SALES AND DISTRIBUTION MANAGEMENT

TERM PROJECT

CIPLA LIMITED & PIRAMAL HEALTHCARE

Group: 7
Amish Agarwal (063005) Deepak Bhatt (063015) Pushkal Arora (063038) Sanchit Wason (063044) Smiti Rastogi (063053) Sunny Kadian (063055)

PART 2

CIPLA SALES

1. Sales Organization and Territory Design. Also review advantages and disadvantages of the design
Total number of employees: 7800-8000

13 STATES Divided Into

60 Regions

(On basis of Business Potential)

Example: UP divided into 3 regions - Central, East and West Delhi divided into 4 regions - East, West, South and North and then has a separate Corporate Division

Steps for making a district: First a survey is done for the potential of the market The districts are chosen according to the pre-defined minimum criteria of sales revenue Then number of divisions allocated according to the potential for each district

All of the major cities have all the divisions of Cipla i.e. Antibiotic, Cardio, Diabetic, Gastro, Super care etc. The districts are also sub-divided into smaller regions to look after the distribution in a better way. In the NCR region, Delhi and rest of the satellite cities of Noida, Ghaziabad, Faridabad, Gurgaon act as separate districts in the region for their respective states.

The hierarchy at Cipla is as follows:

Chief Executive Officer

Head Office Manager)

(National

Senior Sales Manager

Sales Manager

Business Manager

Territory Manager

Management Trainee

The Territory Manager looks after the whole division, Business Manager looks after 2-3 divisions and works as an Area Sales Manager, Sales Manager acts as a Regional Sales Manager looking after a complete region for e.g. UP West. The SSM looks after different regions in a state and National Manager taking care of the different states. The company is also in the process of introducing a new compensation structure keeping in mind the concerns of employees and changing industry environment.

2. Ranking of skill sets required for sales staff by supervisors and sales stuff to see if they match
Ranking by Supervisor (In order of Importance) : 1. Communication 2. Groomed 3. Situation Handling Ability 4. Industry Knowledge 5. Connections with potential customers i.e. doctors

6. Product portfolio knowledge (for people with work experience) Ranking by Sales staff (In order of importance): 1. Communication 2. Relationship with customers 3. Patience and Negotiation Skills 4. Problem handling ability Therefore, one can say that for both the management and the sales staff, communication is of vital importance. Apart from communication and the situation handling ability, the priorities differ for the two.

3. Recruitment and Selection of sales people

Minimum Criteria: 6 Months of Experience and maximum experience of 2 years Age: Less than 25 years for a fresher and less than 27 years for those with work experience. Qualification Required: Science Grad (Most preferred), B.Tech, B.com) All people from a Non-Pharma background are considered as a fresher, regardless of the number of years in an organization No. of rounds depends upon the center of recruitment .

For the process taking place in an office apart from Head Office, there are 3 rounds conducted: Round 1: Face-to-Face Interview Round 2: Online Tests Round 3: Interview with Senior Manager

For the process taking place at Head Office, there are 4 rounds conducted: Round 1: Face-to-Face Interview Round 2: Online Tests Round 3: Interview with HR Head Round 4: Interview with Senior Managers

Selection Criteria: The company has a preference for science graduates

Communication is of utmost importance and therefore given the maximum weight age while selection CIPLA looks for groomed people who already have an experience and therefore, not much time has to be spent on them The background and previous achievements are also considered while selection but are relatively less important CIPLA looks for people who have the ability to handle day to day occurring challenges and problematic situations and therefore, their behaviour and answer are considered carefully in personal interviews where they are given situational challenges

References are checked on call and feedback is taken prior to final selections

The company prefers to hire non-MBA graduates due to the high attrition observed among the management graduates. The company has effectively stopped hiring fresher as a policy, which has been in force for the past 3 years.

4. Effectiveness of different training methods for sales staff

There are different training programs, which are provided throughout the year for all the employees be it newly joined or who have been working for years.

For new employees:

Initial 7 days job induction ( 2 days induction in office , 2 days training in field with seniors and rest of the days about retailing, business potential etc) Then, the employees are sent to field to start up with their jobs for the next 20 to 30 days. After 20-30 days, there is a 15 day training names SPROUT Post - SPROUT , feedback is taken from the area manager and then it's decided whether further training is required or not After the this, the sales person is given individual charge at the division level

For all employees:

CIPLA has an online platform for sharing of information and providing training and learning named Cipla Nalanda. Training provided on topics such as product training, communication etc

Online assessments are carried out after competing training courses online Online platform provides opportunity to share info, blog and post challenges people are facing in various departments and employees who had faced similar challenges reply back

Regional Soft Skills training is provided from time to time Quarterly briefing carried out for all the employees to provide inputs on what are the best ways to achieve the targets and how to handle situations on the field

The effectiveness of the training is also gauged by the inputs gathered from chemists (retailers) and a 360-degree program with feedback from all levels of the organization.

Evaluation: For new recruits

As the eligibility criteria for getting recruited at CIPLA is minimum 6 months of work ex, CIPLA assumes the new employees know the basics of the industry and thus they can grasp the environment faster The training process is very much effective as more focus is laid on going in the field and understanding the market rather than laying focus on theoretical aspects The employees find this way of training effective as they feel they can learn more on the field rather than in a room

For old employees

CIPLA is focussed very much on training their employees at different occasions throughout the year so that they can take into account changes occurring in the environment and these inputs are provided in the quarterly briefing.

5. Compensation structure with aim of finding ratio of fixed to variable with effect on morale
The pay package designed for Cipla employees is thoroughly planned, with distinct demarcations between salaries meant for employees belonging to specific levels at the concern.

Job Category Book Keeper/Accounts Assistant Management Staff Regional Head Territory Manager

Average/Median Salary Per Annum INR 104,000 INR 314,000 with an annual average salary of INR 154,000 INR 411,000- INR 446,000 INR 431,000- INR 464,000 INR 181,000 INR 300,000 with an annual average salary of INR 232,600 INR 180,000 INR 420,000 with an annual average salary of INR 230,000 INR 412,000- INR 446,000 INR 33,000- INR 36,000 (monthly) INR 869,000- INR 928,000 INR 100,000 INR 450,000 with an annual average salary of INR 177,000 INR 400,000 INR 480,000 with an annual average salary of INR 443,333 INR 202,000 INR 222,000 INR 309,000 INR 332,000

Accounts Executive or Accountant Packing Senior Executive Territory Manager (Intern) QA Manager Executive or Administration Assistant

Area Business Manager Medical Representatives QA Executive (with around 6 years experience)

There are no variable components /incentives provided to the employees and provides 100% fixed salary only. Although the fixed salary may vary depending upon the experience and designation of the employees.

Effect on Morale: Positive Assured Salary boosts moral (100% Fixed ) No pressure to work for commission

Negative Not much opportunity to be rewarded for extra effort put in the field leading to low morale

Low moral due to relatively less willingness to put effort No difference between sales people just achieving the target and achieving way more than the target as the salary is same at the same level with same experience . Therefore, lowers the moral and willingness to work

No competition or pressure may make the employees feel less challenged and having a stagnant work life

In case of Cipla, there is more emphasis on the work experience rather than the post of a person. For e.g. an employee as a Business Manager can earn less than a Territory manager. This can have an adverse impact on the employee morale as there is less importance on the work being done and more on the number of years spent at the company. However, it also serves to motivate those people who care a lot about the job title and less about the compensation.

6. Method of prospecting and reporting with degree of sales force automation

Sales Performance is judged on the basis of various categories: Legacy old products ( Old products with no major growth ) : The employees are checked on their ability to achieve at least the minimum target by industry standards Triple P - Programme, Product and Portfolio ( Growing products involving a lot of competition ) NPP ( New Products introduced ) : The products who have been in market for less than 2 years are included in the group.

Within these categories, there might be different targets assigned to different employees on the basis of the region they are catering to. The business potential of the region would determine how much sales the employees have to target in that specific region. There is also an online daily reporting system in place, wherein the sales people update the database as soon as a new customer in this case a doctor or a chemist has been visited. Along with that, the stock entry is also made and updated in the database. A patch list (doctor list) is used for new customers. All of the changes are made immediately and are available to people so that the immediate boss of the sales force can see the required data and make a decision form the updated information.

PIRAMAL HEALTHCARE - SALES

1. Sales Organization and Territory Design. Also review advantages and disadvantages of the design National Sales Manager

Zonal Business Manager

Area Business Manager

Territory Business Manager (MR)

National Sales manager National Sales officer is the caretaker of the entire hierarchy till the lowest level. Piramal operates its sales structure with NSM as the head. The head office of Piramal Healthcare is located in Mumbai from where NSM operates and ensures performance from every zone. 1 NSM, Operates from Mumbai head office

Zonal business manager (Delhi & Ghaziabad) ZBM forms the second level of hierarchy in the supply structure. Reports to NSM Team size 40-45 There are 4 Zonal managers nationally for Piramal Healthcare- 1 North, 1East, 1 West and 1 South

Area Business Manager (2-Delhi, Amritsar, Chandigarh, Ambala, Dehradun, Meerut, Jammu) Reports to ZBM

Territory Business Manager (5-6 TBM under every ABM) Also, the number of RMs depends upon the area and size of the state (For e.g.-Piramal Healthcare takes UTTAR PRADESH and UTTARAKHAND together as one state and hence has 3 Regional Managers for the same). This example delineates that the number of RMs depend on the area to be covered in a state.

Doctors TBM C&F and Stockists Big Retailers

TBM or MR goes to almost 12 14 doctors daily on weekly basis, 1 or 2 distributors in a day but on weekly basis, 5-7 big retailers daily on every third or fourth day.

Advantagesin Current Sales Territory Design 1. Ease in developing a consistent pattern of prospecting to his/her accounts. 2. Conflict is reduced amongst the sales team. 3. Better control and ease of management can be realised because of the hierarchy.

Disadvantages in Current Sales Territory Design 1. One Sales Rep told us that due to current Geographical territory design he is limited to current less active territory and want to explore different regions. 2. Less Consultative selling.

3. Referral to someone outside territory becomes difficult to work due to Geographical territory design.

2. Ranking of skill sets required for sales staff by supervisors and sales staff to see whether they match.

Skills

Ranking by supervisor 1 2 3 4 5

Ranking by sales staff 1 3 5 2 4

Negotiating skills Medical science knowledge Convincing power Complete knowledge about the product Knowledge about competitors product and offerings Networking Punctuality Time management

6 7 8

8 6 7

The above table reflects upon the ranking order of various skills required for sales staff at Piramal Healthcare by the supervisor and sales staff respectively. The highest order of importance in both the cases is given to Negotiating skills.

3. Recruitment and selection of sales people.

Recruitments are majorly done through applications received online. Zonal Business Manager - Science/ Pharmacy Graduate with an experience of at least 10 years in a reputed pharma company with atleast 3 years as MR. MBA Graduates are preferable but 5 years of experience in pharma is must.

Ares Business Manager Science/Pharmacy graduate with an experience of atleast 5 years in a reputed pharma company with atleast 2 years as MR. Territory Business Manager Science/Pharmacy graduate upto 26 years. The following is the selection process followed at the company: 1: Interview 2: Compensation and benefits discussion after the interview 3: Discussion with management about other information to help decision process for applicant. Apart from this, the personal interviews for Territory Business Managers at the time of recruitment are conducted by the respective HR managers wherein the following points are given due importance: Scientific knowledge Background Knowledge about the company

4. Effectiveness of different training methods for sales staff.

Induction is of 15 days for every sales employee recruited and everyone is trained at Mumbai Head office. However Employees feel that training is not keeping pace with the current technological advancements and they are lagging in lead-time compared to their competitors. Also Territory knowledge is necessary for effective training and that requires more period or mocks field training. It is impossible for a TBM to manage a territory efficiently until and unless he has a complete knowledge about the characteristics of the area allotted to him since a lot of strategies will need to be devised so as to meet the targets and ensure proper spread of the products across the territory.

5. Compensation structure with aim of finding ratio of fixed and variable and effect on morale.
For TBM (Territory Business Managers) Annual Package: - 2-2.5 lacs + TA + Phone bill + Incentives on achieving monthly targets(With minimum of 15,000 to 45,000 incentives that can be availed after achieving their respective targets). Normally targets set for TBM is on average of 4-5 lacs per month. Job Category Book Keeper/Accounts Assistant Zonal Business Manager Area Business Manager Territory Business Managers Average/Median Salary Per Annum (exclusive of variable component) INR 100,000 INR 280,000 INR 420,000- INR 480,000 INR 400,000 INR 450,000 INR 200,000 INR 250,000

Variable component for the above mentioned job categories stays the same as for TBM i.e. TA+ Phone bill+ Incentives on achieving monthly targets. The nature of targets however varies for the respective job categories. Effect on morale: The working environment in the company has both a positive and negative impact on the morale of employees. Positive effect Assured Salary boosts along with good rewards as variable compensations forms an important part of the entire package. More enthusiastic to achieve better targets. Personal recognition on attainment of a certain target. Have a competitive work life scenario which makes work more interesting. Availability of good opportunities.

Negative effect More open to conflicts in situations where targets are achieved but beneficiaries are difficult to identify. Presence of extremities in case of those performing brilliantly and those who are underperforming.

Low morale among people who are underperforming or performing less than others resulting into low levels of confidence.

The people of Piramal come to work each day with energy, enthusiasm and a commitment to enhancing human health and well being throughout the world. People at Piramal adapt quickly and continually to changing health care needs, using talent for innovation to create products that help improve peoples health and quality of life throughout the world. As employees, they are taught to be ready to meet change and challenges head-on, and that speed is vital to the fulfillment of companys Promise.

6. Method of prospecting and reporting with degree of sales force automation. Prospecting
As such, the company primarily works on building relationships with their stockists who can push the OTC products and rest of the products cant be pushed much. When it comes to doctors, company tries to ensure that everyone is approached with attractive offers. The TBM are required to have a thorough knowledge of what all offers are being offered by other companies to their channel partners i.e. doctors, stockists, retailers, Institutional hospitals. Reporting The company provides online portal for medical representatives for the daily reporting . Every sales representative has to report online in the evening. No automation hardware or tool used on field visits, every TBM uses traditional record keeping method by noting down all the orders writing it with hand and then getting the computerized bills generated for all the orders by the CFAs.