Laboratorios Indas maximises sales during visits to pharmacies

With IBM SPSS Modeler

Published on 13-Dec-2010

"IBM SPSS has revolutionised our market research process. By enabling us to understand our clients and non-clients, it has given us a real edge over our competitors." - Roberto García, Data Mining and Marketing Research Manager, Laboratorios Indas

Customer:
Laboratorios Indas

Industry:
Healthcare

Deployment country:
Spain

Solution:
BA - Business Analytics, BA - Business Intelligence, Information Integration, Information On Demand, Leveraging Information

Overview

With 431 employees, Laboratorios Indas is the largest manufacturer of sanitary and hygiene products in Spain. Headquartered in Madrid, the company distributes its products through both retail channels (pharmacies, hypermarkets, supermarkets etc) and hospitals throughout the country. Some of Indas’ most important retail clients are pharmacies; the company currently has approximately 65 sales representatives who visit some 14,000 pharmacies at least once a year to promote its products.

Business need:
Laboratorios Indas was looking to launch a targeted marketing campaign which would maximise sales in the pharmaceutical channel. Indas needed a solution which would enable it to extract information from its data warehouse system directly and in real time, and exploit this information for statistical analysis.

Solution:
Laboratorios Indas decided to implement IBM SPSS Modeler which allows the Data Mining and Market Research team to extract both external and internal marketing data from the company’s data warehouse in real time and unite and exploit the sets of data simultaneously. The market research team used IBM SPSS Modeler, a leading data mining solution, to create predictive targets for the existing Spanish pharmaceutical world.

Benefits:
Improves the average number of sales per loyal pharmacy by 37 percent. Allows Laboratorios Indas sales representatives to focus on the pharmacies which offer the most potential in terms of sales. Enables sales representatives to promote products tailored to the clientele of each pharmacy. Reduced the administrative workload of Laboratorios Indas sales representatives.

Case Study

To read a Spanish version of this case study, click here.

With 431 employees, Laboratorios Indas is the largest manufacturer of sanitary and hygiene products in Spain. Headquartered in Madrid, the company distributes its products through both retail channels (pharmacies, hypermarkets, supermarkets etc) and hospitals throughout the country. Some of Indas’ most important retail clients are pharmacies; the company currently has approximately 65 sales representatives who visit some 14,000 pharmacies at least once a year to promote its products.

Targeted marketing

Laboratorios Indas was looking to launch a targeted marketing campaign which would maximise sales to clients and non-clients in the pharmaceutical sector. In order to do this, the company first needed to register the quantity and type of products purchased during the visits of Indas sales representatives to the pharmacies in their region. It could then establish which types of pharmacies should be targeted to a greater or lesser degree, thus enabling the company to improve the cost-effectiveness of each sales visit.

The company’s previous method of collating data from pharmacy sales visits had been a tedious process. “In the past, sales information would have to be gathered using client surveys and questionnaires, the results of which would then be entered into Excel spreadsheets,” said Roberto García, Data Mining and Marketing Research Manager, Laboratorios Indas. “We felt that the quality of this data was sometimes questionable due to the high margin for human error in its processing. In addition, it was difficult to present the data to our sales teams in a user-friendly way.”

Another challenge faced by the company was to convince its sales teams to be more forthcoming with their clients’ information. Roberto García explains, “We needed the input of our sales representatives who are the only ones with the proximity to clients and prospective clients; however, it was a significant cultural change to ask them to share their knowledge.”

The Indas sales teams needed to be persuaded that the provision of their clients’ data would create better targeting models which would ultimately enable their sales efforts to be focused more profitably. “It was essential that the solution we chose should deliver on this promise,” said Roberto García.

Finding a solution

To perform the statistical analysis and present the data effectively Laboratorios Indas decided to implement IBM SPSS Modeler.

“We chose IBM SPSS over other vendors’ solutions because it is a better-known and more specialised tool, which is ideally suited to our requirements,” said Roberto García. “We required a solution which would give us the ability to work with the extremely high volumes of data that are uploaded daily into our data warehouse.”

After each sales visit to a pharmacy , sales representatives now upload required information onto their PDAs, such as the quantity and type of products sold to the pharmacy. This data is then transferred to the company’s data warehouse. In addition to this internal data, Laboratorios Indas’ Market Research team collates external data, for example information regarding the population size, socio-economic level and number of pharmacies in the geographical regions in which the sales representatives are operating.

The advanced analytical tools provided by IBM SPSS enable the creation of sophisticated statistical models that use both the internal sales data and the external geographical data to provide insight into the likely demand patterns for pharmacies in different locations.

“IBM SPSS Modeler has enabled the simultaneous statistical treatment and modelisation of both our internal and external data,” says Roberto García. “In every data mining project, the first phase is to collect and create susceptible variables. IBM SPSS is particularly useful to us because it shows us the significance of every variable selected inside the model and indicates if one variable or another improves the model’s result. As a result, we’ve succeeded in creating highly sophisticated models which unite and exploit both sets of data to identify groups of pharmacies depending on their potential market by product type.

Real commercial benefits

It took only four months after the implementation of IBM SPSS Modeler for the use of predictive models to start yielding commercial benefits for Indas in the pharmaceutical channel.

“After just four months we could already see that the average number of sales per loyal pharmacy had improved. By the close of year 2009 we calculated a 37 percent average growth in sales per pharmacy compared with the year before,” said Roberto García. “Predictive models have enabled us to identify the best pharmacies for our products and target them more systematically with visits, emails and mailings. As a result, the loyalty of these clients has been greatly strengthened while our competitors’ best clients have also been encouraged to purchase from us instead.”

Predictive models have given Laboratorios Indas a greater understanding of pharmacies’ socio-demographic characteristics. “We’re now better able to categorise clients and target particular markets with particular products,” said Roberto García. “For example, we have been able to analyse which pharmacies are located closest to families with young children, and tailor our sales campaigns for this type of establishment accordingly to focus on children-oriented products.”

The use of IBM SPSS Modeler has enhanced Laboratorios Indas’ market research processes right through from the collection of the data to its analysis. Roberto García comments, “Our lives as analysts have been made a lot easier as we now have much more confidence in the quality of the data. The use of IBM SPSS Modeler has also satisfied our sales representatives’ needs. Not only are they selling more products per visit, but their administrative workload has been greatly reduced by the new system.” In the past, a sales representative’s record of his visit to a pharmacy would take five minutes to compile; now the process takes about 25 seconds as the representatives can simply tap sales figures into their PDAS.

The success of IBM SPSS Modeler in creating predictive targets for pharmacies has led the Data Mining and Market Research team at Laboratorios Indas to begin the process of expanding the solution’s use to distribution chain clients and non-clients (hypermarkets and supermarkets).

“IBM SPSS has revolutionised our market research process. By enabling us to understand our clients and non-clients, it has given us a real edge over our competitors,” concludes Roberto García.

Products and services used

IBM products and services that were used in this case study.

Software:
SPSS Modeler

Legal Information

© Copyright IBM Corporation 2010 IBM España S. A. Santa Hortensia 26-28 28002 Madrid Spain Produced in Spain December 2010 All Rights Reserved IBM, the IBM logo, ibm.com, and SPSS are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of other IBM trademarks is available on the Web at “Copyright and trademark information” at http://www.ibm.com/legal/copytrade.shtml. Other company, product or service names may be trademarks, or service marks of others. References in this publication to IBM products, programs or services do not imply that IBM intends to make these available in all countries in which IBM operates. Any reference to an IBM product, program or service is not intended to imply that only IBM’s product, program or service may be used. Any functionally equivalent product, program or service may be used instead. All customer examples cited represent how some customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics will vary depending on individual customer configurations and conditions. IBM hardware products are manufactured from new parts, or new and used parts. In some cases, the hardware product may not be new and may have been previously installed. Regardless, IBM warranty terms apply. This publication is for general guidance only. Photographs may show design models.