Distribution Structure in Indian Pharmaceutical Industry: Significance of Customer Relationship Management (CRM) and Distributor Relationships

The days of mass marketing have given way to a trend towards micro marketing, and the role of the sales representative is slightly shaping into that of an information provider rather than a persuader. In this paper we discuss that how Customer Relationship Management (CRM) as a strategic tool has the capability to strengthen the relationship of companies with their distributors and other members of supply chain trough effective communication. The first part of the paper throws a light on the general structure of the pharmaceutical distribution network. It is based on previous academic literature, practitioner literature, discussions on web forums and some unstructured discussions with the pharmacists and medical representatives. Whereas, the second part of the paper discusses the significance of business-to-business relationships in the pharmaceutical industry and provides a brief view of some CRM tools used in general with their relevant functionalities and advantages. This study concludes that distribution structure of Indian pharmaceutical industry is very complex and dynamic in nature and the relationships with the supply chain partners are critical in pharmaceutical industry and such relationships need to be managed very carefully for competitive advantage. The use of CRM systems is very much significant in such business environments and investments into sophisticated CRM technologies should be taken into consideration by organizations for better management of the business-to-business customer information and customer relationships in order to enhance the profitability through increased customer retention and loyalty.