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Pilgrim Drug Company Sales Strategy Analysis

This document provides background information on Pilgrim Drug Company, including issues they are facing with their sales force. Specifically: - Pilgrim Drug Company has 74 divisions across the US with 18,000 products and each division operates autonomously. - The sales force is diverse, with veteran reps focusing on relationships and newer reps with more education. This is causing issues. - Veteran reps are not fully adhering to the company's sales strategy of focusing on high volume or high margin products. - Territory divisions were made based on seniority and geography rather than market analysis, disadvantaging newer reps. - Problems identified include the diverse sales force, enforcing strategy and policies, and territory issues between

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Jose Shaw
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268 views16 pages

Pilgrim Drug Company Sales Strategy Analysis

This document provides background information on Pilgrim Drug Company, including issues they are facing with their sales force. Specifically: - Pilgrim Drug Company has 74 divisions across the US with 18,000 products and each division operates autonomously. - The sales force is diverse, with veteran reps focusing on relationships and newer reps with more education. This is causing issues. - Veteran reps are not fully adhering to the company's sales strategy of focusing on high volume or high margin products. - Territory divisions were made based on seniority and geography rather than market analysis, disadvantaging newer reps. - Problems identified include the diverse sales force, enforcing strategy and policies, and territory issues between

Uploaded by

Jose Shaw
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

Case 1

Pilgrim Drug Company


Case Presentation
Marketing 458 Sales Management:
Kellen Blomquist
Chase Hughes
Elizabeth Martin
Hilson Merrill
Brad Ruleman
Eustace Winn
Outline

Case Background
Business Case Issues
Analysis
Business Problem(s)
Solution
Case Background

74 wholesale drug divisions in the U.S.


18,000 products. All in store except
periodicals.
Each division an autonomous unit:
maintaining warehouse, sales, purchasing,
and accounting departments.
Case Background- business model

Sales reps visit current and potential


accounts
Sales calendar for each division
Compensation- commission based.
Determined by the margins of the products
sold.
Market analysis records
Sales territories divided geographically
Competition

Only two main competitors.


One carries roughly the same line as Pilgrim
The other carries a more limited line than
Pilgrim
Business Case Issues

Performing less than adequate


Senior reps less educated than young MBAs
Schultz did not adhere to regulations set
forth by New York office.
Nelson wanting Brooks accounts
Analysis of Current Situation

Compensation-
Commissions paid to the sales reps varied depending on
the product mix being sold.
Rolling commission rate. Paid on the basis of margins.
Certain products are pushed with higher commissions
The share of the Syracuse market for wholesale
purchases of retail drugstores held by Pilgrim Drug
was 20%, compared with a 48% share for some of
the other divisions.
Analysis
Plans were implemented that would focus sales reps efforts to
minimize the handling cost of their sales and to maximize profits

The company promoted a three step sales plan for increased


profitability
Sales of larger quantities of an item or of high value items were
encouraged because the cost of processing and filling each line of an order
was practically constant.
Sales of larger total values were encouraged because the profit made on
sales to individual account is related closely to delivery expense. The
larger the total proportion of the accounts business that went to Pilgrim,
the greater the profits as delivery expense remains more or less constant.
Because some manufacturers offered margins considerably larger than
others, sales of higher-margin items were encouraged.
Questions

Any questions so far?


Business Problems

Diverse Sales Force

Strategy and Policy enforcement

Territory Issues
Business Problems- Diverse Sales
Force

Veteran Sales Reps


Seniority Issues
Focused on Relationships

Newer Sales Reps


Educated and Driven

Vets vs. Newbies


Strategy and Policy Enforcement

Strategy:
Sell High Volume or Sell High Margin
Policy:
Sales Calendar coordinating activities and accounts.

Neither was adopted heavily by Veteran Sales Reps.


Territory Issues

Supposed to be divided using Sales and Market


Analysis Record System.

Actually Divided by Seniority and Geography


This heavily favored the Vets and left the Newbies with
less than perfect accounts

All territories were picked through and not worked


to its full potential.
Solution

A mix of old and new


-sharing of accounts between old and
new reps.
Certain product quotas
-make quotas for high margin products
Mix of salary and commission
Solution

Sales rep retreat for division


Train and reiterate sales policies and strategy
Build bond between old and new reps

Compensate based on total sales and not per product profit


margin basis

Behavioral monitoring
Call records
Account checksheets
Questions and Class Discussion

Are there any questions?

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