Download - Mediquip.docx
1
Case Study
Mediquip SA
Introduction
Mediquip was a subsidiary of a French company named Technologie Universalle. However, the
subsidiary dealt in production of CT scanner, X-ray, ultrasound and nuclear diagnostic
equipments. The company adapted to technology rapidly and was known for its good after sale
services. The company competed usually with European competitors, however, its most serious
and intense rival was Dutch based company Sigma. On the other hand, the second organization
involved in the case is a Stuttgart based Lohmann University hospital. It was a general teaching
facility and possessed a number of X-ray equipments.
Problem Statement
The generic problem for the company had been the low number of sales probably due to
ineffective marketing and sales strategy. Lohmann University hospital (LHU) solicited Mediquip
for the purchase of a CT scanner. After long negotiations, LHU decided to purchase it from
Sigma. The main issue for the company had been ineffective sales negotiations. They need to
develop a new sales strategy and improve the sales team in order to avoid such events in future.
Analysis
2
The company lost the deal with LHU apparently because of the ineffective dealing. If we look
deep in to the situation, we would get to know that there had been a number of problems which
caused the loss.
Inability to differentiate products
First of all, the sales team, particularly Kurt Thaldorf the sales engineer of the company had been
unable to differentiate the product from its competitors. He had been unable to depict the value
of their CT scanner before LHU representatives. Moreover, he had to deal with a number of
concerned persons to complete the sale (Figure 1). The ineffective dealing of Thaldorf made the
product look overpriced as he could not exploit the competitive advantage of the company i.e.
technological advancement and after sale services.
First Impression
Mediquip had low number of sales because they don’t have a good first impression. In return, it
jeopardizes the company’s reputation. To elaborate more, the company’s first impression is not
good because of bad preparedness, communication and lack of knowledge. The company does
not have price estimates on hand and does not show a customer as the company’s key account.
The sales team is not prepared; for example, they lowered the prices several times which
jeopardized the company’s reputation. Moreover, there had been lacks in the communication
skills of the sales team. There had been excessive calls to the representatives in LHU which
probably annoyed them. Moreover, the interval between calls sometimes had been too short and
other times too long. This caused the deficiency of trust between two organizations and they
could not understand each other’s needs. Last but not least, the sales team did not have adequate
knowledge; they did not know what features differentiate Mediquip’s CT scanner from its
competitors. Moreover, in case of LHU, they also did not have background knowledge of the
needs of LHU. It also gave the Lohmann University an impression that Mediquip did not have
enough knowledge about medical equipments supply industry.
Price Negotiations
Most importantly, what let Lohmann down was that last price quoted was way far than the
original price. In the greed of carrying out sales, they decreased the price greatly. It basically
3
contradicted the argument of the company for their scanner of superior value. Moreover, it also
shows that Mediquip was trying to take advantage of Lohmann by boasting off their quality.
Hence, it gave a mixed message about the quality of the product.
Too much for nothing
Kurt Thaldorf had been trying to deal with a number of people at the same time. He did try to do
everything but he could possibly divide the tasks and do well whatever he did. He lacked
assistance in technological aspects and in regards of interpersonal communication.
Moreover, the keys mistakes had been avoidance of the business trip for hospital representatives.
Probably, the reason behind it was low budget or no match between timing and availability of
hospital crew. Kurt had also been somewhat overconfident and taking the sale as granted. He
thought the sale was secure but it was not. Another important thing was that Kurt did not find out
who the third member in buying centre was. He assumed Dr. Rufer as the third person and
probably he was not the one.
Recommendation
I would like to recommend implementation of CRM to the company for its better future:
Customer Relationship Management (CRM) System
I deem that there is a blatant need of a customer relationship management system. This system
would ensure that the company pursues the wants of customers; not what the company wants the
customers to want (Kotler). This system would help understand the wants of customers. The
CRM system would also guide and make the company learn that all loyal customers are not
profitable (Reinartz, W. and Kumar).
Requirements
Data Warehousing and Data Mining (How stuff works)
The CRM would be applicable and useful for the company when it would be used in the right
way. For instance, the company would need to have an IT data warehouse. In this data
4
warehouse, they would store the information about the potential customers around the globe.
Then, with the help of data mining, the company would be able to get the desired information at
the time of sales (Vincent Rainardi).
Training of Sales team
To use the CRM effectively, the company would need to conduct training programs for the sales
team. The training session for the sales team would help them understand the needs, wants and
demands of the customers. They would learn to think away from the wants of the company they
work for. The company would have to inculcate product knowledge and confidence in the sales
teams (Lee Obringer).
5
Appendices
Figure 1: Buying Centre
Buying Centre
Radiologists
Administrators
Support agency
Physicists
6
References
1. Kotler, P., “Managing Customer Relationships: Lessons from the Leaders”, The
Economist Intelligence Unit, 1998
2. Reinartz, W. and Kumar, V., “The Mismanagement of Customer Loyalty”, Harvard
Business Review, July 2002
3. Vincent Rainardi, Jan 2010. Using a Data Warehousing for CRM. Extracted from:
http://dwbi1.wordpress.com/2010/01/28/using-data-warehouse-for-crm/
4. Lee Ann Obringer, Money.howstuffworks. How building a sales team works. Retrieved
from: http://money.howstuffworks.com/business-communications/sales-hiring6.htm
5. Howstuffworks.com Contributors. Are Data warehousing and data mining related?
Retrieved from: http://computer.howstuffworks.com/are-data-mining-and-data-
warehousing-related.htm