DDD

1

• DDD
• Drug Distribution Data

The guide to effective sales force management
India
2
Points for discussion

• The Indian Pharma Market Challenges
  Opportunities
• Current Methods of Monitoring Medical Rep
  Performance
• What is DDD in India
• Snapshot of Sales Analyser
• Way Forward

3
Points for discussion

• The Indian Pharma Market Challenges
  Opportunities
• Current Methods of Monitoring Medical Rep
  Performance
• What is DDD in India
• Snapshot of Sales Analyser
• Way Forward

4
The retail market recorded an encouraging growth
in 2006, the highest growth performance witnessed
in the last decade
Source ORG IMS secondary sales audit MAT Dec 06
Revised IMS Prognosis 2006
5
While the mood is upbeat, these high growths also
pose a number of challenges for companies in the
IPM

• The opportunities and growth potential of the IPM
  has attracted many new players into the market,
  with the number of Organised Companies up from
  350 in 2005 to 450 in 2007
• Maintaining/ improving market share in this
  highly fragmented market is a challenge
• With industry benchmark at 15 - 18, the expected
  growth for companies to achieve is quite high
• Entry of new MNCs is likely to increase the
  battle for market share in the long run
• Increasing investments in promotional activities,
  due to higher level of competition, would
  possibly impact bottom-lines
• Recruitment/Retention of field force becoming
  increasingly difficult due to their increasing
  expectations competition from allied industries
  (KPOs, Retail etc.)

6
Identifying potential territories, tracking Sales
performance implementation of strategy by MR
continues to pose a challenge

• It is imperative for new entrants to identify
  potential territories within cities for gaining
  fast access to the market
• Higher market penetration calls for increased
  investments in distribution/logistics
  infrastructure for better chemist/Hospitals/Dr.
  reach
• Expansion of Field force is a must as Companies
  opt for increased Doctor coverage therapy
  focused SBU's
• High investments in these areas make it further
  imperative to track/Monitor MR performance
  evaluate ROI

7
Although challenging, identifying territory wise
sales is of utmost importance in developing
marketing strategies

• Territory wise sales will help companies
• Redefine MR territories based on their value
  potential
• Rationalize promotional investments on Doctors
  according to territory potential
• Defining rational sales targets for MRs based on
  territory potential
• Incentivise and Penalize MRs on the basis of
  performance
• Thus, monitoring the territory wise MR
  performance is the basis to develop effective
  city wise strategies hence improving the overall
  company performance across the country

8
Points for discussion

• The Indian Pharma Market Challenges
  Opportunities
• Current Methods of Monitoring Medical Rep
  Performance
• What is DDD in India
• Snapshot of Sales Analyser
• Way Forward

9
The challenge of evaluating MR performance cannot
be appreciated without a complete understanding
of the complex Indian Pharmaceutical Distribution
Channel
MANUFACTURER (100)
CF agents/Super Stockists
5
95
Stockist (18,000)
30
Sub stockist
5
4
2
56
28
Hospitals/ Institutions (20,000)
Pharmacy (240,000)
NGO/ others
(1-2)
(80-85)
(3-4)
(10-12)
CONSUMERS
10
Companies have developed various qualitative
tools, besides monitoring their primary sales, as
an indicator of Medical Rep performance.
11
Although internal purchase information of
individual stockists could be used for evaluation
of MR performance, the market complexities pose a
number of limitations in its use
Territory 1
Territory 2
Rep A Target 15000
Rep B Target 15000
Stockist
7000
3000
4000
3000
2000
4000
2000
1000
Sale in Territory 2- 15000
Sale in Territory 1- 10000
If the MRs target achievement is calculated by
adding up the purchases of all stockists in his
territory, Rep A could show better performance as
stockists from his territory are buying more, but
meeting the demand created by Rep B in territory
2. This makes the current practice of performance
monitoring not so robust
12
Therefore companies are willing to partner with
external agencies to provide a robust technique
to monitor MR performance

• Hence ORG IMS decided to Launch DDD, a tool to
  monitor the performance of sales representatives
  in their territories within a city

13
Points for discussion

• The Indian Pharma Market Challenges
  Opportunities
• Current Methods of Monitoring Medical Rep
  Performance
• What is DDD in India
• Snapshot of Sales Analyser
• Way Forward

14
DDD is a tool to monitor medical rep
performance, which captures sales data from
stockists to retailers and sub-stockists

• DDD is Direct Data from Distributors
• It is the sell out data from stockist to the
  chemists sub stockist at a granular level that
  represents the territory of each Medical Rep
  within each city
• DDD is unprojected panel data, therefore we will
  ensure min 80 value coverage for the companies
  within each city
• Thus by providing companies sale at a micro level
  DDD can be used as an effective monitoring tool
  for MRs performance

Point of capture
15
We have ensured that we cover all the important
geographies, distribution channels and companies
in DDD

• We cover the top 15 towns in the phase I of DDD,
  followed by rest 20 towns in Phase II
• We cover top 100 companies and some other
  important companies in each city
• We have ensured that we have over 80 coverage of
  stockists (live data) for each of these companies
  
• We have added the sales from stockists to
  sub-stockists along with the retailers as this
  substockist component ha significant contribution
  in some of the cities

16
We feel that 100 coverage of towns, companies
or stockists is neither essential nor feasible in
India

• A. Geography
• Coverage of top 35 cities would be sufficient
• There are 4000 Cities in India. 32 of the total
  sales comes from the Top 35 Metros and the
  remaining cities contribute to 68 of the sale
  (i.e. on an average each city contribute only
  0.02 of the total sales)

• Pool territory concept primarily exists in the
  Metro cities only due to the larger revenue base,
  larger geographies to be covered and a huge pool
  of doctors and retailers.
• Majority of Key Opinion Leaders practice in Metro
  cities only and their prescriptions gain higher
  importance for any company
• Most of the new introductions happen in Metro
  cities
• Patented products by MNCs are expected to launch
  in Metro cities only
• These cities have been the major growth drivers
  for companies till date

17

We are covering all the important companies in
each city

• B. Company coverage
• Top 100 companies at the national level are
  covered in all cities
• ORG IMS tracks 450 organized companies operating
  in the Indian Pharma Market, however top 100
  companies contribute over 90 in each city.
• All MNCs
• Since the new MNCs entering the country have very
  low turnover but focus only on metro cities
• Top 10 local companies in each of the cities that
  do not feature amongst the national top 100
  companies
• This will ensure that we do not miss out any
  regional important player

18
DDD will be launched in 15 metros in a phased
manner.
19
.the first 4 have already been launched cities
20

Though its not feasible to cover all the
stockists in a city, we ensure that they
represent over 80 in value for each of the
companies

• C. Stockist coverage
• We cover stockists that account for over 80 in
  terms of value to each of the companies covered
  in DDD
• Of the 18000 stockists in the Indian Pharma
  Distribution Network, 3500 stockists cover 35
  Metro cities
• Of the 3500 stockists, top 1600 stockists
  contribute to 90 of the Value for 35 metros.
• We plan to cover close to 1500 stockists in these
  35 towns
• Empanelling all stockists (irrespective of their
  contribution) is a non-viable and capital
  intensive exercise.
• Blunt refusals
• Non-availability of computers
• Annual maintenance cost (software maintenance
  honoraria)

21
In addition to the highly fragmented distribution
network, the yet unclear sub-stockist sale makes
it difficult for companies to accurately estimate
secondary sales

• D. Sales to Sub-stockist is added to that of
  retailers in each territory
• In contrast to the intended distribution channel
  i.e. CF Stockists Retailers, the
  Indian network has a large sub-stockists
  component
• A sub-stockist sources goods from a stockists and
  further sells to retailers/ hospitals
• They contribute to 30 of the total stockists
  sell out in the country
• The break-up of sell out from sub-stockists to
  individual retailers is currently difficult to
  estimate due to the lack of an exhaustive database

Stockists purchases
22

Clients will have access to data at territory
level each territory is defined as a group of
pin codes within a city that is covered by each
of the MRs

• We are creating customized territories in each
  city for every SBU.
• Formation of territory is done by clubbing pin
  codes
• Definition of every territory will be obtained
  from the client company
• The ORG IMS team will sit with the client to
  obtain the territory definition within each city
• Creating territory could be a challenge as
  clients may not have a proper definition of
  geographical coverage of their MRs in the
  existing pool scenario

23
Points for discussion

• The Indian Pharma Market Challenges
  Opportunities
• Current Methods of Monitoring Medical Rep
  Performance
• What is DDD in India
• Snapshot of Sales Analyser
• Way Forward

24
DDD will be provided on a monthly basis on the
sales analyzer platform
The highlighted axis are interchangeable thus
facilitating cross-sectional analysis
25
Illustrative
26
Illustrative
27
Illustrative
28
Illustrative
29
DDD being a customised offering client readiness
is important for optimal utilization of DDD

• We will work closely with the clients prior to
  on-boarding to understand their need and
  identifying those requirements necessary for the
  optimal usage of DDD
• Territory Definition
• Various interactions with Clients have revealed
  that Companies do not have territory definition
  by pin-codes and thus set budgets promotional
  schemes and incentives based of City potential.
• We will conduct a territory definition exercise
  for each DDD city that a company subscribes to
• Technical platform
• Clients will be provided a list of technical
  specifications necessary for using the Market
  Analyser software
• Identifying the DDD contact person at the client
  end
• We will identify a single point contact at each
  client
• Our team will train this person on the benefits
  of DDD the usage of Market analyser

30
Points for discussion

• The Indian Pharma Market Challenges
  Opportunities
• Current Methods of Monitoring Medical Rep
  Performance
• What is DDD in India
• Snapshot of Sales Analyser
• Way Forward

31
Our goal Consistently strive to improve and
enhance the value of DDD to our clients

• We will continue to focus our efforts on making
  DDD more robust. The key improvement areas for
  next 3 years being
• Increasing the Coverage for each company from the
  current 80 to 100
• Increasing the no of cities from the 15 to 35
• Separating the sub-stockists component from the
  current method of providing stockist sale to
  substockists to providing sub-stockist sell
  out to retailers
• Linking qualitative information from the Medical
  Audit panel doctors with DDD. Thus providing
  clients an insight of the MR performance not only
  in the Retail space but also in the doctors
  chamber

32

• Thank You
• For further information please contact
• ORG IMS Research Pvt. Ltd.
• voice 91.22.66942237 fax [phone]
• Mr. Amit Backliwal - Head Business Development
  abackliwal_at_orgims.com
• Mr. Mahesh Kalsekar Engagement Manager
  Consulting and Services mkalsekar_at_orgims.com
• www.orgims.com