Industry

Healthcare & Life Sciences

Company Profile

  • Large multinational consumer healthcare company
  • Focused on generic OTC products in many clinical indications
  • Project focus on Germany as a pilot market

Situation and Objectives

  • Leading generic CHC manufacturer
  • High discount rates and lack of discount transparency
  • Strong sales focus on volume/revenue
  • Strong competition in trade terms

Approach

  • Analyzed the current discount allocation system and identified inconsistencies
  • Developed new system to allocate discounts in a transparent way, rewarding performance and differentiating more strongly between customer groups
  • Jointly defined parameters of new trade term system with client to ensure buy-in and understanding of new system
  • Simulated in detail the effects of the new system and calibrated it to minimize negative effects for both manufacturer and customers
  • Ensured implementation of new system by coaching salesforce; supporting key account negotiations and monitoring implementation process

Elements of Trade terms scheme

Results

  • Transparency: Clear discount allocations across customers, products, and channels
  • New system: Focus on comprehensibility, pay for performance, and stronger differentiation
  • Modeling: Simulation of results and calibration of system parameters
  • Implementation: Sales training, project management, monitoring, sparring of key account negotiations, etc.

Impact

  • Profit increase: +23%
  • Trade terms savings: more than €3.1m
  • Project paid off after 2.5 months