CASE ANALYSIS

FORMPRINT ORTHO500

Group 7
• Amarpreet Singh Pruthi 19021141015
• Kshitij Raj 19021141058
• Rupal 19021141092
• Tanvi Jain 19021141125
Company overview
Grew rapidly from 2002
Formed 1998 Sector: Healthcare to 2013 in sales to $
42.9 million.

Premium priced 3D printers –

One of the five major Target Market: Large
higher quality custom built
players for 3D hospitals in
with sophisticated
orthopedic printers metropolitan cities.
technology.

Expansion of target market towards smaller

Price range: $ 30,000 to hospitals and outpatient orthopedic clinics
$ 500,000
through new and less expensive products.
MARKET ANALYSIS
• Worldwide : $ 2.25 billion in 2012, $ 3 billion in 2014 (expected)
• 3D printing healthcare : $ 235 million – USA 75% in 2013
• Grown from 98.7 million in 2012 to 176.25 million in 2013
• Major industries : Automobiles, aerospace, consumer and
medical/dental
• Price for 3D printers : $10,000 - $700,000.
• Saturation of dental and hearing aid Market in US.
Organisational STRUCTURE
Five departments :

• Foreign relations- Asia and Europe

• US Auditory Unit
• US Orthopedic Unit
• US Dental Unit
• US Sales and Distribution (Three distinct sales force, Auditory, Dental and Orthopedic product sales)

Each sales unit specialises in their own domain.

Three additional departments:

• Product Development
• Marketing Communication
• Business Development
BUYING PROCESS
Started with an Solicitation of
orthopedic surgeon Hospital board’s Vendor quotes by
request for approval. Purchasing
technological update. departments.

Cost per sales

Final negotiation Sales cycle: 6
of Price.
person – $
months – 1 year.
400,000 per year.

Hospital administrators value price

Focus on performance,
and ROI. They discuss the profitability
quality and service.
and then go for buying.
PRODUCT LAUNCH – Ortho500
Launch scheduled in early 2014.
Orthopedic priorities:
• Performance
• Price : $ 68,000
• Ease of use
• Reliability
• Functionality : could print exoskeletal bracing,
finger splint, wrist support and fore arm cast.
Target market : Non-hospital orthopedic clinics.
PRODUCT LAUNCH – Ortho500
4P’s
Product : Ortho500 (Exoskeletal 3D printers)-
Improved technology and simple interface.
Price: $ 68,000 (competitive)
Place: Metropolitan cities, most importantly
- New York, Los Angeles, Chicago.
Promotion: Conference sponsorship – 4 ,
direct email campaigns, Public relations,
print ads, websites.
 Increased competition for high end service

Expected entry of two largest computer printer

manufacturers

2.3% sales tax hurting the bottom-line

COMPETITION 4 additional firms competing for market space.

ANALYSIS
Major Players in overall 3D Ashoklal : 25% market share
printing: Formprint : 22% market share

Formprint : 30 % market share

Major Players in 3D printing
Loganstar : 21% market share
Orthopedics:
Ashoklal : 15% market share

Long term relationship building is the indispensable factor

in selling high involvement products
CONSUMER ANALYSIS
• Target market : Country’s largest non-hospital orthopedic clinics.
• Ortho500 designed mainly for outpatient orthopedic physicians.
• Most of the end users are average income US households above the age of 30.
• Geographical segmentation shows metropolitan areas.
• Most of the end users will have insurance backing them up, which will
incentivise them to look for better services (70% of the cost will be reimbursed
by the insurers).
• Awareness needs to be increased about 3D printed exoskeleton brace.
• Headroom for growth as only 3% outpatient orthopedic treatments are done by
exoskeleton brace.
• Expected to grow with improved technology and physician familiarity.
ORGANISATIONAL IMPLICATIONS

Required to set up Need for re-training Need for better Target the fragmented
separate budget for ISR current sales force in incentive layout for and dispersed
costs. terms of : Ortho500. outpatient market.
Negotiation skills
Setting up lease
arrangements.
Maintaining long-term
relationships.
Establish non-hospital
market presence.
 CHANNEL ECONOMIC ANALYSIS
ISRs SALESFORCE
ISRs will take around 23-37% of the sales budget. Sales force has limited manpower and is more
expensive compared to ISR.

ISRs work only on commission and must sell Salesforce has 70% fixed salary and 30%
products within 60 days or face termination. commission with no preset targets.

ISRs do not have much product knowledge and Salesforce is specialized in their own domain
mostly follow short term sales culture. resulting in increased efficiency in that market
only.
 How to promote products through sales force, ISR or
hybrid channel?

THE Facts to be considered:

MILLION  Sales cycle is less than 60 days.

 Functionally simple and easy to use and more portable

DOLLAR
than other 3D printers
 Need more focus on negotiations, lease arrangements
and reimbursement procedures.

QUESTION?  Product is smaller and easier to demonstrate, so the

variable cost of selling it is low.
 ISRs have shallow product knowledge and working for
different manufacturers at a time while our sales force is
70% fixed salary and 30% commission based, which
makes them too expensive compared to ISRs. If they
don’t sell within 60 days, then it is not sold.
 Hybrid approach is preferred.

Our existing sales force will pitch the product to their existing long-
term clients so that they can easily sell to them while ISRs will be
sent into new places since there is no cost involved.

Sponsor more conferences of our target audience.

SOLUTIONS /
RECOMMENDATIONS Pitching product to the forums of local physicians and
creating awareness in medical association meetings.

Guarantee 100% service satisfaction and repairing of the

product.

Built relationship with end users so that they might become

evangelist and we benefit from word-of-mouth.
THANK YOU !