Business to Business Marketing Dendrite International

Presentation by : Group No-5

Group :: Team Members - Amit Kumar Chaudhary [04] - Saurabh Srivastava [23] - Sampurna Nand Sharma [34] - Nikhil Kumar Jha [36]

Context
 Started in 1985 to develop software to assist with call planning and reporting task.  Decided from the outset to be a global supplier of both software and service.  Dendrite International is one of the worlds leading software supplier to Pharmaceutical Industry.  Presence of 15000 sales people in 40 companies in 11 countries, revenue for 1993 $ 33 Million.  As the market scenario is changing, Dendrite is looking at another way to go to market.

Competition
 STI has strong presence in US(Sales of $ 48 Million)-40% share of installed reps in US, but is encountering lengthy delays  Walsh International , based in UK($ 100 Million sales)main business sale and analysis of industry data-have rigid system.  Pharma system is a new company and small company with potential  Cornet (13% Pharma rep)-mainly based on two large firms-had to develop product service package.  Other vendors offering stand alone software package for $ 100400 / per unit as compared to $ 300 -2000/unit for Dendrite  Dendrite offered much higher level of service and product flexibility  Dendrite currently only supplier with product in Japanese Kanji language.

CUSTOMERS
U.S.( about 30% Pharma sales)  Largest sales force-500 to 3000 rep/firm  Calling frequency-every four to six weeks  Higher level of monitoring requirement  Less price sensitive Europe (about 32% Pharma sales)  sale force of generally 100-200 reps  Calling frequency once a year  Government funding is large and presence of managed care organizations  Cost sensitive Japan(about 18% Pharma sales)  Prescription and dispensing takes place simultaneously  Social selling very important  Prices have to be negotiated with individual physicians.  Tracking expenses is a key task

Market Developments
U.S.  Health care costs have gone over $ 900 billion.  Coming up of managed care organizations.  More centralized buying and formularies to lower costs.  Activities of sales force to drop from 250000-300000 physicians to 35000 committees. Europe  Imposition of price control on drugs.  Imposition on reimbursement regulations, More centralized buying.  Activities of sales force to drop further. Japan  Fixed price invoicing mandated and whole seller rebating abolished.  Imposition on reimbursement regulations.  Movement towards separation of prescribing and dispensing  More reps may be required now .

Implications of changing market

 Better account management required instead of better system design.  Change in focus from strategic from tactical.  Contacts should grow from beyond Information systems, sales administrations to client functions, client customers and board of directors.  Less sales force required in US and Europe.  More sales force requirement in Japan.  Percent of Reps automated in Europe and Japan are less as compared to US-scope of automation huge.(Exhibit 4)  Dendrite penetration in US market is less. (Exhibit 4)

Changes
DMU Existing DMU: VP Sales, IS, Sales representatives New: Board of directors, Client functions, Sales, IS, Sales representatives Product Existing:  Mix of product and service.  More service oriented with involvement of dedicated client team.  Service pricing based on user numbers. New:  More emphasis on account management  Less requirement of help centers.  Pricing to be done on product and maintenance cost, rather than user numbers.

Changes
Sales People  Size of Pharma sales force will decrease in US due to MCUs.  Individual sale persons importance will decrease in purchase of ETM.  Sales team will be required to influence formulary(MCUs decision) which will also require drug experts and others technical persons along with sales person. Dendrite will also require sales team with technical experts to sell ETM in US and Europe.  Orientation of sales people to be changed for changed requirements and culture through training and proper goal setting.  In Japan, size of Pharma sales force will increase ,Individual sale persons importance will increase in purchase of ETM. Sales force of Dendrite needs to be increased. Business Manager  Can be involved earlier in project as daily fire fighting will decrease. BM involvement will increase the influence of sales team.  Compensation system to be revised.