Exclusivity Agreement lists possible restrictions between Customers, Vendors, Products, Product Range and/or Countries in the scope of business. It also helps track the status of each exclusivity granted.
This SOP will list the steps on how to create the various Exclusivity Agreements.
Getting started with Exclusivity Agreement
There are three types of exclusivity that can be created in the system to provide more information on the limitations as well as provide reminders on status tracking of exclusivity granted.
Each Exclusivity Agreement includes two or more of the following aspects:
• Customer
• Vendor
• Product
• Brand
• Product Range
• Country
The following are the types of Exclusivity Agreements in the System:
• AdvaCare Granted Exclusivity
AdvaCare granted exclusivity generally ties to a written Agreement citing a list of restrictions granted (generally geographical) for a Customer as a commitment for AdvaCare to avoid granting new distributorship within the scope of restriction. The validity of the Agreement is based on the agreed upon Customer’s performance, generally in the metric of sales volume, be it in the quantity of product ordered or yearly revenue target.
For example: AdvaCare provides exclusivity for Country A to Customer B for product range C under the terms that $XXX amount of order value is to be achieved annually. If the terms of agreement are met, AdvaCare will not pursue new Customers in this market for the same product range. If the terms of agreement are not met, AdvaCare has the right to pursue other Customers in this market for the same product range.
IMPORTANT: When pursuing a Prospect, make sure that the targeted COUNTRY/PRODUCT LIST for that Prospect is NOT already restricted (exclusive) for an existing Customer.
• Vendor Exclusivity
Vendor exclusivity lists the Vendor’s terms with parties outside of AdvaCare, which can present restrictions in working in a certain market/product range with the particular Vendor.
For example: Vendor A has exclusivity with their own customer in market B for all its products. As long as the exclusivity is valid, AdvaCare cannot work together with Vendor A for this market and therefore can focus on working with other Vendors.
• Country Exclusivity
Country exclusivity is a restriction put in place by a country government that restricts multiple facets of a country registration/distributorship. Few markets have Country Exclusivity in place, but when working with country exclusive markets, certain precautions must be taken.
For example: Country A has a restriction in which only one importer may represent one product Brand. When AdvaCare registers the “AdvaLife” brand with a Customer, no other Customers in Country A can register the same product range under the “AdvaLife” brand.
Creating AdvaCare Granted Exclusivity Agreement
1. Locate Registration Module.
2. Click “Exclusivity Agreement” dropdown and select “AdvaCare Granted”.
3. Click “CREATE” on top of the screen.
4. Fill in the following fields:
a. Reference
Leave as “New”, the System will automatically assign an EXC number.
b. Type
Select “AdvaCare Granted”.
c. Customer
Type the name of the Customer and choose the correct Customer card from the dropdown. It is also possible to select “Search More” to search by typing the Customer Internal Reference code.
Note: Choose existing Customer from the dropdown, NEVER create a new Customer. If Customer does not yet exist in the System, create through the Contacts module with completed relevant details before creating Exclusivity Agreement.
d. Registration Country
Type the name of the Country and choose the market in which Exclusivity Agreement is granted from the dropdown.
Note: Choose existing Country from the dropdown, NEVER create a new Country. If the required Country is not showing in the dropdown, ask Business Development Dept. Manager to create the Country.
e. Registration Agreement
Type and select the RA number if the Exclusivity Agreement is tied to a specific Registration. This field is not mandatory to be filled.
f. Issue Date
Fill in the date in which exclusivity is officially granted and in effect.
g. Expiry Date
Fill in the date in which exclusivity is officially expiring. Generally, the expiry date is Issue Date+5Y.
h. Exclusivity Type
Select one or more exclusivity types applicable for the Exclusivity Agreement. Two or more types can be applicable concurrently. Following is some explanation on each Exclusivity Type:
• Product Category – refers to a product range, can be as wide as for example “all pharmaceutical products” or as narrow as “all pharmaceutical tablets”
• Product – refers to a specific product existing in the ERP under a product code.
• Brand – refers to a specific product range, can be as wide as for example “AdvaLife” for all supplement products or as narrow as “ParaCare” for one pharmaceutical product.
• Vendor – refers to tying a specific Vendor to a Customer under this exclusivity agreement. It is generally applicable to a Registration Agreement.
i. Description
This is not a mandatory field. It can be used to provide any additional information that may be relevant for this exclusivity agreement. It can also be used to record different yearly annual commitments. Examples:
5. Fill in the tabs on the bottom of the page:
a. Products
Click “Add a line”, a table row will appear showing the fields: Product, Brand, and Range. At least one of the fields have to be filled corresponding with the Exclusivity Type selected above.
• Product – to be filled for Exclusivity Type: Product, type the product code and select the correct product. Continue by clicking Add a line” for every additional product.
• Brand – to be filled for Exclusivity Type: Brand, input the brand name with accurate spelling, capitalization and spacing. Continue by clicking “Add a line” for every additional brand.
• Range – to be filled for Exclusivity Type: Product Category, type the product range and select the correct product range. Continue by clicking “Add a line” for every additional product range. NEVER create a product range. If a specific range is not applicable from the options, select a wider range option and include the remaining information on the Exclusivity Agreement Description.
b. Terms
To be filled in if the exclusivity agreement includes a Yearly Revenue Target in USD amount and the expected Agreed Yearly Order Target, the terms must be filled in.
c. Other Terms
To be filled in if the exclusivity agreement includes a product list with its minimum quantity per order and minimum quantity per year. Salesperson will work with Sales Manager to determine an “estimated” yearly revenue target based on this list. Fill in the Agreed Yearly Revenue Target in USD amount and well as the expected Agreed Yearly Order Target.
6. Click “SAVE”.
7. Move the pipeline to “IN EFFECT”.
Note: If Exclusivity Agreement is not moved to “IN EFFECT” stage, it won’t be visible in any other place in the ERP (such as Customer page, Country page, Vendor page, etc.).
8. Add Sales Dept. Manager and VP of Sales as followers of the EXC.
Creating Country Exclusivity
1. Locate Registration Module.
2. Click “Exclusivity Agreement” dropdown and select “Country”.
3. Click “CREATE” on top of the screen.
4. Fill in the following fields:
a. Reference
Leave as “New”, the System will automatically assign an EXC number.
b. Type
Select “Country Enforced”.
c. Registration Country
Type the name of the Country and choose the market in which there is an enforced exclusivity.
Note: Choose existing Country from the dropdown, NEVER create a new Country. If the required Country is not showing in the dropdown, ask Business Development Dept. Manager to create the Country.
d. Issue Date
Fill in the date in which exclusivity is officially granted and in effect.
e. Expiry Date
Leave this field empty. It is only to be filled by BD Dept. Manager when there is certainty that country enforced exclusivity is no longer in effect.
f. Exclusivity Type
Select one or more exclusivity types applicable for the Exclusivity Agreement. Two or more types can be applicable concurrently. Following is some explanation on each Exclusivity Type:
• Product Category – refers to restriction of more than 1 importer for a product range, can be as wide as for example “all pharmaceutical products” or as narrow as “all pharmaceutical tablets”
• Product – refers to restriction of more than 1 importer for a specific product.
• Brand – refers to restriction of more than 1 importer for a specific product brand.
• Vendor – refers to restriction of more than 1 importer per manufacturer
g. Description
This is not a mandatory field. It may be used to provide more information that is available.
5. Click “SAVE”.
6. Move the pipeline to “IN EFFECT”.
Note: If Exclusivity Agreement is not moved to the “IN EFFECT” stage, it won’t be visible in any other place in the ERP (such as Customer page, Country page, Vendor page, etc.).
Functionality of Exclusivity Agreement Database
The database has different purposes for each department and how this information is to be used. This SOP breaks down the objectives of the database and guideline on how to navigate them.
1. Objective: Reviewing status of each Customer exclusivity agreement terms to determine exclusivity validity.
Steps:
a. An automated reminder will be sent by the system annually at Month+4 and Month+10 under the EXC task.
b. Salesperson is to check the sales performance of each Customer from the start of the agreement year to the current point of time.
• If Customer seems to be underperforming, the Salesperson can push the Customer to start a procurement plan to retain their exclusivity status. Salesperson is to set an activity under the EXC at Year+1 to determine whether exclusivity will remain “In Effect” or moved to “Canceled”.
• If Customer seems right on track to fulfill exclusivity terms, Salesperson does not need to make any changes on the EXC.
2. Objective: Renewing Exclusivity Agreement.
Steps:
a. An automated reminder will be sent by the system on the Expiry Date of the agreement.
b. Salesperson is to determine whether or not the Exclusivity Agreement is to be renewed.
• If Customer is active and has been meeting the terms of agreement, EXC is to be renewed. Salesperson will revise the “Issue Date” and “Expiry Date”.
• If Customer is no longer active or has been underperforming and Exclusivity Agreement is to be terminated, change the status from “In Effect” to “Expired”.
3. Objective: Confirming that no restrictions may be present when working with Customers from a new market and product range.
Steps:
a. Locate “Countries” under the Registration Module.
b. Search and click on the Country of interest.
c. Click on the “Exclusivity Agreements” tab. All different exclusivity types will be present in the shown table, as well as status of EXC.
d. More information about each EXC can be viewed from corresponding tabs: Factory Exclusivity, AdvaCare Exclusivity, Country Exclusivity.
4. Objective: Reviewing all exclusive agreements for a specific Customer.
Steps:
a. Open the Customer contact card.
b. Click on the “Exclusivity” tab. All different Exclusivity Agreements will be listed under the table together with its status.
