Change Management in Transition from Traditional Sales Force to Key Account Management: Greece Pharmaceutical Companies

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Change management has as its main purpose aiding the transition to new business methods or a change to different management strategies. A certain amount of resistance must be expected before change can be initiated and successfully carried out in business. Therefore, many change management theories have been offered in the literature about how to manage transitions with the least amount of difficulty.

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DISSERTATION SUPERVISOR DISSERTATION TITLE

'Change Management in Transition from Traditional Sales Force to Key Account Management: Greece Pharmaceutical Companies'

DATE KEYWORDS

Change Management. Crisis Management. Key to Key Accounts. KAM. Greek Pharmaceutical Sector.

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EXECUTIVE SUMMARY

Stakeholders such as top management, leadership, employees, and management project team members need to understand the goal so they can all be working to reach the same ends. Explaining why change has been necessary and defining the goal to be reached must be done to make sure everyone is working towards the same end. A clear understanding of the goal has been reported as the first, and maybe the most important step. The step also needs to be reviewed during the process, because during the process new (or old) ideas have a way of leading people astray, especially since change is so difficult.

A crisis often has often motivated change. The Greek pharmaceutical sector endured a negative impact from the global financial crisis that moved around the world beginning in 2008 and arrived in Greece by 2009. (Simou & Koutsogeorgou, 2014) The entire Greek health care sector felt the negative impact from austerity measures taken by the Greek Government. The customers of pharmaceutical companies took measures to cut costs. The pharmaceutical companies needed to consider more than the internal stakeholders. External stakeholders included hospitals, doctors, pharmacies, patients, health clinics and the administrators of hospitals and clinics. Not all the stakeholders dealt face-to-face with patients. For example, hospitals have complex layers of decision-making, so a sales force needs to communicate well with non-health professionals as well as health care professionals. The main object of the pharmaceutical sector was to improve the health of patients, although the salespeople will not come into direct contact with them. Marketing and sales managers must understand what the health issues are daily, seasonally, and annually for all ages of the patient population. (Bhatt et al., 2011). On the other hand, medical specialists were also the contact person for the sales force.

Crisis management was based on change and a potential strategy for pharmaceutical companies to make is to begin using Key Account Management (KAM). KAM analysed the needs of the customers and evaluated their importance to the company. Three points of evaluation to identify accounts that have the potential to become key accounts were (a) prescription volume, (b) ability to influence other health care entities (hospitals, clinics, etc.) and prescribers, and (c) the current share and growth potential. (Bhatt et al., 2011). Consultants from McKinsey and Company have developed a strategy for choosing the hospital accounts and medical clinics that were good to treat with KAM. The decision is based on the lifetime value of the customer and the complexity of their prescription needs. Complexity was measured by how much influence non-clinicians made the buying decisions and how many medical specialties were provided by the facility. (Bhatt et al., 2011)


Successful KAM led to a more efficient handling of particular accounts. Efficiency was the major, overarching goal that change management can provide. And KAM was a strategy that had the potential to reach the goal of efficiency. For that reason, surveys were delivered online to LinkedIn contacts that have management positions in the Greek pharmaceutical industry. The response rate was 27 out of 100 surveys returned. This amount is considered satisfactory because the target was a purposeful sample. The survey was in questionnaire form and addressed three important subjects. The information requested was for (1) the demographic data on the respondent, (2) the company ownership of their employing company, (3) the company’s involvement with KAM and (4) customer account management.

Out of the total of 27 respondents, nine were in middle management and 18 were in senior management. Therefore, purposeful sampling was successful for this survey. The number of respondents was not considered as important as the number of respondents with useful knowledge about the inner workings of the Greek pharmaceutical sector. The success of the sampling strategy was reinforced by the high degree of education of the respondents and the years of experience in the pharmaceutical sector. Ninety three percent of the respondents had Bachelor’s degrees and higher. Sixty seven percent of the respondents had ten years and more experience in pharmaceutical management.

The survey results showed firstly, that most of the KAM was done by consultants external to the company (88 percent) and secondly, the way KAM was carried out was not satisfactory. Problems that became evident included the lack of transparency on decision-making and lack of formal processes for meeting the needs of customers. Over fifty percent of the managers reported a lack of understanding about the appropriate amount of supplier involvement their customers need to cut costs (or improve productivity. Twenty-five managers responded about 50/50 that a formal KAM process is used (12 respondents) or is not used (13 respondents). A regular review of the status of key accounts was reported by 27 percent but not by 58 percent of the responses. Improvements needs to be improved in three very important ways (1) alignment of KAM with local and national regional planning, (2) organize sales communications that have taken place with local and national key accounts, and (3) integrate KAM into the internal company activities.

The Likert scale was used to measure the state of customer account management for eleven issues. The Likert scale was designed to allow respondents to choose six degrees of the accuracy of the statements from their experience. The scale included the choices of (1) never/not at all, (2) slightly, (3) moderately, (4) largely, (5) always and (6) not applicable. The amount of ‘always’ responses was very low, because the statements were based on the customer knowledge available for management and the sales force.

Customers’ views on products and services were not prioritized when decisions were being made for operational charges. Detailed noted about why customers rejected were not kept in all of the companies and this type of report was not reviewed by top leadership. Top leadership involvement with key account reviews and decision making is essential for KAM success. (Bhatt et al., 2011). Another indication that that top management was not dedicated to KAM in some of the companies was understood from the response that even when details were kept on customers rejections, the top management does not regularly review the data. Bhatt (et al. 2007) learned from respondents of their research survey that lacking company reports made access to resources difficult and put no pressure on other departments, like the marketing teams to become involved with KAM functions.

Lack of transparency concerning customer data and files was recognized as a problem from the survey. Successful KAM needs a strong foundation of company commitment on every level. Commitment to filling the needs of the key accounts at all levels in the pharmaceutical sector is necessary.

Future research is needed and the strategy of in-depth face-to-face interviews with Greek managers is recommended. This strategy was used by Priporas and Vangelinos (2008) and produced practical data and interesting comments from the interviewees. The online survey to LinkedIn contacts included space and an invitation to leave comments but none were added by the respondents.

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The research was limited by some poorly constructed questions and by the lack of face-to-face contact with the respondents.

The literature review added to the knowledge of the Greek pharmaceutical sector in crisis and the use of change and key account management techniques. The literature review also enhanced the researcher’s knowledge about change, crisis and key account management. Good strategies for choosing the accounts with the most potential as key accounts are available in the literature.

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