ORTHO500

Case analysis in BBMK

GROUP 16
ZUBIN DADHICH

14S652

NIKHIL RAVINDRAN 14S629

HITESH TAKHTANI 14S716
TITIKHYA DEY
14S754

Situation Analysis
FromPrint, a market leader (#2), a US based healthcare 3D printer manufacturer
had scheduled to launch a low cost 3D printer based on additive manufacturing
technique. Priced at $68K, Ortho500 was a easy to use product primarily
targeted at outpatient orthopaedic physicians at hospitals.

Problem statement
How should Willis employ method of selling 3D in highly competitive market (ISR
or in house reps) so as to penetrate the market at early stage and reap
maximum benefits?

Suggested solution
Direct sales reps (in house), had an upper hand in terms of building relationship
with customers along with continuous sales. Although this product was easy to
use, the knowledge of Sales reps would come handy in pursuing customers who
were looking for performance and price and ease of use as their primary
purchasing factors. Each rep costs about $400,000. It should be noted that this
cost to company is not just concerned with selling Ortho500. Therefore,
arbitrarily we would allocate $100,000 out off $400,000. Ortho500 being priced
at $68,000 would be an achievable target for sales reps to cover cost of selling.
In contrast, hiring ISRs doesnt seem a rational decision because the cost of
training them to sell this product is unanticipated. Moreover, theres compelling
evidence in the case with regards to previous experience of employing ISRs when
cost shot up to 38% of sales.
The solution would be to take a middle road here and employ two ISRs. The
members of product development team could train them and see the results.
This approach would solutionalize the problem fast as the sales cycle was just 60
days when sold by ISRs. The company might have to borne a loss initially till a
sale is completed. In case, ISRs fail to achieve targets we can discontinue with
them and fall back on in house sales reps.

Action Plan

Hire 4 ISRs and train them (product development team should train them)

Wait for the sales cycle to complete, and evaluate the feasibility of

continuing with them

If the cost to company is less than annual sales done by them, we can
train them further and continue with ISRs; else fall back on in house sales

reps
Cost = 23% of avg sales ; 23% of $68000 plus 2.3% tax = $15844 per
piece