Company Background — Nutricia ° a ered Acquisition of Lyemph Nutricia BV and Milupa Recerca) + Established firm position a era el in the European market = + Recognition from the + Partnerships with doctors (3) arena Netherlands royalty Pod Development of baby Acquisition of Cow Worldwide brand formula & Gate + Products catering to + Production began at a + Reinforced its position 100+ countries dairy farm in at top of the baby * Brand penetration Netherlands nutrition market into global + This new formula + Expansion into East¢ household levels addressed an important Europe socal need GurriciaThe Infant Milk Formula (IMF) Market in the Middle East MILKS MARKET VALUE, 2004 EST. Fee s5yra st cut Sau Arabi 100%=162.5M oe ooo Dealings with Acquisitions Opening of Transition from Middle Eastern leading to —_offces to crading-focused dealers market leverage the organization to penetration region's market customer- potential centric ‘+ High number of births and low per capita consumption of IMF represented huge growth potential ‘+ State involvement in healthcare — tender purchases and. registration of products + Any marketing promoting IMF over breastfeeding was prohibited ‘+ Prevalence of retail channel low, main distribution channels are pharmacies ~ mostly small chains or independent businesses + With a share of 12.5%, Nutricia stood 4* in the market after < ‘Wyett, Nestle and Abbott: NUTRICIABUYING PROCESS OF IMF Ostetricians & Lactation Gynecologists Consultant Maternity Hospitals Pharmacists Friends, Relatives & Self re cheice @urriciaFunctions performed by Medical Representatives ° Voice of the Gathering Feedback Reporting ‘Company Regarding sales issues Recording activities Series of visits to and customer's of the day and hospitals & clinics, perception of the pharmacies and meeting with sales product representatives and supermarkets ‘country manager a ~ a Vv Vv Market Sampling and Information Promotion Prescription Responsible for carrying volumes provided samples and brochures by Pharmacists for doctors to give to their patients urea|. Share of voice method o Share of voice (SOV) is the proportion of time that doctor gives to a company’s medical representatives as compared to its competitors The formula to calculate share of voice is: ™ evita Time given to Nutricia med reps SOV = Total time given to med reps Share ofVoice C{C Market Share Large salesforce maintain a high level of visibility within the ‘target segment resulting in more sales opportunities. ” Hence, salesforce size can be optimised to maintain/ capture the desired market share. ” a w a -&): ‘An understanding of competitors salesforce size and the resulting market share are the key elements (wurricia Plead a ake at atAdvantages & Disadvantages Advantages: {23 Simple method and easy to calculate © _ Helps in benchmarking with respect to competitors Disadvantages: It does not consider the effect of own initiative and third-party recommendations on the purchase decision ofe The time that medical representatives spend with doctors need not necessarily be proportional to the market share Gureicia2. Long's 5-step method : pea pea fc Seta eer Pano Portes clas Eur uu) Determine the imate average Idenaiy KP and relevant HCP available working days Decide manager establish universe per rep per year Leeds desad ‘measurements Decide how to Estimate target Estimate total field Review and learn Segment the relevant average call per_——_—force costs and HCP universe ay review vs ¥ Vv investment position Define a call and decide many branded on call frequency by Calculate number filed forces are HCP segment of reps required required 4 Establish the number ‘of HCP contacts required per annum GurriciaAdvantages & Disadvantages Advantages: This method is very comprehensive and takes into account various factors — the sales strategy, the effort required and resources available @ The method is lexibe, and the senstvey ofeach factor onthe salsfore size can be easily understood Disadvantages: It could be difficult to segment the doctors and set an optimal call frequency oke It does not take into account the dimi ling incremental value of adding salesforce, & the differences in performance of new & experienced salesforce urricia3. Return on investment method . Sales force sizing can be measured by estimating ROI of the incremental increase in salesforce Marginal revenue ‘Marginal Cost Opportunity cost of ‘aintaning current Salespeople needs to be added as long as the an Ng sale force se incremental revenue exceeds the incremental cost of adding an extra salesperson. + 809 eusiew + marginal Revenue Hence, the optimal size of salesforces is obtained when, Incremental Revenue Incremental Medical staff costs ~ This method is used for correction in the salesforce size estimate obtained using Long's method GaurriciaAdvantages & Disadvantages Advantages: Takes into account the economic impact of salesforce sizing — diminishing ca incremental sales, ramp-up period in sales performance, differences in new and experiences salesforce @ Estimates about various parameters to be used in this method are already available Disadvantages: The actual effectiveness observed on ground might lead to very different estimates for parameters in this model However, it is very difficult to measure effectiveness as information from third parties is not available readily GurmciaEvaluating the medical representative field force Facetime with doctors ‘The total time spent in conversation with doctors / other hospital influencers in a given period > KPI to measure the eficiency of medical representatives Facetime with pharmacists ‘The total time spent in conversation ‘with and gathering data from pharmacists in a given period > KPI to incentivize data collection from pharmacies Prescription volume ‘The total number of prescriptions of the product fulfilled by pharmacies ina given period > KPI to measure the effectiveness of medical representatives Retention rate Percentage of customers (doctors) who continue to prescribe Nutricia products over competition's > KPI to incentivize counter response to competitor action Gu