Sales Management (BUS 309)

Case A-4 (Spiro 12e)

Johnson Drug Company

(List team members names)

Topics to address in your written report

1. Define the situation (problem) concisely, then briefly formulate and assess the possible
alternatives available to the company. (40%)

Johnson Drug Company was a pharmaceutical company that had been in business for over 50
years. They were known for their high-quality prescription drugs but were facing increased
competition from generic drug manufacturers. This competition had resulted in a decline in sales
and profits for the company.

In addition to competition from generic drug manufacturers, Johnson Drug Company was also
facing other challenges such as increased regulatory scrutiny, rising costs of research and
development, and an aging population that required more specialized drugs.

The company's management team was looking for ways to address these challenges and
improve the company's financial performance. They had considered various options such as
diversification, expansion into emerging markets, cost-cutting measures, and increased
marketing efforts.

However, they needed to carefully evaluate these options and determine which would be the
most effective for the company in the long-term. The management team recognized that the
decisions they made would have a significant impact on the company's future success and
profitability, and they needed to make the right choices to stay competitive in the pharmaceutical
industry.

Possible alternatives for the company could include:

 Diversify their product line by investing in research and development of new drugs or
acquiring other companies that have complementary products to their existing portfolio.
 Expand their market by entering into partnerships with other companies, especially those
in emerging markets.
 Focus on cost-cutting measures by reducing expenses, streamlining operations, and
optimizing supply chain management.
 Increase their marketing efforts by launching new advertising campaigns, exploring new
marketing channels, and improving their online presence.

Assessing these alternatives, each one has its own advantages and disadvantages, and the
company needs to carefully weigh their options based on their resources, capabilities, and long-
term goals. Diversification and expansion into new markets could lead to increased revenue
streams, but also carries a significant amount of risk. Cost-cutting measures could improve
profitability in the short term, but could negatively impact the quality of their products and
services. Similarly, increased marketing efforts could help to drive sales, but could also result in
higher expenses.

2. What changes in the sales management program would you recommend to Eric Johnson to
improve implementation of the “system”? Some possible areas to address in your discussion
include: (60%)
 What should the salesperson’s role and objectives be under the new concept?
 Are the existing salespeople capable of implementing the new concept?
 What changes in supervision and compensation might you suggest to better motivate
salespeople under the new concept?
 Should a training program be developed to assist salespeople in learning how to fulfill
their new responsibilities?
 To what extent should the sales manager’s role and job responsibilities be revised to
correspond to the new distribution/selling strategy?
 What changes should be made in the company’s salesperson recruiting procedures?

 Johnson Drug Company is selling individual products to pharmacists. So, it has to

develop its own sales strategy with an effective communication network which connects
all the parties involved in the sales operations and burgeon the sales growth
considerably.
 It is very important to make an analysis for orders: number of orders, consumer
preferences, periodicity of orders. Quantity of orders. These are important constraints to
implement sales strategy in a successful manner.
 A separate supportive strategy for whole sale selling is to be designed.
 Decentralized system for team work has to be adopted. Sales objectives are to be set not
only for sales growth but also for developing deep insight in to the market to get market
information from time to time.
 Sales personnel duties are to be redefined and the processes are changed with a service
motto though it is product selling . These are all for market stability and sustainability for
its business.
 This kind of service oriented sales approach incorporates the wholesalers in to the
system to improve the organizational efficiency
 Centralized group buying can help to regulate the selling and buying operations
 The objective of sales management is not only to maximize sales and profits but also to
gain competitive advantage, to build core competencies, to improve organizational
effectiveness
 Sales hierarchy is to be designed as per the product type or service. Sales training
should be with an objective of building strong image of an organization.
 Products and services are to be perfectly divided , then sales personnel are to be
organized in to teams accordingly. Supervisors are to be appointed for each team for
regular monitoring .Then only it is very easy to design pay packages and reporting for
staff, communication among people in the team and manager
 These sales team members can bring important market information to the head of sales
which is an important source to the business
 Independent pharmacists can create niche in the market with predefined individual
product lines as per consumer needs and preferences
 Competitive strategy focuses on market gaps to capture uncovered demand and needs in
the market.
 Supply chain management processes are to be reengineered as per the demand and
availability of resources.
 Cost effective leadership strategy for service operations of business
 Recruitment and selection of sales personnel is another important challenge for
management.
 A sales person is not only possessed sales and marketing skills but also possess some
values and ethics at work and also dedication, passion towards his duties and
responsibilities.
 All sales and marketing operations are transformed in to committed formal officials even it
is a low level selling. That means everyone from low level to high level are important and
their contribution is valuable.