SP Jain School of Global Management

Sales and Channel

Management
Group Assignment
Group No. 4
Prajakta Talathi – GSEP13CMM031
Avinash Singh – GSEP13CMM023
Anirudh Venkat – GSEP13CMM020
Manish Barapatre – GSEP13CMM038

14
Executive Summary
Johnson and Johnson is has more than 250 companies located in about 60 countries. These group
companies are organized into three main segments which then further comprise of different brand
and product categories. Broadly, its businesses are segmented into pharmaceuticals, consumer
healthcare and medical devices & diagnostics.

To improve sales J&J uses a hybrid model of where inside sales people initiate sales discussions over
the telephone and emails and eventually travel when necessary to close these sales. Market
Development, Market Intelligence and Generation of Leads with the help of their supply chain
partners is the strategy implemented by J&J.

Different roles are present for sales job following the sales process to “Identify the Prospect” and
“Make the Sale”. Culture of Johnson and Johnson is achieved by

1. Innovation
2. Education
3. Customer focus
4. Credo-led organization

Employees are trained for Global Leadership Profile, E –University, Learning and Development and
other Leadership Development Program. In every segment J&J operates, it holds the position
of a market leader. For being a leader in the market, company always comes up with
innovative products. In a nutshell it works by the way of New Market Development.

Three major opportunities available for J&J medical at present are as follows: Collaboration
with Government, Increase the Reach and Strategic Alliance with other Companies. But presently J&J
is facing few challenges such as Pricing, Legal and Government Issues and Sales and Operational
Planning.

Based on the research, few recommendations are suggested to improve the sales, to improve the
culture and to restructure future of J&J.
Table of Contents
Executive Summary ...................................................................................................................... 1
Industry Analysis .......................................................................................................................... 4
Company Structure ................................................................................................................... 4
Pharmaceuticals.................................................................................................................... 4
Consumer Healthcare ............................................................................................................ 4
Medical Devices & Diagnostics ............................................................................................... 4
Strategy ................................................................................................................................... 4
Inside and Outside Sales ........................................................................................................ 4
Market Development ............................................................................................................ 5
Marketing Intelligence ........................................................................................................... 5
Generation of Leads .............................................................................................................. 5
Roles........................................................................................................................................ 5
Hunters & Farmers ................................................................................................................ 5
Industry Roles ....................................................................................................................... 6
Sales Process ............................................................................................................................ 6
Identifying the Prospect......................................................................................................... 7
Making the Sale..................................................................................................................... 7
Culture of Johnson and Johnson .................................................................................................... 7
Training........................................................................................................................................ 7
Global Leadership Profile........................................................................................................... 7
E –University ............................................................................................................................ 7
Learning & Development........................................................................................................... 7
Leadership Development Program ............................................................................................. 7
Approach to Sales......................................................................................................................... 8
Opportunity & Challenge............................................................................................................... 8
Opportunity.............................................................................................................................. 8
Collaboration with Government ............................................................................................. 8
Increase the Reach ................................................................................................................ 8
Strategic Alliance with other Companies ................................................................................. 8
Challenges................................................................................................................................ 8
Pricing .................................................................................................................................. 8
Legal and Government Issues ................................................................................................. 9
Sales and Operational Planning .............................................................................................. 9
 Managing the Challenges .......................................................................................................... 9
Price ..................................................................................................................................... 9
Legal & Government Issues .................................................................................................... 9
Sales and Operational Planning .............................................................................................. 9
Recommendations........................................................................................................................ 9
Improve Sales ........................................................................................................................... 9
Improve Culture...................................................................................................................... 10
Restructure For Future ............................................................................................................ 10
End-to-end Approach .......................................................................................................... 10
Focus.................................................................................................................................. 10
Proactive Risk Management................................................................................................. 10
Correct Talent Deployment.................................................................................................. 10
Proper Communication........................................................................................................ 11
Bibliography............................................................................................................................... 12
Industry Analysis
Company Structure
Johnson & Johnson, J&J, has more than 250 companies located in about 60 countries. These group
companies are organized into three main segments which then further comprise of different brand
and product categories. Broadly, its businesses are segmented into pharmaceuticals, cons umer
healthcare and medical devices & diagnostics.

Johnson & Johnson

Pharmaceuticals Consumer Healthcare Medical Devices & Diagnostics

Pharmaceuticals
The Pharmaceuticals vertical includes oncology (e.g., multiple myeloma and prostate cancer),
immunology (e.g., rheumatoid arthritis, irritable bowel disease and psoriasis), neuroscience (e.g.,
schizophrenia, dementia and pain), infectious disease (e.g., HIV/AIDS, Hepatitis C and tuberculosis),
and cardiovascular and metabolic diseases (e.g., diabetes) (J&J, 2014).

Consumer Healthcare
This segment has under it a range of products used in the baby care, skin care, oral care, wound care
and women’s health care fields, as well as nutritional and over-the-counter pharmaceutical
products, and wellness and prevention platforms (J&J, 2014).

Medical Devices & Diagnostics

This business segment contains products and services that are used predominantly in health care
fields like orthopaedics, neurological disease, vision care, diabetes care, infection prevention,
diagnostics, cardiovascular disease, and aesthetics. This segment is comprises Global Medical
Solutions, Global Orthopaedics and Neurological, and Global Surgery Groups (J&J, 2014).

The below report is for Medical Devices and Diagnostics segment of J&J.

Strategy

Inside and Outside Sales

Inside salespeople work entirely from an office over the telephone and emails. Sometimes inside
sales manages the entire sales cycle over the phone and through email whereas sometimes they
initiate the sales discussion and transition the leads to outside sales to close the deal. In this
situation they their performance is rated on the number of qualified leads transitioned to sales.

Outside salespeople are those that make visits to prospective customers in their territory. They
thrive on face-to-face interactions and build a strong familiarity and rapport with their clients by
meeting them frequently and only coming back to the office for sales meetings.
Nowadays J&J is using a hybrid model of where inside sales people initiate sales discussions over the
telephone and emails and eventually travel when necessary to close these sales. The effectiveness of
Inside sales can be seen by Marc Benioff’s statement in his book “Behind the Cloud,” that
salesforce.com “grew their company for the first five or six years with a telesales or inside sales
model (Benioff & Adler, 2009).” Group companies of J&J have an optimal mix of these types of sales
people because each industry requires a different approach.

Market Development
The main strategy of J&J is Market Development where they develop market for their own
innovative product.

Marketing Intelligence
Sales and Marketing Strategy of J&J depends largely on their network. Based on the insights of their
Intelligence team, they formulate their strategy.

Generation of Leads
J&J gets their leads with the help of Supply Chain partners, especially their distributors & Front line
sales people.

Roles
Sales contain direct sales and a host of back-office sales functions that are geared towards helping
the on-field sales teams achieve their goals. All sales roles can be classified into the following:

Hunters & Farmers

Hunters have the responsibility of bringing in new business for a company either over the
telephone or through on-field sales. Whereas Farmers focus only on growing existing accounts. This
can be done through up-selling and cross-selling to those particular accounts. J&J needs to retain the
current business as well as grow their accounts i.e. increase the accounts share of wallet in the
company and increase the company’s share of the clients spend. J&J has a mix of these roles across
all the group companies.
Industry Roles

Vi ce -President

Fra nchisee Director(Sales &

Di rector-Finance Di rector-Supply Chain
Ma rketing)

Na ti onal Sales Ma nger Ma rketing Ma nager

Regi nal Sales Ma nager Product Ma nager Product Ma nager

Regi onal Sales Executive

As s itant District
Di s trict Ma nager Terri tory Ma nager
Ma na ger

Vice President: Vice president heads the entire Sales & Operation of the company. He is looks after
Sales, Marketing, Operation and Finance of the company.

Franchisee Director: Franchisee director reports to Vice President & is responsible for looking after
the Sales & Marketing function of the organization.

National Sales Manager (NSM): National Sales Manager reports to Franchisee Director and is
responsible for delivering the sales number for the country.

Regional Sales Manager (RSM): Each country is divide in 4 regions (East, West, North and South)
which is headed by a RSM. They report to NSM and are responsible for delivering the sales number
for the region.

Regional Sales Executive (RSE): RSE are also called as State Managers or Supervisors. They report to
RSM and are responsible for delivering sales number for a state.

District Manager/Assistant District Manager/Territory Manager: These are the front-line

salesperson with slight difference in employee band. They are at customer-end and look after daily
sales operation.

Sales Process
The typical series of events that J&J goes through to sell a product of service constitutes the sales
process. It generally varies from customer to customer and depends on a lot of factors such as type
of product of service, what is the firms’ position on the value chain etc.
Identifying the Prospect
Research Sales Planning
Buying How do we Approach
Identifying
Prospect/s Motivators/Be approach? our Cold Calling or
haviour & Value Feild Sales
Analysis Proposition?

Making the Sale

Building a After Sales
Making the Sales
Relationship/Rap Closing Sale Support &
Pitch
port Service

Culture of Johnson and Johnson

J&J CREDO is the foundation of its culture and commitment to people, community and
wellbeing. It influences the way people interact with each other as well as the way to serve
to customers and their patients and engage with all stakeholders (Jnj.com.au, 2014).
Johnson & Johnson Medical aspire to be the most trusted, caring and innovative healthcare
company which, in partnership with healthcare professional improve life of people around
the world (Jnj.com.au, 2014). This is achieved by:

1. Innovation
2. Education
3. Customer focus
4. Credo-led organization

Training
J&J encourages its people to utilize all possible opportunity for their development. To help
employee in their job, J&J provides the following training:

Global Leadership Profile It is a framework used for self-assessment between manager

and employee. It helps in finding out talent pipeline within the organization.

E –University This as an online tool which allows employee to register for a particular
course & study it online.

Learning & Development Various learning & development training such as Product &
Procedure Training, Negotiation Skills etc. are provided on regular basis.

Leadership Development Program This program is for people coming from different
management schools to give them rigorous on job training & groom them for their
leadership role.
Approach to Sales
In every segment J&J operates, it holds the position of a market leader. For being a leader in
the market, company always comes up with innovative products. In a nutshell it works by
the way of NEW MARKET DEVELOPMENT. J&J never operates in markets developed by
someone else.

To achieve this objective the major focus of company is in spreading more & more of
surgical education to the customer and updating their knowledge & skills about the latest
innovation in the market so that they can provide better treatment to their patients.

Opportunity & Challenge

Opportunity
Three major opportunities available for J&J medical at present are as follows:

Collaboration with Government

Government is running lot of healthcare schemes in India (e.g. NRHM-National Rural Health
Mission etc.) J&J still does not have a dedicated plan for tapping this opportunity. By
collaborating with government on this kind of project will help in developing new business
and contributing to the society.

Increase the Reach

J&J is operating with very premium priced product which is affordable to a particular class of
society. These people are basically situated in the metro city or other big cities of India. A
big chunk of customer living in small cities is still untouched by the company. J& J must find
out some low cost alternative to penetrate this big market.

Strategic Alliance with other Companies

J&J is a very diverse and leading healthcare company in the world. Nonetheless it can
collaborate with other medical device manufacturing companies and create a stronger
position for itself in the market. Presently, customers such as hospitals are trying to take
advantage of manufacturing companies. This alliance with other companies will help J&J
while negotiating with the customers.

Challenges
Three major challenges in front of J&J Medical are:

Pricing
Every year Company is increasing its price of products by 5-6 %. J&J is already charging very
premium price. Indian Market is very price sensitive; hence J&J is losing its business. Sales
people are having hard time to defend the business in the market with such a high premium
price.
Legal and Government Issues
Since last few years J&J is facing Government and Regulatory issues. Two of the production
plants in India have been stopped by Maharashtra FDA. So company is having tough time
dealing with Government bodies. J&J was also fined for some of their defective orthopaedic
implants in the US.

Sales and Operational Planning

Failure of supply chain to make product available to the customer when he requires it is one
of the frequent problems faced by J&J. This is observed regularly because of the
communication gap between sales and supply chain department of company. Because of
this gap company loses business some time.

Managing the Challenges

To operate efficiently and to generate regular profits, company needs to address the
aforementioned challenges faced by it. The various ways used by J&J are:

Price
To justify the premium price charged, company Is investing big amount in spreading surgical
education in country. They have well equipped labs for training surgeon. Company is also
trying to come up with specific surgical kits applicable to different surgeries .These kits will
be helpful in providing low cost alternative to customer in small cities.

Legal & Government Issues

To avoid any legal or Government issues, company has become very strict in terms of its
quality control at every plant. Also the process of launching a new product has been made
more stringent which requires different stages of trial & testing for the product.

Sales and Operational Planning

To manage the issue of Sales and Operational Planning, company is trying to incorporate a
process where supply chain does its own estimation of demand based on previous data and
sales team has also been asked to give its own demand forecast for future on quarterly
basis. Supply chain works on compiled outcome of these two projections. Also they are
keeping enough buffer stock to address any ups & downs in demand.

Recommendations
Improve Sales
Grant Legitimate Powers to front-line Sales team

Front-line Sales team lacks authority to decide price and make other commitments to the customer.
Salesperson will need approval from higher authority before proceeding with any deals. Owing to
this delay, J&J might lose its customer. Hence, if front-line salesperson gets some decision making
power, the deal between customer and J&J may happen quicker.
Fill the Gap in Sales and Operations Planning

Wrong demand forecast by the improper supply chain planning, has caused lags in delivery and
customer dissatisfaction. Adopting proper forecasting methodologies and improving supply chain
planning will help J&J improve their sales.

Reduce Prices

J&J delivers goods at a very premium price and hence is not affordable by all. They have expansion
opportunities B and C level cities and target the price sensitive people residing there.

Improve Culture
Reduce Hierarchy

All big organizations have hierarchical organization structure. In J&J hierarchy has led to Bureaucratic
misuse which needs to be improved. If situation like this persists, soon the moral of employees will
degrade and this will not be good for the company.

Restructure Process

There are too many processes in J&J which need to be followed for any simple thing. This becomes
very time consuming and can result into losing the customer. Rather than following complex and
lengthy processes, J&J should incorporate simple and easy-to-follow processes.

Improve Transparency

More hierarchy and processes have reduced the transparency in the organization. J&J needs to make
their system more transparent.

Restructure For Future

Johnson & Johnson goes for restructuring every 2-3 years. Basic Purpose of restructuring is to look
for innovative solutions for complex problems in the market. By restructuring company deploys
different sales people for different role. But this kind of restructuring of keeping only sales into
consideration has some flaw in it & ultimately leads to financial or talent loss in the organization. So
for future we would like to recommend the following things to be considered while restructuring:

End-to-end Approach
This type of holistic approach will reduce any surprise elements in the process.

Focus
A focused approach will help in managing any effect that come into play after change.

Proactive Risk Management

These restructure will lead to financial losses at some place & talent losses at other. So a proactive
approach to handle risk will be helpful in avoiding this kind of situation.

Correct Talent Deployment

Deployment of right person at right place is very critical for the success of any restructure program.
Proper Communication
Sometimes Company lacks in communicating with employee about the progress of restructuring
which creates an unstable environment in the organization. Information about restructuring should
be communicated properly to the employees.
Bibliography
Benioff, M., & Adler, C. (2009). Behind the Cloud: The Untold Story of How Salesforce.com Went from
Idea to Billion-Dollar Company and Revolutionized an Industry. San Francisco: Jossey-Bass.

J&J. (2014, March 28). Retrieved March 30, 2014, from Johnson & Johnson:
http://www.jnj.com/about-jnj/company-structure

Jnj.com.au. (2014, March 29th). Retrieved from Johnson & Johnson:

http://www.jnjmedical.com.au/people/values-culture