Pilgrim Drug Company

PILGRIM DRUG COMPANY
GROUP 3
SECTION C
Company Overview
 The company owned 74 Drug divisions in US.
 Each division acted as a functionally autonomous unit, maintaining its own warehouse,
sales, purchasing and accounting department.
 The company had a 3 – Step sales plan to increase profitability:
1. Sales of larger quantities or high value items was encouraged
2. Sales of larger total value to an individual; delivery cost remained same
and hence profit increased
3. Sales of higher – margin items were encouraged
 Compensation – Commission based (Determined by the margin of the product sold)
 Sales territories were divided geographically. 2
Syracuse Division Overview
 David Thomas took over as Division Sales Manager from Harry L. Schultz in 1998
 This division sold a broad product line of approximately 18000 items
 There were 2 other competitors in the Syracuse region
 In Syracuse the share was 20%, compared with a 48% share for some of the other divisions.
 Thomas was planning to reassign the individual accounts
 Syracuse Division sales force consisted of 9 sales reps and 3 trainees.
 Four of the sales reps and all of the trainees had come to Pilgrim under a new sales training
program initiated in the late 1980s
 Among these 5 were Veteran Sales reps; 4 were new Sales reps
 Brooks who was a Veteran Sales rep wanted to leave the company 3
Problem Statement
Underperformance of Syracuse division

due to ineffective sales management
4
Veteran Reps
Bill Brooks Clifford Nelson
● Great in Relationship building ● Rushing calls
● Not following weekly plans ● No aggressive selling
● Poor in promotional activities ● Poor in promotions
● Not getting pharmaceutical business ● Needs merchandizing training
● Easy selling ● Loyal and hardworking
● Needs merchandizing training ● Sales% of PWPP= 36.0%
● Sales% of PWPP= 26.9% ● 46/53
● 49/55
5
Veteran Reps
Allen Simpson Walter Miller John Murray
● Popular with his ● Easy going ● Native of Syracuse
customers. ● Good rapport ● Some big accounts
● Complaining about ● Inputs by Thomas well being managed
sales management and received ● Suggestions of Thomas
other operations not being well received
● Sales% of PWPP=
● Sales% of PWPP= 9.2% ● Sales% of
24.4% PWPP=34.0%
● 39/90
● 29/48 ● 33/44
6
New Reps
Grace Howard Michael Taylor Linda Harrington Matt Donnelley
● Increased sales ● Substantial increase ● Still on salary ● Overworked
● Good with in sales ● Ready to learn ● Ready to learn
merchandizing ● Focussed and task ● Territory with ● Worked hard
● Sales% of PWPP= oriented uncontacted ● Sales% of
24.4% ● Sales% of PWPP= accounts PWPP=11.5%
● 32/44 42.4% ● Sales% of ● 56/104
● 29/29 PWPP=21.2%
● 26/36
7
Analysis and Solution
Territory Issues
Old System Territories should be based on
● Territory assigned with no regard to ● Work Load
sales and market potential ● Sales Persons ability
● Biased on seniority and geography
● Sales Potential of Territory
○ This heavily favored the Vets
○ Newbies left with less than ● Number of stores in the area
perfect accounts ● Travel Involved
● All territories were picked through and
not worked to its full potential
9
Sales Plan Implementation Issues:
Sales Policy and Strategy Implementation Issue
● Strategy ● Neither was adopted by Veterans Sales
○ Sell High Volume or Sell High Rep
Margin ○ Selling easy items instead of
● Policy profitable one
○ Sales calendar coordinating ○ Not following merchandising
activities and accounts techniques
○ Schultz did not adhere to
regulation set forth by HQ and
also did not push the vets
10
Veterans V/s New Sales Rep
● Focussed on relationship ● Educated and driven
● Good territorial understanding and ● Asking for challenges and fair
relationship competition
● Not following merchandising techniques ● Following merchandising techniques
● Enjoying low hanging fruits & easy ● Wants to learn and grow
targets ● Motivated, adaptable and coachable
● Not Motivated ● See reorganisation as an opportunity
● Rigid/Hard to Push
● Not happy with reorganisation
Nelson , Miller , Harrington, Howard
Taylor
Murray
Simpson , Donnelley
12
Work load V/s Sales Rep Performance
Workload:
• Miller, Simpson and Donnelly are over-
burdened and needs support
• Given the Taylor’s Active Accounts and
Sales percent of PWPP , he can take
more work load
Sales Rep Potential:

• Taylor, Nelson and Murray has proven
record given their Sales Percent of
PWPP
• Miller and Donnelly perform poorly as
compared to others
13
Nelson’s Case
● From exhibit 3, Nelson is demanding

Brooks’ 70% territory sales by value
● Nelson has “Sales % as PWPP” as
36%, proving his sales potential
● He can be thought to assign few high
performing accounts but adding 16
accounts would increase his work
load
○ Already making rush calls
Restructuring of Territory
Who gets the Brooks account:
• Nelson along with Trainee T1 given –
Jefferson, Lewis (24 accounts) and
very few (4-5) high paying accounts
of Oswego
• Rest Oswego to be given to
Harrington along with Trainee T2 and
Murray
Other Territory Restructuring:
• Donnelly to be supported by a trainee

T3
• Donnelly’s some Oneida accounts to
be handled by Howard
• Taylor given the task to activate some
of the inactive accounts of Simpson
and also takes over inactive accounts
of Chenango from Miller
15
Thanks!
Any questions?
16

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Underperformance of Syracuse division

Sales Rep Potential:

● From exhibit 3, Nelson is demanding

Other Territory Restructuring:

• Donnelly to be supported by a trainee

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