Industry
Healthcare & Life Sciences
Consumer Healthcare
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
