About Moore Medical Corporation

 Practitioner's Business - Provider of general pharmaceuticals, medical and surgical

supplies, fragrances, cosmetics
 Had a strong Tradition of accurately and quickly filling customer orders
 Differentiating features were dedication to service, ease of ordering and knowledgeable,
friendly operators, as well as its ability to provide one-stop shopping

BUSINESS MODEL

 Product Line- More than 8,500 products ranging from disposables to medical equipments
 Markets- 6 Customer Groups: Physicians, Podiatrists, Emergency Medical
Services(EMS), Public sector, industrial and Resellers
 Competitors- Distributors like Schein and PS&S, which were many times larger and
served numerous other markets
 Interaction with customers- 50% from Inbound phones and 25% from Outbound
telemarketing and Field sales
Which new Information Systems, if any should
Moore Purchase
Major problems faced by Moore Medical Corporation
Passive demand forecasting
Higher churn rate (30-35%) as compared to industry average (25%)
Customer acquisition and retention
More penetration rate and less share of wallet in Podiatrist
PMS indicated 68% perfect order

Add bolt-on Software to Exisitng ERP

Demand Planning System
Forecasting on historical and future planned activity such as promotions
Automate purchasing process
Decrease Back orders and Split-shipments which might help to decrease churn rate
h
Warehouse transfer System
Reduction in Split-shipment
Deal Management System and Inventory Stock Simulation
Optimize inventory levels and decrease Inventory Cost
 CRM will help to achieve following Capabilities
Increase consistency of Moore’s interaction with customers
Integrated record of customer contacts through all channels
Decrease churn rate
Increasing customer loyalty through better services
Identifying customer preference such as price sensitivity and product
unavailability
Insights generated by CRM will reduce inventory cost, labor cost, increase customer
services, cross-sell / up-sell capabilities

Proposed Solution

First priority should be to purchase Demand planning system worth $300,000

As Clarity’s CRM system is reasonably priced at $592,500 but it does not solve the
major demand forecasting problem
What are Pros and Cons of Moore’s Move into e-
commerce / online ordering
Pros
Customer Acquisition - New customers from a completely new segment attracted by website
accounted for 13% of online orders and revenues of $500,000 with in the next year
Customers were trained to navigate the site which can lead to less reliance on salespeople in the
future thereby saving on labour costs
The number of orders per month grew from 1,423 to 2,218, resulting in increase of over
$220,000 per month of revenue
87% of the customers ordering from the site were converted from other channels (phone, fax)
and thus saving time for salespeople
The website’s full catalogue saved printing costs
Customer convenience increased by providing them option of comparing products and costs on
their own and saved time

Cons
The investment was expensive and caused Moore to suffer operating losses in 2000. Further, it
prevented Moore from investing in other projects
Costs are expected to rise further if two or three additional programmers at $75,000 to $100,000
each are hired to keep the website updated
It is an impersonal selling tool and some customers who prefer high-touch service may be
dissatisfied due to lowering of perceived value. This could possibly result in increased churn rate
Do you agree that this was a good move for company

Yes, we believe this investment was a good move for the company because of the following
reasons, as determined from the advantages of entering into an online ordering system:

Financially, this was a good move for Moore. Online sales have increased new customers
"wins" by 13% and established a new target market for the company to pursue, which is
projected to account for approximately $500,000 in new business in the upcoming year

This consumer market did not require direct mail solicitation or outgoing phone calls from
existing sales staff, thereby increasing profits from this segment

Existing customers are also drawn to online ordering and are expected to use this system
instead of other channels in the next year

Despite initial extravagant costs due to the transformation from traditional catalogue to brick-
and-click model, the amount of business generated from the website, projected at $544,732
per month means that the rise in costs should be nullified by increase in sales.