Impact of selling expenses on net sales in pharmaceutical companies of India

Selling costs, in a down economy, are a major drag on the bottom line. Selling costs are the budget items associated with sales personnel, their support staff, the departmental infrastructure, and the at times considerable expense accounts for the sellers. While bonuses, commissions and similar considerations are often variable and allow for scaling, many companies still find selling costs overwhelmingly disproportionate with performance promises. Instead of driving results, sales costs become a drag on results. Selling expenses do vary according to industry and industry. It also gets differentiates as per market capitalization rate. The paper studies the impact of selling expenses on the sales revenue. This relationship considers varied capitalization rate as large Capitalization, Medium Capitalization, and small capitalization in pharmaceuticals industry. It has been observed that in pharmaceuticals industry selling expenses do have a major impact on figures of sales revenue whereas if observed specifically then only firms with small capitalization value are able to get maximum benefit out of their selling expenses. Firms with large capitalization value do not require much too spend on selling expenses because they already have their brand equity in market and firms with medium capitalization value have more focus on appointment of more and more medical representatives.