Awareness Loyalty

www.mce-ama.com

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4C directed selling perspectives

Sales Orientation/C

ustomer Orientation

(SOCO)

Adaptive Selling

Sales Service Behaviors

Selling Skills

J. of the Acad. Mark. Sci. (2009) 37:422–439

Patient Access to Health—The “6A’s” Model

www.accenture.com/LifeSciencesBlog

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Distribution of Sales Process

Copyright © 2010 Vantage Point Performance, Inc

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Non-physician calls as a percentage of total calls

http://www.rmcionline.com/

Typical frequency performance A targets


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Typical frequency performance B targets


Perfecting Sales Execution

Source: Consumer Product executive survey—July/August 2011, n = 120

Salesforce effectiveness is ranked among the top five priorities for about 90 percent of all respondents, but less than half feel their salesforce is operating at full potential

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Main areas in which pharmaceutical marketing departments spent funds in 2012

Source: Pewtrusts.org, nature biotechnology volume 32 NUMBER 10 OCTOBER 2014

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© COPYRIGHT 2014 CUTTING EDGE INFORMATION, INC. ALL RIGHTS RESERVED

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Marketing and Sales: How They Work Together

http://www.saylor.org/books

Selling Is a Process, Not an Event

Non-Selling Time for RepsHow much of your sales reps' time is spent in

non-selling activities? (n=199)

Copyright © 2008 CustomerThink Corp.

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Adaptive selling behaviors

Salespeople have many customers with different needs;

Sales position have high importance and value;

The company provides required resources and support.

The salespeople are highly skilled and capable to adapt

International Journal of Research in Management, Issue 4, Vol. 3 (May 2014)

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Understand what really defines sales performance

The four Performance Profile quadrants acquired when considering a salesperson’scurrent performance and performance trajectory

Below AboveCurrent Performance vs Target

Improving

Declining

Pe

rfo

rman

ce T

raje

cto

ry

Current Performance vs. Performance Trajectory

www.theblackdot.com.au

What do high performers do differently?

Scatterplot of Territory OTP and CAGR for Benchmarked Primary and Specialty Care Pharma representatives (2012 data)


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Pharma client example illustrating misalignment between the stated Call Coverage Plan and actually executed Call Coverage Model. Percentages allude to the percentage of total sales calls made throughout

the quarter


The five tribes of segmentation and targeting process adherence within all sales teams


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Evidence 2014 : Patients becoming more like consumer

Healthcare and Life Sciences Predictions 2020 A Bold Future ?

Improving Sales Process Effectiveness

Opportunities To Improve Sales ProcessWhich of these activities do you think offers the top three opportunities to

improve sales productivity at your company? (n=226)


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Optimize the Call Coverage ModelThe three stages required to execute a Call Coverage Model that reflects the company’s defined HCP

segmentation & targeting process


SMART Practices for Increasing Sales Productivity


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Adoption Curve

Customers want Innovation and performance

Customers want Solution and Convenience

Sources: Modification from E.M. Rogers, G. Moore

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The cheapest and most effective is TOPS

Target offeringsOptimized

automation, tools and procedures

Performance Management

Sales Force deployment

Sales Incentive Plan Effectiveness Checklist (1=Best, 4=Worst)

Trend + issue s, Effective Sales Incentive Plans QUARTER 2, 2004

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Efficiency or Effectiveness? Yes!

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Types of Sales Metrics


Using Processes to Achieve Sales Objectives


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Sales Response vs. Sales Force Effort

Source: Eye For Pharma

Evolving Representative Classifications

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Evolving Representative Classifications

How Performance Produces Business Results

Enablers

• Training

• Reference documents

• Expectations

• Feedback

• Incentives

• Ergonomics

• Tools

• Coaching

• Goal-setting

• Job Design

• Job Aids

Behavior

• Asking

• Introducing

• Inviting

• Explaining

• Deciding

• Writing

• Speaking

• Finding

• Information

Job Outputs (milestones)

• Appointments

• Next meetings

• Proposals

• Customized Demos

• Buying Decisions

• Signed Contracts

• Satisfied

• Customers

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Projected Change in S&M Expenditure Allocation by Marketing Target

Booz & Company and National Analysts Worldwide, Pharmaceutical Sales and Marketing Trends 2011

Why look at hospital channel today

The topline importance of the hospital channel for

Pharmaceutical sales continues to grow

Hospital influence outpaces that of other

channels

Hospitals are core components of

increasingly complex and sophisticated healthcare

systems.

Healthcare reform will exert additional pressure

on hospitals to deliver cost efficiency and quality

care

The set of hospital stakeholders that must be

engaged is expanding along with the complexity

of these institutions

Copyright © April 2015 McKinsey & Company. All rights reserved.

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Why look at hospital channel today

Copyright © April 2015 McKinsey & Company. All rights reserved.

Projected Change in Expenditures for Communication Vehicles

Booz & Company and National Analysts Worldwide, Pharmaceutical Sales and Marketing Trends 2011

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The evolution of the pharma sales force

Smaller Team Approach

Customer Service Representatives

Clinical Nurse Education

Embedded TeamsClosed-Loop Marketing

Non personal Promotion

The Future : Leaner, more vital Teams

www.pm360online.com

More Reps, or More Productivity

Harvard Business Review, September 2006

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What Does This Mean For Sales? And What Do I Need To Do To Adapt?

• Segmentation must incorporate Customer Lifetime Value

• Micro-Segmentation and Verticalization

• Sales Coverage models evolvingSales Strategy

• Customer Contact Continuum changes to reflect a shift in buyers and processes

• Job Roles evolve to align with land and expand strategy

• Productivity expectations must change

Sales Structure

• Performance Metrics evolve to reflect recurring revenue

• Sales Compensation looks drastically different

Sales Management

EVERYTHING CHANGES – NOTHING LOOKS THE SAME AS LEGACY TECHNOLOGY SALES!

INTELLIGENT AND TARGETED INVESTMENT IN SALES WILL DRIVE INCREASES IN YOUR SHARE OF WALLET

©2015 The Alexander Group, Inc.®

Adopting A New Sales Paradigm

©2015 The Alexander Group, Inc.®

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Key characteristics of salespeople desired by buyers

Expertise in their company’s

products and the market

Good communication

skills

Ability to solve problems

Ability to understand and

satisfy the buyer’s needs

Thoroughness

Ability to help in ensuring the

reliable and fast delivery of orders

Source: Based on Garver, M.S. and Mentzer, J. T. (2000) ‘ Salesperson logistics expertise: a proposed contingency framework’, Journal of Business Logistics, 21 (2) pp. 113–32; and Williams, A.J. and Seminerio, J. (1985) ‘What buyers like from salesmen’, Industrial Marketing Management, 14 (2), pp. 75–8.

Imperatives for Strategic Key Account Management

Strategy

Create a key account strategy driven by your corporate strategy

Build a competitive growth strategy that defines growth sources and key account added value

Organization

Install cross-functional teams with a multi-disciplinary approach

Re-define the role of marketing and sales

Management

Demonstrate serious management involvement of senior managers

Recognize key account management as a strategic role

Measurement

Measure success and progress

Define and monitor value-adding KPIs

Strive for a full costing measurement

People

Define roles and responsibilities

Foster knowledge and create understanding

Appoint high-level key account profiles

www.mce-ama.com

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To be successful internationally, Asian companies must ask themselves the following questions

2. How will we serve customers and navigate overseas markets?

1. How will we compete?

The human touch behind Asia Inc.’s global push in the 2013, No. 2

To be successful internationally, Asian companies must ask themselves the following questions

3. How will we execute our strategy?

4. How will we build talent, bridge culture gaps and develop global leaders?

The human touch behind Asia Inc.’s global push in the 2013, No. 2

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Guiding principles for Pharma 3.0

Ernst & Young – Global Life Sciences Center, Pharma 3.0 Life Sciences Network Basel, 20 May 2010

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Key levers of Roland Berger’s SFE model

Sales excellence in the pharma industry, www. rolandberger.com

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advanced sales force remodeling strategies in a multi-channel environment indonesia prospective

Documents

emerging markets source

asian emerging markets

importance of emerging

clusters of markets

mature markets source

ims market prognosis

pharma market development

market partner issue