Key Account Management - MSM 6409

Case Analysis
Dendrite International

Subject Professor:
Sakthi Srinivasan

By:
WORKING GROUP B2, FAS 48
ACHAL JAIN (20M102)
ASANGA KUMAR (20M107)
JATIN ANAND (20M119)
MEGHA DUGGAR (20M126)
SEHAJ GROVER (20M139)
SIMRAN AGARWAL (20M145)
 1. How would you describe the nature of Dendrite’s business? What is the company
selling? What are customers buying? How do changes in the provision of health
care affect customer value and marketing requirements?

Dendrite is a service solution provider that helps multinational corporations (MNCs) adapt to
the pharmaceutical industry's sales by supporting them with call planning and reporting
chores. When they first started in 1985, they were up against competitors who had more solid
land and capital to provide lower prices, which Dendrite didn't have. Their software has the
potential to become industry standard, but they must first demonstrate their origins in order
for the US market to trust them. Europe was more price sensitive, and Japan required more
management for negotiations that were taken into account when building a client base.
The company offers a wide range of solutions. They specialise in offering software and
services to pharmaceutical companies and other scientific industries to help them analyse and
manage product sales more efficiently. The service is linked to assistance centres in order to
give clients with a complete solution.
Customers purchase the solution as a combination of software and services, allowing them to
personalise the software to their specific needs, making it tailor-made for them. Customers
were also purchasing the company's service quality. They were also purchasing computer
maintenance and upgrades in case clients needed them in the future.

2. What are the important differences and similarities in Dendrite’s major

markets: the United States, Europe, and Japan? What are the economic
implications for Dendrite's current strategy and account management systems?

In 1987, Dendrite wanted to differentiate itself in the industry by becoming a global software
and service provider. By 1992, they'd entered a number of markets, each with its own set of
codes.
The following are the economic ramifications of this strategy:
 The firm spent $5 million on code customization.
 Sales increased by 92 times in five years, from $250,000 in 1987 to $23 million in
1992.
  The projected sales in 1993 were $33 million which is around 44% growth as
compared to last year
 Following the reorganization, on September 1, 1991, net income increased by 241%,
from a loss of 0.8 million to a profit of $1.2 million.

Dendrite assembled a dedicated team for the customer, which included Customer Support
(CS) and Technical Support (TS) managers and was led by a Business Manager (BM). (BMs)
were in charge of growing the business by attracting new customers by selling products from
a wide variety of modules and the applications that were most relevant to their changing
needs. It was thought that by adding more responsibilities, BM would have less time to
identify new prospects, and that an Operations manager could be added to the team.

 The current crew costs the company about $250,000.

 Adding an Operations manager to the team will increase the cost, which is
comparable to the cost of a BM.
USA Europe Japan
No. of Sales 500-3000 100-200 500-3000
reps per firm Largest being 700
Frequency of Every 4-6 weeks Once a year and can 1 rep per 6 physicians
Sales rep-doc To leave product leave only one sample and abundant samples
meet samples and hence more emphasis were given. Social
literature, perform on advertising, direct selling was an
service tasks and mail, medical meetings important part of the
build relationships and conferences whole selling process
Characteristic Prescribes drugs Prescribes drugs Prescribes and
of Physician dispense drugs
Service staff: 1:200 1:200 1:100
client service
reps
Characteristic Mature Growing Growing
of Sales
automation
market
New regulations Salesforce downsize Price controls and Wholesaler rebate
centralized buying abolished
 Service pricing Depends on number Fixed annual Fee Depends on number
of system users; of system users;
ranged from $300- ranged from $300-
$2000 $2000
Field Focused on call NA Focused on reports
productivity frequency as well as involving detailed
sales in the rep’s information about
territory for high hospital, doctor,
margin products samples distributed,
any gifts or expenses
undertaken

3. What recommendations would you make to Mr. Bailye concerning the decisions
outlined on the final page of the case? Specifically, which growth option should
Dendrite pursue?

The following recommendations would be made to Mr. Bailye concerning the solutions
outlined:

 Fever solution instances should be used in global deployments. Departments that can
generate considerable commercial benefits at a cheap cost should be utilized.
 Going to the pharma industry will be beneficial for sales executives owing to
knowledge with the subject.
 Upgrade the CRM system, as technology can bring changes in productivity and thus
better services can be delivered to the consumers.
 Day-to-day operations should be optimized by the operations manager.
 Investment should be kept to a minimum.