Waters Chromatography Division: U.S. Field Sales (A)

MARKETING-II

DATE OF SUBMISSION-13.12.2012

SUBMITTED BY:-

SECTION-C, GROUP 13:

Abhijit Das- 2012PGP005

Ashwin Vijayan- 2012PGP073

Kumar Abhishek- 2012PGP178

Payal Anand- 2012FPM10

Rajat- 2012PGP292

Sumit Bapuji Gedam- 2012PGP382

Vikash Kumar- 2012PGP438

Situational Analysis

5Cs

Company

Waters was founded in 1962. It developed, manufactured and marketed HPLC-based

Products used for analysis and purification of fluids ion critical application. Waters offered a

Complete range of HPLC instruments, accessories, columns and supplies. Major part of the

revenue came from instruments sales and the remaining came largely from sales of chemical

products, spare parts and service.

Collaborators

No major collaborations mentioned.

Customers

Waters served a technical customer base in a variety of research and industrial setting,

focus on specific application niches within each customer market. The company's largest market

included pharmaceuticals and life sciences/biotechnology. other important markets included

polymers, industrial chemicals, food/agriculture and electronics.

Competitors

HPCL market could be divided into two broad segments- instruments and chemical

products. Both markets were dominated by Waters, who competed directly against premium

priced vendors (HP, Varian, Perkin Elmer, Beckman, and IBM in instruments; Du Pont and

Altex in columns) and also faced growing pressure from smaller low cost manufacturers.

Context

Waters was considered a pioneer in high performance liquid chromatography (HPCL)

which was relatively new technique for separating complex chemical mixtures into their

individual components. In early years there was limited expertise in the industry and many of the

people who knew HPCL, worked at Waters.

SITUATIONAL FRAMEWORK-

STRENGTHS:

Pioneer in High Performance Liquid Chromatography.

Market share at least double of its nearest competitor

The sales team is technically experienced

Strong customer support

WEAKNESS:

Perception of a ‘premium priced brand’ that lead to the sales loss even in categories where there prices are lower than competitors.

High turn-over rate in field sales staff (10%-20%), cost in lost sales for each turnover averages at $260,000 (since establishing a contact takes 2-3 years)

Technical sales staff ended up doing all activities from sales call to demo to installation: lack of service staff

OPPORTUNITIES:

The worldwide HPLC market expected to grow at 15% annually through the present decade (the 80s)

THREATS:

Growing competitive pressure from smaller, low-cost manufacturer.

High price sensitivity in the market

Growing concerns about the incentive plan: some felt it encourages “sell and run” attitude, without worrying about support and service, which built Waters’ reputation

Customers had a feeling Waters had not kept up in Chemicals business, once dominated by it

Problems

To achieve a growth of 20% annually developing new market areas via the aggressive marketing of existing markets

Timely introduction of new products and a broadened application emphasis by maintaining market share in existing markets

Designing an effective incentive/compensation program to control turnover and motivate employees to bring more business.

Recommendations

The initial risk is in terms of the sales people ending up doing all by themselves. Since there was a slow turnaround time from the support department, it affected those incidents like that of Joe were a new deal could be closed only after the support team’s function. The support team was also crucial in taking care of the promised service guarantee. If these were not performed within time limits the account might be lost which is huge blow to the sales person. To prevent this sales people took care of the support functionality too which overloads them and could reduce revenue generation. To prevent this, the solution is to restructure the package of the support staff as a variable component based on the number of services executed by them. This would make support team as efficient as the sales team.

There is a rapport developed by the salesman with the customer and this might be affected when the territories are split to increase sales. The rapport is essential in loyalty of the customer and increased sales due to persuasion. To maintain this, we would suggest splitting up large territories based on accounts and not on geographical boundaries. The old customer accounts could be handled by the old sales person and the new one could hunt for new accounts. The variable component of these two people can be combined together for the new accounts generated and the old ones could be shared in the proportion based on experience levels.

There could be individual support team created for each division to cater to the service needs of each of the territory. This would prevent customers from waiting on service delivery delay.

Customer support team aimed at booking orders could be extended to service the technical help sought by the customers. The customers who had purchased the instruments had many technical doubts arising and the single point of contact was the sales person. So they directed the query to him. This is overloading the job of the sales person. To make up for this the customer support team should step in clarifying doubts to customers and a hotline number can be setup for this purpose.

The strategy of using technically trained workforce needs to be continued. This is really an advantage in converting orders because the buyers are technically sound and have technical queries.

Incentive is provided to the sales force for the sale of instruments. Incentives may also be provided for the sale of chemicals which would make the sales force promote the 38% share of chemicals.