Dendrite International

• Established in 1985.
• Based in New Jersey, USA.
• World’s leading supplier of sales software to the
pharmaceutical industry.
• Over 15000 sales people in 40 companies in 11
countries used Dendrite systems.
• Forecasted sales for 1993- $33 million.
Group:2
Amit Gupta{06}
Bhavesh Pande{11}
Prabal Thakurta{36}
Tanweer Alam{47}
 Initial Strategy
• Decided to be global supplier of both software & services
since beginning.
• Unlike prevalence of ‘turnkey’ basis of software
automation, it decided to provide continuous support to
maintain and operate technology
• Used venture capital funds to establish subsidiaries &
offices.
• Sales rose from $250,000 in 1987 to $23million in 1992.
• 60% from software licencing & product customization
while 40% from Services, Maintenance & facilities Mgt.
 Product & Pricing
• Electronic Territory Mgt (ETM) & other sales automation product gained
popularity in 1980s.
• Dendrite’s product was a mix of software & services.
• Helped Sales reps in retrieving info, constructing lists for call plans, time-
record, types & no. of calls, email, analyzing & tracking progress etc.
• Client received regular reports from Dendrite’s host computer for detailed
analysis & new idea generation.
• Software sold in two forms: Base System and Added Value Modules.
• Pricing involved license fee, maintenance & support agreement, and service
contract.
• In US service pricing based on no. of System Users while in Europe it was a
fixed annual fee.
 Competitors
Dun & Bradstreet subsidiary Sales Tech.Inc(STI)
• 1992 Sales-$48m, 40% share of installed reps in US.
• Had lost two key accounts during last 18months.
• Not all well there as a no. of top executives of STI removed in late 1992.
Walsh International
• Sales-$100million, mainly from paper-based call reporting and data services.
• Main business is sales & analysis of industry data.
• Rigid ETM system, difficulty in integration .
Pharma Systems
• UK based, focus on ETM & management reporting system.
• Sales $1million with only one major client.
• Firms expressed interest in its PS system because of its compatibility with a database called
Express.
Cornet
• US based, 13% of pharma reps worldwide.
• Needed to develop a product-service package to be a big player.
 Customers
• Dendrite’s selling cycle 18months or more.
• Usually arranged full day software demo for clients.
• Clients usually ranked vendors on Ease of use,
Functionality, Connectivity, Financial strength and
Commitment to full support.
• Dendrites sales: US(60% of its Sales), Western Europe,
and Japan. Each countries differed in sales force
organization, healthcare system, customization, legal
aspects of providing service, Doctor’s practice etc.
 Recent Developments
• US healthcare moving towards managed-care facilities.
• This will result in pharma sales force downsizing in US. Target
of activities to reduce from 300000 individual physicians to
about 35000 committees.
• European countries were imposing price control on drugs.
Pharma firms may move towards smaller, more specialized sales
force focused on given product or therapeutic area.
• In Japan, fixed-invoice pricing mandated and wholesaler
rebating abolished. It was also moving towards seperation of
Prescribing & dispensing for pharmaceuticals, which would alter
pharmaceutical sales task.
 Dendrite’s Sales Organization
• Two types of sales activities: Initial sales to clients and
follow-on sales to existing accounts.
• 20 Business Managers(BMs) responsible for business development at
existing accounts.
• Initial sales handled by salespeople, supplemented by area Vice Presidents.
• Compensation involved base salary & commission (it averaged 30% in 1993).
CLIENT TEAMS
• Team size ranged from 3 to 50, with average of 22.
• Each team headed by a BM and included one CS and one TS Managers.
• After roll out, CS managers focused on Helplines.
• BMs role changed from consultant during project development & installation
phase to service provider & account manager..
 Road Ahead
• Role of customization for the client team will increase. CSS and
TSS team should be strengthened with more trained personnel.
• BMs role should start earlier and should terminate after rollout.
The regular stuff after rollout should be handled by an Operations
Manger.
• Role of US pharma’s sales rep will change from influencing
Doctors to administrators. Since no. of users per firm will decline
(400-700 instead of 1500 odd in US), this necessitate no. of
Dendrite client team to shrink.
• Japanese sales rep are least automated(6.6%) and also the no. will
go up now, there is a need to shift focus to Japan where Dendrite
holds lion’s share(83.5%). Additional re-enforcement should go
from US.
• Develop specialized software for European sales force, focused on
a given product or therapeutic area.