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Case Study Kramer Pharmaceuticals, Inc.

Presented by Debi Prasad


Bagria Kishor Chandwani Nandini Mudgil Mrinmoy Kanti Das Rahul
Agarwal Ritesh Kumar Singh
2. Case Background
o Company : Kramer Pharmaceuticals, Inc
o Business : Pharmaceuticals (Manufacturer
o of Prescription Drugs)
o Country : U.S.
o Year : 1978
o Competitors: Abbott, Lilly, Merck, Upjohn &
o Schering
3. Case Background
o Bob Marsh, a former detailer, worked at Kramer
Pharmaceutical for 12 years and was considered a hard
working, well established detailer (product specialist and sales
associate). He possessed excellent references and credentials.
o Bob was fired because of failure to comply with company
protocol after failing to make several changes in his behavior.
Although it was a little unconventional, his methods have
worked well for him for 12 years.
o This case is extremely rare. Irate customers (Physicians)
complained on Bob Marsh's behalf making the termination of
Bob an issue.
o Sales Vice President decided to look into the case in detail, to
determine whether Marsh's discharge was a management
failure and, if so, what could be done to remedy this
unfortunate situation .
4. Kramers Value Chain Manufacturer Wholesalers Drug stores
General Public by Prescriptions Hospitals Physicians
5. Kramers Sales Force
o Over 500 Detailers
o Considered second to none in the business
o Job details:
o To call regularly on hospital personnel, doctors & dentists to
describe the product line & to persuade these medical
personnel to use and prescribe Kramer drugs
o A typical Kramer detailer is responsible for about 200
physician and hospital accounts within an assigned
geographic territory & expected to make between six and nine
doctor or hospital calls per day
6. Kramers Sales Force
7. Kramers Sales Force
o Employee Attrition :
o Much lower than Industry average
o Only about 8% lost each year from resignations, discharges,
retirements & deaths

8. Kramers Sales Force - Structure Sales Vice President Zone


Managers 1 Zone Managers 2 Zone Managers 3 Zone Managers 4
Zone Managers 5 Zone Managers 6 District Manager 1 District
Manager 3 District Manager 4 Detailers Detailers Detailers Detailers
District Manager 35 District Manager 2
9. Kramers Sales Force - Training
o Mostly Pharmacy School Graduate with a few years
experience as registered pharmacists in retail drugstores
o Receives a months training in product characteristics and
selling (detailing) skills at the companys Denver
headquarters.
o Both new & experienced detailers receives regular on-the-job
training from 35 district managers between 10 to 15 days of
these field visits in a year, depending on his or her experience
& performance
o All Kramer representatives returned to headquarters regularly
for continued training throughout their careers
10. Kramers Sales Force Detailers remunerations
o All detailers are salaried receives annual bonus based on
Corporate Performance
o Corporate Bonus amounts to about 15% of total annual
earnings
o In 1978, Total annual earnings by a Detailer was from $20k to
$36k
11. Cramers Sales Force Detailers Performance Evaluation
o Performance Evaluation done by District Manager
o Formal Performance Evaluation once a year
o Informal Evaluations whenever necessary
o Detailers are evaluated in terms of
Sales volume &
Improvement in relationships with
Customers
o Yearly quota system for each of the dozen or so major product
categories to stimulate proper concentration of detailing
efforts
12. Bob Marsh
o Graduate from Top-flight pharmacy school
o Experienced U.S. Naval Pilot with fine officer service record
o Good academic record & successful drugstore experience
o After a few rewarding but unexcited years in retail pharmacy,
decided to join Kramer ( at a lower starting salary )
o John Meredith, District Manager of Toledo, who interviewed
Marsh for Kramer rated him very high.
o In 1966, Marsh joined Kramer at Salary $14k pa & posted in a
territory in Toledo where he belonged.
13. Bob Marsh Performance over the years

o Rehabilitation blueprint of Marsh by Franlin & new Zone


Manager Pete Mallick Weekly reports, reading assignments,
questionnaire forms.
o July78 At age 44 years, Marsh asked to resign which he
accepted without resistance or comment
78 Tom Franklin (Young one year supervisory experience)
o No salary increase in Jan78
o But Probation status evaporated by default
Sept76 to 78 Tom Wilkens (Background comparable to Reed)
o In 77 : Initially recommended for salary hike, but later rated
Complete unsatisfactory : Again put on probation of 90 days
Aug76 to Sept77 Vince Reed (Young, Competent Detailer &
Promising Manager - 1 st supervisory experience)
o No Salary Increase in Jan75 : Put on probation of 90 days
o Probation removed : Performance found Satisfactory
o In Jan76 : Salary Increased to $25k
Sept74 to Aug76 Jim Rathbun (Bright, young, energetic with many
new ideas)
o In 71 73 : Performance Rating Satisfactory
o In 74 :
Performance : Well above average
Attitude : Well above average
March71 to Sept74 Bill Couch Experienced & Highly regarded
supervisor)
o in 67 & 68
Work Performance : Below Standard
Attitude : Standard
o In 69 : Overall performance : Standard
o In 70 : Rated Completely satisfactory
From 66 to March71 John Meredith (Took entry interview of Bob,
highly recommended him) Observations Period Supervisor
14. Bob Marsh In the eyes of Supervisors
o Quickly grasped all facets of the job, including product
characteristics & basic selling skills
o Exceptionally well received by Physicians, Office Receptionists
& Hospital personnel
o Training Report on Marsh - Excellent
o Increased Kramer prescriptions by Physicians
o Increased in number of Physicians buying Kramer Products for
office use
o Hospital sales showing gains
o Lack of attention to organization, planning & follow-up
o Unplanned approaches
o Tendency to question logic of some of companys major
promotion programs
o More interest in developing his own promotion programs than
in following plans outlined at district meetings
o Deciding himself which products to promote

o Tendency to pre-judge customers interests


o Less focus on promotion of new products
15. Bob Marsh Life in Kramer
16. Bob Marsh Life in Kramer Bob showed continuous
improvement under Meredith & Bill Couch
17. Bob Marsh Life in Kramer
o Frequent changes in supervisors Younger/Less experienced
o Bob started to loose ground Lacked initial enthusiasm
18. Bobs way of selling
o More personalized selling
o Hardworking
o Outstanding Detailers image among Clients - Perceived to be
the finest & most helpful detailers
o Excellent references and credentials
o His selling methods a little unconventional but have worked
well for 12 years
o Shown excellent improvement under Meredith & Bill Couch on
his short-comings/weaknesses
19. Managements handling of Bob
o Rules are rules, and thats the way its going to be.
o More focus on weaknesses than Strengths. Continuous
increase in Sales ignored.
o Lacked HR approaches
o Annual Increment system used as tool of punishment but not
as an effective tool for motivation
o Did not consider other options like relocation of Bob to a new
territory to break the monotony or put another fresh Detailer
with Bob based on the increased workload (Overlooking
Distributor in addition to his existing job)
o Did not anticipate the reaction of the Clients base built up
over the years through personal selling
o Did not anticipate that Competitors might take advantages by
recruiting Bob & using his close contacts & credentials
20. Our suggestion
o Considering the performances put up by Bob over the years
and his excellent interpersonal skill building lasting
relationships with prospects/clients, Company may reinstate
Bob and may look for
Imparting formal trainings to improve his record keeping
& documentation skills and his level of understanding of
promoting new products
After some time, Bob may be relocated to a new
territory where his effective Personal Selling method
would yield benefits to the company
21. Thanks