Unit 4 Marketing

Noida Institute of Engineering and Technology
(Pharmacy Institute) Greater Noida

PHARMACEUTICAL MARKETING
CHANNELS
&
PROFESSIONAL SALES REPRESENTATIVES
Unit: 04
BP803ET:::
Dr. Monika
PHARM MARKETING MGMT
Associate Professor
BPHARM
8th SEMESTER
Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT

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SYLLABUS:: UNIT 4
• Pharmaceutical marketing channels: Designing channel, channel

members, selecting the appropriate channel, conflict in channels, physical
distribution management: Strategic importance, tasks in physical distribution
management.

Professional sales representative (PSR): Duties of PSR, purpose of
detailing, selection and training, supervising, norms for customer calls,
motivating, evaluating, compensation and future prospects of the PSR.
Dr. Monika BP803ET UNIT 4 PHARM

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MARKETING MANAGEMENT
Content
• Course Objective
• Course Outcome
• Programme Outcomes
• CO PO Mapping
• Prerequisites.
• Syllabus
• Coverage of syllabus
• MCQ, Assignments, AKTU Ques, Expected Ques
• You tube lectures
• References
01/11/2022 Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT 3

Course Objectives
• Upon completion of the subject the students will be able to :
 Understand the various channels of drug distribution in the pharmaceutical

industry.
 Understand the duties and responsibilities of professional sales representative

Course Outcomes
CO Statement Level of Blooms

• . Taxonomy
The students shall be able to:

4.1 Identify and design the various L2, L6
channels of drug distribution .
4.2 Explain the process of recruitment , L2, L5

selection and training of PSR and
perceive the various responsibilities
of a PSR
Programme Outcomes (POs)
PO STATEMENTS
1 Pharmacy Knowledge:
2 Planning Abilities
3 Problem analysis
4 Modern tool usage
5 Leadership skills
6 Professional Identity:
7 Pharmaceutical Ethics
8 Communication
9 The Pharmacist and society
10 Environment and sustainability
11 01/11/2022 Life-long learning

Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT 6
CO PO MAPPING
CO PO1 PO2 PO3 PO4 PO5 PO6 PO7 PO8 PO PO1 P01
9 0 1
CO 3 3 1 1 1 --- --- --- --- ---- 2

4. 1
CO 3 1 1 -- 3 3 1 3 -- --- 3
4.2

Prerequisite and Recap
• Pharmaceutics: The students should have an brief idea of various

types of pharmaceutical product formulations which are to be
marketed.
• Pharmacology: The students should have an understanding of mode

of action of various categories of drugs which may help them to
market.

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Topic wise Mapping CO
Topic After completion of topic Students shall be able to CO
Marketing distribution Identify and design the various channels of drug CO4.1
Channel-Design distribution .
Physical distribution Understand Strategic importance, tasks in physical CO4.1

management distribution management.
Purpose of detailing, Explain the process of recruitment , selection and CO4.2

selection and training training of PSR and purpose of detailing, selection
and training, supervising, norms for customer
calls
Duties of PSR Perceive the various responsibilities of a PSR CO4.2

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CHANNEL OF DISTRIBUTION
What Is a Distribution Channel?

A distribution channel is a chain of businesses or intermediaries through which a good
or service passes until it reaches the final buyer or the end consumer. Distribution
channels can include wholesalers, retailers, distributors, and even the internet.
Distribution channels are part of the downstream process, answering the question
"How do we get our product to the consumer?" This is in contrast to the upstream
process, also known as the supply chain, which answers the question "Who are our
suppliers?”

Understanding Distribution Channels
A distribution channel is a path by which all goods and services must travel to arrive
at the intended consumer. Conversely, it also describes the pathway payments make
from the end consumer to the original vendor. Distribution channels can be short or
long, and depend on the number of intermediaries required to deliver a product or
service.
Goods and services sometimes make their way to consumers through multiple
channels—a combination of short and long. Increasing the number of ways a
consumer is able to find a good can increase sales. But it can also create a complex
system that sometimes makes distribution management difficult. Longer distribution
channels can also mean less profit each intermediary charges a manufacturer for its
service.

Direct and Indirect Channels

Channels are broken into two different forms—direct and indirect.
A direct channel allows the consumer to make purchases from the
manufacturer while an indirect channel allows the consumer to buy the goods
from a wholesaler or retailer. Indirect channels are typical for goods that are
sold in traditional stores. Generally, if there are more intermediaries involved
in the distribution channel, the price for a good may increase. Conversely, a
direct or short channel may mean lower costs for consumers because they are
buying directly from the manufacturer.

Conflict is not always undesirable.

CHANNEL OF DISTRIBUTION: IMPORTANCE
 One of the chief roles of marketing channels is to convert potential buyers

into profitable customers.
 Marketing channels not just serve markets, they must also create markets.
 The channels chosen affect all other marketing decisions.
 The firms sales force and advertising decisions depend on how much
training and motivation dealers need.
 In addition, channel decisions involve relatively long term commitments to
other firms.

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CHANNEL OF DISTRIBUTION:INTERMEDIARIES
Intermediaries are the middlemen and signify those individuals in the channels
that either take credits to take goods and sell at profitable margin . They are
directly involved in process of flow of goods from manufacturer to consumer.
Types of Intermediaries-
Merchant middlemen- Wholesalers and Retailers

Agents- Brokers, selling agents, clearing agents, auctioneer and commission
agents

INTERMEDIARIES
Intermediaries are the middlemen and signify those individuals in the channels
that either take credits to take goods and sell at profitable margin . They are
directly involved in process of flow of goods from manufacturer to consumer.
Types of Intermediaries-
Merchant middlemen- Wholesalers and Retailers

Agents- Brokers, selling agents, clearing agents, auctioneer and commission
agents

WHOLESALERS:FUNCTIONS
• Functions of Wholesalers:
 Assembling and buying
 Warehousing
 Transporting
 Financing
 Grading, Packaging and Packing
 Dispersing and selling
 Providing Market Information

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WHOLESALERS:SERVICES
• Services to manufacturers:
 Economies of scale
 Saving in time and Trouble
 Better use of capital
 Price stabilization
• Service to retailers:
 Saving in cost and time
 Economy in transport an packing
 Better use of limited factors
 Expert knowledge

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RETAILERS
RETAILERS
• Retailing includes all activities directly related to the sale of goods and services to
the ultimate consumer for personal and non-personal.
• Functions of Retailers
 Buying and assembling
 Warehousing
 Selling
 Grading and Packing
 Financing
 Advertising

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SERVICES OF RETAILERS
• Services of Retailers: To manufacturer and wholesaler

 Offer Opportunity
 A big relief
 Provision of information
 Reduces the risk of loss
• Services of Retailers: To the consumers

 Largest choice
 Relief from storage
 Extra Service
 Supply of information

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COMMISSION AGENT
 Sells goods on behalf of seller
 Involved in selling of goods on behalf of seller.
 Warehousing, grading, packing, assembling, disposal are performed by
commission agents.
 Get certain percentage as commission on sale made

BROKERS & AUCTIONEERS
 Ownership nor possession of goods
 Involved in bringing buyers and sellers together.
 Negotiate purchasing and selling activities on behalf of buyer and seller.
 Get a percentage of commission for every business transaction.
 Sells good on behalf of party by auction.
 Collect goods from seller, invites bid from buyers and the buyer who make the
highest bid gets the product

FACTORS AFFECTING
DISTRIBUTION CHANNEL CHOICE
• Factors related to Market/Consumers.

 Number of buyers
 Expansion/spread of the Consumers.
 Size of the Order/Sale.
 Objective of Purchase.
 Need of the Credit Facilities.

• Factors related to Product.
 Price of the product
 Standardised or customised product
 Pres-stability of the product
 Technical nature of the product

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FACTORS AFFECTING
 Goods made to order.
 After-sales service.
• Factors related to the Intermediary/Middlemen
 Services offered by middlemen.
 Scope or possibilities of quantity of sales.
 Attitude of agents towards the producers' policies.
 Cost of channel of distribution.

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FACTORS AFFECTING
 Level of production.
 Financial resources of the company.
 Managerial competence and experience.

• Other Factors
 Distribution channel of competitors.
 Social viewpoint.
 Freedom of changing the middleman.

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Choosing the Right Distribution Channel
Not all distribution channels work for all products, so it's important for companies to choose the
right one. The channel should align with the firm's overall mission and strategic vision including
its sales goals.
The method of distribution should add value to the consumer
• Consumer centric approach: Do consumers want to speak to a salesperson? Will they want to
handle the product before they make a purchase? Or do they want to purchase it online with no
hassles? Answering these questions can help companies determine which channel they choose.
• Secondly, the company should consider how quickly it wants its product(s) to reach the buyer.
Certain products are best served by a direct distribution channel such as meat or produce, while
others may benefit from an indirect channel.
• If a company chooses multiple distribution channels, such as selling products online and through
a retailer, the channels should not conflict with one another. Companies should strategize so one
channel doesn't overpower the other.
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SELECTING APPROPRIATE CHANNEL
• To select the right distribution channel for business, company need to consider
what a channel can offer to company, including-
– Location
– Reach (The channel must be easily accessible for customers and prospects)
– Skills (channel member should have the skills and knowledge to sell products)
– Resources
– Management costs and
– Degree of control

• A manufacturer will seek to select that channel or restricted combination of

channels open to him which provides the maximum sales volume at minimum cost
in the long-term.
• In making his selection he will be guided by the size and accessibility of his
consumer or user market,
• The periodicity of customer purchase and of stock-replacement by the distribution
channel, the cost of transport, storage and stock maintenance,, competitors’
distribution policies.

Selecting Channel Members

• While selecting intermediaries, the company should determine what characteristics
distinguish the better ones.
• The selection of intermediaries is essentially a matching process.
• The producer must identify the specific channel members who can perform the
functions needed and convince them of the mutual benefit that will accrue of the
relation.

The selection decision should examine the following characteristics

in the intermediary:
(i) Number of years in the business
(ii) Other product lines carried
(iii) Growth record
(iv) Profit record
(v) Cooperativeness
(vi) Reputation
(vii) Size and quality of sales force
(viii) Quality of other lines carried

• Motivating Channel Members:

• Motivation of channel members is essential to achieving the producers channel
objectives.
• Once selected, channel members must be continuously motivated to do their best.
• The company must sell not only through the intermediaries but to them.
• At times companies offer positive motivators like higher margins, special deals,
premiums, cooperative advertising allowances, display allowances, sales contest
etc.
• At other times negative motivators are used such as threatening to reduce margins,
to slow down deliveries, or to end relationship.

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• Effective communication and information flow in both directions are necessary if

the channel is to function properly.
• Most companies try to forge long term partnership with their distributors to create a
marketing system that meets the need of both the manufacturer and the distributor.
• They jointly plan merchandising goals and strategies, inventory levels, advertising
and promotion plans etc.
• The company must ensure a participative relationship for a mutually beneficial
relationship to exist.

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Evaluating Channel Members-

The producer must regularly check the channel member’s
performance against standards like:
(i) Sales quotas
(ii) Average inventory levels
(iii) Customer delivery time
(iv) Treatment of damaged and lost goods
(v) Cooperation in company promotion and training program
(vi) Services to customers.

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• Intermediaries who are performing well must be recognized and rewarded suitably.
• Those performing poorly must be assisted or as a last resort replaced.
• The manufacturer must however, be sensitive to the dealers.
• Those who treat dealers lightly risk not only losing their support but also causing
some legal problems.
• The distribution channels must be responsive to the changing needs and wants of
customers and to the development of new channel systems by competitors.

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CONFLICT IN CHANNELS
• A channel conflict may be defined as “A situation in which one channel member
perceives another channel member(s) to be engaged in behavior that prevents it
from achieving its goals”. Conflict is opposition, disagreement or discard among
the organizations.

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• “Channel conflict arises when the behavior of a channel member is in opposition,

to its channel counterpart. It is opponent centered and direct, in which the goal or
object sought is controlled by the counterpart.”
• Conflict is not always undesirable.
• It can keep other channel members on their toes knowing that a decline in
performance might lead to a change in the channel arrangements.

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• Operational conflict occurs daily — shipments, invoice errors, unfulfilled promises,

unacceptable product quality. Operational conflicts are annoying, frustrating,
channel disrupting, so most members try to minimize them.
• Real-time systems for tracking/viewing distribution data can alleviate some
conflicts.
• Sometimes firms take actions to generate strategic conflict, gain advantage —
upstream with suppliers, downstream with customers.

Strategic conflict changes the dynamics between suppliers, distributors/wholesalers,

retailers.
Downstream Conflict:
• End users/retailers go direct to suppliers — seek better prices, eliminate distributors.
• New megadealers/high-revenue retailers shift power from
distributors/manufacturers.
• Distributors/buying groups disrupt channel relationships by offering private-label
products.
• Independent buying groups increase buying power for member retailers.

Upstream Conflict:
i. Suppliers go direct to end users, eliminate distributor.
ii. Internet circumvents need for distributors; but may cause conflict/confusion for end
users.
iii. Supplier adds new distributors to achieve better market penetration.

• Vertical conflict
• Horizontal conflict
• Inter type conflict
• Multi Channel conflict

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VERTICAL CONFLICTS
• Vertical conflicts occur due to the differences in goals and objectives,

misunderstandings, and mainly due to the poor communication.
• Lack of role clarity and over dependence on the manufacturers. For e.g. Today the
large retailers dominate the market and dictate the terms.
• Hence there are often conflicts between these giant retailers and the manufacturers.
• Wholesalers expect manufacturers to maintain the product quality and production
schedules and expect retailers to market the products effectively.
• In turn, retailers and manufacturers expect wholesalers to provide coordination
functional services.
• If they fail to conform each expectations channel conflict results.

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REASONS FOR VERTICAL CONFLICT
• Dual distribution i.e. manufacturers may bypass intermediaries and sell

directly to consumers and thus they compete with the intermediaries.
• Over saturation, i.e. manufacturers permit too many intermediaries in a

designated area that can restrict, reduce sales opportunities for individual dealer
and ultimately shrink their profits.
• Partial treatment, i.e. manufacturers offer different services and margins to

the different channels members even at same level or favor some members.

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REASONS FOR VERTICAL CONFLICT
• New channels, i.e. manufacturers develop and use innovative channels that
create threat to establish channel participants.
• No or inadequate sales support and training to intermediaries from the
manufacturers.
• Irregular communication, non co-operation and rude behavior with the channel
members.

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HORIZONTAL CONFLICTS
• Horizontal conflicts are the conflicts between the channel members at the same
level, i.e. two or more retailers, two or more franchisees etc.
• These conflicts can offer some positive benefits to the consumers.
• Competition or a price war between two dealers or retailers can be in favor of the
consumers.

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REASONS FOR HORIZONTAL CONFLICT
• Price-off by one dealer / retailer can attract more customers of other retailers.
• Aggressive advertising and pricing by one dealer can affect business of other
dealers.
• Extra service offered by one dealer / retailer can attract customers of others.
• Crossing the assigned territory and selling in other dealers /
retailers / franchises area.

• Unethical practices or malpractices of one dealer or retailer can affect other and
spoil the brand image.

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INTER TYPE CONFLICT
• Inter type conflict occurs when, the Intermediaries dealing in a particular product
starts trading outside their normal product range.
• For example, now the supermarkets such as Food world also sell vegetables and
fruits and thus compete with small retailers selling these products.
• Large retailers often offer a large variety and thus they compete with small but
specialized retailers.
• This concept is called as “Scrambled Merchandising” where the retailers keep the
merchandise lines that are outside their normal product range.

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MULTI-CHANNEL CONFLICT
• Multi-channel conflict occurs when the manufacturer uses a dual distribution

strategy, i.e. the manufacturer uses two or more channel arrangements to reach to
the same market.
• Manufacturers can sell directly through their exclusive showroom or outlets.
• This act can affect the business of other channels selling manufacturer’s brands.
• Manufacturers can bypass the wholesalers and sell directly to the large retailers.
• Conflict becomes more intense in this case as the large retailers can enjoy more
customers and so the profit due to offering more variety and still economical prices,
which is possible due to a volume purchase.

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STAGES OF CONFLICTS
• Latent Conflict: Some amount of discord exists but does not affect the working
or delivery of customer service objectives. Disagreement could be on roles,
expectations, perceptions, communication.
• Perceived Conflict:
• Discords become noticeable – channel partners are aware of the opposition.
• Channel members take the situation in their stride and go about their normal
business.
• No cause for worry but the opposition has to be recognized.

STAGES OF CONFLICTS
• Felt Conflict:
• Reaching the stage of worry, concern and alarm.
• Also known as ‘affective’ conflict.
• Parties are trying to outsmart each other.
• Causes could be economical or personal.
• Needs to be managed effectively and not allowed to escalate.
• Manifest Conflict:
• Reflects open antagonistic behaviour of channel partners. Confrontation results.
• Initiatives taken are openly opposed affecting the performance of the channel
system.
• May require outside intervention to resolve.

WAYS TO SOLVE CONFLICT IN CHANNELS

WAYS TO AVOID CONFLICT IN CHANNELS
 AVOIDANCE
 AGRESSION
 ACCOMODATION
 COMPROMISE
 COLLABORATION

• Avoidance
• Used by weak channel members.
• Problem is postponed or discussion avoided.
• Relationships are not of much importance.
• As there is no serious effort on getting anything done, conflict is avoided.
• Aggression
• Also known as a competitive or selfish style.
• It means being concerned about one’s own goals
• without any thought for the others.

• The dominating channel partner (may be the principal) dictates terms to the others.
Long term could be detrimental to the system.
• Accommodation
• A situation of complete surrender.
• One party helps the other achieve its goals without being worried about its own
goals.
• Emphasis is on full co-operation and flexibility in approach. May generate
matching feelings in the receiver.
• If not handled properly, can result in exploitation

• Compromise
• Obviously both sides have to give up something to meet mid way.
• Can only work with small and not so serious conflicts.
• Used often in the earlier two stages.
• Collaboration
• Also known as a problem solving approach.
• Tries to maximize the benefit to both parties while solving the dispute.
• Most ideal style of conflict resolution – a win-win approach.
• Requires a lot of time and effort to succeed.
• Sensitive information may have to be shared.

PHYSICAL DISTRIBUTION MANAGEMENT
• Physical Distribution:
• Physical distribution is responsible for delivering to the customer what is wanted
on time & at minimum cost
• The Objective of distribution management is to design & operate a distribution
system that attains the required level of customer services & does so at least cost.
• TYPES
• Physical Supply: goods moving from supplier to manufacturer : “inbound”
• Physical Distribution: goods moving from manufacturer to customers : “outbound”



ACTIVITIES IN PHYSICAL DISTRIBUTION
• Transportation: It involves various methods of moving goods outside the firms

building
• Distribution Inventory: It includes all finished goods inventory at any point in the
distribution system.
• Materials Handling: It is the movement of stored goods inside the distribution center.
• Packaging: Goods moving in a distribution system must be contained protected &
identified.
• Order Processing: It includes all activities needed to fill customers orders

OBJECT OF PHYSICAL DISTRIBUTION
1. Total Cost Concept

2. Customer Service Concept
a. Time
b. Dependability
c. Communication
d. Convenience
e. Accuracy
3. Distribution Cost-Service trade offs
f. Achieve right balance between them
g. Flexibility is important in balancing the cost and service

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• Order Processing
a. Verifying Customers’ Credibility
b. Checking for any outstanding payment
c. Monitoring stock level
d. Preparing invoice
e. Arranging transporter
f. Sending the consignment and information

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• Transportation
i. Transportation brings together raw materials for production of marketable
commodities & distributes the products of industry to the marketplace
FACTORS
i. Suitability or nature of product
ii. Affordability
iii. Availability
iv. Customers’ specifications
v. Competitor’s transportation model

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• Warehouses include plant warehouses, regional warehouses, and local

warehouses. The service function that warehouses perform can be classified into
two kinds:
• General Warehouse: where goods are stored for long periods & where the
prime purpose is to protect goods until they are needed.
• Distribution Warehouse: It has dynamic purpose & mixing. Goods are

received in large volume uniform lots, stored briefly & then broken down into
small individual orders.
• Role of Warehouse: Transportation Consolidation, Product mixing, Service.

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• Packaging:
• The basic role of packaging in any industry is to carry the goods safely through a
distribution system to the customer. The Package must do following:
• Identify the Product
• Contain & Protect the product
• Contribute to physical distribution efficiency.
• Role: Protect the product against shock, compression, vibration, moisture, heat,
solar radiation, oxidation, animals, bacteria etc.
• Atleast 3 levels of packaging: Primary Packaging to hold product, next for small
packages shipping container is needed, thirdly several primary or sec packages are
assembled into unit load.

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• Materials Handling
• Materials handling is short distance movement that takes place in or around a
building such as plant or distribution center
• Objectives: To increase cube utilization by using the height of building & by

reducing space
• To improve operating efficiency by reducing handling
• To improve the service levels by increasing the speed of response to customer needs
• TYPES:
• Conveyors, Industrial Trucks, Cranes & Hoists

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PROFESSIONAL SALES REPRESENTATIVE
• An individual acting for a company by performing one or more of the following

activities:
• Prospecting, communicating, servicing, and information gathering.
• Salespersons have many names:

• Agents Sales Engineers
• Sales consultants District Managers
• Sales Representatives Marketing Representatives
• Account Executives Account Development
Representatives

TRAITS OF SUCCESSFUL SALES PEOPLE
• Enthusiasm Friendly
• Patience Persistent
• Initiative Attentive
• Self-Confidence Honest
• Job Commitment Hardworking
• Customer Orientation Team Players
• Independent
• Self Motivated
• Excellent Listeners

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STEPS IN SELECTION OF PSR
• Receiving applications
• Screening of applications
• Preliminary interview
• Written test
• Final interview
• Medical examination
• Appointment and induction

• Recruitment is a continuous process whereby the firm attempts to develop a pool

of qualified applicants for the future human resources needs even though specific
vacancies do not exist
• Usually, the recruitment process starts when a manger initiates an employee
requisition for a specific vacancy or an anticipated vacancy.
• Sources of Recruitment:
• Internal Recruitment
 Promotion
 Departmental Exam

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Selection
• DALE YODER “Selection is a process in which candidates for employment are
divided into two classes, those who are to be offered employment and those who
are not.”
• V.S.P.RAO “Selection is the process of picking individuals who have relevant
qualifications to fill jobs in an organization.

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IMPORTANCE
• Qualified sales people are scarce.
• Good selection improve sales force performance.
• Promotes cost savings.
• Eases other manager tasks.

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THE SELECTION PROCESS
•Kujnish (2006) describes a typical selection process which is

explained by the following diagram:-
Application Testing
Requirement
form
Employment Physical Interview

offer examination

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THE SELECTION PROCESS
Selection tools and procedures are only aids to sound executive judgment and
not substitutes for it. They can eliminate obviously unqualified candidates
and generally help recruiters spot extremely capable individuals.
• Application blanks
• Personal interviews
• Psychological tests
• References and credit reports
• Assessment tests

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• Transfer
• Internal Advertisement
• Employee Recommendation
• External Recruitment
• Management Consultant
• Employment Agencies
• Campus Recruitment
• News Paper Advt
• Internal Advt
• Walk In

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SOURCES OF RECRUITMENT OF PSR
• INSIDE ORGANIZATION:
– By promotion within the organization.
– By Transfer
– By reemployment of ex employee
• Merit :
– Motivation
– Simple process
– Short training process
– Efficient use of HR
– Low Cost

• DISADVANTAGES OF INTERNAL SOURCES OF

RECRUITMENT:
– Limited Choice
– Stagnation of Skill
– Discourage Competition:
– Reduced Productivity.
– Increased conflict and discontent within organization

• OUTSIDE ORGANIZATION
– Through Newspaper Advertisements
– Through Employment Agencies
– Through Campus Recruitment

– From Competitors
– From Unsolicited Applications
– From Recommendation of existing employees

• ADVANTAGES OF EXTERNAL SOURCES OF RECRUITMENT:

– Qualified personnel
– Wider choice a pool is large

– Competitive spirit exist as existing staff compete with outside staff
• DISADVANTAGES OF EXTERNAL SOURCES OF

RECRUITMENT:
– Dissatisfaction amongst existing staff
– Time consuming
– Costly Process
– Unfamilarity with new organization

SELECTION AND TRAINING OF PSR
• Selection is the process of evaluating the candidates or applicants of a specific job

and thus selecting the best among them suitable for the right job based on certain
specific criteria according to the job specification.
• The tests and process follow a basic pattern but differ from organization to
organization and job to job according to the needs.
• It basically is the testing and screening of candidates. Since it involves rejection, it
is a negative process.

• Selection Process- There are three phase process including

 Preliminary Screening(Resumes/Applications)
 Initial Interview
 Intensive Interview

• Hiring Process - There are three major steps
 Analyzing Sales Personal Needs-Determining the number of sales people

required.
-Identify the type of personnel desired.
- Realistic understanding of both helps to develop recruitment, selection and training
program.
 Recruiting Sales Candidate- Identifying potential sales people and attracting them
towards firm.
 Screening/Selection-Eliminating unqualified and undesirable
- Choosing best from qualified persons.

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• Use several recruiting sources-

 Internal, friends, customers and suppliers
 Sets up a skill profile of the top achievers in a sale organization.
• Applicant search – sources

 Candidate within the company
 Employee referrals
 Collage and university students
 Trade and newspaper advertisements
 Employment agencies.
 Internet

• Making the job offer

 Follow up with first class letter containing formal offer of employment, should
include
 Deadline for accepting the position
 Information about responsibilities
 Starting Salary
 Allowable moving expenses
 Formal training dates

 Probation Period
 Number of vacation days

TRAINING
• Process of improving skill and knowledge for doing a job.

• Advantages to Company:
– Systemic learning
– Future Manager building
– Improvement in work quality
– Accommodation to changing environment

– Wastage minimised
• Advantages to Staff:
– Skill and Knowledge
– Adaptation to new technology
– Efficiency increases
– Satisfaction increased

TYPES OF TRAINING
• Induction Training: Introduction of new employee to organization

• Promotional Training: Given to employee in organization to meet the
requirement of higher posts.
• Refresher Training: Given to employee to update his skill/knowledge

• Job Training: Given to newly recruited employee during job

METHOD OF TRAINING OF PSR

ON THE JOB TRAINING
• Job Rotation: Shift from1 dept to other

• Apprenticeship Training/Internship: Joint prog by educational instt and
company.
• Special Project Training

• Coaching: Teaching to juniors.
• In field Training

OFF THE JOB TRAINING
• Classroom Lecture
• Sensitivity Training
• Case Study
• Conference
• Role Playing
• Brain Storming
• Vestibule Training

DETAILING
• “Detailing" is basically an integral part of personal selling which is thoroughly

rehearsed, memorized and practiced to an extent that when it is heard, it sounds
as if it is coming out of one's own talk about the product. Even though the
script is written by someone else (usually the Product Manager), it looks as if it
is the MR's own.
• Detailing story highlights the relevant points, the unique selling points of the brand
raising the doctor's interest to an extent that he prescribed. This slowly creates a
brand image.

01/11/2022 88
DETAILING
• Advertisement of company's product (a walking audio-visual).

• To create and arouse interest in the doctors mind regarding products thus
influencing his prescribing habit.
• To emphasize the advantages / benefits and salient features of products.
• To generate more prescriptions.
• This solely depends on how effective the detailing is or in other words how
convincingly one can communicate.
• Communication is the essence of marketing.
• It is a four step process:
 MR - the medium
 Detailing folder / visual aid - the tool
 Voice of the MR - the audio
 The matter on the visual aid - the visual.

01/11/2022 89
STEPS OF EFFECTIVE DETAILING
• There are 9 commandments of effective detailing in order of importance.

 Text
 Voice
 Handling of Visual Aid
 Use of Pointer
 Eye to Eye Contact
 Body Language
 Listening
 Use of Senses
 Time Management

01/11/2022 90
EVALUATION AND COMPENSATION

COMPENSATION
• Compensation is a systematic approach to providing monetary value to employees

in exchange for work performed.
• Compensation may achieve several purposes assisting in recruitment, job
performance, and job satisfaction.
• Objectives - To recruit & retain qualified employees.
• To increase or maintain morale.
• To determine basic wage & salary.
• To reward for job performance.

COMPENSATION
• Its importance- Compensation is an integral part of human resource

management which helps in motivating the employees and improving
organizational effectiveness.
• Effectiveness in terms of:
 Attracting & Retaining Talent
 Motivating talent for better performance
 Cost effectiveness

TYPES OF COMPENSATION
• Direct compensation
• It refers to monetary benefits offered and provided to employees in return of the
services they provide to the organization.
• The monetary benefits include basic salary, house rent allowance, conveyance,
leave travel allowance, medical reimbursements, special allowances, bonus,
PF/Gratuity, etc.
• They are given at a regular interval at a definite time.

TYPES OF COMPENSATION
• Indirect compensation
• It refers to non-monetary benefits offered and provided to employees in lieu of the
services provided by them to the organization.
• They include Paid Leave, Car / transportation, Medical Aids and assistance,
Insurance (for self and family), Leave travel Assistance, Retirement Benefits,
Holiday Homes.

CONSTITUENTS OF COMPENSATION(CTC, HEADS)
• Wage and Salary: The most important component of compensation and these are
essential irrespective of the type of organization.
• Administered individually Provides employee stabile income and can plan chores of
daily life, budget
• Incentives: Incentives are the additional payment to employees besides the

payment of wages and salaries.
• Often these are linked with productivity, either in terms of higher production or cost
saving or both.
• Can be administered individually and for groups Additional compensation having
immediate effect and no future liability.

CONSTITUENTS OF COMPENSATION(CTC, HEADS)
• Fringe Benefits: Fringe benefits include such benefits which are provided to
the employees either having long-term impact like provident fund, gratuity,
pension; or occurrence of certain events like medical benefits, accident relief,
health and life insurance; or facilitation in performance of job like uniforms,
Canteens, recreation, etc. Administered for a group mostly
• Perquisites: These are normally provided to managerial personnel either to

facilitate their job performance or to retain them in the organization.
• Such perquisites include company car, club membership, free residential
accommodation, paid holiday trips, stock options, etc. Administered individually
mostly

PURPOSE OF COMPENSATION
Business Strategy
↓
People Requirement
↓
Compensation Management

PURPOSE OF COMPENSATION
• For Employer- Brand image (employer of choice) for attracting candidates

Motivating employees for higher productivity and performance Retaining talent
Consistency in compensation Provoking healthy internal competition
• For Employee- Work-life Balance Recognition as tool to self esteem Planning

for better quality of life

Designing an Effective Sales Compensation Plan
• Designing a new compensation plan or revising an

• existing plan consists of the following steps:
• Examine job descriptions
• Set up specific objectives for salespeople
• Decide levels of pay / compensation
• Develop the compensation mix
• Decide indirect payment plan or fringe benefits
• Pretest, administer, and evaluate the plan
• We shall examine these steps briefly

Examine Job Descriptions
• Separate job descriptions are required for different sales positions or jobs – E.G.
missionary salesperson, senior salesperson, key account executive
• Each job description should include responsibilities and key performance
standards, to decide how much to pay
• Set up Specific Objectives for Salespeople
• These are derived from company’s sales and marketing objectives
• Salespeople should have some control on the objectives – E.G. number of sales
calls made
• Objectives should be measurable. E.G. sales volume, selling expenses

Decide Levels of Pay / Compensation
• It means the average pay or money earned per year (or month)
• It is important to decide levels of pay for all sales positions
• It is decided based on the following factors:
• Levels of pay for similar positions in the industry
• Levels of pay for comparable jobs in the company
• Education, experience, and skills required to do sales job
• Cost of living in different metros and cities
• Annual average pay levels vary between industries, within the same industry, and
sometimes within the company
• Firms decide a range of average pay, instead of a specific pay Salespeople earn pay
depending on their and company performance

Develop the Compensation Mix
• Widely used elements of compensation mix are:

(1) salaries, (2) commissions, (3) bonuses, (4) fringe benefits (or perquisites)
• Expense allowances or reimbursements like travel, Lodging, etc are not included
• Basic types of compensation plans are:
• Straight salary
• Straight commission
• Combination of salary, commission, and / or bonus
• 68 percent companies use combination plan and balance 32 percent firms use
straight salary or straight commission
• We shall briefly examine above compensation plans

Straight – Salary Plan
• Characteristics:
• 100 percent compensation is salary, which is a fixed component
• No concern for sales performance or salesperson’s efforts
• This plan is suitable for sales trainees, missionary salespeople, and when a company
wants to introduce a new product or enter a new territory
• Advantages: Salespeople get secured income to cover living expenses
• Salespeople willing to perform non-selling activities like payment collection, report
writing
• Simple to administer
• Disadvantages: No financial incentive to salespeople for more efforts and better
performance. Hence, superior performance may not be achieved
• May be a burden for new and loss-making firms

Straight – Commission (or Commission Only)
Plan
Characteristics:
• It is opposite of straight-salary plan
• Most popular commission base is sales volume or profitability
• Commission rate is a percentage of sales or gross profit
• This plan is generally used by real estate, insurance, and direct-sales (or
network marketing) industries
Advantages: Strong financial incentive attracts high performance, removes
ineffective salespeople and improves results
• Controls selling costs and requires less supervision
Disadvantages:
• Focus is on sales and not on customer relationship
• Salespeople may pay less attention to non-selling activities

Combination Plan
• Characteristics:
• Combines straight salary & straight commission plan
• Four types of combination plans used by companies:
1) Salary plus commission: suitable for getting improved sales and customer service
2) Salary plus bonus: a bonus is a lumpsum, single payment, for achieving short-term objectives.
• This plan is used for rewarding team performance
3) Salary plus commission plus bonus: suitable for increasing sales, controlling salesforce
activities, and achieving short-term goals.
• Also suitable for selling seasonal products like fans
4) Commission plus bonus: Not popular.
• Used for team selling activities for selling to major customers

Combination Plan
(Continued)
• Advantages:
• Flexible to reward and control salesforce activities
• Security for living costs and incentives for superior performance for salespeople
• Rewards specific sales performance
• Different plans for different sales positions / jobs
• Disadvantages:
• Complex and difficult to administer
• May not achieve objectives if not properly planned, implemented and understood
• Indirect payment plan, also called fringe benefits or perquisites, help in attracting
and retaining people, but have now come under government tax in India

Pretest, Administer, and Evaluate Compensation
Plan
• Pretesting the new / proposed Compensation Plan:
• Companies pretest a new (or proposed) plan, before adoption
• Either it is simulated on a computer, or pretested at one / more branches for 6-12
months
• It should involve all concerned people
• Administering the new compensation plan
• Announce the plan in advance
• Explain the new plan and reasons for changing the previous plan
• Outsource administration if plans are changed frequently
• Evaluating the new compensation plan
• Find if objectives of the plan are achieved
• Some companies audit compensation plans

Supervising Salespeople
• Supervising is directing and controlling day-to-day activities of salespeople

• It is a part of leadership
• Sales managers use a combination of methods to supervise salespeople
• Methods of supervision are classified into two categories –
• Indirect Supervisory Methods Direct Supervisory Methods
• Sales reports Telecommunications
• Compensation plan Sales meetings
• Sales analysis Personal contacts
• Expense accounts Coaching / Mentoring

DUTIES OF PROFESSIONAL SALES
REPRESENTATIVES
• Sales Achievement
• Customer support
• Product promotion
• Launching of new products
• Market feedback
• Company Images
• Record keeping

PSR ROLES
• Role of the medical representative is to create demand for an existing pharma

product or launch new product ensuring availability at retailers and stockiest.
• The role of a Medical Representative is very challenging and a difficult task. They
are the key link between medical and pharmaceutical companies and healthcare
professionals.
• A medical representative organize appointments and meetings with the community-

and hospital-based healthcare staff

PSR ROLES
• He has the main hand in identifying and establishing a new business by Sales
Achievement
• Demonstrating and Presenting the pharma products to healthcare staff including

doctors, nurses, and pharmacists
• Launching new products in the market
• Pharma Product Promotion and Market Feedback about the product

PSR ROLES
• Company Representation is handled by medical representation

• A medical representative build and maintain positive working relationships with
medical staff and support administrative staff
• He should manage budgets for catering, outside speakers, conferences, and
hospitality of the company
• Keep detailed records of all contacts and a further reportings
• Reach, and if possible exceed annual sales targets given by the company
• A medical representative Follow up on leads generated by the company

01/11/2022 113
Job Profile of a Medical Representative
• The job profile of a medical representative can be covered under

three categories, namely
1. Prescription generation:
• The most difficult activity of a medical representative is to generate sales revenue
and the most effective way to do this is to generate prescriptions for the Company’s
products from the doctors he meets.
2. Customer coverage:
• The medical representative has to meet the doctors regularly.
• A medical representative has to be aware of the different specialties of the doctors
and promote the right products to the
right doctors.

01/11/2022 114
Job Profile of a Medical Representative
3. Market intelligence
• The success or failure of a business is decided by how well prepared it is to satisfy
its customers’ needs in light of the competitors’ efforts and prevailing market
conditions.

01/11/2022 115
SUMMARY
• Thus this Unit of this course gives an overall exposure to

the following:
– Various channels of drug distribution including the
management of conflict in them.
– Designing a new channel of drug distribution by
considering various factors
– Various process of physical distribution of drugs were
discussed
– Recruitment, selection, Training, Salary Fixation of
Professional sales representatives ere discussed.
– Tips to be successful as PSR was also discussed.

Faculty Video Links/ Youtube & NPTEL Video Links and
Online Courses Details (if any)
• Youtube/other Video Links:

• https://www.youtube.com/watch?v=N0NrsOObiXo&t=118s
• https://www.youtube.com/watch?v=248_r0eNtgo
• https://www.youtube.com/watch?v=PEP6oShatGQ
• https://www.youtube.com/watch?v=qkj9V0hXtZs

Daily Quiz
• Define training and development. Enumerate the benefits from the

standpoint of company as well as employee.
• What are the functions of retailers and narrate the services expected
from them
• Suggest the role of brokers and auctioneers in pharma industry.
• Discuss the various functions which a drug wholesaler has to play
in a pharma sector.
• What are the various models of in house training of medical
representatives?
• Suggest some sources of recruitment of sales force.
• What are the differences between:
– recruitment and selection
– Training and development
– Sales and Marketing
Weekly Assignment
• What are the various channels of drug distribution? Suggest the

advantages of wholesalers.
• Narrate the steps you will take to recruit the sales force for your
industry.
• Explain the various models of salary and wage fixation of PSRs
• How will you train the pharmaceutical professional representatives?
• Suggest the various reasons for channel conflict and suggest some
ways to overcome them.
• What are the factors you will consider to set up a channel of
distribution for your pharma company.
• Suggest some benefits of incentives to the employee.
• How will you motivate your staff

MCQ s
• Job rotation is an example of off the job training

– True False.
• Vestibule training is an example of on the job training
– True False.
• Incentive is an example of financial motivation.
– True False.
• Basic is an example of financial motivation.
– True False.
• Channel conflict arises when manufacturer uses dual distribution
network
True False.

Old Question Papers of AKTU
• New subject introduced in 2020-21 session.

• No questions available.

Expected Questions for University Exam
• What are the various channels of drug distribution? Suggest

the advantages of wholesalers.
• Narrate the steps you will take to recruit the sales force for
your industry.
• Explain the various models of salary and wage fixation of
PSRs
• How will you train the pharmaceutical professional
representatives?

References and Books :
Text Books:
1. . Philip Kotler and Kevin Lane Keller: Marketing Management, Prentice Hall of India,
New Delhi
2. Walker, Boyd and Larreche : Marketing Strategy- Planning and Implementation, Tata
MC GrawHill, New Delhi.
3. Dhruv Grewal and Michael Levy: Marketing, Tata MC Graw Hill
4. Arun Kumar and N Menakshi: Marketing Management, Vikas Publishing, India
References:
https://www.slideshare.net/banand7/online-5161970
https://www.slideshare.net/keerthininan/direct-mail-marketing-21311416.
https://www.slideshare.net/piyushtripathi19/indian-retail-ppt

References and Books
Slide References:
https://www.slideshare.net/ChiragRT1/job-evaluation-compensation-
human-resource-management
https://www.slideshare.net/gitikajagwani/channel-conflicts
https://www.slideshare.net/crazykudi/channels-of-distribution-24233
998
https://www.slideshare.net/rajworship/distribution-channels

Noida Institute of Engineering and Technology
(Pharmacy Institute) Greater Noida
THANK YOU!

01/11/2022 125

Unit 4 Marketing

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Noida Institute of Engineering and Technology

(Pharmacy Institute) Greater Noida

Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT

• Pharmaceutical marketing channels: Designing channel, channel

Dr. Monika BP803ET UNIT 4 PHARM

01/11/2022 Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT 3

• Upon completion of the subject the students will be able to :

 Understand the various channels of drug distribution in the pharmaceutical

01/11/2022 Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT 4

CO Statement Level of Blooms

The students shall be able to:

4.2 Explain the process of recruitment , L2, L5

4 Modern tool usage

9 The Pharmacist and society

10 Environment and sustainability

11 01/11/2022 Life-long learning

CO 3 3 1 1 1 --- --- --- --- ---- 2

01/11/2022 Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT 7

• Pharmaceutics: The students should have an brief idea of various

• Pharmacology: The students should have an understanding of mode

Dr. Monika BP803ET UNIT 4 PHARM

Physical distribution Understand Strategic importance, tasks in physical CO4.1

Purpose of detailing, Explain the process of recruitment , selection and CO4.2

Duties of PSR Perceive the various responsibilities of a PSR CO4.2

Dr. Monika BP803ET UNIT 4 PHARM

What Is a Distribution Channel?

01/11/2022 Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT 10

Understanding Distribution Channels

01/11/2022 Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT 11

Direct and Indirect Channels

01/11/2022 Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT 12

Conflict is not always undesirable.

01/11/2022 Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT 13

 One of the chief roles of marketing channels is to convert potential buyers

Dr. Monika BP803ET UNIT 4 PHARM

Merchant middlemen- Wholesalers and Retailers

01/11/2022 Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT 15

Merchant middlemen- Wholesalers and Retailers

01/11/2022 Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT 16

 Grading, Packaging and Packing

 Dispersing and selling

 Providing Market Information

Dr. Monika BP803ET UNIT 4 PHARM

Dr. Monika BP803ET UNIT 4 PHARM

Dr. Monika BP803ET UNIT 4 PHARM

• Services of Retailers: To manufacturer and wholesaler

• Services of Retailers: To the consumers

Dr. Monika BP803ET UNIT 4 PHARM

 Sells goods on behalf of seller

 Involved in selling of goods on behalf of seller.

 Warehousing, grading, packing, assembling, disposal are performed by

 Get certain percentage as commission on sale made

01/11/2022 Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT 21

 Ownership nor possession of goods

 Involved in bringing buyers and sellers together.

 Negotiate purchasing and selling activities on behalf of buyer and seller.

 Get a percentage of commission for every business transaction.

 Sells good on behalf of party by auction.

01/11/2022 Dr. Monika BP803ET UNIT 4 PHARM MARKETING MANAGEMENT 22

• Factors related to Market/Consumers.

 Expansion/spread of the Consumers.

 Size of the Order/Sale.

Strategic conflict changes the dynamics between suppliers, distributors/wholesalers,