This document will seek to evident the effect of reducing pharmaceutical sales representatives in that the reduction of the sales force leads to decreased sales associated with pharmaceuticals. Currently in many fields, sales are closely related to the effort put in an attempt to move the products to the target market. The rationale behind this study lies on the assumption that, if reduction of the pharmaceutical sales force is done, there will be a decrease in the sales costs in the business (Goldman, 2003).
This basically proves important since majority of the sales people aim at beating a given sales in the selected target market and therefore this efforts increases the sales in the business. Abstract In the context of this paper, sales representative with in pharmaceutical industry are trained personnel who are specialists in their area of specialization and normally offers mobile pharmaceutical services to their targeted clients. This paper will reckon the major effect the reduction will have on the industry by borrowing much from the study findings.
Since human element is vital in the sales force employed by any pharmaceutical business, any change done that directly affect the sales force will impact heavily on the businesses operations as well as the performance. This document will center on the major issues which have led to my current assumption that, reduction in sales force will impact the pharmaceutical sales performance. As it will be indicated later, sales force with in pharmaceutical businesses deals with a sensitive area of the drags business and the stake role is vital in the market as much as it’s imperative in the business operations (Worthen, 2004).
This research paper will therefore seek to use the theoretical framework from the pharmaceutical industry backed up with the research findings concluded from the research work. Today medical service rendering industry is well known to be highly competitive industry that requires proper management of available resources in ensuring that the costs meant for maintaining the businesses operations are kept at minimum. This paper will explore the significance of the sales representatives in moving the businesses sales and the correction between the numbers in the sales force and the subsequent sales costs yield.
Sales force in this service rendering organization faces major challenges that ought to be resolved in an attempt to ensure that the high numbers in the sales team is maintained in order to boost the pharmaceutical sales For the interest of this document analysis and representation of these issues will adopt scientific approach borrowing a lot from the sales force perspective on the issues affecting the pharmaceutical businesses (Maynard, 2006). Introduction
Pharmaceutical stand to benefits from proper sales representative management by ensuring the required number of the team is maintained during both business peak and off-peak seasons in order to stabilize sales. A well managed sales representative team entails proper motivation strategies, proper remunerations programs, performance appraisals, capacity building, teamwork spirit and establishment of attainable sales targets in order to govern the sales processes adequately (Teena, 2005).
In this research paper issues such as sales quotas, sales projections, sales targets, sales team recruitment and training will be used to analyze the quality of the sales performance as well the type of the sales team in the market sales effort play. This document will also introduce the various activities of the sales department as well as the sales manager in the process of governing sales movements or trends in the pharmaceutical business. This research will acknowledge the findings on pharmaceutical sales management and any other literature used in the subsequent discussion.
For interpretation, this study analyses the significant issues that poses enormous effects on pharmaceutical sales costs in relation to the sales representative efforts. In the interpretation the role of in the sales team numbers will play a vital responsibility in ensuring that the study topic is clearly justified. This paper will support the argument by considering the various factors which direc6tly or indirectly impact sales volumes in the pharmaceutical businesses today.
Various factors that tend to affect the sales volumes will include the effect of sales representative numbers and the quality of training in the team pushing the business sales (Landefeld, 2009). During the study elements such as sales ledger books, sales targets and other sales records will be bused to analyze the effect of the sales team to the sales volumes. The basic statistics and data findings to be used will be based on the indicated pharmaceutical business. Use of tables and statistical analysis will help evaluate the pharmaceutical sales performance over a given period of the year.
The analysis of this will be made possible by the overview given the subsequent section on literature review . By analyzing these results in the discussion section; this study seeks to recommend some changes in the sales management that governs the pharmaceutical sales operations as a whole. This study scope will be limited to the entire pharmaceutical structure and its relations to the sales management versus the current sales supporting documents. In the end the paper will evaluate the objective of the study by giving an overview of the thesis in the conclusion section
Literature review Introduction Numerous studies have been conducted that relates to the sales analysis in different pharmaceuticals business around the world. Although this research borrows much in the concepts applied in the previous studies, the subsequent result findings from the research will not lay any prejudice on the previous researches results. These studies have given immense contribution on the issues by using the ideas and philosophies in the analysis of the concluded results from such studies.
Much of these studies have tried to resolve the sales representative reduction crisis surrounding many pharmaceuticals since industrialization era. These issues have been focused in the recent years and much policy on pharmaceuticals regulations and management of sales activities in the new technological era (Smith, 1997). In this review let’s focus on the main issues that elaborate on various elements or effects the pharmaceuticals sales representative streamlining on the organization’s sales volumes as discussed below.
First, the recruitment of the right number of sales representative with the required skills and job knowledge through training and orientation has been noted by many researchers as an important issue that directly affects sales volumes in the pharmaceuticals business (Stevens, &Kinni, 2006). According to researchers any pharmaceuticals ought to have the required skills to perform the sales tasks allocated to them to a given location.
At times retraining and refresher courses can help rejuvenate the latent capacity in the sales team but, the sole idea is that the pharmaceuticals must have the preliminary numbers for them to be productive at their sales levels. It is these basic sales team size and skills which will form the basis of evaluating the pharmaceuticals performance levels and productivity. In fact, over the past twenty years several substantial empirical studies on the impact of reducing the sales team in relation to volume of drugs sold have been conducted.
Among the numerous findings, the most significant result suggests that the business sales volumes are squarely determined by the out put of each sales representative. Second, according to the researchers many pharmaceuticals have embraced this move in the 21st century more seriously as compared in the 18th century. In fact in the current statistics from US indicates that pharmaceuticals sales representatives are estimated to be 100,000 who main target is to pursue the set sales volumes. Many records show that the 1970s sales performances in many national pharmaceuticals in US were as low as $100 per month.
The main reason attributed to this was the fact that, many pharmaceuticals had not embraced the importance of high numbers of sales reps in the pharmaceuticals marketing. Some suggestions given by the researchers include the following (Smith, 1997). One , the pharmaceuticals had to retrain the current manpower in an attempt to meet the target market demands of their drugs by involving personnel selling rather than relying on the over the counter strategy which is normally restricted to the business clients who can afford to visit the business premise.
Two, other researchers suggested that the present pharmaceuticals had to establish full fledged sales management in an attempt to alias with the HR department in order to secure the right number of sales reps to move the pharmaceuticals products(Goldman, 2003). Third, the late 1980s ten studies showed that there was a persistent lack of economies of scale in the firm decision to reduce the sales force in an attempt to cut expenses of the pharmaceuticals sales team.
In fact the reduction of the sales reps led to over storage of drugs ought to be distributed to the market if the services of the sales reps were enhanced. This over storage means that the produced drugs were not reaching the market in the right time and this saw the sales volumes of the pharmaceuticals go down at a considerable margin. On small scale by early 1990s, very few firms in Europe embraced the idea of involving trained physician in field selling in order to boost the sales.
In the early 1990s there was persistent lack of service quality data on pharmaceutical management and therefore the then studies could not sufficiently develop a parameter of measuring sales reps proficiency and out put in relation to their set sales volumes (MedZilla, 2004) According to researchers high sales are met by pharmaceutical which seeks to recruit high numbers of able and skilled sales reps in order to move their sales. Research Methodology The purpose of this research paper is to concentrate on the most important findings relating to the sales volumes of pharmaceuticals business in relation to sales reps reduction.
This study adopted a scientific approach in data collection, interpretations, analysis, presentation and the current reporting procedures. During data collection the researcher used observations, surveys, or historical records in getting relevant information on the study subject matter. By first reviewing the of pharmaceuticals business publications, the researcher formulated some criterion to be used in issue selection in order to offer relevant data on effect of sales reps on pharmaceuticals sales volumes.
First, the study chose the issue which had potential cost significant effects on the of pharmaceuticals business. Second, the study selected any issue on of pharmaceuticals sales management that was assumed to be an emerging issue or with the potential to affect the firm’s sales projections in the near future. Finally, the researcher also considered sales reps issues that seemed to have current or present effects or consequences in the short term basis of pharmaceuticals business (Blaisdell, 2001) The study target population included the fifteen random selected samples from a population of 300 members.
In the sampling the study used stratified technique plus snowballing approach in order to reduce the response error margin. The results were analyzed and evaluated by use of tables and graphs. The values presented in the study are based on Argentina Pesos and Swedish SEK. All the data on costs of various aspects in the pharmaceutical sales are presented on annual basis, depending on the firm’s financial reporting schedule and the availability of such records. Some assumptions were used in the generalization and interpretation of the financial reports.
There existed some differences in the responses given and were undoubtedly caused by the sales management support team on the contribution of sales people to the business sales volumes. Research findings In summary the research findings included the following. First, the most profitable pharmaceuticals businesses are those which engage well trained high numbers of sale reps in moving the firm’s products. The increase in profit is always proportional to the sales volumes in relation to the sales force engaged in the selling process (Smith, 1997).
Second, improved sales force efforts leads to increases in sales volumes in the pharmaceutical business over a given period of the year. This improvement relates to the trainings as well as acquisition of skills to the sales reps deployed in the field in an attempt to push sales in the given market segment. Third, when the sales reps are widely spread in a given sales quota in large numbers the sales of the business are recorded at high levels for a specific period required to meet the target.
In order to ensure that the sales targets are attained the sales reps are evenly distributed to cover a given region at a given season, these sales records are then compared to the previous season sales to determine the sales volumes trends. Results discussion First, the sales volumes are determine by any increase in the sales reps in the field work activities. These sales reps have various responsibilities which includes; Selling of products and assists in managing sales accounts, helps in presenting business’ drugs to dentists, pharmacists and physicians, links the company to the consumers during products presentation.
More profitable pharmaceuticals engage large sales force by deploying the personnel to the sales quotas (MedZilla, 2004) . The following table shows the shift in profits based on Swedish pharmaceuticals data archive. Note that the currency presented is in Swedish SEK. From data below, the sales in the Swedish pharmaceuticals business in January was recorded low since the sales reps were reduced to a substantial number due to economic crisis facing the world. As result the profit margin dropped due to the reduced numbers of the sales reps.