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1.0 Environmental factors affecting new product launch

Scenario

You have been asked to observe, advise and act as a Consultant to the Sales Director of a medium – sized company operating in the pharmaceutical sector of the UK economy. The company is about to launch a new product that it hopes will soon become a market leader in its particular niche. As a consequence the sales force, both management and field personnel will face major challenges over the launch period and subsequent sell – in

Task

Write a report where you will;

(1) Explain and analyse the main environmental factors that might affect a new product launch and the role of the sales force in ensuring that the launch and its role – out programme is a success

(2) Explain how the sales team can benefit from a full review of training, both in sales technique and new product knowledge

(3) Devise a recruitment and training program for the company based on their desire to expand their sales operations and to maximise revenue from this new product launch

(4) Describe the likely barriers to the successful implementation of such a program that would be encountered and suggest how they might be overcome

(5) Suggest a suitable measurement and reward scheme that would allow the organization to monitor the success or otherwise of its new sales strategy

Strategic sales management involves the putting forward of the sales objectives by a company. The management process can include formulation of a sales strategy through developing sales force, sales revenue forecasting, and planning the sales. Implementation of the sales management strategy is done by the selection, motivation and training of the sales force of an organization, by setting up the sales revenue targets. Sales force management however can be done by implementing the sales performance, monitoring it, constant evaluation and analysis (Ingram et al.2012). This study discusses the launch of a new product by a pharmaceutical company, with the possible hindrances to the launch and how the sales force and its selection and training can prove beneficial for the product. The possible barriers to the training are also discussed, following the possible ways of overcoming them.

For launching a product it is very important to conduct an environmental analysis, co that the current market scenario can be analyzed and the launch of the product is successful. In this case a pharmaceutical company is looking forward to launching a new product (Cravens et al. 2011). The use of PESTLE or SWOT strategies are apt here, the factors to be kept in mind can be political, economic, sociological, technological, legal and environmental as well. The concerned factors raise the questions like:

What are the vital political factors that will affect the pharmaceutical company?

What is the importance of economic factors of pharmaceutical industry?

What cultural aspect does pharmaceutical industry has?

How the technological innovation can be used for the pharmaceutical company?

What are the current legal implications on the pharmaceutical industry?

What are the environmental considerations in case of pharmaceutical industry?

1.1 Role of sales force in making the launch successful

As per Cron et al. (2014), a new product launch should have clear goals and objectives; these are the factors which determine the success of a launch. The goal may include the establishment of the company in a market sector that has strong growth and huge potential, the company aims to cover 4% of the market share in next one year. These goals and objectives give a more precise blueprint of the launch and how it has to proceed for making a launch a success. The new product which is to be launched needs to be successful in it. The product may offer certain features and performance that will prove to be superior product in the market and will have an edge over its competitors, in this study, for a pharmaceutical firm, the product must provide benefits to the person consuming it with minimum side effects or no side effects at all.

The commitment made by the sales force of the company is a vital factor for the new product launch. The sales employee must have the motivation and the knowledge as well for selling the new product with conviction and also give information which are appropriate for the buyers. This why sales force under goes training in case a company plans to launch a new product as they are the people who get to interact with the customers directly and transmit information of the product to them. Another very important factor for the success of the product launch is the market awareness (Cummins et al. 2013). It is very important to acquire the customers for the newly launched product for quickly jump-starting the launch and maintaining the momentum of the event. Invitations to the customers and the prospective customers to the product launch can help in the generation of high interest level and awareness of the product. Other mode is the use of media and websites for better awareness. The success finally depends on the proper distribution of the product, as the availability of the product plays an important role. The company should be able to cope up with the market demand by the customers. All these factors are directly or indirectly related to the internal and external environmental factors that affects a business and its operations directly.

The macro environmental factors which can influence the successful product launch by the company can be the demographic forces, as the educational level, patterns of the house hold may affect the use of the pharmaceutical product (Ahmed et al. 2014). Economic factors which include the means of production and distribution by the company, physical forces which include the resource availability, technological factors related to knowledge application, and the materials and machine used in the production of goods and services that have an impact on the business of the organization. Political and legal obligations which directly affect the marketing decisions, as law affects the production capacity, capability, price, design of the product. Social and cultural concept has crept into marketing literature as an alternative to the marketing concept. The social forces make products socially responsible.

Sales force plays a vital role in the launch, positioning and off take of a product in the market (Briggs et al. 2012) For making the launch successful the factors should be placed for the business to grow and be profitable. These factors can be by the industry and by the company’s stage of development as well. For a new product launch to be a success, the first factor is concerned with the product quality and whether it offers the benefit or not, unless until the sales force really understands the new product, they would not be able to sell it. However, the effective transfer of the in depth knowledge by the company’s product management and development organizations to its sales department is not the only thing which is required.

Sales force is in the best position for understanding the real life problems which the consumer is facing and wants to solve. They choose how to and when to utilize the sales tools for developing the market. Product marketing always delivers fully fledged messaging and the materials for sales. Apart from just generating the income of the organization, a sales force is responsible for building trust of the customers, as they tend to engage the customer at all the stages of the relationship. According to Calantone and Benedetto, (2012), the new customers of a product need ample amount of information about the product. The current customers gain trust on the basis of constant follow ups and communication with the sales representative. Sales person also work towards reengaging the previous customers through the promotions, giving discounts and communications. Sales force in a business can be of two types and the company can make use of either both of them or either one of them. Outside sales representative work for generating the sales independently, as they travel to customers situated in different locations for pitching of the product, whereas the sales person inside the company are responsible in convincing the prospective customers through telephonic conversation and making appointments accordingly. A successful product launch is a success only when it ultimately generates revenue for the organization. This is mainly possible if a customer base is build up which is done by the sales force.

Sales force is responsible for increasing the brand awareness, incline the loyalty of the company, and ultimately profit maximization. A sales force is responsible for creating the excitement around the products and services they sell. The other way used by them for reaching the potential customer of the company is the social media, promotion of the sales campaign, providing appropriate information, spreading the details of the new product to the already existing customers of the company. Efficient salespeople need to overcome the three main types of objections without feeling rejected or intimidated. In view of Zoltners et al. (2012), customers conditionally decline a product or service when they say they do not need or cannot afford it. Or, customers use stalling tactics by stating they want to think about the purchase before taking action. Salespeople may find these two objections difficult to overcome. Customers asking for quality assurance, such as customer testimonials or referrals, present the easiest objections for a sales force to surmount. This is a major hurdle which sales force tries to overcome and make the launch a success.

The sales force gives a sales momentum to the company by winning the product launch. This is accomplished by them by their market activities which give information that what are the factors that might affect the launch and the key areas to be focused upon. Functions like the matching of the product capabilities to the market needs and requirements, clarity in the positioning of the product and its appropriate marketing, setting of the launch goals in a more clear manner, the power of the leverage, priming up of the pump, and timing of the launch so that the sales of the new product maximizes (Cooper and Kleinschmidt, 2011).

Benefits of training to the sales team is a crucial component for better sales performance in the product launch and making profit for the organization. The full review in training results in increased sales, as the performance of the sales team will improve. The more understanding of the sales process will makes it easy to understand the queries from the customers. Training will increase the sales skills like starting of the sales dialogue, discovery of the reason for the purchase and closing of the deal. The entire process is responsible for sales generation (Dacko et al. 2015). Better customer service is another advantage of the training, as the increased customer service can be very profitable. The interpersonal communication skills of the sales force tend to improve, which results in quality service delivery to the customers. Customer service and sales are not different departments, as both deals with the issues of the customers which are ultimately linked to the sale of the product. Training the employees will give them a better understanding of the link in between sales and customer service (Deeter-Schmelz, 2012).

Of the various skills which are required for sales, negotiation is a crucial one. A sales person needs to negotiate from time to time for increasing product sales. Training will help in the grooming of this skill. The communication between the two parties, how information about the product has to be gives all these are made clear during training session for effective performance of the sales force. Business process standardization is a challenge as it demands successful reporting and high user adoption. It is important that the business processes work all together towards the organizational goals (Holmes, 2014). The technological adaptations by the firm are important to be communicated to the sales team as well for optimizing the process utilization and improvement in the performance. Laguna and Marklund (2013) states that it is very often that an organization quickly grows the customer base but the continuous support is lean, development of the internal resources and staffing for the growth in sales force must be directly correlated to the user and sales force road map. And most importantly training is important for better employee satisfaction and retention.

Recruitment and managing of the sales force by the company is importance for inclining the quality of the work force. The recruitments ensure the selection of quality candidates in the team. For pharmaceutical companies the sales person directly contacts the potential customer, who makes is more important that the selection should be done on qualitative basis. There can be two methods of recruitment which are internal and external. Both the methods are used ensuring the existing employees to move up in the organization (Guler and Nerkar, 2012). External recruitment involves the selection of people outside the company. The main purpose is the creation of diversity among the potential candidates. The recruitment procedure of the sales team starts from the very initiation of the job analysis by the company. Where the firm will decide that new workforce is required for the particular designation. The job is applied for by candidates who go through a primary filtration by certain tests like the aptitude test. The selected candidates go through the rounds of interview, which will test whether they have ample amount of knowledge of the field or not. The short listing is followed by medical checkup for ensuring sound health of the candidate, confirming which the job is offered (Evanschitzky et al.2012). Managing the sales force is a big responsibility for consistent performance and revenue generation.

Figure 1: Management of sales force

(Source: Yang and Li, 2011)

The training of the sales force is important for improving the quality of the sales force, developing the proper sales skills, enhancing the employee growth. It helps in the prevention of obsolescence, assisting each other in the time of team working. Training help develop a bridge in between the planning and implementation of a process by the sales force (Blocker et al. 2012). The training may have five decisions which are ACMEE: that is aim of the training, the content of the training which will involve the training method, whether it will be a group method or an individual method, executing training including who has to be trained, who will train, what to train, training aids. The evaluation program helps understand whether the training is reaping benefits or more effort has to be put in by the organization.

For carrying out a sales training, following the core principles is essential which are:

Sales process alignment: without a thorough procedure understanding of sales, it is not possible to align the sales force with the buyers, and the competency requirements are not highlighted for the training to take place. Assessing the objective and measurement: the sales organizations need to define models for evaluation of the skills of sales professionals, without which it is not possible to assess and measure the existing gaps (Evans et al.2012).

Realistic training programs: the training should be layered starting from the basic components to complex portions. A limited time period is never favorable for carrying out a successful sales training process. Role based curriculum planning should be made realistic, for staged learning and reinforcement paths for the salesperson. It is important to keep the communication during the training as unrestricted and honest for better connection between the employees.  Comprehensive sales training curriculum: many sales training processes focus on the one sided dimension of selling, instead of concentrating on other competencies like the targeting, planning of the accounts, power access (Chen et al.2011). The training should cover sales planning, its execution and the disciplines of managing it. Repetition and variety: essential concepts need to be learned and reinforced in the multiple forms across well planned times of horizon. Content delivery side should be both supportive to the learning objectives and also offer enough variety so that the learner retains the interest in learning things (Piercy and Lane, 2011).

Lack of coach training: the training process should be carried out by an experienced person, as the knowledge and skills required for carrying out a sales process needs ample amount of expertise. In case the training is done by any other departmental employee, the basic objective of the training remains untouched. It is important to develop skill full employees instead of focusing just on the theory part. As per Lassk et al. (2012), coaching the sales employee is not an obligation: The coaching relationship is a choice, not an obligation. The relationship between the coach and the people who are coached is a designed alliance, a collaborative partnership, and more. As such, remedial or sanctioned coaching is often met with resistance rather than with open arms. Competitive senior management in much case it is seen that the managers are under tiff which tends to make them train for winning among each other. The purpose of the training should be kept to the employee skill development only. This is not on better for the training but also for better motivation level among the employees, as the managers will give them confidence to perform well (Matikainen et al.2015).

The key solution to these issues is giving the leadership support, along with the change management. Personal leadership helps in avoiding the apathy and facilitates competency based approach. The wrong sales training mix issue can be overcome by critical delivery, managing the knowledge and knowing the market and the consumer well (Homburg and Hess, 2012). The lack of a sales development system needs a learning and performance approach, which will improve the competencies, identify the gaps in the knowledge, and develop a strategic sales training program. Better measurement techniques can be developed by leading output measuring as well as the lagging outputs, keeping a check on the behavioral change is also important. And training the right content includes a centralized training procedure by the organization. It helps in the understanding of the competencies and gives knowledge about the correct time of customization. Sales training is a holistic process which cannot be considered as an onetime event, choosing the right content makes the entire process realistic and apt and helps in coming out with right outputs (Hinerasky et al.2014).

The main motive behind measuring the sales performance is increasing the profitable revenue growth through better management of the sales functions and the distribution channels. This can be done with the help of software by the companies for managing the sales force. The application may include the management of the territory, analytical portion, management of the quota, and resolving the disputes among the employees (Ketter et al.2012). The utilization of technology for the purpose of measurement introduces the accuracy and timelessness of the payments, lowers the cost of the administration, better reporting format which is more organized, lower cost from the technology point of view, faster approach to market and better management of the sales planning by the sales force. There can be four categories of the sales measures which include production or the volume including revenue, price and the margin, the products are another part of the quantitative measurement including the units sold, product mix, introduction of production, and up-selling.

New retained, expanded and satisfied accounts and milestones of threshold achievement, and contract signing up are other dimensions of quantitative measurement of the sales force. The qualitative performance measurement can be hard which would impact the company results directly, put the pay at risk, upside potential and funding the models which would require hard measure of fairness, whereas the soft measures tend towards stable pay outcome even if there is fluctuation in the performance of the sales force. Soft measures on the other hand are useful in tough economic times and give recognition and enhance the retention (Ulaga et al.2014). The soft measures are especially meant for long sales cycles; officially the organization will focus on the good and the bad behavior. The link between the two is that it shifts from purely sales results driven incentives. Other metrics can be also incorporated for measurement of performances like the incentive pay factors, modifiers that is matrix, accelerator, hurdles, and additional incentives.

The motivation, evaluation and compensation of the employees are interrelated. The rewards for the employee can be a base compensation plan, monthly or quarterly sales campaigns or short burst sales contests. The rewarding also included the incentive plans of the sales force, which can be non-financial, direct financial incentives or in the form of indirect financial rewards (Johnston et al.2013). Non-financial incentives include giving recognition to the sales employee, conducting sales contests and incentive programs, quarterly appraisals, arranging sales meetings and sales training. Direct financial incentives are the monetary benefits from sales function that is the salary, the commission on the achieving the target or over achieving it, and bonus. Indirect financial rewards are the fringe benefits which gives relief in the taxation. Reward schemes support the goals of the organization by aligning the goals of the employees with these, and also motivating them. It ensures the proper recruitment and retention of sales force with the right skills in the system.

Conclusion

The introduction of new product by a company has to face a number of barriers before it strikes the success.  The different department of the organizations play vital role in the overall success of the paper. However, sales force plays a crucial role in making a successful launch. This makes it important to carryout proper recruitment, selection, training and development of the sales force. In today’s environment sales people have to nurture and grow the business relationships with the customers. Due to this reason, many companies have sales management systems which have tools and database information for developing a more holistic customer interface and relationships. Companies take suitable measurements and introduce reward schemes for motivating and retaining the sales force for better performance and revenue generation.

References

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