Becton Dickinson and Company:

Multidivisional Marketing
Programs

Olivia Hovey, Austin Bridgers, Nik Donlin, & Clay

Killgore

About Becton Dickinson

(BD)
Manufactures products for health care
professionals, medical institutions, industry,
and the general public
Divided into two sectors:
Medical
Diagnostic

Five Operating Divisions

BDAC, BDD, BDMS, BDVS, & DM

About Health Medical

Center (HMC)
Carrier of products bought from all five
divisions of BD
Leading teaching hospital in the southeastern
United States
Bought $252,000 of medical supplies
$216,000 in needles and syringes in 1988

Facing a severe budget deficit

Attractiveness of multidivisional
marketing
Stress the importance of BD within their account
Can help cut costs through Supply Chain
Management along with cross-divisional
coordination efforts
BDD will also be able to better translate the
value added services to the end users rather
than administrative personnel
Changes in managerial personnel will allow the
start up of a new marketing program

Factors that aid and inhibit

Aid:
John Gormally
Gormally supports
supports the
the
John
idea
idea

Inhibit
:
HMC is
is more
more interested
interested in
in
HMC
price than
than services
services
price

Structured to
to fit
fit
Structured
multidivisional
marketing
multidivisional marketing
strategy
strategy
Terumos low
low pricing
pricing
Terumos
Differentiated product
product
Differentiated
offerings
offerings
Reduction in
in cost
cost amounting
amounting
Reduction
to
more
than
Terumos
to more than Terumos
discounted price
price
discounted

HMC working
working with
with Terumo
Terumo on
on
HMC
discounted
plan
discounted plan

Circumstances for implementation:

Strategy
A multidivisional strategy would increase the
opportunity to raise awareness of unused
products and services
Multiple divisions selling to an account
regularly
Account size justifies increased attention
Value-added services will increase BD
attractiveness

Do these circumstances apply?

Yes
Account size
Currently buying from 5 different divisions
Mutually beneficial
Reduction in costs for HMC
Increased sales for BDD

Whats at stake?
For BD:
Undercutting one division would cause problems with
other divisions
A potential key account relationship
Opportunity for growth in divisions

For BDD:
If no action is taken they will lose their account with HMC
$252,000 in sales to HMC

For various personnel at HMC?

Layoffs 100+ hospital personnel
$175,000 expense reduction from materials management

Key Players
BDD
John Kmetz: Sales rep
Ramon Gilmartin: CEO
Robert Jones: VP Sales
Robert Flaherty: President

HMC
Joanne Wilson: Purchasing Manager
Stan Delaney: VP of Financial Services
Phil Robinson: Administrator of Financial Services
Judy Koski: Director of Material Management

Recommendations
Mr. Jones should recommend the
multidivisional marketing strategy
Discuss the long-term cost savings with the key
HMC executives
Avoidance of a price war with Terumo at all
costs

Implementation Process
Identify target accounts in which the new marketing
structure would be successful
Identify communication channels within these
accounts
Ensure divisional managers support this process
Determine which value-added services will be
offered
Have cost savings and specific financial information
ready when meeting with account representatives
Potential 25-30% reduction in supply chain costs