MERI-Journal of Management & IT

Abstract

Indian Pharmaceutical sector that was practically non-existent in 1970s, is now considered as one among the top five pharmaceutical emerging markets of the world. Marketing has always been a major thrust area for pharmaceutical industry. Personal selling through MRs was the only method of promotion of pharmaceutical products till about a decade ago. However the period post liberalization saw many changes in Indian pharmaceutical Industry(IPL). Huge expenditure, upto 15-20% of the annual product revenue on the sales force, with a questionable ROI was putting a lot of pressure on these firms. To intensify the competition The Indian Patents (Amendment) Act was implemented in 2005. This resulted in a paradigm shift in the marketing and promotion strategy adopted by the industry. The traditional model of promotion through personal selling was replaced by newer sales models like channel management & key account management through customer relationship management (CRM) strategies.

This research paper gives a qualitative research review of the CRM & e-CRM strategies adopted by the selected pharmaceutical companies of India with the help of secondary data sources and opinion survey of company officials in Delhi.Although Indian Pharma industry has adopted the newer technology to build and enhance its relationship with doctors but the ironic fact is that it is still staggering with the proper and effective implementation of the selected CRM Software. The major reason for the same is lack of willingness on part of the sales team (as found during personal interactions with the sales managers of these firms), to accept and adopt this new technology.

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Abstract

Background- Pharmaceutical companies often focus their CRM strategies towards doctors only. An important aspect that they ignore in the pharmaceutical prescription process is the role of chemist. The prescription written by the doctor is honoured by the chemist and more often than always, the brand prescribed by the doctor may get substituted at the chemist level in case the same is not available or if the patient insists on buying a low priced version of the same drug formulation. Role of chemist is therefore crucial in the sales generation of pharmaceutical products. However the irony of the situation is that effective relationship management at chemist level is still weak with majority of the pharmaceutical companies in India. This paper tries to analyze the extent of use of CRM strategies by the pharmaceutical companies and their effectiveness with chemists in Delhi city.

Methods- A sample of 150 Chemists from different areas of Delhi city were selected through Non-probability method sampling method. The selection of the chemist was based upon Judgement Sampling technique and the criteria of selection was based on vicinity(within 1 Km) to a major hospital/Nursing Home/Practicing doctor. The responses generated were marked on a 5 point Likert scale ranging from “Strongly disagree (score=1) to Strongly agree(score=5).

Results: While MR visits, conducting retailers meet, giving discounts, schemes & offers on purchase of products, gifts such as pen, writing pad, mugs, T-shirts etc. are commonly used offline CRM tactics at retail level. The online tactics include the use of specialized software like ERP solutions, CRM solutions and SCM software. Chemists keep stocks only once the prescription is generated from the doctor, not on the recommendation of MR.

Conclusions: Chemists find incentive schemes offered by the companies as the most lucrative and effective CRM tactic. Often in the initial stage when prescription of a new product is generated and the stock of the same is not available at the chemist counter than it is substituted with some other brand having same or similar molecule. E-CRM strategies are still not very popular with the chemist/pharmacist.

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