Pharma Talent: Paying Sales Force Bonuses Within a Fixed Budget
(8 pages of text)
This case concerns the bonus structure for a representative sales team. Pharma Talent, a contract sales company for pharmaceutical companies across Canada, promised its clients that its representatives would drive sales at a lower cost than what the client would incur if it had its own sales force. Historically, it had contracts with products that targeted physicians (e.g., prescription drugs or medical devices); however, a new contract in Ontario involved an over-the-counter (OTC) product. Pharma Talent currently had a pay-for-performance bonus structure that had already been revised three times. Nevertheless, due to the structure of the different territories in Ontario, many sales team members thought the bonus was unfair and very discouraging, while its pay-for-performance structure did not meet the clients' needs.
- To explore the difficulties of defining an effective compensation incentive plan.
- To describe the role of a sales representative who calls on a retailer and the budget limits of a sales manager.
- To explore the link between marketing strategy, the sales role and the compensation plan.
- To demonstrate how an effective plan can motivate desired behaviour in a sales force in order to effectively implement the marketing strategy versus an incentive plan that creates unproductive behaviour.
Health Care Services
Canada, Small, 2011
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