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Hewlett-Packard Imaging Systems

Division: Sonos 100 C/F

By : Group B5
Ashish Rana
Nikhil Kumar
Nirmal Raj
Sargam Malhotra
Vivek Busar

Company Background

Hewlett-Packard Company is an American multinational hardware


and software corporation.
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))

Product
Sonos 100

Colour Flow is a cardiac


imaging product which uses
mechanical arrays to produce
two-dimensional colour flow
images

The
Opportunit
y

Non-Hospital segment of
cardiology
Increased customer satisfaction

The
Potential

Demand for ultrasound usage is


expected to increase with aging
population in USA
New govt. Regulation may help
in increasing in demand for
medical imaging equipment

Market in 1992
Overall Market

Others; 14
Japan; 12

Product Market in US ($ millions)

Others; 205
US; 41

Radiology; 328

Europe; 33
Cardiology; 287

US

Europe

Japan

Others

Radiology

Cardiology

Others

Phased array
or older
technologies
48/64
channels,
lesser quality
$90000$150000
16% market
share and
17% revenue

Low
Performance

Full feature
Systems
Colour Flow,
96/128
channel
capabilities
$150000 +
47% market
share and
64% revenue

MidPerformance

High
Performance

Segments
Even lesser
quality
Often lacked
colour
capabilities
$55000$90000
37% market
share and
20% revenue

Management Decision Problem

How should the Sonos 100 CF be distributed: through ISYs


Direct sales force or through Manufacturers Reps(MR)?

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

Opti
ons

Ch
oos
e
Dir
ect
Sal
es
Tea
m

Ch
oos
e
Ma
nuf
act
ure
rs
Re
p
(M
R)

Positives:
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

Negatives:
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

Positives:
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
Services of Direst team could be employed to target Hospital market segment

Negatives:
MRs work on commission basis, hence wont spend much time in developing

the market or providing demonstrations and follow-up service


Loyalty to company or own interest
Lack of technical knowledge about the product
Turnover rate of MRs and additional costs of training and monitoring them

Suggestion

Choose direct sales team for the


distribution of Sonos 100 CF because:
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
Greater control on the selling process
Loyalty issue

Thank You