The pharmaceutical industry is one that has been seeking to enhance efficiency in customer relationship management through strategies that involve a transition from the traditional sales force to Key Account Management. However, the transition requires organization changes and is subject to several factors. In that respect, this analysis refers to the case of pharmaceutical companies in Greece for the purpose of analyzing change management that relates to the transition. To achieve the objective, the analysis will provide a literature review and an empirical analysis seek that seeks to answer a number of questions that define the research thesis. Those questions include:
- What are the key transition’s factors that are crucial to the companies’ management?
- What are the key changes resulting from the transition?
- What are the most crucial change management responses to the transition effects?
- Literature review
- Pharmaceutical industry and the transition
The limited access to physicians is a great cause of challenges for pharmaceuticals sales force and businesses in the industry have sought to enhance their sales through innovative practices that increase their product’s uptake. In that respect, the companies have sought to transform their sales forces to valuable resources by rolling out strategies to manage their key accounts with their key target market that mainly comprise of physicians. This has resulted to a transition from the sales force tactics that were product driven to a new approach which is more customers- centered.
- Overview of Pharmaceutical industry in Greece
The Greece pharmaceutical industry operates under complex and challenging environment and is experiencing fast changes as a means for the Companies to enhance their performance. The country’s healthcare expenditure accounts for 9.5% of the country’s GDP and sales to hospitals account for a 17% of the total industry sales. In addition, the country’s private expenditure on healthcare is 47% of GDP, hence being the largest among the EU’s 15 member countries. This is an indication of the need to enhance key accounts management considering that institution customers are forms a significant target market. (Croma, 2014) The industry’s sales performance can be summarized by the sales figures shown on the table.
Source: (Croma, 2014)
- Transition in Greece pharmaceutical industry
Western Europe has been facing economic challenges which have affected the healthcare industry among other industries. With that effect, it is increasingly becoming difficult to get the government to pay for drugs or subsidize the healthcare to lower the cost of drugs for patients. In that respect, there is an increased push by the pharmaceuticals for hospitals to prescribe generic drugs that are termed as being cost effective. With that change, there is an increased need for the pharmaceutical companies to develop close relationships with hospitals as the sales force turns to offer advisory service to hospitals as they work on lists of those cost effective prescriptions. In that view, the sales teams have to identify key client accounts and develop relationships with the institutions as they become more engaged in not only the sale transactions, but also in advising on the drugs prescription.
Traditional sales force
The traditional sales force involves personal selling that is viewed more as transactions oriented than relationship management. This has mainly been reinforced by the reward system that marks the revenue-focused transactions hence the strategy being one of stimulating rather than meeting demand for products. In that respect, the sales force has had least contact with hospitals as institutions but as buyers and have been dealing only with individuals responsible for drugs’ purchases. Thus, there has been minimal contact between the sales force and the hospital management and workforce. (Kotler & Armstrong, 2004)
Key Account Management
Key Account management is a sales strategy that is being adapted by several businesses and has been in operation in the past two decades. In addition, it is an organizational process that applies to business-to-business sales’ operations through which the pharmaceuticals sales teams are transforming to take a more advisory role for hospitals in a bid to enhance drugs sales. This entails the sales team coordinating with hospital management and entire workforce to develop lists of generic drugs’ prescriptions that will be cost effective for the economically challenged industry. In that respect, sales teams have to manage their clients’ accounts with an increased contact and close relationship between the two institutions’ management. (Kotler & Armstrong, 2004)
- Change management
Change efforts can be defined by a number of elements including the change purpose & measure, necessary leadership style, the motivation for change as well as the focus for that change. In that respect, there are two main types of changes that are crucial for addressing the rising issues. In that view, change management approaches are dependent on the nature of change and its drivers; with the two types of changes including the economic value driven change and the organizational capability driven change. Thus, the forthcoming transition in the pharmaceutical industry can be classified ad economic-value-driven since it focuses on enhancing value delivery through customer relationship management. (Hiatt & Creasy, 2013)
In view of the pharmaceutical industry sales transition, the change management can be said to be dependent on some factors as listed below:
- Planning for and documenting of the management’s objectives.
- Defined governance that involves establishing appropriate organizational structures and roles definition.
- Leadership commitment for purpose of organizational guidance.
- Stakeholders’ awareness that define their participation and understanding of the changes.
- Workforce alignment through identification of the changes’ impact and establishing suitable plans to enhance workers support. (Luecke, 2003)
- Research methods and rationale
Research methods and rationale
In a bid to answer the research questions that address the change management in the forthcoming transition from sales force to account management, the research applies descriptive methodology by conducting a survey on a number of selected Pharmaceutical Companies in Greece. The respondents will be selected from various companies on basis of geographical representation of the market. According to Boote and Mathews, descriptive survey can either involve application of qualitative or/and quantitative methods in collecting more data and information on the subject matter. In that respect, this research applies a qualitative approach that uses questionnaires in collecting data from the companies as well as from the industry customers. (Boote & Mathews, 1999)
According to Malhorta, the advantages of using a questionnaire over other primary data collections like interviews include the fact that questionnaires are easier to administer and less expensive as well as protects respondents’ confidentiality. In light of these advantages and appropriateness of the survey method, descriptive research methodology is chosen for this research with questionnaires being distributed to respondents to collect details that relate to their perception of the transition’s effect on the companies as well as their management. (Malhotra, 1996) In addition, the survey will involve collection of secondary data that will rely on existing studies and published market and industry data. In that respect, the survey will be applying triangulation where several methods are applied to arrive at a common finding. (McDaniel & Gates, 1995)
Population and sampling frame
In order to achieve the objective, the study will be done by selecting a population that would be representative of the characters under the study’s definition of pharmaceutical companies. Therefore, the population under study will comprise of 100 companies’ executives all from within the geographical location of Greece. (Looney, 1997) However, due to efficiency purposes in terms of reach and cost, the whole population cannot be reached for the survey hence a need to apply the questionnaire to select few who would be representative of the population under the study. In that respect, a sample of 30 will be taken from ten largest cities in Greece. In getting a representative sample, stratified random sampling method will be applied for its ability to achieve a fair representation as well as from the fact that the sample’s mean is likely to be close to the population’s mean. (McDaniel & Gates, 1995)
Further, the sampling method applied will seek to ensure convenience in terms of identifying respondents who are easily available and reachable in terms of their emails availability through which the questionnaires will be sent. In that respect, the whole country will be analyzed with executives from each town being targeted for a total target of 40 respondents. However, it is expected that out of the 40 executives; at least 30 will respond to the questionnaires and mail them back making a sample of 30 executives. (Patton, 2001)
Data collection will be done through primary and secondary methods. The primary method will involve a questionnaire that will have open ended questions which seeks to collect the suitable data to answer the research questions. The questionnaires will be sent to respondents through mail for the purpose of efficiency in terms of cost and timely delivery as well as reply. In addition, secondary sources will be used as a source of data which will involve collecting the already published data on pharmaceuticals in Greece. The information is available in industry reports and past surveys done in respect to the industry’s operations. (Patton, 2001)
Validity and reliability
Although research’s method’s validity and reliability are usually regarded as denoting different things in their application to quantitative research, the two are inseparable when it comes to qualitative research. In respect of reliability, it relates to the idea that same results can be achieved if the same survey was conducted elsewhere. In that consideration, it can be regarded as the estimation of the tools’ consistency given the same subject and settings. (Golafshani, 2003)
On the other hand, a study’s findings are regarded as valid when the measurement instruments qualifies as reliable with validity being in itself the measure of strength or trustworthiness of the survey’s conclusion or findings. If any arrangements or approaches exists that increase audience confidence on the truthfulness and originality of the result, it can be regarded as a reliability measure. However, unlike in quantitative research, both validity and reliability are encompassed when other terms like precision, transferability and credibility are applied in qualitative research. Thus those terms are taken to be more effective in provision of suitable lenses for evaluating the outcomes or the findings of a qualitative survey like in this case because qualitative researchers are not much concerned with the replicability of a survey results. (Golafshani, 2003)
In respect of application of secondary research that will be done, it takes the form of a case study design whose reliability is to a great extent determined by the quality of the person doing the research as well as collecting the data and information. In this design, there is an opportunity to gather data from different sources hence resulting to triangulation that helps to search for and achieve convergence. In that respect, triangulation is defined as the validity procedure in which the researchers will seek for convergence from different sources of information in forming categories or themes in a study. Thus application of triangulation will help in strengthening this study by combining several methods. (Patton, 2001)
In that consideration, this study will involve getting information from several companies and customers as well as getting published information and data which will seek to solve the question on validity and reliability through convergence of the findings from the difference methods used hence increasing the quality, strength, trustworthiness and credibility of the study. In addition, the use of published sources including industry reports and websites increases the reliability since the study’s validity can be confirmed from the sources. Finally, the questionnaires design that elicits consistency in responses enhances the study’s reliability. (Golafshani, 2003)
The data collected will then be analyzed through qualitative methods including application of statistical measures like the mean and tabulation of percentages as a way of describing the research results and findings. This will involve use of Likert scales which are uni-dimensional and non-comparative scaling techniques meant to measure a single aspect. It will involve respondents indicating a certain agreement level with statements in an ordinal scale. In that respect, responses vary with the most common variation being the 5-point scale that range from Strongly Disagree to Strongly Agree. Thus, each scale level will be assigned a code or numeric value that starts with one increasing by one to the last. (Patton, 2001)
Likert scale is named after psychologist Rensis Likert who invented it and is commonly used in survey research. It involves measuring the level of agreement with a likert item which can be defined as a statement that respondents are expected to evaluate according to any objective and subjective criteria. In that consideration, a five level scale will be used in the questionnaire for this analysis with the format including Strongly disagree, Disagree, Neutral, Agree and Strongly Agree all of which measure the negative or positive responses. In addition, the analysis will seek to find convergence between the findings from the collected primary data in the survey and the findings with application of secondary data. (Malhotra, 1996)
In summary, the research methodology will take the form of descriptive survey in which primary data collection with application of qualitative method where a questionnaire will be used to collect data from the pharmaceutical companies and customers. Further, there will be triangulation with a mix of methods where secondary sources will be used to collect existing data on the survey parameters. For the questionnaire, the data will be collected from all over the country to reflect fair representation in which a population of 100 companies’ executives will have a representation by a sample of 30. In addition, the data collection will include both primary and the secondary method where a questionnaire will be the primary source while industry reports and companies’ websites will form the secondary sources. Finally, the data analysis will involve application of statistical methods in seeking to draw conclusions and findings from the collected data and information. (McDaniel & Gates, 1995)
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