GROUP 3

2016034 Naheera Almeida Coutinho

2016054 Shruti Ramesh Patki
2016072 Arunima Chandra
2016125 Wendy Michelle Fernandes
2016207 Dinraj Vijaykumar Pai Khot
2016208 Durgakumar Digambar Samant
2016211 Harshendu Shrinivas Dave
 Case concerns negotiations between managers of Becton Dickinson's
(BD) VACUTAINER division (which manufactures and sells blood
collection products) and managers of a large hospital buying group
Recent changes in the health care industry are the background for the
negotiations, which involve the buying group's attempt to negotiate
both lower prices and different distribution terms with BD
Key Issue:
APGs demands concerning pricing, branding (Private Labels) and
distribution terms
Key Decision Makers:
William Kozy - National sales director for Becton Dickson
VACUTAINER systems (BDVS)
Hank Smith - Vice President of marketing and sales BDVS
Alternative 1 Alternative 2
Partner with APG Reject APGs Private Label, Distributor
Pros and Pricing:
Maintain Revenue Source and Market
Share Pros
Attain economies of scale through Maintain Brand Image
larger volumes
Reduced risk of Image corruption Practice control over pricing
Flexibility Maintain profitable distributor
Can be associated with new products relationships
Challenges Challenges
Lower margins
Lower control Loss of a significant Revenue Source
Tampered distributor relationships Loss of Market Share
Shift of bargaining power to
purchasing groups
Alternative 3 Alternative 4
Target growing physician market Target hospitals through Z-contracts
Pros Pros
Untapped Market First Mover Advantage Premium pricing for higher quality
Largest Growth Potential
Maintain Brand Identity
Can introduce new products
Maintain good relationship with large
Challenges distributors
Lower margins
Control on distribution network
Set competitive pricing for the changed
market scenario
Challenges
Small part of market
New selling techniques to be developed Convince DMUs of larger hospitals to
Increased R&D costs to justify product buy through Z contracts
differentiation
Catering to the requirements of the new
market segment
Partner with APG for private-label and accept distribution demands and stick with part of the
proposed contract and also, target hospitals through Z-contracts

Maintain competitive of product quality, availability and responsiveness to user demands with
z contracts and market share with the partnership

Exclusive contracts with small and large hospitals

Ensure symmetric margins across volume levels

Restructure distribution network-Reduce logistical expense ( which is equal to raw material

expense)

Develop the growing physician market with the help of distributor relations
THANK YOU!