Pharmaceuticals Industrial Management IIBM EXAM ANSWER SHEETS PROVIDED. MBA EMBA BMS DMS ANSWERS PROVIDED. DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com
Section A: Objective Type & Short Questions (30 Marks)
This section consists of Multiple Choices & Short Notes type questions.
Answer all the questions.
Part one carries 1 mark each & Part Two carries 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
Examination Paper of Pharmaceuticals Management
IIBM Institute of Business Management 2
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 fora)
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.
Answer all the questions.
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.
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
END OF SECTION A
Examination Paper of Pharmaceuticals Management
IIBM Institute of Business Management 3
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 webenabling
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.
Examination Paper of Pharmaceuticals Management
IIBM Institute of Business Management 4
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
Examination Paper of Pharmaceuticals Management
IIBM Institute of Business Management 5
Section C: Applied Theory (30 Marks)
This section consists of Applied Theory Questions.
Answer all the 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
Examination Paper of Pharmaceuticals Management
IIBM Institute of Business Management 6
IIBM Institute of Business Management
Examination Paper MM.100
Pharmaceutical Marketing
Section A: Objective Type & Short Questions (30 Marks)
This section consists of Multiple Choice & Short Notes type questions.
Answer all the questions.
Part one carries 1 mark each & Part Two carries 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
Examination Paper of Pharmaceuticals Management
IIBM Institute of Business Management 7
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
Examination Paper of Pharmaceuticals Management
IIBM Institute of Business Management 8
Section B: Caselets (40 Marks)
This section consists of Caselets.
Answer all the questions.
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
Examination Paper of Pharmaceuticals Management
IIBM Institute of Business Management 9
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:
Examination Paper of Pharmaceuticals Management
IIBM Institute of Business Management 10
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
Examination Paper of Pharmaceuticals Management
IIBM Institute of Business Management 11
(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.
Section C: Applied Theory (30 Marks)
END OF SECTION B
Examination Paper of Pharmaceuticals Management
IIBM Institute of Business Management 12
This section consists of Applied Theory Questions.
Answer all the 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-2-300813
END OF SECTION C
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