What are recommendations regarding sales force structure

Assignment Help Marketing Management
Reference no: EM131399041 , Length: 15 Page + 6 PPT

Sales Account, Management, and Design Plan Course Project

HART HOSPITAL EQUIPMENT, INC.

The Company

Hart Hospital Equipment, Inc. (HHE) manufactures and sells medical care equipment to hospitals, surgi-centers and emergency rescue teams.  In the past, the bulk of the company's revenues came from the sales of defibrillators (devices that use an electric shock to jolt a heart into beating again) and EKG machines (devices to analyze cardiac functions).  However, two years ago, Hart released its first line of monitors (devices to track vital body functions).  Monitor sales have grown so rapidly that they now constitute over 50% of total HHE sales.  Hart has another high-potential product, a pacer, in the pipeline.  It is scheduled for release in June, 2018, a little more than a year from now.  The pacer maintains cardiac functions for up to twenty minutes, giving physicians time to determine appropriate treatment for cardiac arrest victims.  Since Hart's pacer will be the first in the industry, high sales volume will depend on the sales force's ability to develop physician awareness and acceptance.

Hart's philosophy of developing innovative products, marketing them through well-trained sales representatives, and providing excellent service, has led to a strong position in the defibrillator and monitor markets.  Sales in 2014 reached $71 million, nearly a 42% increase over 2013, and this year's sales look like they will be 15% higher, due to monitor performance.  Tough competition is slowing growth rates in the current product lines, but the introduction of the pacer should boost next year's sales an additional 22%, to $100.5 million.  Hart's stockholders are delighted with their hefty dividends. 

Hart's R&D and production departments are proud of their successful products.  But Hart's marketing department worries whether the current size and structure of its sales force will optimize sales.

The Sales Force

The field force is Hart's main vehicle for product promotion.  Not only has it proved to be by far the most effective way of conveying information, but Hart has also attracted and kept customers because of the service that its sales force provides.  Field force expenditures account for nearly 75% of HHE's marketing budget.  The remaining disbursements cover journal advertisements, direct mail and conventions.  Hart's sales force costs approximately 13% of total sales, two percentage points lower than the industry average.

The HHE field force consists of 93 sales representatives:  87 who have geographically determined territories and six who cover only national accounts.  The geographically-based representatives report to district managers who, in turn, report to regional managers.  There are three regions, each with three districts and 29 representatives.  The six national account representatives report to the national account sales manager.  The regional sales managers and national account manager report to the Vice President of Sales.  As Hart's sales have multiplied, so has the number of territory-based representatives.  The number of national account representatives has remained constant for the past three years.

Hart's sales force has high visibility in the firm as well as within the industry.  It is well compensated and well-trained because of the complex skills needed to sell its equipment.  For example, it takes six to 12 months before a newly-hired representative becomes truly effective in selling defibrillators, EKG machines, and monitors.  Management expects that representatives will require even more training before they can sell pacers well, because in addition to mastering the equipment, they also must be able to explain conceptual issues to cardiologists who have never before used this type of device.  Pacer training programs will therefore begin in six months. 

The Market

Hart's customer base can be divided into hospital and pre-hospital users.  The pre-hospital market consists mainly of Paramedics, Emergency Medical Technicians (EMTs), and surgicenters.  A further division in HHE's customer base can be made between contract and non-contract hospitals.  The entire per-hospital market is served locally, but a steadily increasing number of hospitals that HHE sells to belong to national account purchasing groups.  In its national account agreements, Hart offers discounts on equipment to national buying groups.  The discounts, ranging up to 10%, are tied to the quantity of equipment purchased by the account's members.  In some cases, hospital buying groups have only one national account supplier per product.  The degree of contract compliance depends on whether the purchasing group is proprietary or voluntary.  Proprietary arrangements are the stricter of the two since the hospitals that belong to such groups are centrally owned.  In voluntary groups, winning a national contract can be equated with qualifying for the championships, not earning the trophy.  Purchasing agents for voluntary groups negotiate discounts, distribute lists of national account suppliers, and encourage each member hospital to buy from the listed companies.  However, members are under no obligation to do so.

National account representatives work closely with local representatives who pressure voluntary hospitals to follow the centrally-made recommendations.  Local sales force activity is also essential to successfully covering proprietary hospitals.  Representatives make sure that certain types of equipment are budgeted and that Hart products are picked when competitors also have contracts.  Currently 47% of total selling effort tis devoted to national account hospitals. 

The Competition

Hart's slow growth in the mature defibrillator and EKG markets can be attributed to stiff competition.  Furthermore, in the past year, Hart has taken sales force effort away from EKG machines and defibrillators and focused it on monitors.  The strategy of increasing monitor share is based on two points.  First, the competition in the monitor market is still relatively weak, and hence there are significant opportunities to grow the business.  Second, hospital and pre-hospital buyers are, with increasing frequency, purchasing all of their equipment from one manufacturer.  It is felt that, due to their complexity and importance, monitors will become the base system that will determine other purchases.  Nonetheless, Hart's monitor sales are beginning to flatten.  Competing monitors are beginning to beat Hart's products on price.  Hart's edge on quality is expected to erode in two years when its leading competitor is expected to introduce a higher-tech line.  Therefore, Hart expects future growth to come largely from its pacers, which have a first twelve month sales forecast of $12 million.  The pacers' advantage is that no competitive products are expected to enter the market for at least two years.  Thus Hart plans to capture the market before competitors have a chance to make inroads.

The Plan

Faced with level sales in its two traditional product lines, growing sales in its new product line, and a multi-million dollar forecast for its upcoming pacer line, HHE sales and marketing executives have made the following decisions for its sales force size and structure.......

YOUR ASSIGNMENT:

You are to assume the role of Hart's sales executives and provide "The Plan" by making the following decisions:

1. What is your recommendation for total number of sales representatives?

2. What are your recommendations regarding sales force structure?

Course Project/ Hart Hospital Equipment, INC.

Suggested Outline -

A. Abstract

B. Introduction

1. Brief overview of case

2. History and Background

3. Current Sales performance

C. Go-to-Market Strategy

1. Defining how to Segment the Market

2. Work required for each segment

1. Pre-purchase

2. Purchase

3. Post-purchase

D. Sales Force Assessment

1. Sales Force Strategy

2. Sales force productivity drivers

3. Measuring productivity drivers

E. Territory Alignment

1. Determining if realignment is necessary

2. Steps to take to maintain effective alignment

1. Alignment criteria

2. Auditing alignments

3. The importance of planning and expertise

F. Customer Segmentation

1. Understanding Sales potential based on:

1. Profile, Behavior, and Needs

G. Account Strategy Development

1. Developing sales actions or strategies for each segment

2. Assessing cost and benefits of each strategy

3. Selecting a strategy for each segment

H. Recommendations

1. Recommended Total Number of Sales representatives

2. Recommended Sales Force Structure

I. Conclusion

1. Summary of the recommendations

2. Overall Conclusion

3. Predictions of future success and sales growth

J. References

1. APA Style For sources and citations

2. Use primary sources, journal articles, credible newspapers, and current articles

3. Minimum of six sources

Reference no: EM131399041

Powerpoint presentation marketing - car tracking

PowerPoint presentation marketing: car tracking. In your final presentation, you should cover: Your business mission statement, Targeting strategy and SWOT analysis & Perceptu

Identify various social trends that affect marketing

To complete this assignment, students must prepare a real-world marketing news example, event, or success story and communicate it to the class. Students should use popular

Organization to design management support system

Imagine that you have been hired by an organization to design a management support system used to support decision-making at the company. Write a proposal in which you inclu

Create an internet marketing plan for your event

Create an Internet Marketing Plan for your event or to market yourself as an event planner for your final project topic. You may refer to general guidelines described this w

Who might you use for regular pepsi and diet coke

Which celebrity would you use to endorse Diet Pepsi in attempts to reach a ‘different' target group? Who might you use for regular Pepsi? Diet Coke? Coke Classic? Sprite? Expl

Importance of communication during the incident

1. Use Driscoll's 2000 model (what, so what and now what) of reflection as a framework to this patch. 2. Outline the incident briefly and upon the importance of communication

Compute the kinetic energy of a proton

Compute the kinetic energy of a proton (mass 1.67×10-27kg ) using both the nonrelativistic and relativistic expressions for speed of 2.85×108m/s.

Find the slope of the line using the two points

If you have a pair of ordered pairs of a linear function, you can find that linear function in the same way we did lines.  Find the slope of the line using the two points and

Reviews

len1399041

2/18/2017 3:41:27 AM

As described in our syllabus, this should be approached as an “ongoing” project. You must not wait until the end of the semester and approach this like a “case analysis”. This is much more than a case analysis…it is a project. So, I highly recommend that you approach this project in sections that are intentionally aligned with each week of study and class material. 15-20 double spaced pages in text length, not including cover page or Appendices. New Times Roman, 12pt font, Paper must be written according to APA style and be carefully referenced and You must include an abstract which is included in your total page count.

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd