Becton Dickinson and Company: Multidivisional Marketing Programs

Becton Dickinson and Company:Multidivisional Marketing ProgramsGroup 5Ankita (60008)Ankita Pandey (60009)Kumar Devashish (60019)Neha Srivastava (60026)1

Becton Dickinson at a GlanceTypePublicIndustryMedical EquipmentFoundedEast Rutherford, New Jersey (1897)FoundersMaxwell BectonFairleigh S. DickinsonHeadquartersFranklin Lakes, New JerseyAreas ServedWorldwideKey PeopleEdward Ludwig (Chairman)Vincent Forlenza (President)No. of Employees28,8032Question 1Why is the topic of "multidivisional marketing" attracting corporate attention at Becton Dickinson (BD) during the period covered by this case?Is it a good idea?What factors aid or inhibit the implementation of this concept at BD?3Why is the topic of "multidivisional marketing" attracting corporate attention at BD during the period covered by this case?

To respond to customers seeking more efficient and effective approaches to their operating and service needs. Achieving competitive advantage for BD through superior customer service.Growing trend of Group purchase systems (GPO): primary decision making authority shifting from end users to non users. Shift in the power base. Price war competition by TerumoMultidivisional marketing was a prerequisite for value added services for key accounts4Is Multidivisional Marketing a good idea?

Can demonstrate BDs importance within an account in a better and more elaborate mannerWill help to promote the different services already offered by BD to accountsEffective use of resources to develop Value added services (product bundling agreements and/or provision of order processing systems services that might be prohibitive for a single division but feasible on a multidivisional level)Broadest product lineInventory management task was easier5c. What factors aid or inhibit the implementation of this concept at BD?

Factors aiding in the implementation

Formation of new operating group- SCMHealth care players at all levels of the supply chain are interested in asset-management techniques and systems that can lower their total costs of obtaining and using needed products and servicesNot all divisions have great sales - products and service will get alignedConcept of Value added servicesRemoval of inefficiencies and duplication in operations and overlap in purchasing processes due to sale of similar products by various divisionsBroad distribution capabilities6c. What factors aid or inhibit the implementation of this concept at BD?

Factors inhibiting the implementation Loss of control feared by divisional managers Divisional Managers concerned about the impact of such a concept on their individual businesses (BDs Acute Care, BDVS)Divisions desired to define rulesEach division had its own information systemAveraging capabilities: unlike other divisions, DM lacked a strong presence at HMCHigh number of divisions

7Question 2More generally, under what circumstances would the kind of marketing strategy inherent in the multidivisional approach make sense?Do those circumstances apply at the HMC account?8a. Under what circumstances would the kind of marketing strategy inherent in the multidivisional approach make sense?

Resource constraintGlobalisationUncertaintyPrice warMergers and acquisitionsClosely related products for a homogenous customer base

9b. Do those circumstances apply at the HMC account?

10CircumstancesIn context of HMCResource constraintNoGlobalisationYesUncertaintyYesPrice warYesMergers and acquisitionsYes (Deseret Medical)Question 3What is at stake at the HMC account: for BD? for Becton Dickinson Division (BDD)? for other BD divisions? for various personnel at HMC? Who are the key players that must be considered in responding to the competitive threat at this account?11a. What is at stake at the HMC account: for BD? for Becton Dickinson Division (BDD)? for other BD divisions? for various personnel at HMC?

For BD: Terumo as competitorSales share

For BDD: Loss of an important national account Sales will declinePricing structure protectionEmergence of Terumo as a prime competitor 12For other BD divisions: BDAC loss of potential salesDM chance to increase sales and introduce new productsBDVS fear of losing straight rebuy status due to end user brand preferenceBDMS possibility of having to be involved with a purchasing committee

For HMC Personnel: 3-4 months for product evaluationEnd users preferred quality - BDD productsNew Information systems would have helped lower inventory levels and operating costs by helping in choice of the right distributor

13b. Who are the key players that must be considered in responding to the competitive threat at this account?

At HMCs endStan Delany Vice President, Financial ServicesPhil Robinson administrator of finance servicesJudy Koski director of materials managementJoanne Wilson purchasing managerPersonnel dealing with different divisions- Dr. Henry Jackson (Director Anesthesia) and Cynthia Smith (IV Therapy Supervisor)14Question 4What should Mr. Jones, VP of Sales at BDD, do with regard to the HMC account? Specifically, should he pursue a multidivisional approach in this situation, a price decrease or another option?How should any actions concerning HMC be implemented?15a. What should Mr. Jones, VP of Sales at BDD, do with regard to the HMC account?Pursue multidivisional approachPrice cant be reduced - works on quality and serviceRest of the purchasing groups will ask for price reductionAll divisions are selling to same client; should have synergyHMC is facing financial crunch - value addition should result in tangible benefitBy providing value added services with the help of MIS, BD can help HMC in material management and thus in cost reductionA consolidated efforts by all the divisions will allow to smaller discount to match the price offered by Terumo

16b. How should any actions concerning HMC be implemented?

ImplementationHighlighting the cost benefits such a strategy will provide to HMCUsing the MIS developed by BD, HMC will improve material management and thus cost reductionThe powerful players in the buying centre should be identified (Joanne Wilson, Cynthia Smith) and should be brought on boardFinally individual divisions should contact the key personnel in HMC for their individual processes and convince them about the newly implemented strategy

17Question 5In which companies operating in India do you think a similar situation could arise?

AMUL & Tata Steel

ReasonsNo of divisions are highClosely related productsHomogenous customer base1819