Asclepius Consulting is - as many small software companies in India - trying to change from services to a product company. In the case study, one of the three co-founders, who is experienced in business processes, business strategy, and planning, is trying to set up a revised sales and marketing model as the current approach of selling via resellers and an inside sales force is not achieving enough reach.
Harvard Business School (W13563-PDF-ENG)
01/10/2014 (Revision: 01/09/2014)
Case questions answered:
- Segmentation and Targeting
Explain briefly your chosen segmentation of the market. Which segment/s are currently the most important to Asclepius Consulting, and which offer the greatest opportunity? Which segment/s, therefore, should be targeted?
Explain how the products and services that Asclepius offer should be positioned for each target segment. Consider in particular the respective value proposition/s for each segment.
- Channel Strategy
Given your responses to questions 1 and 2, what is your recommendation with regards to the sales channel for Asclepius? Consider how they can best reach their target customers and communicate their value proposition, the type of purchase decision and how it would be made, and the nature of the ongoing relationship with the company. You should discuss the advantages and disadvantages of each alternative but be clear in your recommended strategy.
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Case answers for Asclepius Consulting: The Sales Force Dilemma
Introduction – Asclepius Consulting
Asclepius Consulting, an Indian innovative business specialized in health management information systems, faced the challenge of gaining a foothold in the market. The company’s success mainly depends on its sales performance strategy.
Asclepius targets the business-to-business market, which is comprised of both, public and private sectors. Depending on the location and the sizes, the software is sold by either resellers or in-house sales representatives. The company’s main priority is to grow the number of sales and/or the number of modules per contract by either increasing its own sales force or continuing to develop the resellers’ network.
While many companies have issues requiring high technical expertise, the resellers at the local level were only able to solve the basic queries. Unfortunately, expanding its own sales force is associated with higher costs.
The main problem is how Asclepius can generate more sales in a sustainable manner. The report will identify possible segmentation and targeting strategies for Asclepius Consulting, the positioning of its product and services for the targeted segments as well as the best channels to reach their customers. The report will also give recommendations for the company in order to avoid the current dilemma.
Segmentation and Targeting
Market segmentation is the identification of individuals or organizations with similar characteristics that have significant implications for the determination of marketing strategy (Gilchrist, 2012). Market segmentation is presented in eight different segments based on characteristics, customers’ value perception, and the market share value of each segment as choice criteria. (Figure 1)
- Segment 1 – daycare and nursing homes (over 100 beds)
- Segment 2 – daycare, nursing homes and charity hospitals (30-100 beds)
- Segment 3 – Charity hospitals (over 100 beds)
- Segment 4 – Multi-specialty (30-100 beds)
- Segment 5 – multi-specialty (30-100 beds)
- Segment 6 – corporate chains
- Segment 7 – Single specialty (30-100 beds)
- Segment 8 – Single specialty (over 100 beds)
In the current situation, Asclepius Consulting is targeting all hospitals and healthcare facilities without focusing on any specific segments. The company aims at increasing the sales performance and the deal size. In order to determine which segments are the most important to the company, evaluation of the market share, the deal size, as well as the total, acquired revenue was performed. (Table 2.1,2.2)