Syntex Lab
What sales force and allocation would you recommend? Would you allocate by product, specialty or some combination?
As per the facts in the case and subsequent analysis, a number of factors stand out which indicate that Syntex should increase the number of sales force and direct the sales effort for optimal allocation of sales presentations to Syntex products. The various reasons to adopt an allocation based on products are as follows:
1) Though Syntex started as specialty oriented company, its product Naprosyn had become the 9th largest selling drug in US, accounting for 21.4% of Syntex’s market share. Even though the NSAI market was fast growing and becoming more competitive, Naprosyn was expected to hold onto its position. When compared to the big anti-arthritis competitors, Syntex’s sales force was much lesser (443) and needed to be increased to cater to the growing market of Naprosyn.
2) The sales Force Strategy Model (SSM) based on product presentations shows a greater increase in net profit with a lesser number of sales force when allocated based on products as compared to the allocation based on specialties.
3) The response functions used as an input to the model indicate that increase in sales at different levels of sales effort (no calls, one-half, present, 50% more and saturation) is generally greater for products than for specialties.
4) At the current level of sales force of 443 and increasing it till 600 the incremental contribution to profit of each additional sales representative is more for specialties than for products but the absolute profit contribution of products is greater than specialties.
5) While allocating sales forces based on specialties, one of the main assumptions made is that all doctors respond in the same way to different products. This does not provide an opportunity to focus sales efforts on some particular product requiring greater sales effort or offering greater growth prospects. For example, A sales representative
As per the facts in the case and subsequent analysis, a number of factors stand out which indicate that Syntex should increase the number of sales force and direct the sales effort for optimal allocation of sales presentations to Syntex products. The various reasons to adopt an allocation based on products are as follows:
1) Though Syntex started as specialty oriented company, its product Naprosyn had become the 9th largest selling drug in US, accounting for 21.4% of Syntex’s market share. Even though the NSAI market was fast growing and becoming more competitive, Naprosyn was expected to hold onto its position. When compared to the big anti-arthritis competitors, Syntex’s sales force was much lesser (443) and needed to be increased to cater to the growing market of Naprosyn.
2) The sales Force Strategy Model (SSM) based on product presentations shows a greater increase in net profit with a lesser number of sales force when allocated based on products as compared to the allocation based on specialties.
3) The response functions used as an input to the model indicate that increase in sales at different levels of sales effort (no calls, one-half, present, 50% more and saturation) is generally greater for products than for specialties.
4) At the current level of sales force of 443 and increasing it till 600 the incremental contribution to profit of each additional sales representative is more for specialties than for products but the absolute profit contribution of products is greater than specialties.
5) While allocating sales forces based on specialties, one of the main assumptions made is that all doctors respond in the same way to different products. This does not provide an opportunity to focus sales efforts on some particular product requiring greater sales effort or offering greater growth prospects. For example, A sales representative