Sonos 100 C/F, a new cardiac imaging product is soon to be launched. The marketing manager at the Hewlett-Packard Imaging Systems Division must decide whether to use channel strategy. This case study seeks to find the answer on how the Sonos 100 CF should be distributed. Should it be through ISY’s direct sales force or through manufacturers’ reps?
Frank V. Cespedes and Marie Bell
Harvard Business Review (593080-PDF-ENG)
February 22, 1993
Case questions answered:
- What factors are affecting competition, product development, and marketing requirements in the ultrasound imaging market?
- Should HP enter the low-end segment of this business? What is the role of this product in MPG’s product portfolio?
- How should the Sonos 100 C/F be distributed: through ISY’s direct sales force or through manufacturers’ reps? What are the economic and organizational implications of your decision?
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Hewlett-Packard Imaging Systems Division: Sonos 100 C/F Introduction Case Answers
Executive Summary – Hewlett-Packard Imaging Systems Division: Sonos 100 C/F Introduction
Sonos 100 C/F, a new cardiac imaging product, is soon to be launched. The marketing manager at the Hewlett-Packard Imaging Systems Division must decide whether to use a channel strategy. This case study seeks to find the answer to how the Sonos 100 CF should be distributed.
Q1) What factors affect competition, product development, and marketing requirements in the ultrasound imaging market?
The factors affecting these different variable requirements in the Ultrasound imaging market are due to several Ultrasound Imaging manufacturers with insufficient customers for them to exploit and grow. The market was not sufficiently viable enough.
The Medical Product Group (MPG), a division of Hewlett-Packard, competed against Vingmed, Interspec, and Biosound in the low-performing segments and competitors Toshiba, Acuson, and ATL in the high and mid-performing segments.
Industry Growth during the 1980s was high, but then, in the 1990s, industry growth started to become sluggish due to increasing R&D costs. Price levels were stagnant. They remained flat or declined to leave, with no possibility to offset rising R&D costs.
Regarding product development, customers were able to try the products beforehand – and view demonstrations that showed which product produced the most optimal results.
The R&D department had to improvise in finding the perfect mix of software and hardware to create a suitable product relevant to their customer base.
The business department was the primary link between marketing and sales. It is responsible for conducting competitive analysis, setting up product training, price exceptions, customers visiting the factory, preparing trade shows, and national account support.
Thus, product marketing utilizes this link to relay messages to the sales unit. Eventually, the organization was having positioning issues as it began to shift its focus from product-oriented to market-oriented. Basically, they are increasing their product lines instead of focusing on one exclusive high-end product.
Q2) Should HP enter the low-end segment of this business? What is the role of this product in MPG’s product portfolio?
Initially, the launch of Sonos 100 CF was…
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