Moore Medical Hbs Case Analysis
Essay by Apoorv Agarwal • November 22, 2018 • Case Study • 520 Words (3 Pages) • 1,491 Views
Page 1 of 3
Target Customers
- Not targeting volume based/Low Margin/Predictable demand customers - Drugstores
- Targeting Low Volume/High Margin/Unpredictable demand customers – Practitioners
- Only 6 customer groups
- Only 2 major customer channels
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Key Customer Requirements/Market Strategy
- Broad product Range
- Quick response to orders
- High accuracy and reliability of delivery
- Dedication to service
- Ease of ordering
- Knowledgeable and friendly operators
- Marketing through Direct Marketing materials such as catalogs, brochures and less direct selling through sales force
- Customers are unsopisticated
Current State
- Portfolio of 8500 products which is only fraction of the total products available in medical supplies marketplace
- Wide variation in penetration rate among the six customer groups
- The company provides ‘one-stop shopping’ (i.e. all products than customer needs) more in some customer groups than others
- Share of wallet also varied widely among the six customer groups
- Most Imp customer group – Podiatrists with penetration of 75% and share of wallet 45% - Company would like to increase this gp
- For Podiatrists the penetration was high as – Moore invested heavily in Marketing for this gp but wallet was low as – cannot offer all products required by this gp. (CRM needed to target marketing efforts to gps who can be served fully with product portfolio)
- Very High Churn rate – 30% (Industry avg. 25%) reason – 1) Limited promotion – special offers 2) Product Portfolio too narrow
- Competitors – Large Distributors with high SKUs and Small distributors focusing on specific customer groups
- Moore kept exactly same items in stock in each DC in order to ship complete orders from DC closest to customers – Wrong method
- Ships some orders direct from Mfg to avoid stocking low volumes and minimize handling of sensitive items. (CRM can enable demand prediction to favor this)
- Perfect order % - 68%; 32% were split shipments (87% opportunity is in demand planning)
- Many suppliers with variations in Lead time, plans to implement supplier rationalization
- Now moving to internet enabled direct marketer
Costs
- $7 million for ERP installation
- New $300,000 for additional 4 ERP modules
Problems with ERP J.D. Edwards structure
- To create a bid or quote for a customer or gp of customers was extremely cumbersome.
- It did not provide total campaign solution for managing marketing efforts. It was not conducive to Moore’s preferred method of pricing.
- Order entry was cumbersome
- Lengthy process of new customer account setup and increased duplicate records
- Didn’t have any demand forecasting
CRM solution
- CRM soln can provide a single enterprise view of customers to have an integrated network through all of their channels such as phone, E-mail, and web thus making processing of bids and quotes with customers easier. (Problems with ERP J.D. Edwards structure pt# 1) – Only solves Bid/Quotes Problem
- CRM can identify most valuable customers and sales efforts can be focused on those increasing penetration rate for most valuable customers (Current State pt# 2,5) – Moore Only has a small customer base
- SFA module in CRM can help assemble past order information about valuable customers so that ‘one-stop shopping’ can be provided to most valuable customers, increasing share of wallet for those. (Current State pt# 3-6) - Moore Only has a small customer base
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