A solution for pharmaceutical manufacturers. Increasing sales by 73% with the Integral Product Index (IPI)
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Objective:
Increase sales of targeted SKUs in pharmacies and pharmacy chains by identifying and making use of underexploited potential.
Context:
A pharmaceutical drug manufacturer invests in promoting and distributing its SKUs in pharmacies and pharmacy chains in Asia. The promotion is complicated by the simultaneous presence of both OTC- and Rx-drugs—with a predominant share of prescription drugs—as well as narrow target audience segments. The competitive environment is saturated with international manufacturer brands.
Key indicators:
SKU quantity: 150 Number of outlets (pharmacies and pharmacy chains): over 1,500 Cumulative sales growth for all SKUs in the pilot group: 73%
Solution:
An analysis of pharmaceutical sales, as well as an assessment of the factors influencing sales, revealed that several parameters were crucial for increasing sales, including the locations of pharmacies and healthcare facilities, the work of medical representatives and the efforts of competitors. Based on data processing and geo-tracking modules, GML developed a comprehensive knowledge-based solution for the pharmaceutical manufacturer's smart sales: the Integral Product Index, or IPI.
The application uses over 500 parameters and data layers along with analytics modules. Random decisions in pharmaceutical drug sales are minimized. Geodata allows users to know where target patients live, work, move, and purchase goods and services, thus giving them the ability to estimate sales potential up to a particular household and pharmacy.
The factor of random decisions in drug sales is minimized. Geodata allows you to find where the target patients live, work, move, and purchase goods and services, which enables you to assess the sales potential to a specific home and pharmacy.
The Integral Product Index allows users to plan sales based on demand or based on the sales plan.
In the first case, the app highlights the locations where there is greatest interest in the pharmaceutical drug, and in the second case, it shows the pharmacies and chains that are most suitable for sales.
Based on the analytics, the system recommends actions aimed at increasing sales. For example, to change/expand the product range, extend opening hours, or close down a point. Even within a single pharmacy chain, IPI identifies points with unrealized potential and helps to increase sales.
For convenience, all pharmacies are grouped into four categories: 1) maximum sales zone with well-functioning synchronous promotion and distribution operations 2) promotion deficit zone, where promotion is insufficient and distribution generates illiquid stock 3) distribution deficit zone 4) minimum sales zone, where both key sales drivers (promotion and distribution) are in the red
According to data from the fall of 2021 alone, 14% of the pharmacies that fully implemented the recommendations on residual stock provided by the Integral Product Index system showed a 73% increase in profits. During the same time period, these pharmacies accounted for 50% of total sales of packaged drugs.
The Integral Product Index makes the same recommendations for other criteria. For example, by analysing the data, the system can recommend increasing or decreasing the number of medical representatives and their visits, redistributing drugs within one or more chains, and increasing or decreasing the procurement of a drug group or one SKU.
Accumulated and structured data allow for a comprehensive approach to solving a variety of tasks ranging from developing product strategies to monitoring processes at every stage and delivering reports with step-by-step algorithms for each participant.
The platform not only analyses pharmacy sales and their potential, but also assists customers. The Integral Product Index patient support tool shows the nearest pharmacy with the prescribed medication available and allows the pharmacy to reserve the medication the patient needs. In this way, the Integral Product Index shortens the time for both the patient and the pharmacy to make their first purchase while also increasing patient loyalty.
The Integral Product Index system is a platform where all processes are digitized, integrated with accumulated data, and analysed online.
Like a good dispatch operator, the service guides patients, predicts demand for specific SKUs and their groups, analyses pharmacies' potential, and suggests steps to maximize sales.
Result:
The pilot project proved the effectiveness of the geo-analytical approach for planning and increasing pharmaceutical sales as compared to the traditional approach. Analysis of digitized characteristics of the sales process—from distribution to patients receiving their prescription and purchasing the drug—makes it possible to find weak links in the sales chain on-line and reconfigure processes to be more efficient. A verified pilot suggests a 70% increase in sales if two of the system's recommendations are followed: optimizing distribution and promotion. Following the other recommendations has the potential to double the results.
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