Description of the situation
Anna is a pharmaceutical representative in one of the leading companies on the market, a manufacturer of, among other products, a line of dermo-cosmetic products for people with very sensitive and atopic skin. She’s responsible for sales and promotion of the product line, mainly serving pharmacies. Her key clients are large chains and pharmacies located in shopping centres, where products are sold using an over-the-counter, self-service model. Anna took over the area after the departure of a good sales rep who met their sales goals, and she also has good relationships with her clients. Sales are based on a plan developed over several years. Anna hasn’t changed her predecessor’s strategy, which is based on three pillars: regular visits (especially to key clients), strong substantive support, and promotional campaigns. Her work is additionally facilitated by brand recognition activities, such as advertising campaigns.
In the last few months, sales of the dermo-cosmetic line for those with atopic skin - part of Anna’s portfolio - have fallen by 15% in terms of both value and quantity, even though the overall market for such products hasn't decline. That means that the line’s market share has decreased.
After an initial analysis, it appeared that the declining sales were due to the launch of a competing product - a line aimed at the same group of patients, in similar packaging, but at a 40% lower price. The competition flooded pharmacies with samples, and doctors also recommended their products.
This is quite a common situation - the salesperson is aware that the competition is marketing a cheaper alternative, but doesn’t take any strategic action, counting on the fact that their product will defend itself, backed up by its tradition, customer loyalty, and effectiveness. Meanwhile, in addition to the natural appeal of a new product - in this case, the competing line - the decline in Anna’s sales was also influenced by other factors. The lack of regular analysis of her own sales data and indicators turned out to be a key issue. Anna disregarded the competition and forgot that even if products seem to sell themselves, that won’t last forever, and the market is always changing.
Tip: The pharmaceutical industry is specific, and it’s worth analysing sales in this area from a broader perspective: not only the pharmacy (pharmacist)-patient dynamic, but also doctors’ recommendations, the wholesale situation, and promotions.