Ortho 500

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 doesn’t seem a rational decision because the cost of training them to sell this product is unanticipated. Moreover, there’s 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)

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

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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

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