STRENGTHEN SALES PLANNING & COMMERCIAL

STRATEGIES.

A MANAGEMENT FRAMEWORK.
LATAM SALES & DISTRIBUTION CHAIN.
(For Medical & Healthcare Industries)

Osvaldo Quiroz Leyton

Ingeniero Comercial. Lic.Cs.Economicas
Master of Business Administration
email: oqleyton7@msn.com // oqleyton@vtr.net
 TOPICS:

First section.
1. Highlighting Business Management.

Second section.
2. Putting Business Management in Action
 Sometimes Companies face the Iceberg dilemma:
“Core problems are hidden under the organizational
surface ”.

STRATEGY AND PERFORMANCE EVALUATION

…” the path to disminish the operational and market risks…”
1) First section.
Highlighting Business Management
 Key Drivers Developing Strategy:

1. Corporate Human Resources.

2. Leadership, Innovation and Management
Capabilities.
3. Management System, and efficient use of
Technology.
4. Financial Planning and Corporate
Performance Evaluation
 Thus,…..Better Results at any company are derived from 5
basic elements..:

1) Human Resources (key driver)

2) Cash Flow Management supports Growth

3) Optimal IT usability
4) Leadership Culture /
Values & Ethics.

5) Corporate Synergies
=> 2 +2 = 5
 “..Barriers that limit the firm success..”

1. Emptiness or lack of corporate Strategy Mindset.

2. Poor, lack of useful communication among the corporate
teams, executives of the company.
3. Activities are not being evaluated, lack of systematic
tracking.
 Why is it important to do Strategy (II)

1.Why is it important
Addressing to do Strategy (I)
the sense of Direction.
Planning secure coordinated efforts.
Sharing the vision. Staff knows where the company goes,
settle commitment and value the incentives to
accomplish goals.

2. Strategy diminish the uncertainty.

…so, corporate teams take into account unexpected
changes, weigh up impacts and develop coordinate
answers..
 Why is it important to do Strategy (II)

3. Minimize losses and avoid double work.

We deploy management skills to detect failures on-time
4. Setting dashboards, indicators for Management
Performance purpose.
Without planning, control management is not affordable.
Evaluating management performance let us foresee
issues, and take corrective actions.
INTEGRATIVE MANAGEMENT.

A basic framework to balance

Management Functions in the
Company
 Finance.

Activites (month)
Objetives

Indicators
• Return over
Educational
activities (NPV)
• Profits.
• Income.
• Cash Flow (VPN)

Customers Operations

Activities (moths)
Indicators
• Purchasing
Objectives

Objetives
• Courses,
Activities (mes) • IT
Indicators

• Portfolio of
Services & Integral • HR and
Products. Management Leadership.
• ABC. • Logistics
System
Customer
efficiencies

Business Intelligence

Indicators
Activities (mes)

Competitors
analysis Objetives

Benchmarking.

Relational
Marketing
 Follow the steps to manage strategically
and succeeds…
1) Targeting Customers
needs (Doctors , Patients)

2) Translating those
needs into
strategic actions

3) Efficient Execution
4) Follow-up, Tracking,
evaluating commercial
activities

5) We improve financial &

commercial performance

6) Finally we integrate :
- Cash Flow and budgeting activities.
- Allocate internal resources wisely.
- Manage the company efficiently.
 Therefore, a better organization
manages Key Organizational Drivers
Customer Oriented

Listen the voice

Technology Improving & Learning
Smart Support
Innovation at work
Strategic tool

Organization
Excellence

Egalitarian Internal Flexible Structure

Climate
Create strong teams Adaptable to changes
Creative Human Resource
Management
Settle company’s growth
 Summarizing this message toward
building Strategy :

1. Set clear and measurable objectives.

2. Identify alternative actions over the time.
3. Build Organization of Excellence.

4. Strategy means …..

Keeping competitiveness through Leadership, Quality and
Effective Service.
 2th section.
Putting Business Management in
Action.

1. The Salesman Mindset

2. Product Portfolio Management
3. Customer Focus
4. Pricing
The Salesman Mindset
 Selling with powerful ideas
“…A product is expensive when its price is
higher than its value...”
 “… Attitudes to construct the path for
selling effectively ..”
 Be PROACTIVE:
 Goes one step ahead the customer, deploy helpful
initiative.
 Be OPTIMIST:
 Always believes can do better this or the next visit.
 Be SELF-CONFIDENT:
 Strongly beliefs, he/she provides the best products.
 Increase KNOWLEDGE:
 Knows the products and its competitors.
 Be POSITIVE:
 Shows assertiveness, never losing attitudes.
 Pitfalls to avoid in the selling activity:
• Selling without first training on “the System/Solutions”.
• Assuming client understands the philosophy and its
benefits.

Therefore:

1. Clients must be taken through the entire “adoption process of the

System”.
2. Clients have to be driven in educational programs, courses and
workshops to let us evaluate further improvements (Post -Selling).
3. We take into account commercial risks, because, a Client who buys
products without enough education, could misuse the system, this could
be a risky investment.
4. Exercise Permanent Customer retention.
 So,…….More than products , we sell:

1. Higher Quality in Product

Technology 2. Innovative System

Summary : Leading with Creative Ideas

 Product Portfolio Management

VectorTAS-Intelligent Design
VectorTAS-Intelligent
 Why do we need to build product portfolios?:
Because we need to improve the Pareto Sales
Distribution
Product Sales (units) Sales Income ($)

20% Products
80% of Income($)
EXPLAIN…

Growing Sales profits our Commercial Operations!!!

 Product Portfolio Logic.
…Offsetting the Pareto Law

1. We diversify commercial risk.

2. We complement selling activity

Bundling Products:
Means, we always tide products as a integrative system:

1. Core products.
2. Complements

3. Strongly specialized Educational Supply

•Regional Workshops / courses / Monthly

Meetings / Educational Workflows.
 ..“Optimizing a diversified Product Portfolio, is possible to
cover a wider Demand and get Profits from different
source of Sales “..
Price
1,000 VECTOR
Mx “… When managing the complete Supply curve, it is
advisable to follow Economics Selling Logic according to
Technological Learning curve..”
ICE

ORTHOS
500

MINI X

MINI 2010
OTHERS
10

100 500
15 Quantity
 So, What do we sell? :
1. Products & Systems as a highly technology development.

2. Cost-Effective, Efficient & High Quality solutions.

3. Integral packages of Product and Services: The product & System

and Systematic Educational activities for Customers

4. Long-Term profitable solutions.

5. Regarding the global economic environment, wider competitive

labor market, we provide solutions that increase the labor
productivity (TIME IS MONEY).
 CUSTOMER FOCUS.

Appraisal methods to evaluate

Commercial Events and Educational
Activities
 Identify and Segment CUSTOMERS:

1. System Adopters
2. Irregulars or Dabbler Users.
3. Rejecters
4. Conservative or Later Adopters

Distinguish System Adopters

among:
Beginners
Medium Level Users
Advanced Users.
 Measure the Market and Demand.

Measure and Segment the

Market

Quantity of Quantity of
Dealers Clients

Sales Forecast

Income = f [ Doc demand (Customer (demand) ]

This is a Derived Demand. Sales depends of the
customer located at the end of distribution channel.
Customer segment.
Placing marketing ideas.
MACRO VARIABLES TARGETING LIFE CYCLE
Dr. Gjerset says. "As teeth and jaws come into alignment, self-
esteem increases too. Patients can look forward to a lifetime of
improved dental health."

“Today more adults are having orthodontic treatment because of

greater awareness of the health benefits of a proper bite and the
increased self-esteem that comes with an attractive smile. Given
today's technological advances and the affordability of
treatment, patients of all ages are improving their smiles.“

..While orthodontic treatment can be successful at almost any

age, early detection of orthodontic problems may prevent
complications in the long run. Early guidance of jaw growth, in
some cases, may decrease a patient's need for more involved
procedures later on. ..
 Selling and the Multiplicative Effect:

1. Reinforce Loyalties and Network of Customers.

2. Strength permanent Practice supported by mentoring and Regional
Champions.
3. Build the Study Club jointly with practice.
4. “Learning by doing” policy let the company create loyal links with clients
who support the market share growth. (products and commercial system).
5. Friendship. Relationship among dealers supported by the company
representatives creates lastly links.

Transmission of Knowledge
Doc-Champion

Customer A B C
 Selling and the Multiplicative Effect:

Knowing: number of practitioners in the country :

• Sizing # customers at marketplace.
• Forecasting annual target : (4-5%?)

Identify segments:
1. Clients using core products: ACTIONS :
2. Clients buying other products: 1. RETENTION
3. Clients buying products and services 2. CONVERTION
from competitors: 3. MOTIVATION
 Q: What it would be the impact of Event’s
Investments over Financial Cash Flows ?
A: Managing an Appraisal Model of Events, Clinical Courses and Workshops

Monthly Event Calendar Budget-Event

Expenses

Keeping Database of Doctors

attending Events

Systematic Tracking of Doctor’s

participation

Event’s Return Over Investment

 Scheduling Local Events
Monthly Calendar 2008
Week 1 Week 2 Week 3 Week 4
January
Febreary
March
April
May
June
July
Agost
September

October
November
December
 When Scheduling Events, Courses :
…Do not forget to segment doctors under its
learning curve, past experience and knowledge.

User Profiles.
1. Adopters
2. Irregulars or Dabbler Users.
3. Rejecters
4. Conservative or Later Adopters
 RELATIONAL MARKETING.
CUSTOMER-ORIENTED
Relationship

Customer Data-warehouse: measuring

Recover monthly consumption, products mix. Statistic
of participation in Event, courses. Retention
Bringing back past costumers, could be Keep purchasing records. Track monthly the
less difficult to bring back the company. sales by doctor. Also track the courses and
We know each other. We can offer improvements at doctor practice.
something different (services, etc)
It is less difficult to place more orders and
CUSTOMER different products to current doctors

Re-activation
Profitability
Former Costumers. Lower customer
research Cost. Customer had already Improve profits regarding the product mix,
bought. Put other products. sales frequency.
We need to make customer cost-effective and
References profitable at long-run

Viral Marketing. If we overpass customer expectation, it

comes epidemics. Other customers adopt our ideas and
products. (This is a positive virus)
 Managing a Database of Doctors at
Events, Courses or any Educational
Service
Calendario de Eventos 2008
Enero Febrero Marzo Abril
Dr.A
Dr.B
Dr.C
.
Dr.G
.
.
Dr.N
.
 Budgeting- Events
COSTS (US$)
WORKSHOP COURSE NACIONAL INT’L
EVENT EVENT
HONORARIES
TICKET AIRLINE
INPUTS:
BRACKETS
INSTRUMENTS
REPRESENTATION
EXPENSES:
MEALS
TRANSPORT
OFFICE MATERIALS
OTHERO MATERIALS

TOTAL EVENT COSTS

 Calculating Return over Investment by
Event
Quarterly Performance Evaluation

Q1 Q2 Q3 Q4 Total

Sales (Docs) 1,000 2,000 4,000 10,000 17,000

Costs 500 1000 2000 5,000 8,500

Montly 50% 50% 50% 50% 50%

Operational
Margin
 EVENT SCHEDULE (Coordination
Table)
Domestic y Regional
2008 Argentina Brazil Bolivia Colombia Chile Ecuador Peru Uruguay Venezuela

Ene

Feb

Mar

Abr

May

Jun

Jul

Ago

Sep

Oct

Nov

Dic
Pricing
 Basics to analyze price settings
are:

1. Brand Positioning.
2. Market Share.
3. Return over Commercial & Sales
Operations.

We have to analyze impacts expected from

the Pricing Policy which explains financial
outcomes..
 High Price Model Low Price Model

(2) Income = PxQ= (1) Income = P x Q=

1,000($) x 10 = $10,000 10($) x 1,000 = $10,000

Do both model get the same outcomes?

Return over
No! COMMERCIAL & SALES
OPERATIONS!!

Targeting Different Markets :

1. High Price Model meets the needs of customer
segment which looks for Quality. Differentiable
Products.
2. Lower Price Model meets the needs of customer
segment which looks for Price more than Quality.
Commodities, Homogeneous Products.
 ..Remembering any corporate financial
structure :

The financial corporate goal is to Maximize the earning equation:

We look to get the optimum combination of price and quantity under
financial restrictions, the Fixed and Variable Costs.

Max Π = PQ – CV – CF.

ϕΠ = ϕPQ – ϕCV – ϕCF.

Not an easy dynamic solution:
Come Back to Strategy again…
 Analyze the mix of Expenses, specially the items that let you
generate new Income, some of them are Variable Costs :
1. Working Capital Flows
2. HR costs (it could be our best investment)
3. Education and Workshops. We could see those items as a
dynamic investments over the time; If we have a Management
System to evaluate them as Return over Investment parameters.

and what is happening with other Economic costs?

Do planning to:
• Investment in Capacity for growing.
• Operational Risks…Watch out!!

Do not Stress if….!!!

 International Pricing Structure…,
Why Discounts??....
International in-house Prices

CIF Price
• Price discounts criteria look
to target potential Demand,
(Duties, and to make room for further
Tariffs, taxes) increases at the market
share.

Competitive
Discounts %

Dealer Price

B2C- Customer
Price
 Economic Parameters affecting Pricing
Policy.

Level and Variations of :

1. Rate Exchange : (∆ E)

2. Taxes, Duties, Tariffs : (∆ T)

3. Incoming productivity efficiencies : (∆ Q)

4. Market condition Changes : (∆ P)

5. Demand Price Elasticity ( How Customers respond against Price Changes ) :

∆% Q / ∆% P
 Rate Exchange Variations : (∆ E)

If Rate Exchange
Decrease : (-∆ E)
There will be enough room to
take advantage when getting
new Inventory, because, Imports
are less expensive now:
We should leverage inventory to
prevent the skinny cows season! If Rate Exchange
Increase (+∆ E)
Imports are more expensive now.
So, it makes more sense to deploy a
Management System to track
purchasing and market strategies!
Taxes, Duties, Tariffs : (∆ T)

Well, you and every importer face Taxes as

Inevitable Costs!.
So, Tracking internal Demand, Programming
Purchase let us work for gaining more inventory
efficiencies.
 Incoming productivity efficiencies : (∆ Q)

Company. Distributors.
Productive improvements Improvements supported by
transmitted to Customers. the Management System
High Quality Manufactured Dealers Strategic-Oriented
Products.
Dealers Customer-focused
Highly Management support
 Market condition Changes : (∆ P)

If we compete by Price, add more services.

Advisable to keep a diversified offer;
Wider spectrum in product portfolio which mix
different quality products and prices.

In we compete by Differentiated Products,

strengthen branding efforts.
Keep the message to customers, we hold the
best quality. “cheap is expensive”.
Focus the sales effort in Relational Marketing.
 Price Demand Elasticity :
∆% Q / ∆% P.
(Sensibility against price changes )

Inelastic Demand.
Price Variations relatively do not
change the consumption rates:
Specialized products.
No closer substitutes

Elastic Demand.
Price Variations relatively change
consumption rates:
Homogeneous products.
Commodities
closer substitutes.
Concluding……
 So if we manage strategically our Firms:

… We build and let competitive

Advantages last..
Differentiable Factors

Must be kept

Sustainable over the time

 “ Focusing on the Economic and
Organizational Dynamics “
Resources to compete:
1. Human Capital (our people, customers).
Creating a competitive advantage.
2. Leadership, Innovation y Management
capabilities.
3. Inventory Management and Cash Flow. Making room to compete and
4. Investment to support corporate growth. increase market share.

Competitors are on the Market

same hunting too

Current Potential Demand

Demand (+) (e)
 Strengthen Distributors Management System
……..Means: WIN-WIN

..If you Grow… We Grow..

HEADQUARTERS
DISTRIBUTORS/DEALERS

.. Then, If you get returns, ..Your Growth.. Means

all of us win. earnings & profits….
Actions to improve Management
System:

1. Education
2. Commercial
Strategy
 Then, two core focus of corporate
management:
Education.
1. Boosting and strengthen Education to attract more adopters.
2. Improving coordination at educational activities in the Region.
3. Planning events, courses, workshops, practices with System .
4. Better coordination of customers, Insiders in the territory.
5. Creating value added to bring into more Adopters.

Commercial Strategy.

1. Building Management System with Dealers.

2. Pricing Policy regarding Potential Demand, Growth and Market
Share.
3. Get a Visible presence of regional Manager, more than emails,
being in the Business Battlefield.
 Reinforcing Ideas:
a) Protect our current accomplishments, but do not forget there are
more doctors in the marketplace.
• Increasing physical and valuable sales.
• Strengthen sales regarding current Doctors as customers, so ,
expand quantity of products in the same customer.
• Add more Damon Adopters.

b) Monitor if current customers are improving their practice.

• More patients means better practice, reputation, return over
investment, more sales. (cause-effects)

c) Strengthen Distributor Management Capabilities

• Building-up the competitive Advantage.
• We need to think strategically; Improve management and
produce effective coordination.
 Finally:…
1. We Set procedures and formalizations to follow-up Commercial
Performance in the Region. The What’s, How’s and When’s.

2. We manage business under a formal Regional Management

Network.

3. We Gain “coordination” regarding the Regional events.

4. Strengthen clinical courses, training, participation of more

doctors at every regional event

5. The Pricing Policy (Discounts) follows Growth, Market Share

criteria.

PLANNING / ORGANIZATIONAL OBJECTIVES/ ALSO FINANCIAL GOALS

THANK YOU!

Osvaldo Quiroz Leyton.

Leyton
MBA. Eng. Business & Economics.
Email: oqleyton7@msn.com// oqleyton@vtr.net