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    HPcase Submission

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    bhurrarocks
    Hewlett-Packard is considering how to distribute its new Sonos 100 Colour Flow cardiac imaging product. It can use either its existing direct sales force or third-party manufacturers' representatives. The direct sales force lacks experience in the non-hospital market segment being targeted but would allow HP greater control and build loyalty over time. Manufacturers' reps have market experience but work on commission, so may not fully develop the market or provide support. The document analyzes these options and ultimately suggests using the direct sales force, so HP can emphasize long-term customer relationships and develop its sales team's skills for the evolving healthcare market.

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    HPcase Submission

    Uploaded by

    bhurrarocks
    2K views3 pages
    Hewlett-Packard is considering how to distribute its new Sonos 100 Colour Flow cardiac imaging product. It can use either its existing direct sales force or third-party manufacturers' representatives. The direct sales force lacks experience in the non-hospital market segment being targeted but would allow HP greater control and build loyalty over time. Manufacturers' reps have market experience but work on commission, so may not fully develop the market or provide support. The document analyzes these options and ultimately suggests using the direct sales force, so HP can emphasize long-term customer relationships and develop its sales team's skills for the evolving healthcare market.

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    Hewlett-Packard is considering how to distribute its new Sonos 100 Colour Flow cardiac imaging product. It can use either its existing direct sales force or third-party manufacturers' representatives. The direct sales force lacks experience in the non-hospital market segment being targeted but would allow HP greater control and build loyalty over time. Manufacturers' reps have market experience but work on commission, so may not fully develop the market or provide support. The document analyzes these options and ultimately suggests using the direct sales force, so HP can emphasize long-term customer relationships and develop its sales team's skills for the evolving healthcare market.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2K views3 pages

    HPcase Submission

    Uploaded by

    bhurrarocks
    Hewlett-Packard is considering how to distribute its new Sonos 100 Colour Flow cardiac imaging product. It can use either its existing direct sales force or third-party manufacturers' representatives. The direct sales force lacks experience in the non-hospital market segment being targeted but would allow HP greater control and build loyalty over time. Manufacturers' reps have market experience but work on commission, so may not fully develop the market or provide support. The document analyzes these options and ultimately suggests using the direct sales force, so HP can emphasize long-term customer relationships and develop its sales team's skills for the evolving healthcare market.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Section B, Group 4 Page 1

    Hewlett-Packard Imaging Systems Division: Sonos 100 C/F Introduction - Case


    Analysis








    COMPANY BACKGROUND
    Hewlett-Packard Company is an American multinational hardware and software corporation which provides
    products, technologies, software, solutions and services to consumers, small- and medium-sized businesses
    (SMBs) and large enterprises, including customers in the government, health and education sectors
    Revenues : $14.5 Billion (Fiscal 1991)
    The Medical Products Group (MPG) , a division of HP having revenues of $900 Million (Fiscal 1991) derived
    from a variety of product lines including patient monitoring systems , operating room systems, and clinical
    information systems
    Key Person : Cynthia Danaher (Marketing Manager , Imaging Systems Business Unit(HP))
    Case Facts
    Sonos 100 Colour Flow is a cardiac imaging product which uses mechanical arrays to produce two-
    dimensional colour flow images
    Price : $55000/unit
    Target Market : Non-Hospital segment of cardiology( Health maintenance organisations, mobile health labs,
    clinics)
    Demand for ultrasound usage is expected to increase as population of aging population in USA is expected to
    increase
    New govt. Regulation may help physician groups to operate their own outpatient clinics, hence increase in
    demand for medical imaging equipments
    Management Decision Problem
    How should the Sonos 100 CF be distributed: through ISYs Direct sales force or through Manufacturers Reps(MR)?
    Swapnil Dashora PGP27127 Siddhartha Srivastava PGP27252
    Trupti Lohar PGP27128 Ravindra Solanki PGP27253
    Abhishek Joglikar PGP27152 Gaurav Somwanshi PGP27254
    Sarbswarup Mohanty PGP27179 Vishal Choudhary PGP27262
    Prasoon Kumar PGP27236 Brijesh Kumar PGP27213
    GROUP 4, SECTION B

    Section B, Group 4 Page 2

    Key Issues
    Stagnating growth in USA ultrasound market (Mature market after initial growth in 80s)
    Increasing R&D cost in the wake of limited resources
    USA ultrasound market is going through transition phase, which is moving from high-growth, technology
    driven market to a slower growth, market driven landscape
    Analysis of options

    Option 1 : Choose Manufacturers Rep (MR)
    Arguments in the favour of option :
    MRs are usually former sales managers of major players in this market having significant experience in this
    market, great negotiation skills and detailed knowledge of physician reimbursement procedures.
    Non-Hospital customers dont care much about value added services to be offered by using Direct sales team
    The services of Direst team could be effectively employed to target Hospital market segment
    Arguments against the option :
    MRs work on commission basis, hence wont be spending much time in developing the market or providing
    demonstrations and follow-up service
    MRs may not be loyal to the company and rather be focussed towards their own interests
    Lack of technical knowledge about the product
    Variation of professionalism and selling expertise in MRs
    Turnover rate of MRs and additional costs of training and monitoring them
    Option 2 : Choose Direct Sales Team
    Arguements in favour of the option
    Direct sales team would have long term orientation regarding building relationship with customers
    Direct sales team would be directly under the control of Sales department
    Direct sales team would be loyal to the company
    Arguements against the option
    Current Direct sales force doesnt has relevant experience and required skills to cater non-hospital segment
    of market
    Increased cost due to investment in training of Direct sales force

    Suggestion
    Choose direct sales team for the distribution of Sonos 100 CF
    Arguments for choosing Direct sales force :
    To emphasise on building long term relationship with customers
    Opportunity to develop skills of sales team through training which will be an asset in evolving tougher
    market
    Section B, Group 4 Page 3

    Greater control on the selling process
    Loyalty issue

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