MAHA RESEARCH LABS: SALES

FORCE EXPANSION
CASE PRESENTATION
Case Facts

 Managing director of Maha Research Labs Private Limited (MRL)- Mohammed

Isaquddin Kureshi
 MRL achieved sales target of Rs 500 million by 2016
 Growth of 31.8 percent by 2017, sales worth Rs 670.2 million
 Ambitious growth target of nearly 50 % by 2018
 Aiming for net revenue of Rs 1 Billion
 Target set for MRL 2020 vision- Pan India Presence
 Sales revenue worth Rs 2 Billion by 2020
 Strong Footprint in Western states
Cont.…

 Expansion into Northern India by July 2018

 Expansion into Southern India by October 2018
 Expansion into Eastern India by March 2019
 Questions regarding sales targets in Kureshi’s mind
o Sales organisation design
o Sales force structure
Company Background

 Pharmaceutical supplier
 Maha Research Lab was set up in 2007
 The initial investment was 3 million ( 30 lakhs )
 During the initial setup there where 5 employees working in the company
 7 brands
 Initial 3 years they marketed 8 sales territory (2008,09,10)
 Mr. Kureshi had taken care of marketing and the sales activity
 They expanded the company in 2010 with 22 brands and 10 sales territory
Cont..

 2017 December the company had over 50 brands,75 employees

 The company also started delivering high quality international products to Indian and
overseas markets
 MRl’s product line included analgesics, antibiotic, anti-allergy cough syrups and a
range of nutritional products
INDIAN PHARMACEUTICAL
INDUSTRY
 The Indian pharmaceutical market witnessed growth at a compound annual growth rate
of 17.90% during 2005-16
 The primary growth drivers on the demand side are improved standard of living,
increased penetration of health insurance and a thriving export market
 On the supply side, primary growth drivers include skilled workforce and low-sot
manufacturing capabilities
 The industry also had ample government support in the form of several key reforms
and investment commitments
Cont.…

 By 2020, the Indian pharmaceutical industry is likely to become the sixth largest in the
world by absolute size
 The pharmaceutical industry was divided into four segments:
1. Active pharmaceutical ingredient(API)
2. Formulators
3. Contract research and manufacturing services(CRAMS)
4. Biosimilar markets
Sales Organization Structure

Director

Zonal Sales Manager (ZSM)

Area Sales Manager (ASM) 7 ASMs

Professional Sales Officer (PSO) 8 PSOs

Sales Organization

 Location Based sales structure

 Dividing sales team according to Geography
 Sales target depend upon past performance
 EachPSO undergone 14 days training & attended
an week long refresher course
 ASMs worked with each PSO for 3 days each
month
Role of PSOs

 PSO’s were the backbone of pharmaceutical industry

 PSO’s role was similar to missionary selling
 Checking products were available for consumers
 PSO’s job was to get more physicians
 After sales
 They also include non selling responsibilities
 Target achievements by value and volume
Sales Process

 Sales style – Missionary sales

 Map out the process / Prospecting
 Decision making / Preparation
  Who will influence the decision? / Approach
 Understand what motivates the buyer to buy / Presentation
 Understand what happens after the buy / Handling objections
 Are repeat buying decisions the same as the first? / Closing
 The process is unlikely to stay the same / Follow-up
What would be an optimum sales structure? Should
the company opt for a generalized sales force or a
specialist sales force structure?
 Company should go with generalist salesforce structure because
 Nature of the products is same (not complex)
 Tested and used in western zone
 Low cost
 Mandatory for every PSO to call 10 physicians and visit 6 retailors daily to
achieve 2 Billion goal.
 Specialist structure can be used when there is demand for only specific
products in a particular territory or in case of complex products.
 Efficient because orders are in bulk and combinations.
Would MRL need to revisit the decisions on its sales
target now that the expansion was imminent and the 2
billion revenue target has been announced ?
 Yes, the MRL need to revisit its decision on sales target.
Target is difficult to achieve because : -
 Presence of domestic competition
 Entry of international brands
 Will take time to gain foothold in the new markets.
 Customers will show resistance and will take time to shift from competitors.
 PSOs will take settling time which may result I sales leakage
 Companies assumption can be wrong.
While the existing model had worked so far, would the expansion
plans affect the optimum size of the sales force or the process MRL
should follow in designing its sales territories?

 The expansion will affect the salesforce size because: -

 Every sales force has a size, defined by the number of salespeople. And That
size changes over time as the company evolves its products and adapts to
different market conditions or expands geographically.
 Size of territory may not be same as previous year.
 Customer base will increase
 Increase in sales target will also affect the sales force size
 Geographical concentration (travel time, customer coverage)
Different factors which will affect the design of new sales territory: -
 Routing
 Size of the sales territories
 Demand of the product
 Transportation and Communication
 Density of customers
 Selling efforts required in new territories
Thank
You