CHAPTER 1

The Problem and a Review of Related Literature

Pharmaceutical companies rely on a well-known equation: Meet with

physicians, detail new medicines, and encourage production adoption. As

access to physicians increases, so does influence, and thus revenue. What

happens to earnings, however, when the face time that physicians allot to in-

person meetings declines sharply — as is the case today? The answer:

Pharmaceutical companies must find new ways to stimulate sales.

Previously, physicians’ time was not such a scarce commodity. In 1982,

for example, pharmaceutical representatives consulted with physicians

regularly and for an average of 12 minutes per visit. Now, however, more

than one-third of physicians meet with sales representatives fewer than

seven times per year — if at all — and these interactions last, on average,

just three minutes. As a result, according to the Health Strategies Group,

while sales representatives conduct about 41 physician calls per week, and

42 additional calls on staff, they spend only 127 minutes per week detailing

products.

Declining face time is only one factor challenging pharmaceutical sales

today. The information environment is also extremely saturated. A typical

primary care physician interacts with 31 representatives weekly, leaving

little time for substantive discussions. Indeed, one-third of interactions

involve a samples sign-off, with no product discussion. Predictably, sales

force morale suffers. Likewise, new regulations plus many individual

hospitals’ restrictions have curtailed sales activities and sample distribution.

As a result of these challenges, pharmaceutical companies struggle to

increase brand awareness, maintain high levels of sales force morale and

productivity, and exert the influence required to increase sales.

It is in this light that the researcher wants to know the approaches

towards sales effectiveness of medical products representatives in the

pharmaceutical industry in Batangas City. This research also aims to

determine the effectiveness of a customer-centered approach in increasing

the sales effectiveness of professional medical representatives in the area of

Batangas City.

RELATED LITERATURE

The twentieth century will be remembered for many technological

achievements including a greater understanding of the atom’s structure, the

information explosion that has resulted from advances in computer technology, and

the information obtained from space explorations. When measured in terms of its

impact in people’s lives, though, the twentieth century might just as well be called

“the drug age”.

Although drugs and drugs alone cannot be considered to be the sole reason

for the progress in medicine achieved in the twentieth century, a glance back to as

recently as 40 years ago indicates that “at that time, there were no antibiotics, no

corticoids, few sulfa drugs, few vitamins, no tranquilizers, no antihypertensives,

antihistamines, no oral contraceptive drugs, no effective oral diabetic drugs, no

prophylactic drugs for gout, no potent active oral diuretics, no drugs to lower the
level of blood lipids and cholesterol in the plasma and no vaccines against polio,

measles or mumps. Many great strides, however, have been made in the last 40

years. Not only have many of the debilitating diseases now been controlled or

eradicated, but many experts agree that by the end of this century,

pharmaceuticals may be of even greater importance in our lives because of

anticipated major breakthroughs in the field of neurobiology, immunology,

molecular biology, cellular differentiation, cell membrane studies and genetics.

Although everyone, whether friend or foe of the pharmaceutical industry,

recognizes the contributions of the industry to the health and welfare of the public,

it is important to realize that all the developments in the pharmaceutical field and

the availability of pharmaceuticals to the general public have not merely occurred

by chance. Although most of the praise is accorded to those in the pharmaceutical

industry concerned with research and development, few appreciate the

contributions made by the pharmaceutical marketing system in making these drugs

available at the right time, at the right place, in the right quantity at a reasonable

price and with the right information.

Marketing Defined

What we refer to today as marketing veers much from its original meaning when

first introduced in the early 1900s. During this time, marketing consisted solely of sales

initiatives without any regard for the full complexity of its current meaning. It wasn’t until

the 1950s that marketing began to assume the comprehensive meaning it has today.

This shift was due much in part to postwar prosperity that left consumers embracing

materialism like never before. The concept of “keeping up with the Jones’ generated

demand for a growing range of goods and services” forcing marketers to evolve their

roles far beyond that of the traditional salesman (Thomas, 2005).

 This revolution called for much more sophisticated strategies of product

differentiation, pricing competition, promotional campaigns, and distribution methods.

This shift was by no means an overnight event. While it began to take form in the mid-

1900s, the evolution of marketing was slow in many respects and is still today

considered to be a young and evolving industry.

In 1948, the American Marketing Association (AMA) adopted the definition of

marketing from its predecessor, the National Association of Marketing Teachers. This

original definition stood until 1985 when it was revised to define marketing as “the

process of planning and executing conception, pricing, promotion and distribution of

goods, ideas and services to create exchanges that satisfy individual and organizational

goals." Nineteen years later, the AMA once again amended the definition, giving us its

present form which includes a customer-centered approach with a focus on relationship

management. Today’s formal definition of marketing, as defined by the AMA, is “an

organizational function and a set of processes for creating, communicating and

delivering value to customers and for managing customer relationships in ways that

benefit the organization and its stakeholders.” As marketing mogul, Kotler, explained,

“As an umbrella term, marketing refers to any means of promotion devoted to the ends

indicated in the definition” (1975, p. 78).

Customer Expectations

Customers, both businesses and consumers, are dynamic, always changing. As

individuals, they expect new products to be better, faster than previous models. They

expect better service and technical support. They do not expect products to fail, but, if

they do, they expect the company that made the product to stand behind their products
and take care of them. Their expectations are continually moving upward. They, as

consumers, do not expect product capability and service to decline; they expect it to get

better for virtually all suppliers. To meet these rising expectations, businesses must

continually improve and innovate at a rate at least equal to the increase in customer

expectations.

In a recent survey of CEOs of the Fortune Global 1000 firms, the 1000 largest

firms in the world, CEOs were asked to identify the major challenges facing their

organizations. The major challenge identified by CEOs of firms based in North America

and Europe was to become more customer focused and to better satisfy customer

needs. Becoming more customer-focused was the second most frequently identified

issue by CEOs of Asian firms.