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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

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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

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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

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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).

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Appendices

Figure 1: Buying Centre

Buying Centre

Radiologists

Administrators

Support agency

Physicists

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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