Asclepius ConsultingGROUP 2

What makes a market attractive? How will you segment the healthcare information systems market in India and which segments would you recommend to Asclepius?

No. of BedsSector

Healthcare Organizations

Public

30-100 100-300 >300

Private: Charitable Organizations

10-100 100-300 >300

Private: Corporate Houses

10-100 100-300 >300

Private organizations:Resources to afford the systemsIncentive to improve processes and improve efficiency which can act as a differentiatorNo. of beds above 100:The hospitals having beds less than 100 can manage their processes manually as well and might not see significant benefit from the HMISThey are also not likely to have enough resources to afford the HMIS

What are the factors that you will take into account while deciding on a sales strategy? Identify the same with relevance to Asclepius and its target market.

Cost Creating company’s own sales force was expensive than scaling the reseller network

Technical Knowledge Company salesperson were required to close the deal as resellers weren’t adept to sell the product on their own despite extensive training

Scalability Asclepius goal was to sell the basic product to as many hospital as possible. It was faster to scale up the reseller network. For every 10 resellers one sales support representative was allocated.

Resource Allocation Creating company’s own sales will drain limited company resources. After Sales Support and Maintenance

Generally resellers provided maintenance and additional incentives were given to them for support work. But serving could be done remotely which would cut costs and ensure accountability.

Account Management In order to earn profit, company had to sell more modules to a single contact. The company had develop a good account management program.

Consulting Asclepius had to provide insights to its clients to help improve their service. Experienced professionals were required for this purpose.

Describe the decision making unit (DMU) at a large hospital? How is understanding the DMU relevant to the sales strategy for Asclepius?

•Decisions are made by a committee consisting of both Administrators and Doctors

•It was believed that the top-down approach of getting buy-in from the top management was a better approach due to past experience.

•Convincing the IT and administrative staff was easier after getting buy-in from the top.

Proposals were evaluated on the basis of:Total expenditureBenefits of process improvementAny significant improvements in quality of care to

patients

Buying Centre

Economic Buying

Influence: MD or CEO

User Buying Influence:

Lower, Middle Levels and

Doctors

Advocate: None

Technical Buying

Influence: IT Department

Discuss the purchasing behavior of the various segments. How will you utilize this information to devise your go-to-market strategy?

Segment(Based on no of beds) Purchasing Behaviour

30 to 100 Found value in Basic Administration, Billing, Pharmacy, OPD and IPD Modules. Price Sensitive Hesitant to Change

100 to 300 Found value in all modules Needed support in overall process management Installation was of strategic importance Robustness, Scalability and ease of use important. ROI essential Credibility of Vender important

More than 300 Found value in all modules Needed support in overall process management Installation was of strategic importance Robustness, Scalability and ease of use important. ROI essential Credibility of Vender important Need management consulting service

Go to Market StrategyNo of Beds 30 to 100 100 to 300 More than 300Target Contact CEO/MD

directly/through referrals

Contact CEO/MD directly/through referral, hire consultants, RFC process

Contact CEO/MD directly/through referral, hire consultants ,RFC process

Product Portfolio

Basic modules with additional modules as per requirements

Complete Package with customization.

Develop an account management process with end to end process management and support.

Pricing Module wise pricing Licence based pricing Licence based pricing

Promotion Research and provide Cost- Benefit Analysis for addition modules. Offer discounts for each addition.

Focus on customization and cost saving due to web- based system architecture (10-15k per machine).

Provided initial offering at a discounted price as the revenue for maintenance and support will be substantial

Selling Strategy

Leverage reseller network

Apart from reseller use own sales rep and referrals

Apart from reseller use own sales rep, referrals and experienced consultants

What are the various go-to-market alternatives in front of Asclepius? What are their pros and cons and which model would you recommend?

Selling Costs

Sales Volume

Own Sales Force

Independent AgentsOwn Sales Force

Control over the entire selling process

Opportunity to build relationships with the clients for further sales

Not cost effective when the sales volume is low

Additional source of revenue from maintenance and service

Better knowledge of the products and technical details

Re-Sellers

More Cost effective when sales volume is low

Wider reach and better network of customers

Only basic knowledge of products, could not address complex queries

Required the presence of a senior manager from Asclepius for site-visits

and deal closure

No relationships with clients for selling more complex products

Assumptions:Effort required for easy to medium sales process =1

Effort required for Moderate to Tough sales process =2Effort required for Tough sales process =3

Rational:Potential market value per effort is highest for 30-100 beds Day care centres at more

than Rs. 44 crores

Average Revenue earned per reseller per annum = Rs. 9,30,000

Fixed Cost = Rs. 85,00,000 Variable Cost per reseller= 1,82,800

At Breakeven: Fixed Cost = ContributionContribution per reseller = Rs. 7,47,200

Hence Number of resellers = 12 and number of sales person = 2

Total potential leads= 2203Number of warm leads per reseller = 50

Hence, total resellers required to effectively cover the market = 45

& number of salesperson = 5

Microsoft Excel Worksheet

Based on the data provided in the case, how many salespeople or resellers would Asclepius need to have to a) break even and b) to effectively cover the market.