“Sequel: Alignment of Business Structure and Processes”
If the main focus is not given enough energy and only superficial issues are taken into account, management resources will be wasted. This is also true in business.
Originally, private companies exist to maximize profits, and all private companies should operate on the premise of bearing all responsibility for management under the free competition.
For pharmaceutical companies in the future, it has become an era where they cannot survive in the global competition unless they are companies that can survive in the midst of free competition.
Now, can the current pharmaceutical industry reform the essence of its stagnant business structure?
“In a hierarchical healthcare industry, just one customer has a market impact.”
The so-called “problem of conflict of interest”, is still fresh in our minds regarding doctor tried to promote specific drugs for endowed courses at Hiroshima University.
This is an example of the power of a single customer’s influence in a hierarchical organization.
The pharmaceutical business, which is targeted marketing, is fundamentally different from the consumer goods business, which extracts customers with a high probability of receiving orders.
Even if the customer rank is set low in the Pareto classification by market size.
It would be difficult for the head office to grasp the influence of such regional characteristics.
In the example shown in the slide, competitor product B, which has the lowest share in three products competition, has the highest competitive advantage.
Conversely, you can see that competitive product A, which has the highest market share, has a very weak competitive environment. The matrix analysis method can reveal vulnerabilities in a competitive environment that cannot be seen only by outward superiority or inferiority.
“Reasons #3 to urgently switch to a regional strategy”
If you only look at the overall market, you may misunderstand the competitive environment, and there is a danger that the sales reps will execute the wrong business plan.
If you only think about marketing, you tend to focus on “differentiation” from competing products.
But strategy is not just about differentiation.
In market share theory, there are four major strategies: “non-differentiation strategy”, “differentiation strategy”, “concentration strategy” and “niche strategy”.
You need to choose these four strategies correctly from the 3C perspective.
I will introduce an example of analysis using dummy data, using a competition between two parties as an example.
Suppose that the market share of competing products is 52% and the market share of your own product is 48%, and the competitive environment is in a state of rivalry.
According to the matrix analysis method, only 4.9% of customers are in the “competitive state” of your company, and the contribution rate to sales is only 4.8%.
Allocating all sales resources to this frame will not work, and 95% of the resources will be wasted.
On the other hand, for competing products, 12.2% of customers fall under the category of “competitive”, contributing 29.1% to sales, and occupying 23.8% of the total market, which is a large value compared to our company.
In other words, if competitor implement a differentiation strategy in the same way as your company, the effect will be overwhelmingly large.
Your company’s loyal customer rate is 34.1%, and the contribution rate to sales is extremely high at 75.4%.
Maintaining this frame will lead to stable sales, so the non-differentiation strategy lead to nullify the differentiation strategy from competing products.
A strategy must be chosen correctly according to its purpose.
Anyone can easily analyze and plan the matrix analysis method, and it is a very effective tool for area marketing.
“Reasons #2 to urgently switch to a regional strategy”
In many companies, it is a enhancement type that adds a new method using digital instead of conversion while keeping the conventional strategy plan / marketing plan method as it is.
What is really required, however, is a fundamental shift in strategy.
As the market shrinks, conventional strategic plans/marketing plans will be forced to change.
Even in Ansoff’s growth matrix, which is used as a textbook, “market penetration” is the frame of the growth strategy during the period of market contraction.
You will give top priority to maintaining existing customers, win over competition in a shrinking market, and expand your market share.
Business expansion and unreasonable diversification will dilute the brand image of the company, and the sameness that makes it difficult to differentiate will progress further.
The matrix analysis method can realize quantitative and visual strategy planning from the viewpoint of 3C.
“Reasons #1 to urgently switch to a regional strategy”
In a game-type competitive market, there will be winners and losers, so moving ahead of the competition is an overwhelming advantage in gaining a competitive advantage.
Daiichi Sankyo has announced that it will reorganize its marketing and sales divisions to strengthen its area marketing functions.
Not only are sales activities by MRs returning offline as the coronavirus crisis subsides, but it has also become difficult to respond to the uneven distribution of the market and the diversification of customer needs with a business plan based on centralized management at the head office.
Essentially, strategic planning/marketing planning should analyze external environmental factors and decide relatively based on the internal environmental factors affected by them.
In other words, external environmental factors are regional characteristics themselves, and a strategic plan/marketing plan should be established for each area with a different market environment.
Until now, even with the strategic plan/marketing plan centrally managed by the head office, we were able to succeed depending on the expansion of the market. But it can be said that a serious problem has been exposed.
In addition to Daiichi Sankyo, an increasing number of companies have strategic managers in their regional strategy departments and branches.
However, there is no standardized process for area marketing methods, and we have no choice but to rely on planning based on the experience and intuition of each person in charge, and consultations for new solutions have increased.
Anyone can easily analyze and plan the matrix analysis method, and it is a very effective tool for area marketing. Please contact S.I Lab for regional strategies.
A loyal customer is a customer who is attached to a product, service, or company and does not switch to a competitor.
As the 1:5 rule and the 5:25 rule indicate the importance of loyal customers, cultivating and maintaining loyal customers is an important point for sustainable growth of a company.
In particular, when the market shifts from maturity to decline, the importance of this will increase even further.
Customers who are close to loyal customers include “best customers” and “top sales customers,” but they should not be confused.
In order to maintain and nurture loyal customers, we must select appropriate loyal customers from among our customers.
LTV, RFM, NPS, and CPM are used to define loyal customers, but none of them are sufficient.
Because loyal customers are customers who do not switch to competitors, it is necessary to consider competitive factors in their selection. By using matrix analysis, you can complete the process of selecting appropriate loyal customers, analyzing the purchase motivations of the selected loyal customers, and maintaining and cultivating them based on the analysis results.
If the “strategy” is wrong, the “means” will also be wrong.
If the “means” is wrong, no matter how much the “sales process” is improved, the business goal cannot be achieved.
In addition, 88% entered inaccurate data into SFA/CRM, 69% managed customer information outside of the designated SFA/CRM, and 62% of sales rep did not enter information into SFA/CRM.
It is reported that approximately 90% of companies have not achieved the expected business impact even after implementing SFA/CRM.
The matrix analysis method can quantify and visualize the correct resource allocation according to customer priority and competitive advantage based on 3C, the correct message according to the customer type and the correct strategy according to the four strategic plans.
“Measuring the contribution of sales representatives to the organization using the matrix analysis method”
Do you incorporate “contribution to the organization” into your evaluation of sales reps?
I think that there are many cases where evaluation is performed based on sales targets such as achievement rate and progress rate, and activity targets such as KPI.
However, all of these metrics are in-house evaluations.
I know if you’re a sales rep, you’re probably not satisfied with doing a set number of actions.
Sales reps challenge myself every day to increase customer engagement and create sales impact with the quantity and quality of activities that outperform our competitors.
Mr. B, who is in charge of the prefectural hospital, is actually responsible for 46% of the sales of the organization, giving stability.
Mr. E, who is in charge of the university, manages to maintain the status quo in a tough competitive environment where each company sends out A class personnel.
Losing a competition on this frame will do a great deal of damage to your organization’s sales.
Conversely, if Mr. B ranks up to A frame, the organization’s share will increase by 3%.
So, organizations should prioritize resource allocation.
In-house evaluation alone overlooks the efforts of hard-working sales rep. Praise should be given to those who truly contribute to the organization.
“Strategy is to determine STP from the perspective of 3C”
Strategy is to decide the place, the opponent, and the method to “win without fail, never lose”.
It is intended to gain a competitive advantage over competitors by effectively investing limited management resources.
Places, opponents, and methods are markets/customers, competition, and your company, segmentation, targeting, and positioning.
The correct strategy eliminates the waste of management resources.
If the strategy is not correct, the expected results cannot be obtained, and even if the number of measures is increased, it will not work and management resources will be wasted.
If you use order data and matrix analysis, you can achieve results with limited management resources.
“Marketing process and synchronization with customer behavior change phase and its pitfalls”
Information provision activities of MRs are diverse and are carried out through multiple channels.
Offline interviews, email, web interviews, telephone calls, web lectures, offline lectures, briefing sessions, etc.
Then, are these activities selected and executed according to the marketing process and customer behavior change phase?
The marketing process, which is becoming more digital, and the customer behavior change phase are linked processes.
There are several effective information channels as a “means” for the purpose of raising the awareness and interest of potential customers, stimulating their desires and cultivating them into prospective customers, selecting customers with a high probability of receiving orders from prospective customers .
Sales representatives tend to focus much of their activity around customers who are already engaged.
In addition to visiting directly, sending emails and providing information via the Web, management resources are wasted more than necessary.
If sales representatives are responsible for everything, the force will be dispersed, so it is necessary to appropriately select information provision channels according to the marketing process and customer behavior change phase.
For loyal customers whose share value has already reached a stable target value, it is necessary to allocate the sales representatives own activities to the “strengthening” frame, so it is not necessarily linked to the marketing process and the customer’s behavior change phase.
It stems from the fact that the pharmaceutical business is targeted marketing with a mix of various customer types.
In the customer behavior change phase, if there is a competing product in the same class, it is possible that the competitor’s product has already been selected due to poor progress with your own product, so always remember the 3C perspective.
Using the matrix analysis method, you can grasp the customer phase from the perspective of 3C and track the changes.
