Measuring Sales Efficiency in the Pharmaceutical Industry

A recurring issue in sales force research is the choice of the sales force evaluation method. In this thesis the author applies Data Envelopment Analysis (DEA) to assess sales force efficiency by calculating objective scores for each salesman. The calculated efficiency scores are decomposed to reveal the roots of inefficiency. Moreover, the analysis identifies criteria for providing an optimal DEA version in sales. Using the LaGrange multipliers, the author identifies input and output variables of various degrees of importance for a DEA analysis. In addition the existingliterature for controlling sales forces has been complemented by an intertemporal DEA approach with a productivity index to evaluate the performance of salesmen also over time. In current sales force assessments multiple input and output factors result in subjective benchmarks. To improve this situation, DEA has been empirically applied to a sales force of a well known pharmaceutical company to incorporate all relevant key performance indicators into one single, objective efficiency measure for all individuals in the sample - new horizons for both, sales controlling and Data Envelopment Analysis are reached.

Autorentext

Dominik F.L. Freund, Dr. rer.soc.oec.: Studies of business administration and economics at the universities of Regensburg, Karlstad (Sweden) and Konstanz with a focus on marketing and international economic relations. Doctoral degree at the Vienna University of Economics and Business in 2008. Today Dr. Freund is a senior consultant for UNITY.