Poor performance in ho chi minh city at hetero vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Le Tran Phuong Thao

POOR PERFORMANCE IN
HO CHI MINH CITY AT HETERO

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2021


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Le Tran Phuong Thao

POOR PERFORMANCE IN
HO CHI MINH CITY AT HETERO

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: Assoc. Prof. Dr. Tran Ha Minh Quan

Ho Chi Minh City – Year 2021


CONTENTS

1. OVERVIEW OF HETERO VIETNAM ................................................................... 6
1.1.

The background of Hetero .................................................................................. 6

1.2.

The context of problems ...................................................................................... 7

2. SYMPTOMPS ............................................................................................................. 7
2.1.

The decline of customers ..................................................................................... 7

2.2.

Symptom Validating ............................................................................................ 9

3. PROBLEM IDENTIFICATION ............................................................................. 10
3.1.

Potential Problems ............................................................................................. 10

3.1.1.

Weak in sales promotion ............................................................................ 10

3.1.2.

Weak in creating the competitive advantages .......................................... 11

3.1.3.

Ineffective sales people ................................................................................ 12

3.2.

The preliminary cause-effect tree ..................................................................... 13

3.3.

Problem Validating ............................................................................................ 15

4. CAUSE ANALYSIS .................................................................................................. 16
4.1.

Potential Causes ................................................................................................. 16

4.1.1.

Lack of sales force structure ...................................................................... 16

4.1.2.

Lack of personal selling training ............................................................... 18

4.1.3.

Lack of performance appraisal .................................................................. 19

4.2.

Causes and effect tree ........................................................................................ 20

4.3.

Causes Justification ........................................................................................... 20

5. ALTERNATIVE SOLUTIONS ............................................................................... 23
5.1.

The solution for lack of sales force structure: Restructuring sales force ..... 23

5.2. The solution for lack of personal selling training: Organize training course
every quarter ................................................................................................................ 24
5.3. The solution for lack of the performance appraisal: Establish and develop
performance appraisal ................................................................................................. 25
5.4.

Alternative solutions .......................................................................................... 26


5.4.1. Set solution 1: Personal selling training every quarter combine with
establishing and developing performance appraisal................................................. 26
5.4.2. Set solution 2: Restructuring sales force combine with personal selling
training associate with establish and develop performance appraisal .................... 27
5.5.

Evaluating solutions ........................................................................................... 27

5.6.

Solution Justification ......................................................................................... 28

6. ACTION PLAN......................................................................................................... 29
6.1.

Objective ................................................................................................................. 29

6.2.

Timelines and estimated cost ................................................................................ 29

7. CONCLUSION ......................................................................................................... 31
8. SUPPORTING INFORMATION ........................................................................... 32
APPENDIX: Interview Guide ........................................................................................ 33
REFERENCES ................................................................................................................ 39


EXECUTIVE SUMMARY
In the competitive environment, many company push a lot of efforts to acquire and attract
new customers through expensive marketing campaigns, advertising or giving a lot of
bonus rewards, the expenses and costs also increase. Instead of put aggressive efforts to
acquire new customers, maintain the existing customers or reduce the customer churn rate
will increase organizational profits, increase purchases and reduce operating costs to
services (3). The decline of customers using Sife-100 in 2020 compare to 2019 in Ho Chi
Minh City at Hetero Vietnam is the symptom effecting the business performance of
organization. By using qualitative and quantitative research to collect the primary data and
secondary data, the main problem was identified as ineffective salespeople; the causes also
were defined as the company lack of sales force structure, lack of personal selling training,

and lack of performance appraisal impact to ineffective salespeople. Based on theories and
opinion of Hetero’s key stakeholder, the solution will be explored to solve the root causes.
The feasible action plan also was mentioned to implement the solution including the
timelines, estimated cost and the department who will be in charge.

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1. OVERVIEW OF HETERO VIETNAM
1.1. The background of Hetero
Hetero is one of India’s leading generic pharmaceutical companies and the world’s largest
producer of anti-retroviral drugs. Backed by over 27 years of expertise in the
pharmaceutical industry, Hetero’s strategic business areas spread across Active Product
Ingredients, Generics, Biosimilars, Custom Pharmaceutical services and Branded
Generics.
Since headquarter in India tend to promote and expand business in Vietnam, so Hetero
Representative Office Vietnam was established in 2017 with head office in Ho Chi Minh
City. Hetero Vietnam supplies major therapeutic categories such as HIV/AIDS,
Cardiovascular, Neurology, Urology… to hospitals, pharmacies and also local
pharmaceutical companies.
With the core values are knowledge, quality focus, dynamism, and responsibility; Hetero
is positioning in the market as a leader of providing high quality products with reasonable
price, and changing the bias mindset of India’s products.
The head of Hetero Vietnam is Country Manager with Sales Forces is core human
resources, organizational structure was shown in Figure (1)
Figure (1). The organizational structure
Country
Manager

Tender

Marketing

Regulatory

Administration

Area Sales
Manager North

4 Product
Specialists

6

B2C National
Sales
Manager

Area Sales
Manager Central

2 Product
Specialists

B2B & B2C
Business
Development

Area Sales

Manager HCM

3 Product
Specialists

Area Sales
Manager Mekong

3 Product
Specialists


The sales performance was divided into two channels: tender and private. Tender channel
mention about sales in social insurance through by hospitals, and private channel is nontender through by pharmacies, clinic or pharmaceutical companies, where patients can pay
the bill by themselves. Tender channel is not mentioned in this research since the strategy
is only focus on price, offer a better price to bid to win tender; the disadvantage of imported
products that the cost is higher than local products and Hetero’s products cannot competed
local competitors. Private channels will be focused, since its match Hetero’s objective,
developing and expanding business in private channels.
1.2. The context of problems
Hetero Vietnam is a newbie with the baby steps in the market, they are on the processing
to complete and expand the business, due to the tightly tender’s process and intensive
tender’s price in Vietnam, Hetero have to expand the business into private market instead
of pay attention to tender, which have low profits and high competitive pressure of price.
The Government have revealed the new Joint Circular in 2015 (1) to support local products
and decrease the usage of imported products, results the imported products decreases from
17.14% in 2013 to 6.51% in 2018, while local products significantly increases from 15.61%
in 2013 to 33.89% in 2018 (2). Face with that situation, the private market, especially in
pharmacy channel will be focused by Hetero Vietnam to develop in the future.
This research only pay attention to marketing and sales scope in Hetero Vietnam, and focus

on the Sife-100 products since having stable stock in the past compare to the other products
which having insufficient stock issues.
2. SYMPTOMPS
2.1. The decline of customers
From the beginning of 2020, Hetero Vietnam is focusing to increase sales and the number
of pharmacy through the main product for sales to pharmacy and big contribution to Hetero
is Sife-100 (ingredient is Sildenafil 100mg). The first analysis of sales data from 2019 to

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2020 in Ho Chi Minh City (HCMC), the main symptom can impact to sales performance
of Sife-100 is the decline of customers.
In 2019, there are 97 pharmacies have purchased Sife-100 and decreases to 42 pharmacies
in 2020 even new pharmacies can be acquired are 32 pharmacies, the losing pharmacies
are 87 pharmacies (Table 1). The customer churn rate is calculated by dividing the number
of customers lost in 2020 by the number of customers at the beginning of 2020 (4). The
customer churn rate of Sife-100 in 2020 is 90%, it’s pretty high since Hetero has a baby
step to entrance the market.
Table (1). Number of new pharmacy and pharmacy made one order

No. of customer

2019

2020

97

42

No. of new customer

32

No. of losing customer

87

CCR*

90%

CRR**

10%

(Source: Hetero’s Sales Data)
*CCR: Customer churn rate
**CRR: Customer retention rate
According Kotler and Amstrong, keeping customers loyal makes good economic sense,
loyal customers spend more and stay around longer, it’s five times cheaper to keep an old
customer than acquire the new one (11). There are also some advantages of customer
retention such as generating higher profits, more word of mouth referrals, easy up-selling
and cross-selling, better communication with customers and loyal customers are more
forgiving (5). So with many efforts and expenses to acquire the customer, they will leave
and forget the company, while the satisfied customers will order again and talk favorable

8

to the other customers, it significantly impacts to brand equity and sales performance of
organization.
While Hetero has many promotion and campaign to acquire new customers, losing of these
customer make company suffers a lot of losses, also the effort of sales team to penetrate
these customers. It’s such like the leaky bucket, the customers flow in will run out from
the leakage (6).
2.2. Symptom Validating
While the customer churn rate (CCR) is lower in other areas which have big contribution
of Sife-100 in 2019 and 2020 (table 2), HCMC has the highest CCR will impact to company
business.
Table (2). Customer churn rate in region
REGION
CCR HCM
CCR Mekong
CCR North

2020
90%
73%
52%

(Source: Hetero’s Sales Data)
Interview Ms Loan – B2B & B2C Business Development Manager:
“Since many customers were lost in 2020 compare to 2019, the low number of pharmacies
reflects that even we set up a team to build brand but we are on the trend to losing all
customers that we got it”
Since Hetero is a new player in the market, the declining of customers will impact the
negative impression to these customers and may be other customers. Besides, it also
increases the cost to acquire customers and company has to face with the difficulty to

expand the business. So that, the decline of customers in HCMC is the main symptom that
Hetero is facing to and has to solve it.
The analysis what is the problems cause the decline of customers will be explored in the
next steps.

9


3. PROBLEM IDENTIFICATION
An in-depth interview with Mr Vipul – Country Manager, Ms Loan Nguyen – B2B & B2C
Business Development, Ms Phu Pham – Area Sales Manager HCM and pharmacist at
pharmacy were conducted to identify the potential problems. Also the group-interview with
sales team in HCM and pharmacy surveys also were conducted for validating information.
3.1. Potential Problems
Selecting and training employees to be knowledgeable and friendly increases the likelihood
that customers shopping questions will be answer satisfactorily; or distinguish the causes
of customer attrition and identify those that can be managed better can reduce the defection
of customers (3). The competitor’s implementation and strategy also play a crucial role to
make customers decided to stay or leave (7). According interview with sales team and
pharmacies to find out the reason why they stopped purchasing the products, sales team
mentioned due to the promotion scheme is big for customers to sell out quickly, pharmacies
need time to clear the stock while the demand are not high; besides that, the pharmacies
mentioned about the pressure of the competitors when they push a lot of combo for
motivating the purchases, so that even many promotion was executed and the main
competitors was identified but Hetero couldn’t reach the customers. Also through the
coaching with sales team, they showed many weaknesses in their skill, knowledge,
planning, the way how to identify the potential customers or handle objection. So that,
combined with theories, there are three potential problems can influence to the decline of
customers using Sife-100 are weak in sales promotion, weak in creating competitive
advantages, and ineffective sales people.

3.1.1. Weak in sales promotion
According Philips Kotler and Kevin Keller, the objectives of trade promotion are getting
retailers to carry new items and more inventory, buy ahead, or promote the company’s
products and give them more shelf space (3). Business promotion are used to generate
business leads, stimulate purchases, reward customers, and motivate sales people.
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There are many competitive products in the pharmacy, Sife-100 is not the first option to be
recommended to end customers due to some customers directly ask for the other products
and the pharmacist want to release the competitive products since the stock of them are
high. The main competitors have a long presence in the market and supplying a lot of
necessary products, the pressure make pharmacy to buy a combo to get the best price for
these products is high so pharmacy cannot be spurred to purchase Sife-100. Opposite to
that, the stock of Sife-100 is low in current pharmacies, so they do not have any pressure
to sell out product to final customers. It’s easy to be eliminated if the competitor offers the
deeper promotion to pharmacy. Also the number of loyalty customers signed the sales’
commitment per quarter is none in HCMC, while this number in other areas are increasing
recently. Loyalty signifies a favorable correspondence between relative attitude and repeat
patronage (8). Creating loyalty customers is at the heart of every business (9) and creating
a strong, tight connection to customers is the dream of any marketer and often the key to
long-term marketing success (3).
As interview with Mr. Bao – Pharmacy:
“Dai Bac Company has a list of many products, they always push me to buy a combo of
many products including necessary products and new products for better price, so that’s
why I have to buy a combo and cannot support Sife-100 more”
With these current situation, weak in sales promotion to push sales lead to the pharmacy
do not refer to purchase for inventory and sell out to customers; it impacts to current
customers will leave company.
3.1.2. Weak in creating the competitive advantages

In the competitive marketplace, understanding customer is not enough to be survived,
gaining competitive advantages to engage customers to outperform which competitors are
offering will bring more value to company (11). Even though, Majera and Adagrin are
identified as the main competitors, but Sife-100 lacks of a strategy to against with; the only
advantage that offering to customers is the lower price.
11


As interview with Ms Phu – Area Sales Manager of HCMC:
“The main competitors are Majera and Adagrin, they have a big market share and are
presented in the market long time ago, almost the pharmacies have them in the inventory
and even the customers directly ask for those products”
Effective management involves the identification, selection, and implementation of
business strategies (12). The lack of competitor analysis lead to a passive react to the
market, no distinct and long-term advantages. That’s why weak in creating the competitive
advantages is a weak point make Sife-100 is inferior than competitors and easy for
customer to leave.
3.1.3. Ineffective sales people
Sales force play an important role in the company, they are an individual who represents a
company to customers by performing one or more of the following activities: prospecting,
communicating, selling, serving, information gathering, and relationship building (11). In
special industry as pharmaceutical environment, the sales representative more plays a
crucial role in promoting products due to the limitation in marketing of medicine (13)
forces the pharmaceutical companies have to build a core sales force approaching
doctors/pharmacists and delivering the science information. The ineffective of sales force
significantly impact to marketing strategies, or the fail of marketing campaigns. According
Kotler and Amstrong, after the resounding success of Salesforce app, the company need
the great sales force to sell this app (11).
In a research with 90 doctors, 48.2% doctors believed that the prescribe decisions were
influenced by visit calls of medical representative (14). Physicians can aware that the

medical representative’s visiting will influent their prescribed decisions, but physicians
still need to be interacted with medical representative since the benefits bringing such as
the scientific literature or scientific sponsor (20). Thus, the importance of visiting
frequently are more emphasized. The frequency of Sife-100 sales people goes to visit

12


pharmacy are low, an internal report through an application showed 80-90% of two in three
sales people in HCM have wrong location when do a report call at pharmacies.
As interview with Ms Hoa – Pharmacy:
“I have ordered Sife-100 long time ago from a tall boy, sometimes he comes to ask for the
stock and then leave”
As interview with Mr Bao – Pharmacy:
“It’s been a long time I didn’t see any medical representative come to take care and
introduce the products”
A group interview was conducted with sales team in HCM to discuss about the pharmacies
have already ordered Sife-100, a high number of pharmacies ordered product by
themselves or ordered through a sales representative from distribution.
3.2. The preliminary cause-effect tree
With three potential problems as above, the preliminary cause-effect tree was showed in
the figure (2).
According to Ms Phu – Area Sales Manager HCMC: “Because the promotion scheme is
big for pharmacy so they need a long time to sell out the products to customer while they
still have to sell the other products with the same indication, beside that the customers were
familiar to use Majera and Adagrin so it’s hard to change pharmacy’s behavior even though
their price is higher than ours”. The decline of customers due to the stock in the pharmacy
are still high, the low liquidation make customer spent long time to sell out to end
customers and make the order again. And because the competitors push the pressure to
pharmacy to purchase their products, the customer spending to Sife-100 is less. Also the

loyalty program for pharmacy such as “discount on order if pharmacy reach the sales value
that they sign the commitment” is none in HCMC, while the number of customers
participate this program is 33 and 26 pharmacies in Mekong and North in quarter 01.2021.

13


Figure (2). Preliminary cause-effect tree
Pharmacy don’t have any
pressure to sell product

Weak in sales promotion to
push sales in pharmacy

Cannot spur pharmacy
spending

Low liquidation of
stock in pharmacy

None of pharmacies have
sales commitment per
quarter
Weak in creating the
competitive advantages

Lack of competitor analysis
Cannot handle with
competitors

The decline of
customers

Poor selling skills
Ineffective sales people
Not frequently go to visit
customers

Marketing promotion
cannot be delivered to
customers

An interview with Mr Bao – Pharmacy:
“The demand of erectile dysfunction is not high in this area, I just sell for several familiar
customers who just come to ask for erectile dysfunction, then I will recommend some
products for them to choose, some customers come and directly ask for one product that
they have used before. Less of patient come to ask Sife-100, I have to consult and persuade
them to use”
According to Mr Bao, the importance of pharmacist who admits to consult Sife-100 to
customers play a crucial role, and the tight connection with pharmacist will help them to
remember Sife-100 is the first priority.
The customer’s interview who are in the database was also conducted with at least five
pharmacies but they responded that they didn’t purchase the product before, that means the
sales team just only make the unreal order. This situation was also confirmed by sales
people.
As interview with Mr Vipul:
14


“Sales people just come to the pharmacy and only show the product quotation, while they

need to do a “full call” to introduce products and deliver professional information to
persuade pharmacist to support our products”
When sales team in HCM were asked what would they do since pharmacy gives the
feedback that Sife-100 didn’t work for patient, almost sales people keep silence and cannot
handle objection even this case was practiced before. Sales people lack of product
knowledge also were shown since Product Manager from marketing department having a
joint visit with salespeople to meet pharmacies to monitor how they delivering the product
information.
An interview with Ms Loan – B2B & B2C Business Development:
“HCMC Team’s responsibility have to develop retail business but they just only sell Sife100 to wholesaler with low price, I have many complaints from pharmaceutical company
that our staffs offer the lower price than the price I’m offering to them”
Revenue come from pharmacy usually are lower than pharmaceutical company so sales
people try to push sales in these companies with low price to achieve the target and get
incentive, it’s easier than approaching one by one pharmacy.
3.3. Problem Validating
In pharmaceutical industry, the medical representative plays a crucial role, they are the
connection between the company and customers, the company needs to promote product
or deliver information to customers through medical representative, also needs to receive
the feedback of them. The job of a medical representative is promoting and selling the
medical products, the customers maybe included doctors, nurses and pharmacist, a medical
representative will increase the awareness about products, answers queries, consult and
introduce products (15). Personal selling is an important tool for many companies have
complex products or services need to emphasis the advantaged features and explore the
customer’s demand; and if customers pose objections, the salespeople use their powers to
overcome the objections and persuade customers to purchase products; maintain customer
15


relationships is also the objective of personal selling (37). Besides the problem “weak in
sales promotion” lead to low liquidation of stock, many promotions were given by

marketing department but cannot be delivered to customers due to the ineffective in sales
people, and also they are not aggressive to grab and persuade the customers. Weak in
creating the competitive advantages also plays an important role, because the current
competitors have a big market share, that is the opportunity to expand the business
performance, but with the ineffective sales people situation, the exploration, research or
implementation will be more difficult than ever, even though Sife-100 has presented in the
market before Hetero Vietnam was established in 2017. Sales force plays a critical role in
implementing the emerging relationship marketing perspective and dealing with the
growing importance of such services, and sales person span the boundary between the firm
and its customers, they are responsible for developing, maintaining, and expanding these
customer relationships (10).
Because of that, after discuss with the company, the main problem was chosen is
“ineffective in sales people” have significantly influenced to the decline of customers.
As interview with Mr. Vipul:
“We have to develop and build a good team equips strong skills to expand our business
more, we should recruit more since HCM area is big and just three sales people cannot
cover all of the territories”
The detailed analysis will be explored in the next steps to figure out this problem.
4. CAUSE ANALYSIS
Ineffective sales people was shown by some potential causes as the company lack of sales
force structure, and lack of personal selling training that impact to performance of sales
force.
4.1. Potential Causes
4.1.1. Lack of sales force structure
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Sales force structure affects salespeople by defining the skills and capabilities that they
need to be successful in their jobs, by determining who each salesperson’s manager is, and
by influencing how salespeople and managers interact with one other (23). Hetero Vietnam

currently has fifteen products were divided as Table (4) and the sales force structure of
HCM’s team was shown in Figure (3). The lack of sales force structure situation that make
one sales people has to take over all of products for all channels. At the growth phase, when
product portfolio is expanded or the list of customers is increased, as tasks grow beyond
go outside to the salesperson’s capacity, they have the tendency to drop current customers,
products, selling activities and just maintain which are easy to deal with (16). When the
major new products are launched, a specialty sales force may bring the benefits such as
necessary coverage and ensure the remainder of the product line also receives adequate
coverage (17).
A salesperson attempting to do a job that exceeds his or her bandwidth will no longer be
able to produce the results the company desires. Companies that sell many complex
products to many diverse markets require a sales bandwidth that is much greater than the
capacity of a single salesperson (22). A salesperson who in order to meet customer needs
had to understand a large, complex, or diverse product and service portfolio, or who has to
perform many selling tasks for several customer segments with complex and diverse needs,
at some point will not be able to perform the job effectively (23).
Table (4). Categories of products
Group/Channel

Number of
products

Tender

Clinics

Pharmacy

Wholesalers

x

x

Sife-50/ Sife-100

2

Virology

2

Cardiology

4

x

x

x

x

Gastroenterogy

2

x

x

x

x

Orthopedic

2

x

x

x

Antibiotic

1

x

x

Antihistamine

2

x

x

x

x

(Source: Internal Data)
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Figure (3). Ho Chi Minh’s Sales Force Structure
B2B & B2C
Business
Development

National Sales
Manger

Area Sales Manager
HCM

Product Specialist
All channels

Product Specialist
All channels

Product Specialist
All channels

As interview with Mr Viet”
“Almost salesperson want to focus on tender if they are assigned to take over all, that’s
why I want to divide team into separately OTC and ETC team, OTC team just only focus
on private channel and ETC team manage hospital tender channel”
As Mr Vipul said:
“If you build an equivalent promotion for all channel, the salesperson just only sells
products into the big pharmaceutical company to grab the incentive”
All that show the situation of lacking salesforce structure can create a mess of workload,
unclearly objectives, and low motivation have impacted to effective sales force.
4.1.2. Lack of personal selling training
An effective training program teaches sales force about the potential customers and how to
build relationships, about the different types of customers and their needs, buying motives,
and buying habits, also teach them the completely selling processes; moreover, sales force
should be trained about the competitors in order to handle or against with their products or
services. Besides that, a training should train salesperson about the company’s objectives,
products, and strategies to drive them match to organization (11). The content of training
for salespeople can be categorized into four sessions: product knowledge, company
18


knowledge, market/industry awareness, and selling techniques related topics (18).
Salespeople in HCM are lacking of understanding about the company’s objectives and
strategies; how to assess and build relationships with potential customers lead them to at
low motivation. Sales training effects on sales force performance and customer orientation
(19), so the sales training program can significantly impact to salesperson to improve
his/her performance.
As Mr Vipul:
“A selling training should be focused on how salesperson make a “full call”, they have to
know how to assess the potential customers, how to approach them and build relationships,
know the effective way they make a “full call” to impart the products information to

persuade customers, not only show the product quotation”
4.1.3. Lack of performance appraisal
Performance appraisal may be defined as any procedure that involves setting work
standards, assessing the employee’s actual performance, providing feedback to the
employee with the aim of improving and motivating that person (24). Performance
appraisal plays a crucial role in performance management which can drive all of the
company’s goals, besides that it can develop the plan to correct the deficiencies and to
reinforce the right things, it provides an opportunity to review the employee’s career base
on their strengths and weaknesses, and one more thing is helping to identify employee’
training and development needs (24). Employees with low performance are identified
during the evaluation cycle and given feedback on how to improve, they might also
undertake some developmental activities such as training in order to rectify performance
deficiencies (30). In Hetero, the situation of lacking performance appraisal leads sales team
feel comfortable with their efforts and what they already done, the supervisor cannot coach
and give them feedback to improve or enhance their abilities in work, even salesperson do
not know clearly about the performance targets. Besides that, the needs and objectives for
training will not be identified to improve their performance. Performance appraisal can
19


control the result of organizational direction and drives sales team into the right objectives
of the company, the lacking of performance appraisal will significantly impact to Hetero’s
objectives.
According to Ms Phu – Area Sales Manager HCM, the sales value in pharmacy is really
small, her objectives are developing in tender hospitals and selling products for wholesaler
and let them distribute to other pharmacies. This objective goes wrong with the direction
of Hetero Vietnam.
4.2. Causes and effect tree
As the main problem is ineffective in sales people, the causes and effect tree was developed
as the root causes in Figure (4)

Figure (4). The causes and effect tree
Lack of sales force
structure

- Overload workload

- Not focus to all of products

- Low of motivation
- Tend to skip the problem solutions

Ineffective in
sales people
- Cannot reinforce what
salesperson is missing
- Cannot identify clearly
performance targets

Low of motivation

- Cannot assess
and approach
customers
- Cannot handle
with competitors

Lack of performance
appraisal

No confident to meet

customers

Lack of personal
selling training

4.3. Causes Justification
As a sales force is no longer to just only sell and sell the products, they need to know how
to assess and diagnose a customer’s problem and propose a solution that can help improve
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the customer’s profitability (11). Ineffective sales people make the company face to the
executed marketing effort and relationship building can fail (21).
During start-up, the smart companies focus on whether they should depend on third parties
to sell products or invest to establish their own field force. In the developing phase, sizing
the sales force is more important. And when the business on maturity phase, the focusing
move to the efficiency of sales force by appointing the key managers and reallocate
salespeople’s resource, and saving money by using less expensive people (16).
Training and development help to increase the sale’s performance and productivity through
management training, selling training, or mentoring training, it helps to reduce the
employee turnover, improve the company’s culture and objectives (34); solving the
employee’s weaknesses and make them satisfy with their job (35); and learning programs
help individuals grow better skills (36).
The benefits of performance appraisal can impact to salesperson productivity and the whole
company; it helps to identify the salesperson’s role in the company, how important they
are, which they can contribute; developing salespeople by giving them positive feedback
or helping them to improve themselves, they will know the strengths and weaknesses when
meeting customers or pursuit their career’s path; motivating by having performance reward
through performance appraisal; and helping the organization define which position
salesperson fits on and who is the worse need to improve, transfer the job, or even terminate

the contract (31-33).
The competitive environment forces the company have to build a core crucial sales force
to solve with the market, lack of sales force structure makes Hetero is dealing with the
situation of overloading and not concentrating to the particular product or kind of
customers, lack of performance appraisal and training cannot help to evaluate and identify
the missing to make the steps to filling it, it will significantly impact negative to Hetero’s
business. Although the lack of sales force structure is supposed to be the main cause,
performance appraisal and personal selling training are the activities works throughout in
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the business of Hetero Vietnam to develop current and in-the-future staff, and even the
current sales force structure significantly impact to the organizational business, that’s why
with ineffective sales person situation that Hetero is facing to, all of root causes are lacking
of sales force structure, personal selling training and performance appraisal are important
to be improved in the same time.
According to Ms Loan – B2B & B2C Business Development, the company is recruiting
more salespeople in HCMC and will divide them to cover smaller territories, also the
categories of customers will be reallocated. It means the salesperson will cover less
territories than before and more specializing in kind of customers. The lack of performance
appraisal also was mentioned by Ms Loan, since there is no performance system to appraise
and evaluate salespeople.
According to Mr Vipul – Country Manager, the company have a plan to recruit more
salespeople to develop and expand the business but there are some obstacles in selecting
suitable person. Meanwhile, the personal selling training should be conducted monthly or
quarterly to increase selling skills, product knowledge and improve the deficiencies of
salesperson.
Main Causes
Lack of sales force structure
Lack of training program

Lack of performance
appraisal

Main Problem
Ineffective salespeople

Consequences
Customers don’t feel satisfy with
company
Cannot expand business by crossselling the other products
Cannot handle competitors
The marketing promotion cannot be
delivered to customers

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Symptom
The decline of pharmacies in
HCMC


5. ALTERNATIVE SOLUTIONS
5.1. The solution for lack of sales force structure: Restructuring sales force
Sales force management as analyzing, planning, implementing, and controlling sales force
activities. It includes designing strategy and sales force structure as well as recruiting,
selecting, training, compensating, monitoring and evaluating the organizational
salespeople (11).
The success of any company depends on its ability to acquire and retain customers. Sales
strategy specified targeted customer segments, the product offering to each customer
segment, and the resulting sales process. Designing the sales forces involves three major

components: sales force structure, sales force size, and sales force deployment (22). Sales
force structure decisions should align with and reinforce a company’s business strategy,
which is driven by customer needs, and is influenced by competitors’ strategies and the
business environment (23).
If the company has numerous and complex product with many kind of customers, product
and customer sales force structure can be applied, in which the sales force specializes along
product lines and customer lines and use some form of workload approach to set sales force
size. (11).
Based on the features of each channel, the categories of products, targeting products, and
the types of the customer, the sales force structure in HCMC can be designed as in figure
(5). While tender and clinics channel will focus on doctors with complex products,
pharmacy and wholesaler will focus on pharmacists with popular products.
After design the sales force structure, Hetero can implement the plan as managing the sales
force with these steps (3):
-

Managing the sales force

-

Recruiting and selecting sales representatives

-

Training sales representatives

-

Supervising sales representatives
23

-

Motivating sales representatives

-

Evaluating sales representatives
Figure (5). New sales force structure

National Sales Manager

Area Sales Manager _ HCM
OTC

Area Sales Manager _ HCM
ETC

1 PS
Tender + Clinics
Main product:
Virology

1 PS
Tender + Clinics
Main product:
Cardiology,
Gastroenterogy,
Orthopedic

B2B & B2C Business
Development

1 PS
Tender + Clinics
Main product:
Cardiology,
Gastroenterogy,
Orthopedic

1 PS
Pharmacy +
Wholesaler
Main products: Sife,
Antihistamine,
Antibiotic

1 PS
Pharmacy +
Wholesaler
Main products: Sife,
Antihistamine,
Antibiotic

5.2. The solution for lack of personal selling training: Organize training course
every quarter
Employee training and development is the most important motivator is used to help the
individuals and organization reach their short-term and long-term objectives, training and
developing is not only increase the knowledge, skills, attitudes, but also giving some

benefits such as: (i) increase the employee’s spirits, confidents and motivation; (ii) lower
the production costs because the individuals are able to reduce waste; (iii) promote the
safely feeling and reduce the leaving and absenting of employee; (iv) increase the
employee’s involvement in the changing process by providing the necessary competencies
to adapt with new and challenging situation; (v) open the door to be admitted, increase the
salary or promotion; (vi) help the organization in improving the capacity and quality of
human resource (29). Training can improve the performance and productivity of the staff
24


and ensure that they have relevant skills (27). The employer should use a rational training
process: analysis – design – develop – implement –evaluate (ADDIE), the process as
follows (24):
-

Analyze the training needs

-

Design the overall training program

-

Develop the course (actually assembling/ creating the training materials)

-

Implement training, by actually training the targeted employee group using methods
such as on-the-job or online training

-

Evaluate the course’s effectiveness.

The survey of training needs may emerge from the skills gaps, needs to update the
organization and update the skills of the employee, which may arise from the performance
evaluation and/or development programs (28). The company should design the overall
training program including training objectives, delivery methods, and program evaluation
(24). Based on the current situation, Hetero can design the objectives of training are making
salesperson more professional in product knowledge, handling objection, showing them
the importance of firm’s goal and helps to improve their attitudes, in which product
knowledge and practice are the most focusing on. More effective salesperson has richer
various knowledge than in less effective salesperson in terms of customer types and selling
strategy to customers (25). Each salesperson has to practice before they deal with real
customer, if not it can be a disaster (26). The practice can apply behavior modeling, a
training technique in which trainees are first shown good management techniques in the
film, are asked to play roles in a stimulated situation, and are then given feedback and
praise by their supervisor (24).
5.3. The solution for lack of the performance appraisal: Establish and develop
performance appraisal
The performance appraisal contains three steps: (i) setting work standards, (ii) assessing
the employee’s actual performance relative to those standards, (iii) and providing feedback
25