Examination paper pharmaceutical industrial management&pharmaceutical marketing

Examination Paper of Pharmaceuticals Management

IIBM Institute of Business Management 1

IIBM Institute of Business Management

Examination Paper MM.100

Pharmaceuticals Industrial Management

Section A: Objective Type (30 marks)

This section consists of Multiple Choices/Fill in the blanks & short notes type questions.

Answer all the questions.

Part one questions carry 1 mark each & Part Two questions carry 5 marks each.

Part One:

Multiple Choices:

1. Which of the following not the principle of co-‘ordination?

a. Principle of early beginning

b. Principle of continuity

c. Principle of time

d. Principle of reciprocity

2. Oral communication includes-.

a. Lecture

b. Poster

c. Union publication

d. Complaint procedure

3. Enthusiasm, co-operation, tact and skillful handling come under-.

a. Intellectual quality

b. Character quality

c. Psychological quality

d. Physical quality

4. Which of the following is the demerit of formal communication?.

a) Decay in accuracy

b) Time consuming

c) It is temporary

d) Fairly unsuitable

5. Arrange the following into decision making process

i. Conception

ii. Investigation

iii. Perception

iv. Selection

a) iv,i,iii, ii

b) ii,iv iii,i

c) iv,i,iii,ii

d) iii,i,ii, iv



6. FIFO stands for ______________________.

7. Record of all item of material and good in the store is recorded in which document?

a) Store ledger

b) Bin card

c) Both a & b

d) None of these

8. VED stands for ______________________.

9. In the EOQ formula ‘C’ is stand for-

a) Annual consumption

b) Cost of per unit of material

c) Cost per order

d) Storage

10. WTO stands for ______________________.

Part Two:

1. What is questionnaire? Explain rules or guidelines for designing a good questionnaire?

2. Define drug store management? ‘Discuss the arrangements of drugs in drug store?

3. Name the various steps in the selection of a pharmacist?

4. What are the purposes of training given to a pharmacist?

Section B: Caselets (40 Marks)

This section consists of Caselets.


Each case let carries 20 marks.

Detailed information should form the part of your answer (Word limit 150 to 200 words).

Caselet 1

For the Indian Pharmaceutical Industry which has been presenting a robust performance during the last

few years, the internet is a powerful tool. Web-enabling leverages the pharmaceutical firm’s existing

investment in IT. Customer Relationship Management (CRM) and Sales Force Automation (SFA)

systems can be web-enabled to cost of operations, and on being effectively used, they establish immense

customer goodwill.

END OF SECTION A



The speed, efficiency and accuracy of a pharmaceutical company’s response to customer queries

determine the extent of customer satisfaction. About 200,000 doctors will be contacted by a typical mid-

sized pharmaceutical company, on a regular basis. It is crucial that these doctors are kept abreast of

product profiles, new introductions etc. also, during the sales calls made by the field force queries are

raised by the doctors, which need to be addressed quickly. By possessing a comprehensive medical

information system, pharmaceutical companies are able to fulfill their obligations, and, at the same time,

lend support to their sales and business partnerships. A good CRM system incorporates features that

enable information sharing and identification of trends in the market; at the same time, to accommodate

growth, it runs on a scalable platform.

A good CRM system is characterized by two key functions:

Tracking, organizing, prioritizing and responding to callers; and

Automating quick responses through letter, fax or e-mail, using a comprehensive data

base.

The CRM system can help make urgent responses. It will also have a system of archiving call sheets.

The benefits of a good CRM system include a facility to handle a large number of medical queries

efficiently; tracking customer correspondence/exchanges; retrieval and dissemination of the latest medical

information; providing statistical reports for the re-assessment of product profiles. A good CRM system

arms the company with tools to implement measures for continuous improvement of its business

practices; it can be an invaluable aid to the sales force in understanding the interests and concerns of

medical practitioners.

Sales Force Automation (SFA) is a system related to the CRM system. This tool enables a company to

manage a vast field force. The system provides up-tp-date information to the field force while they are on

the field; it provides the managers with a facility to keep a tab on field force’s activities and ensure they

are going according to plan.

A good SFA system incorporates features as under:

Customer Profiles: by maintain up-to-date, detailed profiles of customers, the system

facilitates tailoring of the profile base for different needs; a comprehensive view on

important business opportunities and important customer is generated.

Hospital Profiles: detailed hospital profiles maintained helps in implementing focused

strategies.

Activity Planning: planning of activities by each member of the team is made possible

by the SFA system.

Promotion/Call Reporting: detailed information about a particular promotion, and each

sales call are made available; this enables planning of future activities that focus on

specific needs.

Online Submission: daily call reports can be submitted online; call coverage reports and

record of monthly target achievement can be maintained.

Analysis and Reports: to facilitate better planning and strategy formulation, the SFA

system provides detailed statistics.

If the traditional applications and expertise of pharmaceuticals companies can be leveraged by web-

enabling them, then major benefits are in store for them. The companies can cut down costs, manage their

markets with more effectiveness and also enter into new markets.

The following are some of the CRM/SFA systems available in the market for the pharmaceutical industry.



FFReporting of Sarjen Systems Pvt. Limited.

CrissSmart SFA/CRM of Oasis Infotech.

Online MR Reporting Software of Marg Compusoft Pvt. Limited.

Siebel-based Pharma CRM Implementation Kit of Infosys Technologies Limited.

Pharma Pulse of TVS-electronics.

Talisma of Talisma Corporation.

Questions:

1. Briefly explain the concept of CRM & SFA systems.

2. State the features of a Good SFA system.

3. Write down some CRM/SFA systems which are available in the market for Pharmaceutical

Industry.

4. What are the benefits of CRM system?

Caselet 2

Glenmark Pharmaceuticals uses a web-based tool for sales force automation. The tool helps the sales

force in adding new contacts/accounts, deciding upon the appointments, planning their tour, planning

joint working, submitting their daily call reports, submitting request for samples, promotional articles etc.

based on the actual travel, the tool also calculates te necessary expenses to be paid to the field sales

officer. The sample management and promo management modules in the software keep a complete track

of samples and promo items. Te entire leave management system for the field sales staff runs on this

software. A part from this , the software has multiple reports such as missed call report; call average

report etc, which helps the entire sales force hierarchy to be aware of the developments and act

accordingly.

Majority of the above features and functionalities are available on the mobile interface of the application

as well. The software also allows the field force to capture certain important remarks made by the

customers. The CRM team/medical support team can make the best utilization of this data gathered.

These systems are upgraded on need basis. A part from the pure technical upgrades, the enrichment of

features and functionalities happen through the new version release of the software. The sales force

automation tool is in the form of portal. The portal has two components in terms of content- static Content

and Dynamic content. The transactions happen on the dynamic content side, where as any circulars,

information to the field force, product related FAQs, Manuals etc. are posted on the static content side.

This section really helps to keep in touch with the field force. Any product information which would help

the field force to upgrade the product knowledge can be posted here. Going forward, Glenmark also plans

to have CBT (computer based training) programs to be made online on this portal. These types of

interactive programs will really boost the process of learning for the field sales force.

Questions:

1. Explain the working of a Glenmark Pharmaceuticals.

2. State the features of a Glenmark Pharmaceuticals.

END OF SECTION B



Section C: Applied Theory (30 Marks)

This section consists of Applied Theory Questions.


Each question carries 15 marks.

Detailed information should from the part of your answer (Word limit 200 to 250 words).

1. Define ‘Pharmaceutical marketing? Explain objectives and importance of pharmaceutical

marketing.

2. Define ‘Advertising’? What are the advantages and disadvantages of advertising in

pharmaceutical marketing?

END OF SECTION C



IIBM Institute of Business Management

Examination Paper MM.100

Pharmaceutical Marketing

Section A: Objective Type (30 marks)

This section consists of Multiple Choice questions & short notes type questions.


Part one questions carry 1 mark each & Part Two questions carry 5 marks each.

Part One:

Multiple Choices:

1. What is the full form of ‘IPR’?

a. Intellectual property rights

b. Intellectual patent rights

c. Intellectual process rights

d. International patent rights

2. The environment that poses tremendous opportunities for new products and services to alert

marketer is an _________ environment.

a. Ecological

b. Social

c. Technological

d. Competitive

3. Arrange these market opportunities analysis step by step:

i. Evaluate new opportunities in new segments

ii. Build on your strengths

iii. Explore new market opportunities

iv. Analyze your existing markets

a. i, ii,iii,iv

b. ii,iv,i,iii

c. iv,ii,iii,i

d. i,iii,iv,ii

4. Marketing virtually the same product with two or more brand names is a strategy of:

a. Family brand strategy

b. Multiple brand strategy

c. Individual brand

d. Private brand

5. The pricing that deals with the judgmental or subjective elements of pricing is a:

a. Cost-based pricing

b. Petition based pricing

c. Market based pricing

d. Demand based pricing



6. Which of the following is not a member of distribution channel?

a. The Physician

b. Manufacturer

c. The consumer

d. The transporter

7. Arrange the communication process in order:

i. Medium

ii. Feedback

iii. Sender

iv. Receiver

v. Message

a) ii,iv,v,i,iii

b) iii,v,i,iv,ii

c) iv,i,iii,v,ii

d) iii,ii,iv,i,v

8. The strategy used to create a demand for a product within a channel of distribution by appealing

directly to the consumer is a:

a. Pull strategy

b. Push strategy

c. Combination strategy

d. Competitive strategy

9. Toward off a competitive threat or to create an entry barrier, some companies from different

power blocks may temporarily form a cartel it is termed as:

a. Franchise power

b. Integration power

c. Niche power

d. Coalition power

10. Which of the following ‘R’ is not a part of good management principle?

a. Resources

b. Recognition

c. Responsibility

d. Reward

Part Two:

1. Define the term “Marketing Communication”.

2. Differentiate between ‘Product Item’ and ‘Product Mix’.

3. Differentiate between ‘Cost Based Pricing’ and ‘Demand Based Pricing’.

4. Describe “Boston Matrix”.

END OF SECTION A



Section B: Caselets (40 Marks)

This section consists of Caselets.


Each Caselet carries 20 marks.

Detailed information should form the part of your answer (Word limit 150 to 200 words).

Caselet 1

Apex Pharma was one of the Leading pharmaceutical companies with manufacturing plants spread all

over India. Initially, the company produced bulk drugs as the activities expanded, the company started

manufacturing formulation. The first formulation plant was commissioned at Mandideep, Bhopal in 1983.

This plant was exclusively catering to the overseas demand in various countries including the US, South

Africa, Australia and the UK.

The demand in pharmaceutical industry is not evenly spread throughout the year. There were months

when the company operated at 50%-60% of its capacity, and there were months, when the company

operated at more than the installed capacity, by working in three shifts. As a general policy, the company

used to operate in two shifts. Third shift operations were only resorted to during the peak season. Apex,

during the period of increased demand, outsourced medicines from other companies. However, the

medicines which were outsourced were sold only in the domestic market. The company applied high

quality standards so as to fulfill the requirements of the export market.

Apex’s Bhopal plant was run as a cost center and hence, it was not supposed to report any profits or

losses. The plant had three different blocks manufacturing different sets of medicines (capsules, tablets,

dry syrups and injectibles).

Semi Synthetic Penicillin Block (SSP): This block produced antibiotics and drugs based on

amoxicillin and ampicillin.

General Block: This block produced non-antibiotic drugs.

C Block: this block produced third generation drugs based on cephalosporins.

Apex had a policy to invest in a new plant and machinery only when the company foresaw a sustainable

long-term demand for a particular product. For its cephalosporin’s range of drugs, the company was

experiencing an increased demand from the US markets for the past 2-3 years.

The total investment in C-block was Rs. 130 million with the existing capacity of 396 million capsules

per year. The demand had increased to 590 million capsules per year. To meet the increased demand, the

management decided to purchase a new machine. The finance manager, Ramesh Swami, had two options

(Refer Table 1)

Table 1

Particulars Machinery I Machinery II

Brand Zenhasi (USA) Zentacs (Second hand

machinery from Russia)

Capacity 300 million capsules per

annum 200 million capsules per

annum Cost of Machine Life of Machine

Rs. 11.70 million 5 years

Rs. 9.50 million 3 years

Residual Value Nil Nil



Sales revenue (for 18 tones

material equivalent to 194

million capsules per annum) Rs. 575.4 million Rs. 575.4 million

Material Cost 90.68% of sales price 90.68% of sales price Cost of repair and overhauling

before commissioning Nil 1.30 million

Total indirect costs (65%

fixed, 35% variable) Rs. 26.91 million Rs. 30.00 million

Depreciation as per income

tax provisions Rs. 0.87 million Rs. 0.80 million

Total Interest (Non cash) Rs. 7.86 million Rs. 7.79 million Income Tax rate (company is

paying only MAT @ 11.5% of

EBT) Rs. 2.08 million Rs. 1.74 million

Investment requirement in

working capital for operations

of the machine (assumed to be

released at the end of life of

the machine)

Rs. 63.39 million Rs. 63.39 million

The interest was calculated on the aggregate of receivables, investment and the working capital. The

details for the proportion of different components of total interest are given in Table.

Table 2

Particulars Machinery I Machinery II

Receivables Rs. 0.06 million Rs. 0.06 million Investment (10.4% of the cost

of Machine) Rs. 1.21 million Rs. 1.12 million

Working Capital (10.4% of the

investment required in

working capital)

Rs. 6.59 million Rs. 6.59 million

Total interest Rs. 7.86 million Rs. 7.79 million

After calculating the cash flows for the alternatives available, Swami decided to buy the first machinery.

The policy of the company was to discount the cash flows at the rate of 16.59%. the order for the machine

was placed in March 2000, with a delivery period of four months, and the machine was to be made

operational in July, 2000. The payment was released in April, 2000. The machine was received in July,

2000 but it could not be made operational due to damage in the transit. The machine was finally made

operational in October, 2000. The company was not able to generate revenues from that machine for the

same period. Apex finalized its balance sheet on June, 30 every year.

Questions:

1. If you were in the position of Swami, what would have been your decision? Justify keeping

qualitative aspects in mind.



2. Discuss the various other factors, which should be considered while making capital investment

decision.

Caselet 2

Geetha Laboratories Pvt. Ltd. Was established by Mohan Ramnath in 1985 at Chennai. He was a PhD in

Chemistry, a soft spoken gentleman who did not believe in working under pressure. The company was a

small scale unit manufacturing non-patented anti-malarial medicines. The company worked 6 days per

week and was running smoothly. In 1978, CITU supported union came into existence. Industrial relations

started deteriorating making it difficult for the company to service. In 1983, Ramnath decide to enter into

partnership with three other partners, Chandan Keshav, Bharat Pathak and Veenu Ramachandan to

overcome the difficulties faced by him. The company came to be known as Geetha Laboratories Ltd.

Even after this, industrial relations did not improve till 1990 and it was during this period that 14 workers

were sacked. In 1990, Ramnath decided to sell his shares to Emission Pharmaceuticals, a multinational,

though other partners continued. Now, the company was called German Drug House (GDH)

Pharmaceuticals. During this period CITU withdrew support to the union and BMS (Bhartiya Mazdoor

Sangh) came into the picture. An average increment of Rs. 225/- was given to all workers and industrial

relations improved to some extent.

IMPLA Pharmaceuticals Limited was another non-patented anti-malarial bulk drug manufacturing giant

having units at Poona, Mysore, Hyderabad, and Coimbatore and having corporate office at Baroda. It

wanted to have monopoly in anti-malarial drug manufacturing by taking over GDH, but before taking

such step, they wanted to assess the internal condition of the company. Therefore, in January 1994 Vishal

Shrivastav, a qualified Chartered Accountant, was inducted as Director by purchasing a requisite number

of shares of the company. In September 1994, after IMPLA was convinced about the favorable conditions

of GDH it formally took over the company. At that time the manpower strength of the plant was 210 in

which 130 were workers and 80 were executives and staff members. After taking over, IMPLA made

many changes and the major ones were:

1. They increased the salaries of executives and staff of the unit to reduce the gap in the pay

structure of the executives and staff of this unit and their other units.

2. They invested 3-4 crores for up gradation of the plant.

3. They shifted from 6 days working per week to 7 days working per week to improve the

productivity and enhance cost-effectiveness of the unit.

The shift from 6 days to 7 days working without any financial gains, made workers resists the change. At

this junction Sumeet Joshi, Corporate Manager, (IR) intervened and promised the workers that they

would be paid for 30 days instead of 26 days, but Ravi Shriman, Director (Personnel) and Vishal

Shrivastav; GM (operations) refused to agree to this since they were not involved when Sumeet Joshi

made the commitment. The promise was not fulfilled, further complicated problems. The issues kept on

lingering for 6 months. No decision could be taken because of the difference of opinion among senior

executives. In June 1995, the workers gheraoed Vishal Shrivastav to pressurize the management to take

the decision. They were successful to some extent as it led to the agreement of management with workers

that financial benefits would be given with retrospective effects of 4 years making it one additional year

over and above 3 years of normal agreement. They were asked to give a notice of change which the

Workers couldn’t give till December 1995 because of disagreement among themselves. It was felt at this

point of time by Shrivastav that the plant should have an Assistant Manager (Personnel) instead of having

a Personnel Officer. Ajit Dubey, Assistant Manager (Personnel) was appointed in October 1995 but even

this appointment took 3-4 months because of difference of opinion between shrivastav and Shriman.

In December 1995, the workers gave a notice of change demanding an increase of Rs. 2200/- per month.

In January 1996, a notice of change was given by management. In February 1996, the negotiations started

and continued till July 1996. Shrivastav, Rajkumar, the new Corporate Manager (IR), Ajit Dubey and



Kishore were to represent the management and nine members of the union were to represent the workers,

besides V.D. Agarwal, the General Secretary of BMS. The first two rounds of meeting did not lead to any

outcome as none of the parties were ready to budge. This made V.D. Agarwal withdraw as he was fed up

with the rigid stand of the union leaders.

The third meeting was held without Agarwal, wherein the union leaders came down to Rs. 1,200/- from

Rs. 2,200/- p.m. The minutes of the meeting were jotted down but the union leaders refused to sign.

Taking advantage of the occasion, Dubey and Shrivastav had a secret meeting with Agarwal in a hotel.

Agarwal advised the representatives of the management to maintain a low profile for a few months to

crack down the workers’ aspirations who had very high expectations. It was observed by Dubey that there

were perceptual differences between senior and junior union leaders. Taking clue from this, Dubey

adopted a policy of divide and rule and took into confidence Devilal, the senior union leader and had

secret meeting with him to explore the last settlement amount and apprised him that the management

could go only upto Rs 450/- . He also took Janak Singh, the junior union leader into confidence and

convinced him that the management was not going to bend before their demands and as such the workers

were going to be the ultimate sufferers. Besides this, Dubey spread the message that no wages would be

given retrospectively.

The next day the meeting resumed in which union representatives demanded Rs. 750/- (because of the

pressure from the workers) beyond which they were not ready to come down. It was decided that instead

of having a meeting with all the members, only two members, one senior union leader, Devilal and one

junior union leader, Janak Singh would sit in the negotiations. Immediately a meeting between

Shrivastav, Rajkumar, Devilal and Janak Singh was held and it was resolved that Rs. 575/- average per

month would be given for 4 years retrospectively. A MOU was drafted by the legal consultant at the

corporate office and was duly signed by Shrivastav, Rajkumar, Dubey and all the union representatives.

In the evening a dinner was hosted in which all the negotiators were invited. When the papers were sent to

R. Shriman, he objected to the MOU on the following points. First, the other plants were having 30 days

pay system leading to less average per day and in Chennai plant it was to be given for 26 days leading to

higher average per day. Second, the milk allowance given for overtime at Chennai unit was higher than

other units. it took Shrivastav and Rajkumar two months to convince Shriman about the agreement,

thereafter implementing the same. Rs. 14 to 15 lakhs were given to all the 160 workers within a week as

arrears and the issue was settled.

Questions:

1. Was it right for V.D. Agarwal to withdraw half way during negotiations?

2. In view of the information given in the case, suggest the strategies for making IMPLA

Pharmaceuticals a more progressive organization.

END OF SECTION B



Section C: Applied Theory (30 Marks)

This section consists of Applied Theory Questions.


Each question carries 15 marks.

Detailed information should from the part of your answer (Word limit 200 to 250 words).

1. Explain the terms in the context of the “Pharmaceutical Marketing” :

a. Brand

b. Trademarks

c. Product line

2. Explain the important point that should be considered, while packaging pharmaceutical product?

Also list the various dimensions of pharmaceutical market.

S-2-301012

END OF SECTION C

Examination paper pharmaceutical industrial management&pharmaceutical marketing

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Transcript of Examination paper pharmaceutical industrial management&pharmaceutical marketing