GlaxoSmithKline's New Sales Force Compensation System in the US


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Case Details:

Case Code : MKTG258
Case Length : 10 Pages
Period : 2009-2010
Pub Date : 2010
Teaching Note : Not Available
Organization : GlaxoSmithKline Plc
Industry : Pharmaceutical
Countries : US

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"Sales reps cost pharma companies billions of dollars and drain scarce physician time, yet provide little of the results-based information increasingly demanded by providers, patients, payers, and regulators."1

- Deloitte Consulting LLP2, in 2009.

Introduction

In July 2010, the US arm of GlaxoSmithKline Plc (GSK) announced that it would replace its existing system of evaluating and compensating its sales professionals with a new system. The new system was to be based on the service its sales professionals delivered to customers rather than the widely used and existing practice of focusing on individual achievement of sales targets.

GSK, headquartered in Brentford, UK, was the fourth largest pharmaceutical company in the world as of 2010. It announced that it had arrived at this new compensation plan in response to the changing dynamics in the pharma selling environment. According to the new system, the bonuses of the sales professionals would be based on customer feedback and adherence to company policy.3

This new system was to be implemented from 2011.

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1] W. Scott Evangelista, Michelle Poulin, Christopher T. Geissler and Justin Andrew, "Pharma's New U.S. Commercial Model: Promoting the Science Not the Swag," www.deloitte.com, 2009.
2] Deloitte Consulting LLP , a subsidiary of Deloitte LLP, is a leading consulting firm.
3] Reid Paul, "GSK Rethinks Rep Compensation," http://pharmexec.findpharma.com, July 28, 2010.


 

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