KRAMER’S PHARMACEUTICAL CASE STUDY

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About Kramer Pharmaceuticals

Major manufacturer of prescription drugs (medical & dental)

Sales exceeded $400 million in 1977

Headquartered in Denver

Kramer’s HierarchySales Vice President

Zone Manager 1

Zone Manager 2

Zone Manager 3

District Manager 15

Detailers 15Detailers 16

District Manager 16

District Manager 17

Zone Manager 4

Zone Manager 5

Zone Manager 6

Sales Force Team

Over 500 detailers

Job Description

Regularly called on hospital personal, doctors, and dentist on products

Each detailer was responsible for about 200 physicians (in his/ her territory)

6 to 9 calls per day to doctor or hospital

Sales Force Team (contd..)

Job Specification Pharmacy School Graduate Few year experience

Receives Training Product characteristics Selling skills

On the Job training

Sales Force Team (contd..)

Composition of Sales Team(experience basis)

60% of detailers have 10 or more years experience

25% had less than 5 years experience

Age basis

50% were 40 years or above

25% were below 30

Sales Force Team (contd..)

Remuneration

Salaried and annual bonus based on performance

Bonus amounts to 15% of total earnings

Company’s automobile

General fringe benefits

Sales Force Team (contd..)

Evaluation Once a year (formal)

Whenever necessary (informal)

Done on basis of Sales volume

Improvement in relationship with customers

Evaluation from District Mgr

About Bob Marsh

Graduated from top-flight pharmacy

1966, manager of prescription department in a major drug store, Toledo, Ohio.

Became detailer for Kramer Pharmaceuticals in 1966

Initial Salary offered was $14000 a year

Assigned to a territory in Teledo.

About Bob Marsh (contd)

Worked under

John Meredith (1966-71)

Bill Couch (1971-1974)

Jim Rathbun (1974-1976)

Vince Reed (1976-77)

Tom Wilkens (1977-78)

Tom Franklin (1978)

Working under John Meridith

Favorable Report Hard worker Well received by Physicians Anxious to do well Appreciates and follows instructions

well Cooperative

Unfavorable View Prejudging Customer Not much responsive to

management directives Not much planning and organization

• Hired him

• Performance and Salaries

– Below Standard in 1968 and salary was raised to $16000

– Substantial improvement in 1969 & salary was raised to $17000

– Complete Satisfactory in 1970-71 & salary was raised to $20000

Working under Bill Couch Favorable Report

Outstanding reception in physician offices & drug store

Gratifying improvement in drug store sale

Good acceptance by fellow associate

Excellent attitude and company loyalty

Work performance and attitude was graded well above average

• Performance and Salaries– Gave Satisfactory performance from 1971-1974 and salary was raised to $24000

– Received additional duty

Working with Jim Rathbun

Report Poor attitude and careless organization

Inattention to planning and follow up

Failing to attend set goals

Performance and Salaries Overall satisfactory; though was on probation period

No increase in salary in 1975, later increased to $25ooo in 1976

Working with Vince Reed

Report Slow acceptance of new products among Marsh’s customer Physician sale was not up to the mark Marsh’s organization was still deficient

Performance and Salaries Initially favourable Later performance slipped and has become completely

unsatisfactory Marsh had an salary increase in 1977 to $25000

Working with Tom Wilkens

Observations

Spend few days on field with Marsh

Confirmed the observation made by earlier supervisors

Salary and Performance

Probation period was removed

No increase in salary for 1978

Working with Tom Franklin Report

Not good record Has less time to show improvement

Survival Procedures

Improvement in Sincerity Loyalty Cooperation Work habits

Franklin’s Program Call him for the review of progress at

appointed time each week Weekly reading assignment(technical

and Promotion literature Submit written summary of report Complete questionaires on his major

hospitals

Salary and Performance Bad start of the program Effect of removal became less Finally at 44 he was asked to resign

Bob’s Performance at Kramer

Hard working Good in personal selling Anxious to do well Cooperative Unplanned Unorganized Less Sincere

Bob’s Salary in Kramer’s

0

5

10

15

20

25

30

1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978

Salary

Salary

Bob’s Salary in Kramer’s

0

5

10

15

20

25

30

1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978

Salary

Salary

No hike in Salary

Bob’s Performance

Years Review District Managers1966 Excellent Meredith1967 Below Standard Meredith1968 Below Standard Meredith1969 Standard Meredith1970 Above Average Meredith1971 Satisfactory Bill Couch1972 Satisfactory Bill Couch1973 Satisfactory Bill Couch1974 Well above average Bill Couch1975 Satisfactory Jim Rathbun1976 Satisfactory Vince Reed1977 Completely Unsatisfactory Tom Wilkens1978 Asked to Resign Tom Franklins

Bob’s Performance

Years Review District Managers1966 Excellent Meredith1967 Below Standard Meredith1968 Below Standard Meredith1969 Standard Meredith1970 Above Average Meredith1971 Satisfactory Bill Couch1972 Satisfactory Bill Couch1973 Satisfactory Bill Couch1974 Well above average Bill Couch1975 Satisfactory Jim Rathbun1976 Satisfactory Vince Reed1977 Completely Unsatisfactory Tom Wilkens1978 Asked to Resign Tom Franklins

Frequent change of District Manager

Analysis of Bob’s Performance

Performed and improved well under Meredith and Bill Couch

Salary constantly increased upto 1974

Excellent references and credentials

Had an outstanding image on client’s mind

Management’s Role

Kept focusing on weakness rather than strength

Punishment instead of motivation

Frequent change in supervisor

Younger supervisors

Suggestion

Relocating Bob

Introducing a new detailer to assist Bob

Use of motivation (other than monetary benefits)

Send him for training Programs

Thank You