In Indian pharma industry, the sales model is still decades old. It focuses on sales through medical representatives (MR). Undeniably, the importance of an MR cannot be underestimated but when you really get down to the sales model, it is: a rep with his bag containing visual aids, samples and gifts, visiting doctor's clinics at regular intervals in an assigned territory. The traditional model was based on number game - "More reps will translate into more business." The underlying philosophy was to increase the probability that sooner or later one of the MR will 'hit' the target. Given the way the marketplace is changing, the Indian pharma industry is likely to face challenges in future. Technology holds promise for increased sustainability and competitiveness for the pharma companies.

In terms of adoption of technology, the Indian pharma companies have been gradual. There have been small but incremental change in the way pharma companies are targeting their customers, but this difference is brought about by only a handful of companies. Few MRs have started using computers for detailing and collecting data about their customers and their visits and update this information on sales force automation systems.

According to the TCS Pharma report, in 2002-'03 cumulative IT spending by 12 leading pharma companies was about Rs 114 crore. Individual IT spending ranged between Rs 1 crore to Rs 35 crore approximately. Much of these investments were focussed at building internal operational efficiencies. Hence, investments were on ERP, supply chain, enterprise application integration and to certain extent on sales force automation systems. While the investment in these areas will continue, the future trends suggest additional areas of investment such as R&D, bioinformatics, CRM systems and business intelligence tools.

While these systems will build operational efficiencies, the pharma industry needs to look at solutions that augment the current efforts through MRs and facilitate a collaborative relationship building efforts with customers. In a highly competitive and rapidly changing environment, the collaborative relationship building efforts must address multiple areas such as therapeutic segments, the brands within those segments, the customers and also the population that it is catering to.

CHANGING MARKET ENVIRONMENT

Some statistics throw light on the same - 500,000 prescriber's targeted for 150,000 brands by 300,000 MRs.

At the macro level, the industry is highly fragmented with 16,000 pharma companies operating at national, regional and local levels, trying to get prescriptions for their respective brands from the same set of prescribers.

In an attempt to enhance longevity in the post GATT era, many companies went on a product launch spree. This has led to proliferation of many brands of the same product in the market place. If we observe the product/brand launches in the last few years, the number of successful launches has declined drastically. Competition has intensified as never before. The window period between the first company launching the product and the next one is almost nil.

The changing trends observed at the doctors/prescribers front are as follows -
- Heightened professionalism, leading to more fact based diagnosis and increased appetite for knowledge.
- The concentration of prescribers is unevenly distributed across geography.
- Prescribers with high potential are getting busier, hence less available or less receptive to detailing by MRs.
- Decreasing value of inputs such as leave-behinds, gifts etc and increasing importance of CMEs and symposia.
- Deteriorating perception of the prescribers towards MRs often because of lack of required skills.

If we restrict ourselves to the sales efforts by the pharma companies, we can observe the following trends -
- Pharma companies are still largely dependent on the MRs for getting sales.
- Today, the industry is struggling to find and retain good talent.
- Since the quality of MRs is declining, a plethora of new problems are arising -
- Lack of commitment in the MRs
- Convenience driven coverage of customers
- Lack of knowledge of customers leading to poor planning of resources.
- Blurred focus between prescribers with high or low potential.

The end consumer, in pharma industry's case "the patients", are using several sources of information to update themselves about their diseases and related issues. They are getting networked with many sources of information. With advent of health insurance coming into play, the TPAs and HMOs will change the way the Indian healthcare industry is functioning. Already some early signs are seen where they are influencing, to a limited extent, the overall treatment of patients.

SEGMENTATION STRATEGY - A NEED

Segmentation of prescribers can be done based on "Customers 2 by 2 matrix", where a doctor's potential to prescribe is compared with his market share in an area. This segmentation strategy involves following steps -

I. Identification of doctor's potential to prescribe and approximate number of patients seen per day (market share).
II. Based on this audit, allocating the doctors in respective quadrants.
III.Mapping therapeutic segments with the doctors in quadrant I and II.
IV. Mapping top line products within each therapeutic segment to the doctors in quadrant I and II.

This matrix varies with each pharma company as the segmentation is based on the mapping the therapeutic segments of that pharma company to the prescription potential of the doctor. If we apply the same analysis across industry, it throws up most profitable and competitive therapeutic segments where most number of industry operators are betting their money.

This analysis helps both the MR and the pharma company. The benefits to MRs are as follows -
- MR is able to clearly assign a doctor a status of super core/core customer, general in his list based on the doctors position in quadrants I, II, III, IV.
- It helps gain clarity about his customers and allows them to focus on the more profitable customers.
- It helps MR to optimally allocate his visits, type and quality of inputs (for eg. literature, gifts etc).
- It empowers them with a focussed approach in his call planning and execution.
- With the help of this segmentation, MRs will be able to approximately forecast number of prescriptions from their customers and hence bring in more accuracy in sales targets and its achievements.

Using this segmentation strategy, the pharma company is able to identify and build a portfolio of the most profitable customers across the nation. If we consider Pareto's principle, the organisation has identified those 20% of customers who have the potential to give 80% business.

Considering the changes taking place at the doctors as well as the MR levels, pharma companies are faced with a stiff challenge to identifying the top line customers and building strong relations with them. Pharma companies are doing their part in training and motivating the MRs in order to enhance their quality, but they must look at alternative efforts that will augment their current efforts and deli-ver faster results.

COLLABORATIVE RELATIONSHIP BUILDING - A NEW PARADIGM

Very simply, collaborative relationship building would mean identifying alternative methods and making efforts in building relationship that augment the current endeavours deployed by the pharma companies using MRs.In the past, many companies have made such efforts, some have successfully worked and some have not. Out of the ones that worked successfully some continue to deliver good results and some have died their natural death. Technology is one such enabler that promises to deliver sustainable results.
TECHNOLOGY - THE ENABLER

Internet, perhaps, is the most powerful medium today. Simple facts like low cost, very wide audience reach, speed and flexibility of updating information and interactive make internet such as powerful medium. It is these simple facts that some industries have leveraged to their advantage and have built huge profits from it. Despite being so powerful, it is not recommended that internet becomes the mainstay of all marketing and sales strategies. At this point of time or perhaps for a long time to come, internet will best augment current endeavours of marketing and sales efforts while creating a whole new set of opportunities for the industry.

Today, Internet and mobile-based technology offer a whole new set of solutions that can enable pharma companies to service the customers better and build stronger and more sustainable relationships with them.

In order to enhance their competitiveness and effectiveness at customer level, Indian pharma industry has to choose the most suitable solution from a wide range of sales and marketing solutions which extend "customers 2 by 2 matrix" segmentation strategy and at the same time are innovative and flexible to suit each companies specific requirements.

- (The author is heading Accerelate Consulting Services -- firm focussed on providing Internet and mobile-based technology sales and marketing solutions)