Thai Drugs Subsidiary Boomed Essay Example

Boomed. Significant changes were made to Boomed's old strategy and a new sales strategy was implemented, including new sales roles and goals for the salespeople.

Chicanery faced a difficult and risky situation. The main issue was strong competition in the market for pharmaceuticals. In 2002, the domestic market for pharmaceuticals was worth IIS$900 million or THEBE billion, with foreign companies holding 35% of the market. Local Thai companies without Research and Development of new drugs accounted for another 35%, mainly in the local generic market, which was shared by 170 manufacturers who generated TPTB, 631 million in sales. The top 5 manufacturers had an 18.5% market share, while the rest was divided among 170 small-to-medium sized private or family-owned businesses. Boomed, on the other hand, only accounted for TABOO million in sales, which was much lower than an idealized average level of THEBE million (6631 *1/170). Consequently, Boomed had a very small presence with just a .07% share of the local generic market in 2002 and was not competitive in Thailand.

Boomed lacked market focus (place) in Thailand as they did not emphasize any specific market segment among hospitals, drugstores, and doctor clinics. Sales representatives did not follow a disciplined approach while approaching these segments, resulting in a scattered approach to generate sales from any potential customer.

The absence of a clear product/market orientation is a characteristic of Boomed's Disconnected Market Strategy. The majority of the company's generic drugs lacked differentiation and were considered commodity-type, covering a wide range of drug categories.

The challenge of promotion is increased by the combination of a single customer contact and a complex sales role. The sales

representatives at Boomed are the customer's sole point of contact, which creates difficulties in understanding their main roles and the products they offer.

The importance of factors like product cost, transportation cost, and ordering costs for maximizing TAB contribution was overlooked. Different territories were not held to specific standards despite varying income and education levels in Thailand. The management did not realize that some sales territories had more potential than others. Additionally, the new Compensation Plan presented challenges in helping sales reps adjust to the new market strategy with fewer errors.

It may be necessary to implement training measures and consider the possibility of some representatives not being able to transition. Additionally, sales representatives may perceive a potential risk to their income and respond negatively at first.

Critical Analysis:

Despite fierce competition, including from small and family-owned businesses, Boomed has considerable market potential as long as it distinguishes itself in terms of products, promotions, and maintaining its high-quality and service-oriented value proposition. To further stand out, Boomed must develop an effective branding strategy to attract customers and establish a credible brand image.

Boomer's products were found to be more suitable for customers at drugstores and clinics rather than hospitals. Therefore, their sales reps were required to generate at least 60% of their contributions from these target segments.

To boost sales volume and lower unit costs, all sales representatives must promote the selected 10-15 items. The objective is to increase sales for each item across all territories, creating economies of scales. Boomed will reduce prices for the focused items, creating a virtuous circle. Sales reps must ensure that 75% of total contribution is

from these items.

The selection criteria for preferred items includes having respective sugar-coated tablets and multivitamins, skills not all manufacturers possess, and selling well in the past. It is important to note that the right pricing is not necessarily low pricing. The new Sales Strategy has resulted in adjusted sales roles and goals, with previous sales representatives having only one goal for sales volume.

To guarantee profitability, sales representatives had to maintain a balance between lowering the price in unit contribution and increasing the volume on a per-order basis, while emphasizing on maximizing the contribution margin.

Alternative Solutions:

In order to enhance sales performance, establish a positive business environment, encourage company loyalty, promote employee satisfaction, and retain valuable staff, it is suggested to design a new sales compensation system that motivates the sales force to alter their conduct in accordance with the newly adopted company strategy. Additionally, the implementation of non-monetary incentive programs and the introduction of a CRM (Customer Relationship Management) system can be beneficial.

Having accurate and current customer information can lead to improved business decisions. A proper CRM system can improve customer services,

reduce costs and waste, and address customer complaints for greater satisfaction and increased profits. Additionally, recognition, rewards, and appreciation programs provide non-monetary incentives that foster employee loyalty and boost morale.

It is imperative to prioritize the training of the sales force and add it to the agenda promptly. Adequate training for sales employees benefits both the company and its staff. Employee motivation and positivity increase through training, facilitating adaptation to changing circumstances. Furthermore, efficiency in operations, sales, and profitability can be enhanced through appropriate training.

The use of promotion mix is essential to distinguish yourself in the market. This mix is comprised of various elements, including advertising (such as on television, radio, and newspapers), direct marketing (through magazines, journals, or phone calls), public relations (which involves evaluating public attitudes), personal selling (one-on-one sales), and sales promotion (additional activities to encourage customer buying). Promotion mix is valuable in raising awareness about products, convincing people to purchase them, retaining loyal customers, increasing demand, competing against rivals, encouraging product trials, and minimizing sales fluctuations.

A non-monetary recognition or appraisal program centered on the sales reps' performance, specifically their ability to maintain positive customer relationships, should be considered.

It is important to monitor customer feedback and work towards creating lasting relationships. An efficient CRM system should be implemented to manage customer interactions and improve service. To prevent conflicts during the transition period, proper preparation is necessary.