Case Study 2 (of 6): The Launch of an Acid Reflux Medication

This PPI or acid reflux medication is launched in an environment with a clear market leader, which is perceived as the best and was almost a medical revolution at the time of its launch. Also, the competing company is much stronger in resources and has established relations with customers and other stakeholders. Now, the team is trying to launch a very similar product that is not seen as new to the market, but rather a “me-too”

product. (Type of Product) Conversely, for the launch team and its company, the product and therapeutic area are new. The type of newness is an important influencer in how the launch strategy is formulated. The team has primarily planned for a price strategy. Their market research shows clearly that a 20-25% price reduction at launch will be feasible if they are to successfully enter and compete in the current environment.

However, the global corporation, to which this marketing and sales affiliate belongs, does not approve of such a price decrease in the local market, so the team has to rely heavily on marketing and sales force messaging to complement the 10% decrease in price that they have approval for. (Market Dynamics) The market environment is considered stable, certain, slow to change and fairly predictable. The market environment is not a huge concern, based on its simplicity of nature and straightforward competitor environment with only one main player. At the time of launch, the main competitor is prepared and ready. The competitor is doing everything they can to interfere with the launch, e.g. they stop the launch product brochure, with the result that the launch team initially loses momentum. This is not, as agreed by the team, a good opening. One of the more resource-intensive tactics is the inclusion of 25 sites for clinical testing around the country, which is followed up with extensive pre-launch and launch activities. The main target group is general practitioners and some key “gastroentologists”. A secondary target group is the rest of the “gastroentologists” as well as practicing surgeons.

As the launch team is faced with a very competitive landscape, or more correctly, a very strong competitor, “team-spirit” is perceived as easy to build. However, building this team-spirit is also seen as one of the most important factors during launch. (New Product Adoption) The team point out the paramount importance of the sales representatives being emotionally attached to the success of the product and that they are willing to make further investments of time and energy. Effort is seen as important in the sense of thoroughly prospecting for customers and quickly building customer relations. As the team perceives that relations are built by investing extra time and energy with the customers, these factors of the discussion are also related to the commitment factor of their willingness to make further investments of time and energy. A lot of work is done by management to build up excitement and emotional attachment to the product in the sales force. There are off-site meetings and a larger kick-off meeting as well as some educational efforts. As much as possible is done in a collective group and in teams to

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reinforce the “we-spirit”. This “we-spirit” leads to greater motivation that the team is able to do better than its competitor. Within this, the management encourages sales representatives to discuss the product with others. However, these discussions between sale representatives are not seen as a very important component for driving a successful launch.

During the early launch, one mistake is made and needs to be corrected. The mistake is to initially promote a sales representative to product manager. The person’s experience of product management was not sufficient to build a compelling enough story in the tough competitive climate. This became a burden in the sales force, but once corrected, things improved quickly and the launch was back on track.

With the competitor being so strong, the behavioral aspects become very important from the point of view of how the sales representatives act in the field. (Behavior Control) Sales management put much effort into spending as much time as possible in the field together with the sales representatives. The primary focus is to monitor and adjust the actions of the sales personnel. The sales representatives are held accountable for their actions, and sales management continues to do this for each sales representative, regardless of whether their sales results are positive or negative. There are hardly any formal procedures or guidelines set up within the company for the sales representatives to follow. These are primarily made up “on the go” as they are agreed upon by sales management in relation to how things develop in the field. Given this lack of processes and guidelines, there is no effort from sales management to either monitor or evaluate this.

(Outcome Control) To reinforce the group and team spirit, incentives and performance evaluations of salespeople are set up accordingly. Sales are the highest valued and important measure. Performance evaluations are primarily based on these sales results.

Also, an important factor in the follow-up of performance is to let failed results be explained. This is done in a group environment, mostly for learning and best practice sharing. Pay increase is not perceived as being connected in a positive way to performance evaluations. Most incentives are collective and rewarded in the form of a better choice of, for example, internal conference locations and levels of luxury. Since most incentives are team-based and fairly simple, management does not spend time making sure that every sales representative knows or understands exactly how they are set up, but just assumes that they understand.

(Supervisory Context) The product and therapeutic area is new for the company, so emphasis is placed on internal marketing of several aspects. As the competing product is well-established in the market, a lot of effort from management is put into explaining the

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rationale of introducing the new product from many angles, e.g. what it means for patients, physicians and payers. The research effort and strategy behind the product is not emphasized as the product was not developed within the company. To some degree, the company’s strategies are explained, but it is not seen as very important. The focus on team-spirit and collective incentives makes the sales management assume that trust will be easy to build. Even though it is seen as easy to build, it is also viewed as being very important, so all aspects of trust between the supervisor and sales representative are emphasized, (i.e. they are encouraged to freely share ideas and feelings about work, freely talk about difficulties while knowing the supervisor will listen, and make considerable emotional investments in the working relationship). Trust is seen to be well established throughout the launch. Training in the product is not really well-organized; it is communicated as being important, but it is seen as on-the-job learning as the sales representatives build up field experience in the therapeutic area. Instead of training, a lot of time is spent by management in the field, focusing on joint sales calls and observations of performance.

(Sales force organizational design) The sales force is organized in geographical teams, with two sales representatives collaborating within that area. The only matter of importance in sales force organizational design, is the fact that there are sales teams of two sales representatives for the same geographical area, (i.e. they have to collaborate and share customers). (Other) The number of sales representatives is seen as important for ensuring that the number of sales calls is better than or in line with competitors. While sales management wants to have many sales representatives, the senior company management wants to minimize costs to generate a good profit. Therefore, how to optimize the number of sales representatives is under continuous discussion within the company. During the launch, a co-promotion agreement is made with another company.

As a result of this agreement, additional sales representatives are added to better meet the share of voice of the competitor. The focus on the new product in the sales calls is seen as very important and as a consequence, the sales representatives only sell the new product.

(Salesperson Characteristics) The background of the sales representatives in the sales force differs as people are moved from other products within the company into the new product. There are no established recruitment processes and the characteristics of the salesperson that are seen as important are their problem-solving techniques and their ability to learn fast. The preferred problem-solving approach for the sales representative is to be intuitive and adaptable to the situation. As quoted from one sales manager, “with sales representatives that learn fast as they go and solve problems based on their intuition, even the customer sees the engagement”.

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(Performance in Selling a New Product) Exceeding the sales targets is the primary measure of launch success. Also, with collaborating teams and incentives built in the same way, success is also achieved when sales representatives, together with their manager, achieve their objectives (how the sales representative assists the sales manager in achieving the objectives for the new product). Secondary measures are volume uptake and profit, but these measures are not monitored frequently or with any great interest from the sales force or launch team.

The launch is considered a success by the launch team members as sales targets were exceeded and sales managers’ and their team’s objectives were met.