why kam fails 1302 pres show

Why KAM May Fail?

1

Key Accounts Management in Pharmaceutical IndustryFebruary 14 & 15, 2013Hotel Avion, Mumbai

Dr Ulhas GanuAdvisors in Medico-Marketing & Management (AIMM)

[email protected]

KAM-Pharma 2012

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• Can It Really Fail?• How Can We Make it Work?

• Can it be Applied by Every Organization?

• Aren’t Organizational Objectives & Goals a Determinant to its Application?

Why KAM May Fail?

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http://assignmenthelpexperts.blogspot.in/2011/09/business-its-environment-and-objectives.html

*

* *

*

Objectives of

Business

*

**

Core Attributes

Intrinsic Attributes

R & DBase

CustomerRetention

Presenter

Presentation Notes

Profit earning is a Primary Concern for all Businesses. The Problem has come because of the Greed, which changed the concept from Optimization to Maximization of Profit and fleecing of the customer

http://2.bp.blogspot.com/-sNqc1AthWoY/TmuKJe3zTtI/AAAAAAAAAWc/tupVLiVmys4/s1600/objectives-of-business.jpg




4

The Story of A Villager at Railway Station

Inquiring About Trains at the Inquiry Counter

The Apologetic Person at the Counter Told him:

• No Train towards Mumbai for 2 hours

• No Train Towards Nashik for 3 hoursSarcastically adding……….• Not Even a Goods Train Movement in Day Time

• The Villager Thanked him for the information……

The Apologetic Person at the Counter Told him:

Information is the Key

5

Turning to his Wife he Said…… Come Dear, it is Safe now to Cross the Railway Track!

Safer than the Safest Possible OptionHeight of Precaution!

Not So Much Overcautious, I Still Wondered….

• Shouldn’t We Be Careful About KAM in India?• Should We At Least Check Coordinates Properly

Before Accepting it Fully & Wholeheartedly….

Information is the Key

6

Skeptic: Why KAM?

Change is a Need Based Action

The Only Person Who Always Likes a Change is a Wet Baby

Which it Can’t Do by Itself!&

Must Invite & Involve Others for Help

Skeptic: Why KAM?

What is Wrong with ‘The Age Old’ ‘Traditional’ “4 P” Model?

Hasn’t it Been Modified & Used Highly Successfully for Decades?

7

Skeptic: Why KAM?



Is KAM a Gimmick Used by the Consultants to Stay in Business ?

8

Let Us See How Marketing Evolved Over the Last Few Decades……

Skeptic: Why KAM?



HR

ProductQuality

ProductValue

Product Promotion

PrimaryAttributes Focused

AttainingThe Desired Goal

Finance Person

& PlaceSr.

Management

9

Age Old Successful Traditional 4 P Model

10

MarketingMix

Product

Price Promotion

Place

CustomerSolution

CustomerCost

Communication

Convenience

The 4 Ps & 4Cs The Standard P:C Theme

(Caiibgbm marketing mgt module d)

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• Medico-marketing

• Technical• Production• R & D

• Quality Assurance

• Medical • Marketing

Senior Management

• Finance

Human Resource

Development

Q

11

The Total Matrix

Place

Attributes

ProductPositioning

Evolved Model

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• Technical• Production• R & D

• Quality Assurance

• Medical • Marketing

Senior Management

Human Resource Development

• Finance

• Medico-marketing

Q

Interaction Within 12

Communication

Limited Outside Interaction

Attributes

ProductPositioning

Limited Outside Interaction

Limited Aspect Communication

Sale Only as the Focus

Why Traditional Model Alone May Not Work Now….

It Largely Worked Earlier Because ……….

1. Not All Companies Followed it……

2. Not All Those Who Followed the ‘Quality Principles’ ‘Communicated’ it to the Customers

3. Those Doing Both Activities were Successful

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The Changing Equations

1. The Model Was Consistently Modified Over Years

2. An Orientation to Working on Key Opinion Leaders & the Key Account Customers Evolved

3. CRM : the Customer Relationship Management became the Key word

4. Tender Business Extracts its Own Price

5. Retailers May Not be Friendly Customers but turned Hostile Adversaries

The Current Situation

• High Competition, too Many Branded Generics!• Limitations of KOL to help with Direct Business• Fear of Losing KAC due to Extrinsic Factors*• Resultant Loss of Business

Need: • The Communication Should Focus on Benefits

that May Accrue to the Customer & Company

• Beginning of KAM Idea

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KAM: Key Accounts Management

Key (What is the Key)Accounts (What are they?)

Managing (Who Would Manage# & Whom*)

The Confusions GaloreKOL / KAM / KAC

Are They Interchangeable / Similar/ Very Different

#: Shouldn’t the Personnel be Trained & Nurtured?Are they Nurtured as Required

KOL: Key Opinion Leaders: Role1. Leading Physicians & Scientists, Respected &

Acknowledged as Leaders in a Subject Area2. Influence Thinking & Treatment Paradigms3. Provide Insight into Diseases & Rx Regimen4. Provide Assessment of Competitive TherapiesThe data is growing. Why aren't Insights? http://www.wipro.com/services/business-application-services/key-opinion-leader.aspx

Drug Discovery : Help Write the Protocol & Define Efficacies of the Drug During the Study

Medical Affairs

* Help Medical Affairs on Drug Usage & Defining Side Effects

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Key Opinion Leaders Serve the Following PurposeThe data is growing. Why aren't Insights? http://www.wipro.com/services/business-application-services/key-opinion-

leader.aspx

• Act as Leading Indicator of Therapy Acceptance(Protocols)

• Help in Diffusion of Information & can Increase Velocity of Product Adoption (e.g. Imatinib) or

• Even Relegation as well (e.g. Hydroxyurea/ Thiotepa/ Total Parenteral Nutrition): Pays to know the trends early

• Physicians & Institutions Increasingly Rely on KOL Guidance for Prescribing New Drugs

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Key Targets

KOLs

1. May Help Expand the Market for a Product through Establishing New Protocol

2. May Help Sales Indirectly

3. Important to be Associated With….. Although they May Not Prescribe Your Products in Large Volumes. Meet if Possible, Follow Trend

Aren’t KOL’s Key Customers? Partners?

20

Key Targets

1. KACs: Prescribers & Directly Generate Revenue Important as Attached to Several Hospitals

2. Products Availability in Hospital Pharmacies a Must as Hospital Management Insist Purchase of Products from their Pharmacy Only

3. KAC’s Must be Met Very Regularly & Since Institute’s Price is Lower, Should be Audited for Sales Returns

4. Profitability Profiling Necessary……….5. Determine GP Coverage? Or Consultant Coverage

Only?

The Key Accounts Concept

1. Aren’t We Aware of It?2. Product Availability in Pharmacies of Institutions

Such as:* AIIMS / * Apollo Hospital Chain* Tata Memorial Hospital/ * Gujarat Civil Hospital* TNMSC/

* Many Other Government & Private Bodies

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• Considered as Valued Clients & Help Position Products Elsewhere

Presenter

Presentation Notes

Don’t we quote that we supply to such prime institutes?

22

Let Us Look At

The Different K’s Collectively

vis-à-vis Key Account - Management

&

The Corporate Objectives

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KOL / KAC / Key Account ---- Management The K’s vis-à-vis Corporate Objectives Are

A Set of Potentially Profitable ActivitiesTheoretically & Functionally Appearing Similar

Varying in the Output

Requiring Optimization of the Matrix

To Achieve Primary Objectives of the Organization

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A Set of Potentially Profitable Activities

Theoretically & Functionally Appearing Similar Varying in the Output



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Theoretically & Functionally Appearing Similar

Varying in the Degrees of Outcome



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Helping Optimization of the Matrix


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Helping Optimization of the Matrix

To Achieve the Primary Objectives of the Organization

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Free Samples*

Personal Tours!Literatures *

Conferences !

Detailing?

Good Product

MonographLBL/Visual Aid

Scientific Updates

Company Needs

?

?

Gifts ! CMEs

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Gifts !

Free Samples*

Personal Tours!Literatures *

Conferences !

Detailing?

Good Product

MonographLBL/Visual Aid

Scientific Updates

CRMCustomerSolution

CMEs

Convenient Appointment

asMedical

Advisor or Consultant

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Interesting Current Model Vs Futuristic Model Influencing the Sale

&

How it May Shape Up in India

3131

Today Future

Ref: Developing Customer Process Orientation Alt_Puschmann BPMJ 2005Business Process Management J. 11 (2005)4: 297-315

Can You Ignore Patient?

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Although Patient is the End UserTraditionally, Doctor is the Client for Pharma

Obviously, Instead of Ignoring the Patient, One May Have to Find Ways to Engage him

Albeit Ethically

Costing May Have to be Controlled

Communicating Economically & Yet Effectively With the Patient Would Require Creativity

Can You Ignore Patient Communication?

33

KAC vis-à-vis KAM Catch & TrapExtra Costs May Make the Model Weaker……

• Hospital Bargains Hard For Price: • Innovator, L1 & L2 Approved is the Norm• At Least Three Competing Products in Pharmacy • Hospital as a ‘Key Account’ Has a Lot of Limitation

vis-à-vis Company

• Doctors Must be Won Over For Prescription or the Products Do Not Move in Pharmacy

• Why Do Indian Companies Have to Compete as L1 & L2 When Quality could be As Good As MNC?

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Provide Ongoing

Cooperation

Deliver Consistent

Quality

Trust Based Customer

Relationship

Deliver Consistent

Performance

Deliver Meaningful

Value

Be Competitive Not Necessarily

the Cheapest

Communicate With Me

KAM Concept

Demonstrate Flexibility & Innovation

Extrinsic Attributes Intrinsic Attributes

3535

Provide Ongoing

Cooperation

Deliver Consistent

Quality

Deliver Consistent

Performance

Deliver Meaningful

Value


the Cheapest

Communicate With Me


ExtrinsicAttributes

IntrinsicAttributes

The White Flag Means Surrender

Surrender Compulsions

orCompromise

3636

Provide Ongoing

Cooperation

Deliver Consistent

Quality

Deliver Consistent

Performance

Deliver Meaningful

Value


the Cheapest

Communicate With Me


ExtrinsicAttributes

IntrinsicAttributes

The White Flag Means Surrender

Red Flag: Drop in

MarketingConcept

Surrender Compulsions

orCompromise

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KAM KAC

TradeSale

Approach

ProductQuality

ProductValue

ProductPositioning

Goal

Primary Attributes Focused

AttainingThe Desired Goal

Primary Attributes Primary Focus

383838

KAC wrongly

Interpreted

CRMWrong

Interpretation as

TransactionModel

Trade SaleApproach

Price

Goal

Quality

Brand Value

Positioning

When Quality &

Trust is Breached

KAM Would Fail to Deliver Desired Results

Secondary Attributes Primary Focus

Marketing FocusLost

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Analyzing the Prescription Definition

A Prescription is an Order/Advice by the Doctor:• To the Patient to Purchase the Drug & to Consume

it in a Particular Manner• To the Retailer to Sale the Drug to the Patient• To the Company to Make it Available at the Counter

• There are A Lot Many Connected Activities & Since Substitution of Drug is Prohibited, Generation of Prescription Amounts to the Sale

Field Force: Does Create, Enable & Sustain Prescription

• Unfortunately Only the Sales & Not the Marketing Invariably Considered- Wrongly- as the Only Key

Their Customers Considered the only Key Customers!

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Analyzing the Prescription Definition

• FF is the Signatory • Authors Could be At the HO or in Field• It is a Multi-numbered Lock

41

• Conceptualization • Backward Integration With Quality Personnel is

Equally Important,

• Backward Integration Ignored Consistently• Quality First / Client as a Consequence

• Without Innovation & Consistent Quality, Building Client Rapport & Long Term Relationship

With Clients isn’t Possible,

Reaching & Staying at the Top

42

Schoolboy Concept of Essay on Rural India vis-à-vis Football

CRM in the Hands of Sales Personnel is Like

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Price Price

Product Product

Personnel Personnel

Positioning Positioning

Place Patient

Package to

Patient

Price to Hospital

Organization Hospital

Deliver Consistent Quality, Deliver Consistent Performance, Deliver Meaningful Value, Provide Ongoing Cooperation, Communicate With Me, Be Competitive Demonstrate Flexibility & Innovation Not Necessarily the Cheapest

5 P Match

44

Skeptic: Why KAM?

Change is a Need Based Action

The Only Person Who Always Likes a Change is a Wet Baby

Which it Can’t Do by Itself&

Must Invite & Involve Others for Help

45

Why KAM: International GenesisNeed Based

1. Pharma Encountered Economic Recession, earlier in (2005 & 2006).

2. “Sales Forces Bloated Earlier” 3. Pharma Sales Reps Started Losing Jobs in Thousands…..

4. “Hence No Other Way but to turn to technology.”

5. CRM software may be more critical than ever to the pharma Industry (Hagemeyer, Gartner Research Managing VP).

(Ref. Market Focus: Pharmaceuticals -- CRM Undergoes an Experimental New Treatment, An older CRM vertical gets a new dose of on-demand technology)

By Lauren McKay

46

KAM under the spotlight: by David Round

The British Experience With KAMhttp://www.pharmafield.co.uk/features/2011/12/KAM-under-the-spotlight

Claims

* Hence Now Using More Sophisticated Approach to

Sales & Marketing Activity

* Delivering More Efficient & Effective Commercial

Model Using a Targeted KAM Methodology

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• Dec 09 & Dec 10 –Working According to KAM ?

• 92.7% of UK GPs had a Face-to-Face Call or Meeting With a Medical Rep from Pharma

• This indicates, the industry was still carrying out almost blanket coverage of GPs.

• The 2010 Merely Continued a Similar Trend from the years that preceded it –

• Past Decade Annual Industry Coverage Consistently Reached Over 90% of the Total Prescriber Population.

KAM under the spotlight: by David Round

The British Experience With KAMhttp://www.pharmafield.co.uk/features/2011/12/KAM-under-the-spotlight

48

KAM under the spotlight: by David Round The British Experience With KAM continued

http://www.pharmafield.co.uk/features/2011/12/KAM-under-the-spotlight

• July ’10 to June ’11, GPs Face-to-Face Call/Meeting with an Industry Representative dropped to 85

• In the First 6 Months of 2011 the Total No. of GPs Who Have Had A Similar Contact Slumped to 73%.

• Now Face-to-face calls/ rep/day falling year-on-year. • No. of meetings (per rep/day) has gradually risen • The Synmetrics data: more meetings taking place

today than at any point in the past 10 years; and• Crucially in 2010 the No. of Meetings/Day Overtook

the No. of face-to-face calls for the First Time.

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Current Trend: A Positive Shift Towards KAM

• Data shows: 17,000 GPs – (around 35%) didn’t receive a Face-to-Face call in the Last 12 Months of ‘10 – 11’

• There’s a Concomitant Increase in the No. of meetings

• A significant drop in face-to-face call activity, • Over 1/3rd of Pharma’s Traditional Customer

Population Not Receiving a Single Call• It’s still too early to make definitive claims that the

KAM model is firmly embedded in UK Pharma.• KAM Picking Up or Call reduction by Compulsion?

Thrust Relatively New

50

Team Management: International Vs Indian Scene

• Account Managers are Encouraged to Develop Their Own Call Plans

• Become More Accountable for Their Own Business• Need Robust & Effective Data to Make Informed

Targeting Decisions in the Process is Paramount

• Strong Feedback System Desirable & • Sharing of the Collected Data Utmost Important• Liaison: Sales Team, PMT & KA Manager: Key to Success• Is Field Force Reduction a Compulsion in India? • If Not…. How Effectively to Use Them For Arranging

Meetings For KA Manager & KOL/KAC…..

51

Lack of Understanding About KA Manager Job FunctionUnderstanding Attributes Required

Developing PersonnelInternal Integration

Their Hospital Work Meaningful Communication

Avoids Repeat Calls by different Sales Personnel to same Customer / Purchaser

All Round Knowledge & Focus on Company Perspective Helps Snatch Profitable Deal

Sales Personnel With Limited Strategic Understanding May Not be the Answer for KAM

Key Account Managers Need More Freedom

KAM Perspective

Integrated Communication Keeping in Mind Company Perspectives Important

52

How Do Consumers Choose…. Among Products & Services?

• Performance > Expectations => Satisfaction

# Performance < Expectations => Dissatisfaction

Only A Senior & Mature Person Can Handle it Properly

Company Needs an “Uncompromising Attitude” Towards Maintaining “Product Quality”

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A Simple Sales Person Cannot Understand the Intricacies

Key Account Management is a Specialized Function

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“MR or FLM” Conducted Activities VersusKey Accounts Manager Managed Activities

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Blake & Mouton

1/9The customers

friend

9/9The problem

solver

1/1The order

taker

9/1The pressure

salesman

5/5Compromise

“Method” approach

Concern for customer

Concern for making the sale

9

191

http://en.wikipedia.org/w

iki/Manageri

al_grid_model

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CAP: (Ward - Strategic Management Accounting)

the “Customer Account Profitability” is

“The Total Sales Revenue Generated from a Customer or Customer Group....

Less All the Costs that are Incurred

In Servicing that Customer or Customer Group.”

57

CAP: (Ward - Strategic Management Accounting)

the “Customer Account Profitability” is

“The Total Sales Revenue Generated from a Customer or Customer Group....

Less All the Costs that are Incurred

In Servicing that Customer or Customer Group.”

Where Would You Put KOL?

58

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10%

50-60%

30 – 35%

30%

60 %10 to 15%

Identify Your Important CustomersPareto’s 80:20 or 10:30:60 aren’t Absolute Ratios

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10%

50-60%

30 – 35%

30%

60 %10 to 15%

Pareto Principle Helps Identify Important Customers

The List is More Likely to be Dynamic than Static

60

10%

60 %

30%

10%

60%

30%

Representative Chart Not Absolute Guide% Marketing Spend Per Segment

Invert the Pyramid and Supercharge Your Profits, by Mark Pricehttp://mnama.blogspot.in/2010_11_01_archive.html

http://3.bp.blogspot.com/_4YZAh7cfTLk/TO1mlj8hwuI/AAAAAAAAACs/fphSYa4DCWg/s1600/Untitled1.png

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Find Economic Ways to Reach Them

Key

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62http://www.expertprogrammanagement.com/wp-content/uploads/2011/06/currys-pyramid.png

Curry’s Pyramid: Classifying Customers

Gold

Silver

Bronze

White

63

What do we want to achieve?

What is happening?

Why is it happening?

What should we do about it?

⇓

Goal setting

Performance Measurement

Performance Diagnosis

Corrective Action

⇓

⇓

Age Old Matrix for ‘Performance & Goal’ Audit

64

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http://www.1000ventures.com/business_guide/crosscuttings/achievement_ability.html

66

Grade 1 2 3 4 5

Physician

Patient

Hospital

Pharmacy

In KAM, Why have L1, L2? Why not a Single Drug Choice to the Prescribing Doctor?

Or Why not Commitment for a• Fixed Minimum Order & • Non-returnable Supply?

With KAM in Place Why Not Special Consideration?

With L1 & L2, There is Still Pressure to Work for Prescription With the Physician Independently

67

http://www.csas.ed.ac.uk/__data/assets/pdf_file/0003/38829/PharmaDistributionIndia.pdf

Pharmaceuticals Distribution System in India, Center for International Health Policy

Working Paper July 2,3, 2007

68

Wholesaler

A Potential Entry Point for Spurious Drugs?Could Nurturing them For Clean Business be Important?

Encourage KAM & Hence the Direct Medical Supplyto Institutions, Hospitals as a

Good Channel to Prevent Spurious Drug Entry

Can KAM be Positioned to Convince &Influence Smaller

Hospitals & Nursing Homes For Business

69

Key Account Manager

Selection & Perpetuity is Important

Hierarchy in the SystemCooperation from HO & Field Personnel Essential

Training the Key Account ManagerKnowing Overall Aspects of Commerce & Quality

Nurturing Key Account ManagerTargets/Incentives

70

How Many Key Accounts?

Visit the Business Triangle: Profit/Serviceable!

Corporate Hospitals or Government Business?

Layers or Gradations Possible Within Segment

Loss of a Single Account May Mean a Setback

Cannot Possibly Ignore Trade Business to Protect From Sudden Account Loss?

Specialty Products? Liquidating Stocks Quickly?Product Centric? Company Centric?

71

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*

*

*

72

Newer Challenges: Paradigm Shift

Trend of Pharma Companies Setting Own Hospitals

Why Would They Buy Crucial & Costly Products From Others

Hospital Chains Getting Own Products Manufactured

Ophthalmic LensesMedicines

Bound to Restrict the Space for Many Companies

73

Challenges In Designing Business Strategy

1. Trade Business or Tender Business? Government Business or Corporate Hospitals?

2. Hospitals: Generally Injectables, 3. Trade: Oral Medications4. Difficult to Evade Retailer Business, as…. Batch Scale

Up/ Batch Economy Possible Only with Liquidation…. 5. Quicker Liquidation: Fresh Batch on Shelf6. Reaching Private Practitioners, Repeat Calls? 7. Ideal Blend of Call versus Business Needs to be

Decided

Perspectives: Field Personnel Vs Organization

• Salary on Time• Product/Price

• Incentives• CRM

(for Important Clients) consistently

• Expenses Reimbursement

on time Regularly

• Sales/Revenue• Profit

• Innovation• Competence &

Commitment (from the Personnel)

• Engagement With Key Customers & Institutions

74

The Mnemonic: SPICE Explains the Conflict

7575

To Be or Not To Be?

1. KAM is Not a Transaction but a Win-Win Model, 2. Not Applicable to Every Organization3. Choose Model Suitable for the Organization4. The KA Manager Has to be a Senior Position5. Select & Train The Key Accounts Managers 6. Nurture & Retain The Key Account Managers7. Support from Sales & Marketing Absolute Must8. Regular Auditing to Select / Deselect Accounts

Desirable as Key Account = Profitability9. KOLs May or May Not Be Key Accounts (Direct

profitability) but Worth Following……

76

Can Group Product Managers be Groomed?As they Help Define & Set Targets

Know Products & Aware of Quality ProfileKnow Finances & Company Policies

Can Integrate & Reverse Integrate Seamlessly With Mfg./QA/ Finance/Sales

Why Not Have Jr. Product Managers at Metro Cities?

Can Train Newly Inducted Personnel Work in Field in the Region

Generate Feedbacks Useful for HO

Wonder, Who Can Possibly Handle the Job?

77

Re-orientation of the Focus is the Key

Use Modern Techniques to:* Convert Data in to Useful Information * Audit Customers / Accounts*Select/Deselect According to Results Dispassionately

78

KAM Does Not Fail

It is the Dilution of Focus on Basic Attributes

& Misfit With Business Type

Which Derails the Process

Thank You

why kam fails 1302 pres show

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