Sales force motivation in pharmaceuticals industry
A contemporary picture of Acme Laboratories Ltd and its selected
competitors
TABLE OF CONTENTS
Executive Summery
v
Chapter 1
Introduction
Background of the report
Scope of the Report
Objective of the Report
Report design
Sample design
Data processing and analysis
Chapter 2
Literature Review
Chapter-3
Acme Laboratories and its Competitors
The Acme Laboratories
Square Pharmaceuticals
Incepta Pharmaceuticals
Biopharma Laboratories Limited
Beximco Pharmaceuticals Ltd
1
4
9
Chapter-4
Present Situation of Pharmaceuticals Company in Bangladesh
Pharmaceutical Manufacturing Firms in Bangladesh
Pharmaceutical Opportunities in Bangladesh
Key Methods of Doing Business
The pharmaceutical industry Structure
Pharmaceutical Company Business Strategies in Acme Laboratories and its Competitors
Implications for Industry Structure
17
Chapter 5
Analysis and Interpretation
Sales Representative Interview Findings in Acme Laboratories and Its Competitors
What need to improve to motivate Sales Force
Mathematical Interpretation
29
Conclusion
References
Questionnaire
43
44
47
Chapter 1
Introduction
Chapter 1
Introduction
Introduction
Motivating high performance in pharmaceutical sales teams is a growing issue in the
pharmaceutical industry. The challenges facing the pharmaceutical industry in motivating sales
teams are compounded by a variety of factors that many other industries do not face including:
government regulation of sales practices, non-direct tracking of sales results, and the impact of
managed care on sales performance.
By impacting a few key team process and compensation elements pharmaceutical companies can
have a significant impact on team performance. I ,in this paper, explores the background of sales
teams in the pharmaceutical industry, research on team motivation and compensation factors,
findings from Acme Laboratories Ltd and its competitors’ representative interviews and details a
few of key team performance factors and how they can impact team performance.
Motivating sales force representatives to perform at a high level of performance is a challenge
that all companies in all industries have. The pharmaceutical industry is no different in this
aspect. In addition, over the last five years many of the leading pharmaceutical companies have
moved towards a team based sales structure.
So this creates a new motivational situation for pharmaceutical companies: how does an
organization like Acme Laboratories Ltd design systems and processes to motivate a
pharmaceutical sales force team to achieve its peak potential?
Origin of the Report
My respected internship supervisor Nusrat Zahan Lopa has assigned me this report. This report is
to be submitted as a requirement of the internship which is a component of the B.B.A. program.
Objective of the Report
Primary objective of the report is to identify how Acme Laboratories Ltd designs systems and
processes to motivate its sales force team to achieve its peak potential.
Secondary objective is to identify the competitor’s philosophy regarding motivating their sales
team to achieve their goals.
Methodology
In order prepare the report; both primaries secondary data is needed. Primary data will be
analyzed for preparing the report. Primary data needs to find out the how Acme Laboratories Ltd
has design it motivations to its sales forces .In addition, how other major competitors of Acme
Laboratories Ltd has structured their sales to achieve their sales target
Sample design
Primary data will be collected here to represent the current situation of the pharmaceuticals
company’s sales force team. To prepare the report, primary data is to be collected by the
questionnaires from the response of respective sales representative. Here directed
communication is essential for gathering required data. As the report covers the Company
“Acme Laboratories Ltd” and its major competitors, the sample size will be 100 for best analysis
purpose.
Data gathering
Primary data will be collected by the questionnaires and Secondary data will be collected from
the internet, books and journal.
Data processing and analysis
This topic intended to find out the how the Acme Laboratories Ltd is designing its motivation
towards the sales team and what is its current impact on the sale team .Report will find out the
competitors motivation and its impact on sales team. This report indented to find out the
motivational impact on sale target that has given to sales to achieve by the company. To analyze
data, different motivational factors will need to identify by the direct communication through
questionnaires. Proper designing of motivational factors can help sales team to achieve the
company’s desire goal in a most efficient way.
Limitation
In every topic, there will be some limitation to its degree of authenticity of data required to
gather from the questionnaires. So some data is confidential for the company which cannot be
acquired by the questionnaires or respondent may not give the exact information Sometimes
sampling error may occur.
Chapter 2
Literature Review
Insight into employees’ perceptions regarding job content and context factors is usually
considered important to aid in uplifting their morale. The study of motivation forms an integral
part of industrial and vocational psychology in which the concepts of need, incentive and attitude
are discussed extensively than the concepts of ability and skill (Vroom, 1995). Business world is
faced with number one problem of how to motivate employees (Watson, 1994). Technological
revolution, demographic changes in workplace and globalization stimulate the need of searching
the novel ways to motivate workforce. Getting to know about employees’ preferences of what
motivates them could help improving productivity and building success story for the
organizations. Consequently, organizations attain competitive edge whereby employees get
valued rewards (Wiley, 1997). Performance of the employees is mostly determined by their
abilities, motivation and positive job environment.
Numerous definitions of motivation have been extended which mostly stick to the idea of
promoting individual’s willingness to invest more efforts to achieve specific objectives.
However, motivation has not been uniformly defined in industrial and organizational psychology
(Locke and Latham, 1990). One possible reason could be the invisible and hypothetical nature of
motivation construct. The interplay of internal and external forces initiates work-related
behaviors and ascertains the direction, intensity and duration of motivation (Pinder, 1998).
Mullins (1992) defined motivation as the direction and persistence of actions. He has described
that the driving force for motivation is to satisfy certain needs and expectations. Conroy (1994)
has defined motivation as, “a person’s active participation in and commitment to achieving the
prescribed results.” Wiley (1997) has noted that the following three assumptions of human
motivation guided contemporary research: “(1) Motivation is inferred from a systematic analysis
of how personal, task and environmental characteristics influence behavior and job performance.
(2) Motivation is not a fixed trait. It refers to a dynamic internal state resulting from the influence
of personal and situational factors. As such, motivation may change with changes in personal,
social or other factors. (3) Motivation affects behavior, rather than performance (Nicholson,
1995).
Initiatives designed to enhance job performance by increasing employee motivation may not be
successful if there is a weak link between job performance and an employee’s efforts.” Locke
(1976) has noted that motivation is determined by goal directedness, human willingness, and
perceived needs and values to sustaining the actions of employees in relation to themselves and
to their environment.
Charles and Marshall’s (1992) conducted a survey to explore the motivational preferences of the
job factors among 255 Caribbean hotel employees. The participants rated “good wages” to be the
most important factor in motivating them to do their best work. The results of the survey by
Simons and Enz (1995) were equally supportive. The hospitality employees in 12 hotels across
United States of America and Canada perceived “good wages”, “job security” and “opportunities
for advancement and development” as the top rated motivators. The results also revealed that the
employees from different functional departments differed regarding importance placed on jobrelated factors.
The results of a survey (Wiley, 1997) indicated that full-time and part-time employees from
diversified industries such as retailing, services, manufacturing, insurance, utilities, and health
care and government agencies considered the following three job factors important in their
motivation:
1. Good wages
2. Full appreciation for work done
3. Job security
Research on workplace performance and motivation has been going on since the early work of
Elton Mayo at the Western Electric Hawthorne Plant in the late 1920's and early 1930's
(Franken, 2002). This research jump started research into worker's motivation and performance
that has continued throughout the last 70 plus years. In the 1930's and 1940's Skinner's (cited in
Stajkovic & Luthans, 2003) operant conditioning looked at motivation and performance from a
behavioral perspective while in the 1940's and 1950's Maslow presented and expanded on his
"hierarchy of needs" outlining human motivation as a stepped process that began with the
motivation for safety, shelter and food and worked up through self-actualization (the desire to
reach one's full potential) (Shermerhorn, Hunt and Osborn, 2003).
Both performance and
motivation theory has progressed and grown from all of these histories. Recent work has
focused on intrinsic versus extrinsic goals, goal congruency, situational motivation, expectancyvalue, goal setting, and self-efficacy (Cameron & Pierce, 1994; Bandura, 1991; Stajovic &
Luthans, 2001; Franken, 2002; Schermerhorn, Hunt & Osborn, 2003) Role-ambiguity works in a
similar manner in that individual team member motivation is decreased when role-ambiguity is
high, and increases when role-clarity is present (Franken, 2002). Thus a team that has clearly
defined and understood roles will outperform a team with ambiguous roles or misunderstood
roles.
Research done by Latane, Williams and Harkins (cited in Messe, Hertel, Kerr, Lount, & Park,
2002) has shown that individuals frequently reduce their effort in a group setting as compared to
when they work alone. This effect has been labeled "social loafing" and has been replicated in
other studies. This is in contrast to research by Messe et al. (2002) that demonstrates the "Kohler
effect" in which people tend to exert more energy and effort when in a team or group setting than
when alone. Messe et al. (2002) attribute these contradictory findings to the type of tasks that
the team had to perform as to either being conjunctive-tasks or additive-tasks.
Research done by Karau and Hart (1998) indicates that group cohesiveness is a moderator on
social loafing. Thus members of a high-cohesive group or team are less likely to engage in
social loafing as opposed to members in low-cohesive groups when the individual's efforts are
viewed as important to the overall group's performance. They also found that internal group
competition decreased the cohesiveness of a group and thus had a positive correlation to social
loafing.
trust and interpersonal trust. To be effective, teams need to build trust in both areas with task
being the more important of the two for creating high-performance (Dixon et al., 2002).
Compensation for sales representatives inside of the pharmaceutical industry typically is
composed of three elements: base pay, incentive pay, and benefits (Best Practices, 2002). While
the combination of all three is vital to successful motivation, all things being equal, incentive pay
has the most variable impact on performance (Churchill, Ford, Hartley, & Walker, 1985
Money's outcome utility is based on its exchange value for goods, services and privileges
(Stajkovic & Luthans, 2001). While money itself has little or no outcome utility, it is its ability
to be exchanged for something that someone wants that motivates. People are attracted to well
paying jobs and perform extra activities that bring them more pay (Stajkovic & Luthans, 2001).
Deci, Ryan and Koestner (1999) point out that rewards (i.e. money) may have both positive and
negative effects on motivation, with some aspects of rewards being perceived as controlling thus
decreasing intrinsic motivation and some aspects being seen as providing evidence of
competence and thus increasing intrinsic motivation. Money's informative content is dependent
upon how it is received.
Chapter-3
Present Situation of Pharmaceuticals Company in Bangladesh
Pharmaceutical Manufacturing Firms in Bangladesh
Bangladeshi pharmaceutical firms focus primarily on branded generic final formulations using
imported APIs. About 80% of the drugs sold in Bangladesh are generics and 20% 5 registered
brands which have 8,300 different forms of dosages and strengths. These include a wide
range of products from anti-ulcerants, flouroquinolones, anti-rheumatic non-steroid drugs,
non-narcotic analgesics, antihistamines, and oral anti-diabetic drugs. Some larger firms are
also starting to produce anti-cancer and anti-retroviral drugs
Domestically, Bangladeshi firms generate 82% of the market in pharmaceuticals; locally based
MNCs account for 13%, and the final 5% is imported.
Although 235
pharmaceutical companies are registered in Bangladesh, only about 85 are actively
producing drugs. The top 30 to 40 companies dominate almost the entire market; the top 10
hold 70% of domestic market share; and the top two, Beximco and Square, capture over
25% of the market The industry structure is relatively concentrated. In comparison,
the top ten Japanese firms generated approximately 45% of the domestic industry revenue
in 2006, while the top ten UK firms generated approximately 53%, and the top ten
German firms generated approximately 60% .
Because Bangladesh API capacity is insignificant, API firms import approximately 80% of their
APIs. Fifteen to seventeen Bangladeshi firms are involved in the manufacture of about twenty
APIs, but they usually run the final chemical synthesis stage with API intermediaries,
instead of the complete chemical synthesis. The other 1,000 required APIs are imported.
Approximately 75-80% of the imported APIs are generic.
Drug Quality
For generic pharmaceutical products, quality is defined as the generic drug having the
same active ingredients as the original formulation and being bioequivalent to the brand name
counterpart with respect to pharmacokinetic and pharmacodynamic properties (equivalent
absorption rates, elimination rates, and other in vivo effects). By extension, therefore, generics
are assumed to be identical to the original product in dose, strength, route of
administration, safety, efficacy and intended use.
While some Bangladeshi pharmaceutical products on the market are of world-class
Standards, others are less so. Medical professionals and pharmacists interviewed voiced strong
opinions on the quality levels of different brands. Although further comprehensive and
systematic analysis is required to assess Bangladesh's pharmaceutical quality, some anecdotal
reports exist of lower quality drugs.
Some Bangladeshi firms have invested in quality raw materials, manufacturing processes and
environment, and technical know-how.
However, a "perverse incentive" exists against
upgrading due to the weak regulatory structure.
Firms that have invested minimally in
quality continue to sell drugs alongside those that have invested substantially.
Because of weak regulations, the consumer cannot determine quality differences and select
for purchase the superior product.
As a result, firms that have invested in quality
manufacturing and quality processes are in a sense penalized.
Domestic Drug Distribution
Bangladesh's drug distribution marketplace is composed of small independent
pharmacies.
This structure combined with an under-regulated industry, few firms
manufacturing pharmaceuticals, and companies competing to sell branded generics based on
brand names provides ample opportunity for the sale of low-quality drugs at higher 11
significantly in Bangladesh.
Pharmaceutical firms can sell their products to private sector pharmacies, the government and
its public health care facilities, or to international organizations operating in
Bangladesh (e.g., UNICEF).
Government sales are not as profitable as private sector sales
because the government pays less, on consignment, and at times, after considerable delay.
Pharmaceutical firms nevertheless still target public facilities because doctors become
acquainted with the firms' drugs and then prescribe them in their private Practices. And,
because drugs are not readily available at public facilities, patients receiving treatment
there may still go to a private pharmacy to procure the required drugs. Without these
public sector connections, many firms would turn more attention to 12 the private sector.
Although there are approximately 200,000 private pharmacies in Bangladesh, he 13
license or a licensed pharmacist on staff. Pharmacists have varying education levels and many
lack adequate training. For example, a visit to four pharmacies in Dhaka and ten pharmacies in
the bordering Gazipur, Narayanganj, Keranigonj and Manikgonj Districts revealed that each
had one professional pharmacist, who had four years of coursework; while the two
medium-sized pharmacies visited had one person with a year's training and several untrained
coworkers, all of whom were working as pharmacists. Rural pharmacies may have
pharmacists with high school education and approximately two weeks training. The
Bangladesh Pharmacist Society is currently implementing the first phase of a three-phased
program to improve skills of pharmacists. The program should 14 be completed in seven to
eight years. Most pharmacies are individual shops, though some chains are starting to
develop, especially in urban areas. Large pharmacies visited reported buying medicines
according to sales trends, e.g., what sells the most.
The medium and small pharmacies
visited reported linkages with a medical doctor. Their sales were therefore usually skewed
towards that medical professional's preferences.
Several brands of each drug, with variable quality levels, are on the market. In urban
areas, the visited pharmacies tended to sell higher quality brands, whereas in more rural areas,
pharmacies visited tended to sell lower quality, lower cost brands. This may be due to a
district’s political sway influencing brand selection. The pharmacies visited tended to have
brands associated with people who held power in that district. Those more distant from
the city center also had increasingly more ayurvedic and herbal medicines.
The top twenty pharmaceutical manufacturing firms have established extensive sales and
distribution networks. Each pharmacy visited has 10-50 pharmaceutical firms supplying their
medicines daily. For example, Beximco Pharmaceuticals has 1,200 representatives visiting
pharmacies daily to take drug orders. Each pharmacy receives approximately 1215 Beximco shipments per month. Acme Pharmaceuticals has 1,100 representatives and
Square Pharmaceuticals has 950 representatives visiting pharmacies. None of the pharmacies
visited restock any medicine that does not sell well. The small pharmacies report only
keeping a medicine for a maximum of six months.
Pharmaceutical is one of the highest priority sectors in Bangladesh. With an annual two-digit
growth rate the Bangladesh pharmaceutical industry is now heading towards self – sufficiency in
meeting local demand. There are more than 230 small, medium, large and multinational
companies operating in the country producing around 97% of the total demand. The sector is the
second highest contributor to the national ex-chequer after tobacco and it is the largest whitecollar intensive employment sector in Bangladesh. 95% of the total demand of Bangladesh is
being met by local manufacturing. The remaining 5% basically constitute import of much
specialized products like vaccines, anti-cancer products and hormone drugs.
The country can continue to produce patented products until 2016 as per trade related intellectual
property rights (TRIPS). The industry is legally permitted to reverse engineer, manufacture and
sell generic versions of on-patent pharmaceutical products for domestic consumption as well as
for export to other LDCs. It created a big opportunity to make Bangladesh a new chemical entity.
Bangladesh can share its long years of experience in pharmaceutical formulation and marketing
with the Least Developed Countries (LDCs) and developing ones, who need it. Among the 49
LDCs, Bangladesh has the strongest base to manufacture pharmaceutical products.
Over $300 million invested in the sector, has helped modernize and create new facilities. A good
number of skilled professionals from home and abroad are expected to join the industry to enrich
its human resources pool
Pharmaceutical Opportunities in Bangladesh
Opportunities
Raw Material & Machinery Souring
Bangladesh imports 80 per cent of its pharmaceutical raw materials. A good number of skilled
professionals from home and abroad are expected to join the industry to enrich its human
resources pool The pharmaceutical manufacturers in Bangladesh procure raw materials from
various countries namely USA, UK, France, Germany, Japan, Holland, Italy, Denmark, China,
Switzerland, Austria, Hungary, India, Ireland etc.
Most if the machinery’s comes from Germany and China. Some of the bigger companies are
using machinery from UK.
Toll Manufacturing
Bangladesh has a very strong manufacturing base in pharmaceuticals “toll manufacturing” of
current products as a number of companies have already constructed facilities as per USFDA and
UKMHRA Standard and are seeking certification in other regulated markets. After gaining the
UK MHRA Certification Square Pharmaceutical, one of Bangladesh's leading pharmaceutical
industries is now manufacturing cardiovascular drugs and diuretics for overseas clients. A good
number of Bangladeshi companies have won accreditation for export from the regulatory
authorities in some developed countries. The accreditation will allow them to enter the export
market with their competitive prices and standards.
Investment opportunity
During last couple of years a good number of investments have taken place in the pharmaceutical
sector in the form of facility expansion/upgrading and new entrants. It is estimated that a total
investment of US$ 300 million has been made in this sector in last few years. Bangladesh is also
a large market for Active Pharmaceutical Ingredients (API) and intermediates. Although
Bangladesh is meeting 97% of the countries demand by local production it still depends largely
on imported bulk drugs. Around 80% of Bangladesh's total need of API is being met through
imports.
a.Bulk Drug Manufacturing
In case of manufacturing and exporting pharmaceutical products, Bangladesh being a least
developed country (LDC) enjoys a patent waiver under a deal of world Trade organization
(WTO) until 2016. Under the TRIPS Agreement Bangladesh will enjoy manufacturing patented
drugs until 2016. Since most of the countries of the world will not be able to manufacture
patented drugs after 2005. It also approved a waiver for LDCs on exclusive marketing rights for
any new drug during the period. There exists an excellent opportunity for foreign investors in
bulk drug manufacturing in Bangladesh. They will be able to cater to growing bulk drug need of
Bangladesh as well as 49 such other patent exempted countries of the world. Bangladesh would
be an excellent place for investors & relocating R&D set up for reverse engineering. Bangladesh
Pharmaceutical Society is planning to set-up a “Reference Laboratory” for appeal,
biopharmaceuticals and pharmaco kinetic analysis and research. They are also seeking foreign
participation in developing this laboratory. Opportunities have been created in Bangladesh for
bioequivalence study, validation report, clinical trials and manufacturing plant audit mechanism.
These sub-sectors would need more investment in future. The industry created opportunities for
foreign direct investment.
Some of the pharmaceutical manufacturers of Bangladesh have made multimillion-dollar
investments on new plant and facilities conforming to USFDA and UK-MHRA Standards. They
have sufficient production capacity for contract (“Toll”) manufacturing including an abundant
and cheap labor force. UK companies can exploit these opportunities to promote and sell their
machinery and equipment or by setting up joint-venture plants.
b.API Park
Around 80% of Bangladesh's total need of API is being met through imports. In 2007,
Bangladesh's 100 pharmaceutical plants imported medicine raw materials worth $214 million.
To meet the API demand locally the Bangladesh government's highest planning body, the
executive committee of the national economic council (ECNEC), approved the Active
Pharmaceutical Ingredient (API) Park at Munshiganj at an overall project cost of $31 million in
May 2008. It will be the country's first hub for medicine raw materials and the country can save
at least 70 percent of the amount by producing raw materials at the API Park. Already the local
companies have lined up some $285 million for investment in the API Park.
The Bangladesh Small and Cottage Industries Corporation (BSCIC) have been assigned to set up
the park. The project is expected to be completed by 2011. Government is also inviting foreign
companies to invest in this “API Park” Project. The corporation will develop the infrastructure
with state-of-the-art facilities including a central effluent treatment plant (ETP) and incinerator
for solid and liquid waste-management.
UKTI publishes international business opportunities gathered by our network of British
Embassies, High Commissions and Consulates worldwide. These opportunities appear in the
Opportunities port let on the relevant sector and country pages on the UKTI website. By setting
up a profile you can be alerted by email when relevant new opportunities are published. New or
updated alert profiles can be set in My Account on the website.
Characteristics of Market
Market Size
In 2007 total size of the pharmaceutical market of Bangladesh was estimated to be US$700
million. The industry produced medicines worth $715 million in 2007 with the market growing
over 12% annually over the last half a decade. The industry also exported drugs worth a record
$32 million in the first nine months of fiscal year 2007-8. At present Bangladesh is exporting 67
different countries of the world.
There are about 450 generics/substances registered in Bangladesh. Out of these 450 generics,
209 are in the controlled category (ie in the essential drug list). The remaining 333 generics are
in the decontrolled category. The total number of brands/items that are registered in Bangladesh
is currently estimated to be 5,300 while the total number of dosage forms and strengths are
8,300,
At present, there are 240 registered Pharmaceutical manufacturers in Bangladesh. The country is
producing more than 5000 Crore Taka worth of drugs and pharmaceuticals in about 12,500 plus
brands. Domestic manufacturers dominate the Bangladesh pharmaceutical industry with local
companies enjoying a market share of around 80%, while the multinational Companies are
having a market share of 20%. Out of top ten pharmaceutical companies in Bangladesh, seven
are local pharmaceutical companies (see below). The top two domestic manufacturers, namely
square & Beximco are having a market share of about 25%, while the other manufacturers
contribute about 60% of the total pharmaceutical market of Bangladesh.
Top Twenty Manufacturers
1) Beximco 2) Square 3) ACI (MNCs) 4) Eskayef 5) Aventis (MNCs) 6) Opsonin (MNCs) 7)
Reneta 8) Glaxo (MNCs) 9) Novartis (MNCs) 10) Acme 11) General 12)Orion(MNCs) 13)
Incepta 14) Beacon (MNCs) 15) Jayson 16) Medimate, 17) Drug International 18)Aristopharma
19) Hudson 20) Raymond & Drugs.
International Marketing
As its first move towards internationalization, Bangladesh entered a few overseas markets
exporting a wide range of pharmaceutical products covering all major therapeutic classes and
dosage forms including some developed markets. High-tech specialized products like inhalers,
suppositories, nasal sprays, indictable and infusions are also being exported.
So far, Bangladesh has exported basic chemicals to many countries namely, Iran, Hong Kong,
South Korea, Malaysia, Taiwan, Vietnam, Thailand and Nepal. After being successful in
exporting basic chemicals, a few leading companies also started registering and exporting their
finished formulation in sixty seven other countries, i.e. Australia, Canada, Brazil, Cambodia,
France, Germany Sweden, Sri Lanka, Singapore, UAE, USA, Indonesia, Japan, Pakistan, Kenya,
etc.
The export value of pharmaceuticals, though small, is growing at 50 per cent per year. Exports
increased from $8.2 million in 2004 to $28.3 million in 2007 and expanded further in last two of
years. The export destinations have now risen from 37, to 72 countries during the period.
The following are the export manufacturers: Square, Novartis, Opsonin, Acme, Beximco,
Aristropharma, Eskayef, ACI, Renata, Orion, Jayson and Hudson. Overseas retail buyers apart,
these companies are also supplying pharmaceutical products to some world-renowned hospitals
and institutions like Raffles Hospital of Singapore, Jinnah Hospital of Pakistan, MEDs of Kenya,
SPC of Sri Lanka and KK Women & Children Hospital of Singapore according to BAPI.
International Certification
Bangladesh companies are now on the verge of entering highly regulated overseas markets like
the USA and Europe. Novertis has already received EU certification and has started exporting to
Europe. Squrae, SKF & Renata have already obtained the UK MHRA certification. Other market
leaders like Beximco, is in the process of securing US-FDA, UK-MCA (MHRA), certification.
Key Methods of Doing Business
Pharmaceutical Product Price & Marketing Regulation
The price of products under the controlled category is determined by the Government. At present
the list of essential drugs contains around 209 items, which are in controlled category. While the
manufacturing companies are allowed to fix prices of their products that are under decontrolled
category. According to the Government regulation, the pharmacies/chemists are entitled to get
16% retail margins on top of the trade prices of products. Most of the leading pharmaceutical
manufacturers have their own distribution network and ensure supply of products up to retail
level. Companies that do not have their own distribution networks have to distribute their
products through distributors/wholesalers. In that case they usually fix the distributors margin as
mutually agreed.
In Bangladesh the promotion of Pharmaceutical products in the mass media is strictly prohibited.
Manufacturing companies can only promote their brands to the health professionals by personal
selling, clinical meetings, seminars, symposia etc.
Quality & Standardization
A competent regulatory authority known as the Directorate of Drug Administration, Bangladesh
ensures compliance of the manufacturing facility and practices with the requirements of CGPM
& regulation. Specification & test methods for Raw materials & Drug Products are based on
British Pharmacopoeia (BP), United States Pharmacopoeia (USP), and European Pharmacopoeia
(EP).
The Quality Assurance System in place ensures that the facility, equipment, process and test
methods are validated and instruments are routinely calibrated qualified and trained.
Other background information on doing business in Bangladesh can be found on UKTI’s
website. Simply go to the Bangladesh country page where you will find information on:

Economic background and geography

Customs & regulations

Selling & communications

Contacts & setting up

Visiting and social hints and tips
The pharmaceutical industry Structure
The pharmaceutical industry is highly complex. The technologies leading to drug discovery and
development are at the limits of human knowledge. The huge size of the companies and the
complexities of their processes and technologies presents many organizational and management
challenges. The development and management of the distribution system is highly costly.
However while excellence in managing all these aspects of the industry is a necessary condition
for the survival of the global pharmaceutical companies, the uncertainty of the discovery process
and the potentially huge returns from the discovery of a single drug means that like drilling for
oil or randomly choosing the black beans from a jar of overwhelmingly white ones, success in
the industry depends on a high measure of luck. Much of the thinking about business strategy in
the industry is how best to cope with this uncertainty. This has not always been the case. Colonel
Ely Lilly gained his initial competitive advantage, in manufacturing, by producing ‘true to label’
products in competition with the various ‘snake oils’ and other dubious concoctions of the era.
The highly skewed nature of the returns from the drug discovery and development process means
that a single drug can deliver corporate success at least in the short to medium term. As Scherer
et al. has pointed out, in these conditions the normal principles of large numbers in which
diversified portfolios produce predictable returns does not apply to this industry (2000). Returns
from pharmaceuticals are highly volatile.
For the established pharmaceutical companies the response to the discovery uncertainties has
been to build scale through mergers and acquisitions so that the latter stages of their product
pipelines have at least a handful of highly prospective blockbuster drugs. Scale offers the
capacity to both fund in house research and draw in external research through a variety of
licensing arrangements and alliances. It has also provided the necessary marketing resources in
an industry in which these costs absorb some 35% of revenues
However since the numbers of NCEs at latter stage are so small and returns so uncertain these
‘solutions’ may be of very short duration with gaps in the pipeline re-emerging as existing
blockbuster patents expire and expected blockbusters fail to materialize – producing another
round of M&A. At this stage there seems to be no limit to this pressure to consolidate. The
growth rates demanded by the market to sustain current valuations require a significant and
questionable expansion in the number of new large selling drugs. One other strategy has been for
pharmaceutical companies to diversify their business activities into lower risk activities eg
Merck into Medco or Johnson & Johnson into household health products, but it not clear that this
has been rewarded by the financial markets. Merck recently announced that Medco would be
spun off.
Another diversification strategy is to focus on a comparatively large number of niche market
drugs rather than blockbusters. Whether by accident or design a number of European companies
appear to have followed this strategy. While their total sales of pharmaceuticals place them in the
first rank of pharma companies they have perhaps only one or two drugs of blockbuster status.
Selling a broad range of drugs clearly lessens dependence on the discovery of new blockbusters,
but development and marketing costs need to be watched for the smaller markets to be economic.
While large pharmaceutical companies have sought survival in larger enterprises, these
agglomeration tendencies has not stopped other firms using a discovery breakthrough to ‘chance
their arm’ at developing a blockbuster of their own, ultimately perhaps through a marketing
alliance with a global pharma. These are largely biotech firms that have funded independent drug
discovery through direct access to the venture capital market. In other cases their research has
been supported by large pharmaceutical companies through alliances and licensing. Such is the
return from a single successful blockbuster that a small number of these companies have been
catapulted into the first rank. On the other hand many biotech companies fail to realize these
ambitions and languish as contract research houses or go out of business.
Given the instability and apparent unsustainability of current pharmaceutical business strategies
and structure, other models have been suggested.
There are those who argue that the real added value of the global pharmaceutical company is its
capacity to organize, coordinate and finance the various parts of the drug development and
distribution pipeline (Kay 2001). This would see a more limited role for the global pharma in
which most research and perhaps a large part of the distribution was contracted out. This
presupposes that specialization in various aspects of the drug development and distribution
process could achieve significant economies.
In addition there is an increasing technical capability (e.g. genomics) to provide personalized
medicine. This gives an opportunity for companies specializing in particular therapeutic areas to
target smaller patient groups in which the massive distribution machinery of the global
pharmaceutical companies becomes less relevant. If the economics of smaller patient markets
was improved through the greater selectivity offered by genomics then size would be less
critical.
Evolution of the industry along the lines suggested above has implications for developments in
Australia. Australian R&D, at least in biology, is seen as world class, but constrained in gaining
the attention of large pharma by ‘tyranny of distance’, and limited in funding opportunities from
risk adverse Australian capital markets. In a continuing world of big pharmaceutical companies
perhaps the best that can be hoped for is to gain research and drug development support at an
early stage on a project by project basis from large pharma by more actively pursuing overseas
links.
There may also be an opportunity for domestic companies that specialize in a particular aspect of
the drug development process to contract out their specializations on a regular basis to global
pharmaceutical companies.
Pharmaceutical Company Business Strategies in Acme Laboratories and Competitors
One of the constants of pharmaceutical company strategy that The Acme Laboratories take over
the past decade has been increasing scale. Only by growing larger are companies able to afford
the considerable costs of drug development and distribution.
Within this broad approach at least two business models are discernable:

Blockbuster model involving the search for and distribution of a small number of drugs
that achieve substantial global sales. The success of this model depends on achieving
large returns from a small number of drugs in order to pay for the high cost of the drug
discovery and development process for a large number of candidates. Total revenues are
highly dependent on sales from a small number of drugs.

Diversification model in which a larger number of drugs are marketed to smaller niche
markets. The advantage of this model is that its success is not dependant on sales of a
small number of drugs. However without a blockbuster to help pay for the high
development costs, the model only works for small markets where distribution costs is
low.
Implications for Industry Structure
These new trends in sales and marketing while currently in their early stages will assume greater
importance if medicine becomes more personalized. Currently the implications of the
blockbuster model are to focus attention on mass patient markets. The impact of genomics and
other technological advances outlined seems likely to make possible a level of quite targeted
customized medicine. In particular the mapping of the human genome has introduced the
possibility of personalized drugs to suit each patient’s genetic makeup.
Personalized medicine seems likely to be one component of high quality health care to be
demanded by an aging population seeking longer but still comfortable lives. There are many
components to high quality health care of which pharmaceutical products is but one. Medical and
hospital services from another highly related component. It is readily acknowledged that early
prescription of drugs can sometimes substitute for later acute care. While funders of
pharmaceuticals may be less inclined to endorse early preventative use of drugs, patients are
increasingly likely to demand this type of integrated care and institutions will change over time
to reflect the economies of such an approach .The delivery of such a service implies a radical
realignment of the organizations and businesses currently providing health care. Suggestions to
date involve the development of a complex web of networks, alliances and equity partnerships.
The role of pharmaceutical companies in such realignment is difficult to predict. The
implications of personalized medicine for pharmaceutical companies focused on mass market
blockbusters appear to be fairly dramatic.
Changes would be required at most parts of the value chain, from discovery, through the
development phases to distribution. New technologies would be required through the discovery
and development process and distribution of personalized medicine would be very different.
It has been suggested that the role of the pharmaceutical firms will change and that some of the
trends already apparent will be accentuated. These include:

An increasing reliance on specialist bio tech and other research companies to provide
new compounds under licensing and equity share arrangements.

Increasing provision of new research technologies by specialist firms

Business process reengineering of clinical trials and other drug development functions

New alliances with health care companies for the distribution of drugs
In this world pharmaceutical companies would focus on the co-ordination and financing of these
functions. This view is reinforced by the seeming unsustainability of the blockbuster model – the
rising costs of R&D, the very small number of potential blockbusters and the forces reducing the
returns on those drugs.
Further concentration of the pharmaceutical companies is still consistent with a model in which
these companies coordinate and manage a complex web of alliances, partnerships etc but their
strategies would be very different to those currently pursued. Accordingly whatever the structure
of the pharmaceutical industry or indeed the health care industry it seems likely that large
pharma will have a sifnificant role determining that model.
Chapter-4
Acme Laboratories and its Competitors
The Acme Laboratories
The Acme Laboratories is a complete healthcare powerhouse committed to protecting improving
the health and well being. It has a wide portfolio of Pharmaceutical Products across the
Therapeutic Spectrum for both animal and human being. Its growing Herbal repertoires of
products are based on man’s symbiotic relationship with Mother Nature and her abundant
resources. With the signing up with one of the leading Indian Herbal Healthcare majors,
Himalaya, Acme also wants to focus more on developing safe, natural and innovative remedies
that will help people lead richer and healthier lives.
Mission Statement
Our holistic approach is to ensure Health, Vigor and Happiness for all by manufacturing ethical
drugs and medicines of the highest quality at affordable prices and reaching out even to the
remotest areas by proper distribution network. We view ourselves as partners with doctors, our
customer’s .employees, and our environments.
Since its inception in 1954, has been working relentlessly with a vision to ensure Health, Vigor
and Happiness for all and is on a perpetual quest for excellence. The quality policy
Of the company is

Absolute commitment to the highest obtainable standard of quality product and service
through excellence and concerted efforts of both employer and employee

The Company shall improve its market share and productivity to enhance profitability
through monitoring of its performance on a regular basis and identify opportunity for
continual improvement.

The Company has adopted the ISO-9001-2008 and WHO cGMP (Current Good
Manufacturing Practice) standards. All employees must adhere to the documented
procedures and SOPs (Standard Operating Procedure).

The Quality Management System shall be adequately resourced with competent
personnel, suitable premises, up-to-date technology and requisite facilities.
The Acme Laboratories is a complete healthcare powerhouse committed to protecting improving
the health and well being. It has a wide portfolio of Pharmaceutical Products across the
Therapeutic Spectrum for both animal and human being. Its growing Herbal repertoires of
products are based on man’s symbiotic relationship with Mother Nature and her abundant
resources. With the signing up with one of the leading Indian Herbal Healthcare majors,
Himalaya, Acme also wants to focus more on developing safe, natural and innovative remedies
that will help people lead richer and healthier lives.
The success of ACME in the domestic market prompted it to explore the international market as
well. In 1995, it started its first journey to international operation by exporting medicines to
Bhutan. Since then it has been expanding worldwide. The volume of sales increased substantially
with an average growth rate of 50% almost every year.
At present, ACME is exporting medicines to several countries in neighboring South-East Asia,
Africa, Middle East and the EU, maintaining a philosophy to ensure 'Health, Vigour and
Happiness' for the whole mankind within its means and resources. Sales wise Afghanistan is the
top among the 11 countries ACME is exporting to with a growth rate of 55%.Among the
medicines exported; Antibiotic, Antihypertensive, Antiulcer and Vitamin are remarkable. The
international marketing section is active in exploring the joint venture production possibilities,
establishment of pharmacies, agents or distributors in the Central Asia, the Middle East, Africa,
CIS countries and other parts of the world. ACME has started its operation in Pakistan and early
reports of success are encouraging for us. We are also planning to set up a manufacturing plant
there within a few years.
Achievements so far by Acme Laboratories
Established our overseas office in Pakistan with a view to set up a manufacturing plant within a
few years.MOU signed for mutual business interest with the Himalaya Drug Company of India.
Export Markets:
#A Regular Export Market
Myanmar
Sri Lanka
Afghanistan
Hong Kong
Nepal
Pakistan
Philippines
Vietnam
#B Irregular Export Market
East Timor
Uzbekistan
Yemen
Cambodia
Gambia
Bhutan
Malta
#C Market Development
Ethiopia
Myanmar
Cambodia
Nigeria (Vet)
Taiwan
Yemen
Kenya
KSA
#D Product registration status in different countries
Myanmar=29
Philippines=10
Hong Kong=02
Uzbekistan=09
Kazakhstan=05
Iraq=08
Nepal=36
Vietnam=01
Pakistan=50
Sri Lanka=24
Square Pharmaceuticals
Square today symbolizes a name – a state of mind. But its journey to the growth and prosperity
has been no bed of roses. From the inception in 1958, it has today burgeoned into one of the top
line conglomerates in Bangladesh. Square Pharmaceuticals Ltd., the flagship company, is
holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985
and is now on its way to becoming a high performance global player.
Square Pharmaceuticals Limited is the largest pharmaceutical company in Bangladesh and it has
been continuously in the 1st position among all national and multinational companies since 1985.
It was established in 1958 and converted into a public limited company in 1991. The sales
turnover of SPL was more than Taka 7.5 Billion (US$ 107.91 million) with about 16.92% market
share (April 2006– March 2007) having a growth rate of about 23.17%.
Square Pharmaceuticals Limited has extended her range of services towards the highway of
global market. She pioneered exports of medicines from Bangladesh in 1987 and has been
exporting antibiotics and other pharmaceutical products. This extension in business and services
has manifested the credibility of Square Pharmaceuticals Limited.
Vision
We view business as a means to the material and social wellbeing of the investors, employees
and the society at large, leading to accretion of wealth through financial and moral gains as a part
of the process of the human civilization.
Mission
Mission is to produce and provide quality & innovative healthcare relief for people, maintain
stringently ethical standard in business operation also ensuring benefit to the shareholders,
stakeholders and the society at large.
Objective
objectives are to conduct transparent business operation based on market mechanism within the
legal & social frame work with aims to attain the mission reflected by our vision.
Square Pharmaceuticals Strive For

Square Pharmaceuticals strive, above all, for top quality health care products at the least
cost reaching the lowest rungs of the economic class of people in the country and value
our social obligations.

Owe to our shareholders and strive for protection of their capital as well as ensure highest
return and growth of their assets.

Strive for best compensation to all the employees who constitute the back-bone of the
management and operational strength of the Company through a pay-package composing
salary/wages, allowances, bonus, profit participation, leave salary and superannuation &
retirement benefits.

Strive for best co-operation of the creditors & debtors the banks & financial institutions
who provide financial support when we need them, the suppliers of raw materials &
suppliers who offer them at the best prices, the providers of utilities-power, gas & water
etc. and the customers who buy our products & services by redeeming their claim in time
by making prompt payment and by distributing proper product on due dates.

Strive for fulfillment of our responsibility to the Government through payment of entire
range of due taxes, duties, and claim to various public agencies.

Strive, as responsibilities citizen, for a social order devoid of malpractices, antienvironmental behaviors, unethical and corruptive dealings.

Strive for practicing good governance in every sphere of activities covering inter alia not
being limited to, disclosure & reporting to shareholders holding AGM in time,
distribution of dividends and other benefits to shareholders, reporting/dissemination of
price sensitive information, acquisition of share by insiders, recruitment & promotion of
staff, procurement & supplies, sale of assets etc. all that directly and indirectly affect the
interest of concerned groups – the shareholders, the creditors, suppliers, employees,
government and the public in general.
Incepta Pharmaceuticals
Incepta Pharmaceuticals Ltd. is a leading pharmaceutical company in Bangladesh established in
the year 1999. The company has a very big manufacturing facility located at Savar, 35 kilometer
away from the center of the capital city Dhaka. The company produces various types of dosage
forms which include tablets, capsules, oral liquids, ampoules, dry powder vials; powder for
suspension, nasal sprays etc. Since its inception, Incepta has been launching new and innovative
products in order to fulfill unmet demand of the medical community. The focus was to bring
more new technologically advanced molecules to this country.
The company specializes in value added high technology dosage form like sustained release
tablets, quick mouth dissolving tablets, barrier coated delayed release tablets etc. It has
established a modern research and development laboratory for the development of new advanced
dosage forms for various drugs and devices like poorly soluble drugs, dry powder inhalers,
coated pellets, modified release products, taste masked preparation etc.
Incepta quickly developed a very competent sales team, which promotes the specialties
throughout the country. The company virtually covers every single corner of the rural as well as
urban area of Bangladesh. It has its own large distribution network having 13 depots all over the
country. The company has a clear vision to become a leading research based dosage form
manufacturing company with global presence within a short period of time. The Research and
Development department for various dosage forms has been very well developed. Incepta
intends to bring newer products of advanced technology through research hitherto unknown in
this country. Such activities will not only benefit the company but also the total pharmaceutical
sector of the country. In the post 2005 era, the company also intends to embark into the
production of Active Pharmaceutical Ingredient (API). Plans are underway to get into reverse
engineering and analogue research in order to produce new API.
The company is now expanding its activities beyond the geographical boundary of Bangladesh.
The products are of high standard and therefore these will be exported to both developed and
developing countries. The company is open to collaborate with interested parties in various
countries. The future is wide open and the opportunities are bountiful. Incepta will continue to
strive to provide high quality medicine at affordable prices to the people here in Bangladesh and
other parts of the globe.
Production Facilities
The production site comprises of six different multi-storied buildings, which provide areas for
the production of pharmaceutical products. Cephalosporin and general products are
manufactured in those buildings, Cephalosporin facility is physically separated from other areas.
Manufacturing and packaging operations are carried out according to the validated methods
through systematically qualified machines with full documentation at all stages of operations.
The production sites follow the cGMP guidelines for environmental requirements of the
manufacturing and packaging area, as well as comply with the EHS requirements.
Highly sophisticated HVAC systems are used to condition, monitor and supply clean air to the
working zone according to the manufacturing zone concept, capture and control any dust, vapor,
gas or fume generated, as well as treatment of re-circulated and/or exhausted air. Temperature
and moisture level are maintained at the desired level through this system.
Design of the room and air-conditioning systems ensure:
 Prevention of contamination of the product.
 Protection of the environment.
 Protection of people.
 Prevention of the ingress of vermin, insects, birds etc.
Biopharma Laboratories Limited
Biopharma Laboratories Limited, one of the fast growing pharmaceutical companies in
Bangladesh, Has been manufacturing and marketing a wide range of pharmaceutical finished
products with strict standard of safety, quality and efficacy to ensure public healthcare through
uncompromising scientific and professional approach since 1999. The company has sailed its
journey with the involvement of a group of physicians, inspired with love for mankind, with
innovative mission and global conception. Since then, the company has been running in full
swing bearing its glory for innovation and ethical practice in pharmaceutical sector of
Bangladesh.
Biopharma is always committed to assure the best quality pharmaceutical products and best
services to the customers. Our mission is to serve the mankind, especially the distressed and poor
ailing people and our vision is to be regarded globally as a Quality pharmaceutical manufacturer
through the best quality pharmaceutical products. Bearing this in mind, our technical experts
(pharmacist, Chemists, Biochemists, Microbiologists Analysts and other professionals ) skilled
and trained staffs always try to leave no stone unturned in their professional works by following
the US cGMP, British & WHO GMP guidelines and the guidelines & instructions of the Drug
Adminitration & Licensinge Authority of Bangladesh to ensure the production of quality
medicine. Ever since we at GLP (Good Laboratory practices) have always been performing with
a strict discipline to follow our professional ethics. By virtue of the highest quality of drugs, the
company has already obtained the confidence and trust of doctors and patients all over
Bangladesh and earned excellent reputations in the market through introducing very exciting new
molecules and dosage forms in many therapeutic areas. We are now producing a wide range of
Biological and pharmaceutical products in different dosage forms and presentations including
tablets, capsules, syrups, suspensions, powder for suspensions, pediatric drops, sterile creams &
ointments and inject able preparations.
Beximco Pharmaceuticals Ltd
Beximco Pharmaceuticals Ltd (BPL) is a leading manufacturer of pharmaceutical formulations
and Active Pharmaceutical Ingredients (APIs) in Bangladesh. The company is the largest
exporter of pharmaceuticals in the country and its state-of-the-art manufacturing facilities a
certified by global regulatory bodies of Australia, Gulf nations, Brazil, among others. The
company is consistently building upon its portfolio and currently producing more than 400
products in different dosage forms covering broader therapeutic categories which include
antibiotics, antihypertensive, ant diabetics, antireretrovirals, anti asthma inhalers etc, among
many others. With decades of contract manufacturing experience with global MNCs, skilled
manpower and proven formulation capabilities, the company has been building a visible and
growing presence across the continents offering high quality generics at the most affordable cost.
Ensuring access to quality medicines is the powerful aspiration that motivates more than
3000employees of the organization, and each of them is guided by the same moral and social
responsibilities the company values most.
Manufacturing Facilities
Located at Tongi, near the capital city Dhaka, BPL’s manufacturing site is spread over an area of
20 acres which houses a number of self contained production units including oral solids, metered
dose inhalers, intravenous fluids, liquids, ointments, creams, suppositories, ophthalmic drops,
injectables, nebulizer solutions etc. The bulk drug unit for producing paracetamol is also located
within this site. Company’s penicillin API and formulation units are situated at Kaliakoir, The
plant and machinery throughout the site have been designed by and procured mostly from
renowned European companies.Beximco Pharma has its own utility infrastructure to ensure
adequate generation and distribution of purified water at all times. The installed capacity of
power generation is 8 MW. There is also liquid nitrogen generation facility on site.
Overseas Markets
The company is the largest exporter of pharmaceuticals from Bangladesh and the only company
to receive National Export Trophy (Gold), the highest national accolade for export, for record
three times. BPL has a global footprint in more than 45 countries across four continents and
currently in the process of entering the emerging markets of CIS with increasing focus on
regulated like and USA and EU market.
Besides the retail outlets, Beximco Pharma’s products are being supplied to renowned hospitals
and institutions like Raffles Hospital and K K Women & Children Hospital in Singapore, MEDS
and Kenyatta National Hospital (KNH) in Kenya, Jinnah Hospital, and Agha Khan Hospital in
Pakistan.





Kenya
Myanmar
Nepal
Pakistan
Regulatory Approvals
The manufacturing facilities of Beximco Pharma have been audited and approved by:









National Health Surveillance Agency (ANVISA), Brazil (MDI)
Therapeutic Goods Administration (TGA), Australia (OSD, MDI and Spray)
Gulf Central Committee for Drug Registration (for GCC member states)(OSD & MDI)
Qualified by UNICEF (MDI & OSD)
Qualified by Global GlaxoSmithKline (MDI)
Qualified by Asthma Drug Facility (ADF), France (MDI)
Qualified by Global F Hoff Mann La Roche (OSD)
Approvals by UK MHRA and USFDA are under process
OSD, Oral Solid Dosage; MDI, Metered Dose Inhaler
Chapter 5
Analysis and Interpretation
Sales Representative Interview Findings in Acme Laboratories and Its
Competitors
Interviews conducted with five pharmaceutical sales representatives offer a unique view at how
they perceive their team environment and the contributing factors of its successes and challenges.
These four representatives were from a major pharmaceutical organization of Bangladesh that
had implemented a mirrored-sales force structure in many years. The individual's represented
five distinct teams and did not have interaction with each other. The sizes of each of these teams
were 20 respondents each company. These representatives were chosen for the survey. The
protocol consisted of several questions with that focused on how effective they felt their team
was, what factors went into being effective, how they felt about the team process and team
members, what could be improved on their team, how the optimal team should be set up and how
the team should be measured and rewarded and how they can motivate.
Particularly interesting insights from these interviews was the perceived need for the team to be
able to effectively communicate and share information, desire to have each team member be able
to perform their role effectively (team-efficacy), the understanding of the importance of team
training, team goals and procedures and the need for a team-based incentive system. One
interesting finding was that role-ambiguity did not seem to be an issue with these representatives.
They all felt very comfortable with understanding their own role and the role of their teammates.
This probably has to do with the nature of their position and the clarity of the job requirements.
Communication between team members was deemed to be vital to the team's success. One
respondent stated,
"I can't move the ball unless I know what they did on the last call
Another respondent stated that "I need to work with my partners on an ongoing basis so that we
are constantly in the know as to what we have done, what the physicians said, and any
information that might be relevant to the next call – regardless of who does it" (personal
communication.
In Pharmaceutical Company the respondent said that they need to supervise under strong skill
person .In every company skill person should used a supervisor .In Acme Laboratories
supervision is not up to mark that’s why they are struggling to achieve their sales target. On the
other hand Incepta pharma and Bio-pharma are better so they are gaining the more market share
in Bangladeshi market.
The importance of this ongoing communication involved three specific activities:



Updating call notes in the company’s computer system (i.e. this is an electronic database
that each rep can access and gives information regarding physician interaction,
prescription patterns, and a variety of other sales tools)
Updating each other via phone mail or cell phone on a daily basis, and
Weekly or bi-weekly face-to-face meetings typically held over breakfast.
While the first two are standard operating procedures at this company, the third element, faceto-face meetings, is new and three of the four representatives were doing it. This simple
procedure they claim has been an effective tool in creating a sense of one team and developing
team objectives and goals, sampling strategies, sales routing, and physician messaging.
Another key component that was highlighted was the need to feel like the other team members
were contributing and could effectively do their job.
In regards to team-training the four interviewees felt that more should have been done up front in
order to ease the transition. For instance they mentioned that there was no training as to how
they should operate together particularly in regards to routing and sampling. Respondents
(personal communication, said this about training, "We are all type a players and it's hard to get
anything done. We've been able to work through that but it would have been nice to have some
help with it up front." Elements of team training that the representatives indicated were
important included: team building skills and processes, specific team processes and procedures
(i.e. team charter or protocol), and personality training.
Team goals and processes were thought to be an important contributor to overall team
effectiveness. The respondent that held face-to-face meetings felt that these were great
opportunities to determine team goals and processes. One respondent stated, "We put together a
'process agreement' that we all signed that outlined how we work together, what our routing
strategy was, how we communicate, and how we want to handle difficulties". Group goals that
the respondents thought were important focused around sales growth, physician messaging
strategies, call routing, and sampling practices.
Finally in regards to compensation the key element was to ensure that the team was compensated
fairly and as a team. The structure currently has a base salary with benefits and an incentive
portion. The incentive portion is comprised of two main areas: quantitative and qualitative. The
overriding opinion of the interviewees was that the qualitative aspect did not help the team, even
though it was supposedly geared toward compensating qualities such as teamwork, quality, and
customer focus. Since the qualitative portion of the incentive compensation was determined by
the manager, these representatives felt that it was subjective and did not correlate to actual
performance. The quantitative portion of the incentive compensation plan was seen as more fair
and one that promoted teamwork. In essence, the quantitative portion paid the individuals on
how well their team’s territory performed
Some of the interviewees stated that they felt their incentive compensation was a way to "gauge"
their performance and used it as a way of motivating themselves to improve their efforts.
Maximum respondents stated that compensation policy will affect the motivation of the
employee.
Some respondent brought up the fact that the pay plan could allow for "social loafing" or the fact
that a team member could "ride coattails" and still be rewarded the same as the members who
worked hard. They saw the potential for this, but didn't feel that it would be an issue on their
team because as respondent, "I'd never allow that to happen. That's what the face-to-face
meetings are for – to make sure everyone is on board and working."
Key Elements of Team Process and Compensation in the Acme Laboratories and
competitors
In the Acme laboratories, there are specific key team process elements that pharmaceutical
companies can implement to help create a highly effective sale's team. These elements are
focused on:
(a) Communication processes: Communication process is quite important for the sales people
so that they can understand the company view point regarding the job .In Acme and other
company communication differ from the main aspects of employee performance.
Communication processes should be built into any pharmaceutical team sales structure.
Communication is essential to a pharmaceutical sales team. While their work is additive in
nature it also has elements of conjoint processes with one rep building off of another reps sales
call (e.g. a physician needs clinical data before supporting a drug therapy that the next rep
needs to bring on his or her next call. This dependency requires a high level of coordination
and sharing of information that can only be accomplished through an effective communication
process. At minimum a pharmaceutical company should have the following team systems and
procedures in place in order to maximize team efficiency:

Call notes sharing software and database where reps can instantly update call notes on
a doctor that can be viewed by anyone on the team instantly,

Call protocol for team (i.e. daily voice mail messages for routine updates, cell phone
call for urgent matters, group call for sharing pertinent information and

Mandatory face-to-face meetings with scheduled topics and agenda's.
(b) Team-training: Team training should be conducted with all mirror teams. Best done at the
formation of the new team, this training would be useful throughout the life of the team. This
training should be facilitated and designed to achieve the following:



Understanding team decision making processes and setting up standard operating
procedures (i.e. routing schedule, sampling procedures, etc...)
Discovering team member's personality styles that can be beneficial in working together
as a team, and
Increasing team-efficacy beliefs.
This team training can help the team overcome communication, decision making, goal-planning
and other challenges in the long run. Team targeting for achieving the specific goal is vary in
different company .For example Squire is very much concern about their sales team so team
selection is nearly perfect .So sales target is feasible for their
(c) Team-goal setting: Team goals are another component that can help create a high
performing sales team. These goals should have a stretch element to them that is perceived to
be attainable by the team members. The attainability aspect helps not only in increasing
motivation, but also in helping build belief in the team's efficacy. Team goals can be
management mandated or self-selected by the team as long as they are stretch goals and the reps
"buy-in" to them.
Goal setting can play a big role for target sales .Highly imaginative goal will likely to fail in the
long run .Squire pharmaceuticals and Incepta Pharmaceutical goal setting is nearly feasible that’s
why their sales target is achieved easily. On the other hand Acme Laboratories and Beximco
cannot do this properly so their sales target is not achievable for their sales personnel.
(d) A team compensation structure: Compensation plans should be reflective of the team
nature of the sales process. While qualitative measures are often designed to foster teamwork
from a motivational standpoint, the representatives from this survey felt that qualitative was too
arbitrary and dependent upon a manager's whim. Therefore, it is recommended that most of the
incentive compensation for a sales team be structured around the quantitative aspect of sales
revenue that is team or territory based. Any incentive compensation structure should take into
account the motivational aspect of the plan's outcome utility, informative content, and regulatory
mechanism
Team compensation structure is always important to motivate the sales people .From survey I
found the above 90% Medical Promotion Officer (MPO) Medical Representative (MR) are
dissatisfied with their compensation policy. They wait for the opportunity to leave the job .In
pharmaceutical company compensation depends on the sales target. If someone fail to achieve
the target he will not compensated properly.
The outcome utility for a sales team will be determined by how well the team performs, but the
possible income generated by achieving the quotas should be equivalent with similar pay plans in
the industry. Additionally, the pay period for the incentive portion of the compensation plan
should be as short as possible. While sales data issues in the pharmaceutical industry make
weekly and even monthly payouts difficult, the shorter the timeframe the more utility the
compensation has.
The informative content of the pay system should have teams understanding where they fall
in relationship to other teams as well as against their quotas or targets. This informational
aspect of their pay should help them stay motivated throughout the year.
Regulatory mechanism of the sales plan suggests that the incentive compensation plan should
include symbolic awards and recognition aspects. Part of this is motivational and part of it is
social comparison for those teams that do not achieve this award.
While there are many things that can be included in the compensation plan, there are definite
elements that should be excluded. The compensation plan should not have an individual
component to it. This impacts how the qualitative parameters should be designed and
implemented. By introducing an individual element pharmaceutical companies could potentially
disrupt teamwork, reduce overall communication and limit team's goal planning effectiveness.
Additionally, while capped incentive programs (i.e. no matter how much you sell, the top amount
you can make is X) offer a company a safeguard in how much they pay out, it also limits the
unity value and motivational effectiveness of the sales plan.
What need to improve to motivate Sales Force
Motivation is the inner force that guides behaviour and is concerned with the causation of
specific actions. Motivation is a three-dimensional construct consisting of the following

Intensity or the magnitude of mental activity and physical effort expended towards a
certain action;
 Persistence or the extension of the mental activity and physical effort over time; and
 Direction or the choice of specific actions in specific circumstances
What motivates salespeople
-The reasons behind the intensity and persistence of mental and physical effort expended.
How salespeople choose their action
-The direction or decision to engage in specific actions in specific circumstances
Motivational theories addressing the issue: what motivates salespeople
 Self actualization needs (e.g., challenging job).
 Physiological needs (e.g., basic salary);
 Security needs (e.g., pension plan);
 Belongingness needs (e.g., friends in work group);
 Esteem needs (e.g., job title);
Two Factor Theories
 Motivation factors (e.g., achievement, recognition, responsibility)
 Hygiene factors (e.g., supervision, pay, job security, working conditions)
The theory argues that:
The motivation factors or motivators are the primary causes of motivation and address the
question “why work harder”;
The hygiene factors are necessary conditions to achieve a state of Neutrality and address the
question “why work here”.
Salespeople are motivated by different needs.
 Need for status (e.g., need for recognition and promotion)
 Need for control (e.g., need to be in control and influence others)
 Need for respect (e.g., need to be seen as experts who can give advice)
 Need for routine (e.g., need to follow a routine that must not be interrupted)
 Need for accomplishment (e.g., need more money and challenges)
 Need for stimulation (e.g., need to seek outside stimulation and challenges)
 Need for honesty (e.g., need to believe in the rightness of their practices)
Motivation, job satisfaction, and performance
Job satisfaction refers to all characteristics of the job itself and the work environment which
salespeople find rewarding, fulfilling, and satisfying. From survey it is found that there is a
distinct link between Motivation, job satisfaction, and performance. In every sales force there is
the integral part.
Job satisfaction can be felt by anticipating a desired outcome, or by accomplishing a certain level
of performance and/or receiving a reward. Job satisfaction, motivation and performance are
closely related. It is important to remember that global salespeople may be satisfied by different
outcomes and rewards.
Employee evaluations
Employee evaluations are an important part of maintaining a motivated and skilled workforce.
Employer's should evaluate and assess their employees on a regular basis, not only for the
company but also for the employee to receive feedback on the quality of work they do. Some of
the key topics that should be covered in a thorough employee evaluation are:

Work processes and results

Communication skills

Decision making skills

Interpersonal skills

Leadership skills

Planning skills

Program/project management

Interacting with external environment
In every respondent from the survey feel that compensation should be given on the performance
basis so performance evaluation should be fair. An evaluation should not only consist of
performance metrics, but also behavioral metrics. In addition to gauge the potential growth of a
employee the employer should specify some unique characteristics fitting to the industry the
company is in. The goal of the evaluation should be to encourage professional excellence from
the employees, rather than be used as a tool to point out short comes.
We specialize in creating custom employee evaluation forms and performance review forms
based on the industry the company is in. We work to help you achieve your goals with your
employees and customize the forms for the focus you are looking for. Some forms can be
centered on performance, while others on communication, or management. Our forms and
instructions will help you shape your employees to achieve more.
Optimize sales performance for competitive advantage
The sales force is a major growth engine for a firm, as well as a critical source of market
feedback. Yet it is also a substantial investment and one that can rapidly grow out of control.
Stimulating the sales force while simultaneously controlling costs is a necessary but elusive
balance.
Leading the Effective Sales Force: By analyzing your sales calls, realigning territories, shifting
product or market emphases, reallocating salesperson time or adjusting sales force size, you can
generate maximum growth from your sales force. At the same time, discover how to motivate
sales people and third-party distribution channels through compensation systems and
organizational structures.
Key Benefits

Make the sales force a key source of sustainable competitive advantage for your company

Gain comprehensive approaches to motivate and compensate your sales force

Learn to manage a dynamic sales force in the face of increasing product, consumer and
market complexity
Mathematical Interpretation
In analyzing the data collected for this study, likert’s Summative Rating scale used in section for
easy construction of table analysis and reliability of data. Mean rating will be used to rate the
variables.
Analysis of variables
Likert’s Summative Rating method of analysis was used in the analysis these research questions.
The Assigned weight to the various alternatives is Strongly Agree (SA) =5, Agreed (A) =4,
Neither Agree nor disagree (NAD) =3, Disagree (D) =2, Strongly Disagree (SD) =1
Mean rating was used for the variables .To get the at the mean of each table this formula was
used
Mean
=
X
=
∑X
∑f
Where f =frequency of respondent
X=weight assigned to each alternatives
Formula for calculation as used in the study is by multiplication of number of respondents under
each option with the weight assigned to the option and summing up to divide by the total number
of respondents in order to give the mean rating.
The decision rule is that the mean (x) of the total response falls above 4.5 to 5,it means
‘Strongly Agree’,3.5 to 4.5 means ‘Agreed’,2.5 to 3.5 means ‘neutral’,1.5 to 2 means ‘Disagree’,
0.5 to 1 point means ‘Strongly Disagreed’
Table 1
Variables
SD
D
NAD A
SA X
Current team is effective
0
𝑋
=
11
62
10
3.55
∑𝑥
∑𝑓
=
x
17
355
100
= 3.55
Analysis of the above table shows that the mean Rate 3.55 indicating ‘Strongly Agreed’.
Therefore, the average respondents agreed that the in which they are involve is satisfactory and
effective one.
Table 2
Variables
SD
Company’s current compensation policy can make you 20
motivate
𝑋
=
=
x
D
36
NAD A
16
28
SA X
0 2.52
∑𝑥
∑𝑓
152
100
= 2.52
Analysis of the above table shows that the mean Rate 2.52 which fall under the ‘neither agree nor
disagree’. Therefore, the average respondents have neutral opinion on the question that
Company’s current compensation policy can motivate.
Table 3
Variables
Any anxiety about your job security
SD
0
𝑋
=
=
x
D
7
NAD A
0
8
SA X
85 4.71
∑𝑥
∑𝑓
471
100
= 4.71
From the analysis of the above table that the mean Rate 4.71 which fall under the ‘Strong Agree
’.Therefore, the average respondents have agreed about their job .They may fired any time if they
cannot meet up target set by the company .
Table 4
Variables
You feel empowered at the job
SD
23
𝑋
=
=
x
∑𝑥
∑𝑓
259
100
= 2.59
D
25
NAD
35
A
9
SA X
9 2.59
From the analysis of the above table that the mean Rate 2.59 which fall under the ‘Neither Agree
nor Disagree’. Therefore, the average respondents have neutral opinion about the question that
they feel empowered at the job.
Table 5
Variables
Compensation impact your team’s performance
𝑋
SD
6
=
=
x
D
10
NAD
8
A
12
SA X
64 4.24
∑𝑥
∑𝑓
424
100
= 4.24
From the analysis of the above table that the mean Rate 3.78 which fall under the ‘Strongly
Agree’. Therefore, the average respondents have strongly believe that compensation effect the
performance of the company..
Table 6
Variables
SD
Company encourages you to develop real skills and
5
long-term careers
𝑋
=
=
x
∑𝑥
∑𝑓
323
100
= 3.23
D
19
NAD
23
A
36
SA X
18 3.23
From the analysis of the above table that the mean Rate 3.23 which fall under the ‘Neither Agree
nor Disagree’. Therefore, the average respondents have given neutral opinion about company can
get give the real training to improve for the better future .But when employee are afraid of being
fired, they have less attention to this training.
Table 7
Variables
Access to consult with supervisor on important issues
D
34
NAD
20
A
15
SA X
31 3.43
∑𝑥
∑𝑓
=
=
x
SD
0
343
100
= 3.43
From the analysis of the above table that the mean Rate 3.43 which fall under the ‘Neither agree
nor disagree’. Therefore, the average respondents have neutral about the question; they are not
sure about the access to their superior or the supervisor for communication.
Table 8
Variables
SD
Company have suitable arrangements for health, safety 14
and welfare that provide sufficient protection
𝑋
=
=
x
∑𝑥
∑𝑓
250
100
= 2.50
D
44
NAD
20
A
22
SA X
0 2.50
From the analysis of the above table that the mean Rate exactly 2.50 employees are not benefited
by the healthy environment or the welfare .They are almost dissatisfy with the company
situation.
Table 9
Variables
SD
Company's internal image consistent with its external 13
one
𝑋
=
=
x
D
35
NAD
11
A
41
SA X
0 2.80
∑𝑥
∑𝑓
280
100
= 2.80
From the analysis of the above table that the mean Rate 2.80 which fall under the ‘Neither Agree
nor Disagree’. Therefore, the average respondents have neutral opinion about the question,
Majority respondent are agree with statement .But about 35% people also disagree with the
statement from the point of view of the own company.
CONCLUSIONS
The study results indicated that pharmaceutical sales force identified the following three top
motivators:
1. Pay and fringe benefits
2. Job security
3. Promotion opportunities
Pharmaceutical sales force rated pay and fringe benefits as the most important motivating factor
which is supported by the findings of other studies. In addition, results indicate that pay and
fringe benefits is highly valued by the sales force of all demographic backgrounds. Its possible
explanation could be that pay and fringe benefits enable salespersons to fulfill their physiological
as well as esteem needs. Thus, critical review of the current incentive schemes is required to
make them more effective to cater to the needs of the sales force in both multinational and local
pharmaceutical companies.
All the demographic subgroups of the sales force, except salespersons above 10 years job
experience, emphasized job security as one of the top motivators. It could be probably due to
widespread unemployment conditions in the country. Job insecurity can deteriorate economic
and psychological well being of the sales force. So, when downsizing is necessitated, appropriate
initiates such as severance programmes, incentives for early retirement and outplacement
techniques should to be taken to sustaining productive behaviors of the salespersons
Pharmaceutical salespersons placed promotion opportunities among top three motivators. It is
recommended that organization should ensure to communicate and implement the policy of
promoting sales force from within the company.
Results indicate significant differences in motivational potency of promotion opportunities, job
security, interesting work and pay and fringe benefits among most of the demographic variables.
Thus, it is recommended that decision makers should take into consideration individual
differences while devising motivational programmes for the pharmaceuticals sales force.
References
Bandura, A. (1991). Social cognitive theory of self regulation. Organizational Behavior and
Human Decision Processes, 50, 248-287. Retrieved July 28, 2003, from
http://www.capella.edu.library
Beal, D. J., Cohen, R. R., Burke, M. J., & McLendon, C. L. (2003). Cohesion and performance
in groups: a meta-analytic clarification of construct relations. Journal of Applied Psychology, 88,
989-1007. Retrieved December 12, 2003, from http://www.capella.edu.library
Best Practices, LLC (2002). Building a mirrored sales force and managing sales force expansion:
benchmarking research.
Cameron, J., & Pierce, W. D. (1994). Reinforcement, reward and intrinsic motivation: a metaanalysis. Review of Educational Research, 64, 363-423. Retrieved September 3, 2003, from
http://www.capella.edu.library
Campion, M. A., Medsker, G. J., & Higgs, A. C. (1993). Relations between work group
characteristics and effectiveness: implications for designing effective work groups. Personnel
Psychology, 46, 823850. Retrieved October 5, 2003, from http://www.capella.edu.library
Centers for Medicare and Medicade Services. (2002, October 16). The Health Insurance
Portability Act (HIPAA) of 1996. Retrieved December 10, 2003, from
http://www.cms.hhs.gov/hipaa/
Churchill, C. A., Ford, N. M., Hartley, S. W., & Walker Jr., O. C. (1985). The determinants of a
salesperson performance: a meta-analysis. Journal of marketing research, 22, 103-118. Retrieved
September 3, 2003, from http://www.capella.edu.library
Deci, E. L., Ryan, R. M., & Koestner, R. (1999). A meta-analytic review of experiments
examining the effects of extrinsic rewards on intrinsic motivation. Psychological Bulletin, 125,
627-688. Retrieved September 11, 2003, from http://www.capella.edu.library
Dixon, A. L., Gassenheimer, J. B., & Barr, T. F. (2002). Bridging the distance between us: how
initial responses to sales team conflict help shape core selling team outcomes. Journal of
Personal Selling & Sales Management, 22, 247-258. Retrieved December 10, 2003, from
http://www.capella.edu.library
Franken, R. E. (2002). Human motivation (5th ed.). Belmont, CA: Wadsworth.
Hom, H. L., & Berger, M. (1994). The effects of cooperative and individualistic reward on
intrinsic motivation. Journal of Genetic Psychology, 155, 87-98. Retrieved November 25, 2003,
from http://www.capella.edu.library
IMS Health (2002). SBP Analysis. Working Document. Fairfield, CT.
Karau, S. J., & Hart, J. W. (1998). Group cohesion and social loafing: effects of a social
interaction manipulation on individual motivation within groups. Group Dynamics, 2, 185-191.
Retrieved September 10, 2003, from http://www.capella.edu.library
Locke, E. A., Durham, C. C., & Knight, D. (2001). The relationship of team goals, incentives,
and efficacy to strategic risk, tactical implmentation, and performance. Acadamy of Management
Journal, 44, 326-339. Retrieved September 15, 2003, from http://www.capella.edu.library
Majchrzak, A., & Wang, Q. (1996). Breaking the fundemental midndset in process
organizations. Harvard Business Review, 93-99.
Messe, L. A., Hertel, G., Kerr, N. L., Lount Jr., R. B., & Park, E. S. (2002). Knowledge of
partner's ability as a moderator of group motivation gains: an exploration of the Kohler
discrepancy effect. Journal of Personality and social Psychology, 82, 934-946. Retrieved
December 12, 2003, from http://www.capella.edu.library
Mistretta, L., & Mucisko, D. (2003). Pay for performance sales compensation goal eludes many
companies: productivity suffers as a result . Deloitte and Touche e-survey,. Retrieved October 6,
2003 , from http://www.deloitte.com/dtt
Morgan , Ben B., & Salas, Eduardo (1993). An analysis of Team Evolution and Maturation.
Journal of General Psychology, 120, 277-292. Retrieved December 10, 2003, from
http://www.capella.edu.library
Schermerhorn Jr., J. R., Hunt, J. G., & Osborn, R. N. (2003). Organizational behavior (8th ed.).
New York: John Wiley & Sons, Inc.
Seijts, C. H., Latham, C. P., & Rotman, J. L. (2000). Effect of self-and group efficacy on group
performance in a mixed motive situation. Human Performance, 13, 279-299. Retrieved October
1, 2003, from http://www.capella.edu
Stajovic, A. D., & Luthans, F. (2001). Differential effects of incentive motivators on work
performance. Academy of Management Journal, 11, 580-591. Retrieved September 5, 2003,
from http://www.capella.edu.library
Stajovic, A. D., & Luthans, F. (2003). Behavioral management and task performance in
organizations: conceptual background, meta-analysis, and test of alternative models. Personnel
Psychology, 56, 155-195. Retrieved September 1, 2003, from http://www.capella.edu.library
Tuckman, B. W. (1965). Developmental sequence in small groups. Psychological Bulletin, 63,
384-399.
Tuckman, B. W., & Jensen, M. C. (1977). Stages of small-group development revisited. Group
and Organization Studies, 2, 419-427.
Zastrow, C. (2001). Social work with groups: using the class as a group leadership laboratory
(5th ed.). Pacific Grove, CA: Brooks/Cole.
Zobal, C. (1999). The "ideal" team compensation system - an overview, part II. Team
Performance Management, 5, 23 - 36. Retrieved December 12, 2003, from
http://www.capella.edu.libr
Questionnaire
Respondent Name:
Company Name:
Occupation:
Work place:
(Answer the question below)
Question 1: What makes a team effective?
………………………………………………………………………………………………
Question 2: What has the company done to help your team be effective?
………………………………………………………………………………………………
Question 3: What are the specific elements or factors that make your team effective or not
effective?
………………………………………………………………………………………………
Question 4: How do you feel about the other members of your team?
………………………………………………………………………………………………
Question 5: What specifically makes you feel that way?
………………………………………………………………………………………………
Question 6: What are things that could be improved on your team?
……………………………………………………………………………………………....
Question 7: How would these help make your team more effective?
………………………………………………………………………………………………
Question 8: What is the optimal way that a team should be set up and operate?
……………………………………………………………………………………………....
Question 9: How is measurement and compensation done now?
……………………………………………………………………………………………....
Question 10: What effect does job security have on your ability to work together as a team?
………………………………………………………………………………………………
Question 11: What compensation elements could detract you (or one of your teammates) from
being a team player?
………………………………………………………………………………………………
Question 12: What obstacles stop employees performing to best effect?
………………………………………………………………………………………………
Question 13: How involved are employees in company development?
……………………………………………………………………………………………....
Question 14: How should the teams be measured and compensated?
……………………………………………………………………………………………....
On a scale of 1 to 5, please rate the following (circle the response that best applies)
Strongly Disagree 1, Disagree 2, Neither agree nor disagree 3, Agree 4, Strongly Agree 5
Statements
Current team is effective
Company’s current compensation policy can make you motivate
Any anxiety about your job security
You feel empowered at the job
Employee goals and company goals aligned
Company's internal image consistent with its external one
Compensation impact your team’s performance
Team is working together
Company has done to help your team be is effective
1
2
3
4
5
Company encourages you to develop real skills and long-term
careers
Access to consult with supervisor on important issues
Company have suitable arrangements for health, safety and welfare
that provide sufficient protection
Thank you