P ERSONA

artnership
HUMAN RESOURCE SPECIALISTS

CURACO
Negotiation Exercise (Pharmacist)
Instructions for Participant

Persona Partnership LLP, St Martins House, 16 St Martin’s Le Grand,

London, EC1A 4EN, United Kingdom
Tel: +44 (0)20 7397 8393 Fax: +44 (0)20 7397 8400
www.personapartnership.co.uk | www.assessmentexercises.com
CURACO
Instructions for Participant

INTRODUCTION

The exercise in which you are about to take part is designed to assess your
customer relationship skills, in particular your ability to sell to and negotiate with
an important customer.

You are a newly appointed Sales Representative working within the Gulf area of
Curaco’s Africa and Gulf Region. You will shortly be meeting with a pharmacist,
who you wish to persuade to buy and stock a new prescription drug. The
pharmacist will be ‘played’ by a role player. Be prepared for the role player to be
either male (Kareem) or female (Kareema) but for the purposes of clarity the role
player will be referred to as ‘he’ hereafter.

TASK

Your main objective is to end the meeting with an agreement on the terms of the
sale including, the amount of stock to be purchased, the price and the payment
arrangements. You have recently taken on the region therefore there may be other
issues/areas that you feel it is appropriate to discuss with a new customer.

You have 30 minutes to study the information overleaf and plan your meeting with
Kareem. You may annotate these instructions and/or write notes in preparation if
you wish. You will be able to keep the instructions and your notes for the duration
of the exercise. Following the preparation period you will have up to 30 minutes to
conduct the meeting with Kareem.

For the purpose of this exercise today’s date is 4th July.

PLEASE DO NOT TURN OVER UNTIL ASKED TO DO SO

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BACKGROUND TO THE COMPANY

Curaco was established in 1910 and is now regarded as a market leader across the
five regions within which it operates, namely: North America, Latin America,
Europe, Africa and the Gulf and Asia-Pacific. The company employs 35,000 people
worldwide, 6,000 of who are based in the Africa and Gulf region. Curaco’s revenue
last year was $10.2 billion and its net profit was $1.2 billion. Africa and the Gulf
contributed $3.5 billion to the overall revenue with profits of $.25 billion.

The company has established its position in the market by investing heavily in
Research and Development and is now well regarded globally for its innovation in
the areas of cardiology, respiratory, oncology and neurology.

The latest addition to Curaco’s respiratory range is a new asthma inhaler called
Prevent&Ease. It is anticipated that this new drug will revolutionise the market due
to its steroid free properties and elimination of the side effects associated with
steroid use. Prevent&Ease will be available from 1st August.

YOUR ROLE

For the purposes of the exercise you are a newly appointed Sales Representative
operating within the Gulf region. As a Sales Rep your responsibilities are to:

J Secure sales and business growth in your own territory

J Execute sales effectively, efficiently and ethically
J Establish a consultative relationship with customers
J Obtain, use and communicate market information

Your District Sales Manager has set you some clear objectives for the next three
months with the primary aim of maximising sales of Prevent&Ease and gaining a
greater segment of the respiratory market. He believes the company’s policy of
achieving nothing less than a 50% profit margin is realistic on such a breakthrough
product.

Your predecessor (Yasmin Hussain) and the District Sales Manager recently ran a
symposium within your region to launch Prevent&Ease to the medical community.
The product was very well received and expectations from all parties are now
extremely high. Following the success of the event, the District Sales Manager has
asked you to pay particular attention to stock levels within the region in order to
prevent lost sales and customer disappointment. His concerns about poor stock
levels have been exacerbated by a recent email from a local doctor, Dr Wasif Mansi,
which he has forwarded to you for your attention and follow up. (See Appendix 1)

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ASTHMA PRODUCT RANGE

There are a number of triggers that are known to cause asthma attacks including
some environmental conditions. The oil fires, for example, in some Gulf States are
considered to be a contributory factor to the increased levels of asthma across the
region as a whole. Due to the escalating number of sufferers the asthma product
market is extremely competitive and is currently shared between Curaco and two
other main competitors, Zenith and Virax. All three companies produce and
distribute an inhaler range that is grouped in the following way.

J A reliever inhaler - taken ‘as required’ to relax the muscles in the airways
and quickly ease symptoms. It contains a drug called a short-acting beta-2
agonist. Where symptoms occur every 'now and then', the occasional use of
a reliever inhaler may be sufficient. However, if the use of the reliever
inhaler is required more than 3 times a week, a preventer inhaler is usually
advised.

J A preventer inhaler – contains steroids and is taken every day to prevent

symptoms coming. The steroids work by reducing the inflammation in the
airways. When the inflammation has gone, the airways are much less likely
to become narrow and cause symptoms. This inhaler does not give
immediate relief as the steroid needs 7-14 days to build and become
effective. It can take up to 6 weeks for maximum benefit.

J A long-acting bronchodilator inhaler – may be advised in addition to the

steroid inhaler if symptoms are not controlled fully. Contains a steroid plus
for long acting bronchodilation which continues to work for up to 12 hours
after taking each dose.

Curaco’s New Inhaler – Prevent&Ease

The recently patented steroid substitute ‘Tamolene’ has meant that Curaco can now
market the reliever and preventer inhalers as a combined inhaler called
Prevent&Ease. Trials have indicated that Prevent&Ease can be used as a reliever or
preventer depending on the severity of the symptoms, takes immediate effect and
is suitable for the majority of asthma sufferers. The long acting bronchodilator
inhaler will remain in the range for the more acute sufferers who may continue to
require the stronger steroid medication.

This long awaited steroid free approach to the treatment of asthma means that the
new inhaler is costly to produce and has a recommended retail price that exceeds
the combined recommended retail price of the individual reliever and preventer
inhalers. However, Curaco’s market research indicates that the higher price will not
be an issue and that doctors will be more than willing to prescribe the drug as soon
as it is available.

Curaco believes the price is realistic and is looking to dominate the market with a
patented product in the long term.

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Benefits to the User

J Eliminates the known side effects of steroids, e.g. risk of osteoporosis

J Provides a user friendly combo inhaler, eliminating the inconvenience of

using two separate inhalers

J Has wide appeal as a treatment for most mild to moderate asthma sufferers

J Works effectively alongside Curaco’s long-acting bronchodilator inhaler

J Can be prescribed according to strength of medication required in the same

way as the individual inhalers

J Has the support of local GPs and hospitals following a recent symposium

J CFC free and therefore environmentally friendly

HARIA PHARMACY

The pharmacy is situated in a key town centre location with little surrounding
competition. Curaco has had a long-standing relationship with the owner and
pharmacist, Kareem Nassif, who in the main has always been very co-operative, for
example, agreeing to specific promotions and providing customer feedback.

Haria currently stock a range of traditional asthma inhalers, supplied by both

Curaco and the competitor companies. The company’s recommended list prices are
exactly the same and therefore the Sales Reps are continually looking for
opportunities to offer the ‘best deal’ within their negotiations. Your predecessor’s
IMS data shows that she was performing above the market average in the suburb
and was therefore keeping abreast of the competition in her negotiations.

CURACO’S TERMS OF BUSINESS

J Curaco has a policy of offering credit after invoice for up to 60 days. This
can vary depending on the payment record of the individual retailer. Haria’s
current arrangement is payment within 30 days. Due to a spate of late
payments, your predecessor found it necessary to reduce Kareem’s terms of
payment from 60 days to 30 days.

J Likewise, Curaco has the facility to offer its customers credit ceilings
depending on the size of the business, i.e. $100k for a small to medium sized
business, $200k for a moderate business and $1m for a large business size.
Haria currently operate with a $100k ceiling.

J Discounts are discretionary but do not typically exceed 5%.

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J Curaco guarantees full stock replenishment within 3 days of order.

Kareem is renowned for being a hard negotiator and believes that Curaco is slow to
offer discounts compared to the competition.

ISSUES TO BE ADDRESSED

J Curaco wants Haria to hold a sizeable stock of Prevent&Ease with an initial

order of no less than 100 units. If the product is as popular as anticipated
immediate stock replenishment could be a problem. Previous Sales
Representatives have been unable to break Kareem’s pattern of holding low
stocks and a tendency to re-order too late.

J It would be advantageous if Haria were to only stock Curaco’s long acting

inhaler as this is recommended to work in conjunction with Prevent&Ease
and they cannot guarantee the same results with other brands. Current
stock levels of Curaco long acting inhaler indicate that the pharmacist should
be encouraged to place an order and run down competitor stocks.

J Kareem has not settled an outstanding invoice for $41,400 that is now 4
days overdue.

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APPENDIX 1

EMAIL

FROM: Dr. Wasif Mansi

TO: District Sales Manager

SUBJECT: Drug supplies at Haria Pharmacy

Thank you for arranging the recent symposium on the latest thinking regarding the
treatment of asthma.

As you know the number of asthma sufferers in the region has tripled in the last 10
years and so as doctors we welcome any news about research and development in
this field. I personally feel very excited about the breakthrough of a steroid free
treatment but I don’t want to get my patients too excited about Prevent&Ease as I
worry about the immediate availability of the drug. Our clinic is based in the town
centre and therefore most of our patients use the Haria Pharmacy. It would appear
that every time a new prescription drug from Curaco becomes available, Haria don’t
hold sufficient stocks to meet our demand. Although we are fortunate enough to
have a very well informed and relatively wealthy patient portfolio, we are by no
means a clinic that over prescribes.

I want to bring this to your attention not only because of the poor service afforded
to my patients, but also the potential damage to Curaco’s good name. You
obviously go to great lengths to tell us about the launch of a new product, however,
this seems to be a somewhat wasted effort when the product is then not available.

Best regards
Wasif Mansi

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APPENDIX 2

BACKGROUND DATA

The Inhaler Product Range

Cost Wholesale Pharmacist Curaco

Product price to price to RRP* profit profit
Curaco Pharmacist margin margin
% %

Reliever inhaler 7.50 13.00 17.00 24 42

Preventer inhaler 9.00 16.00 21.00 24 44

Long Acting inhaler 10.50 19.50 28.00 30 46

Prevent&Ease 12.00 25.00 40.00 38 52

inhaler

* The RRP is the Recommended Retail Price, i.e. the recommended price that
pharmacists will sell the product to customers.

ASTHMA PRODUCT SALES TO HARIA PHARMACY

Quarter 1 (April-June)

Product Quantity $ Invoice Payment Payment

date due Received
Reliever inhaler 1,200 units 20,400 31st May 30th June Outstanding

Preventer inhaler 1,000 units 21,000 31st May 30th June Outstanding

Long acting inhaler 550 units 15,400 16th April 15th May 11th May

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APPENDIX 3

HARIA PHARMACY

INHALER PRODUCT RANGE

Predicted Sales Volumes (units)

3000

2500

2000
Reliever
1500
Preventer
1000 Prevent&Ease

500

0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Sales of the Long Acting inhaler will not be affected by the introduction of
Prevent&Ease. These sales are predicted to remain constant and with some
seasonal fluctuation.

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organisation which purchased them. All rights reserved.