Question

Mediquip Ltd. is a company dealing in the distribution of medical equipment. The company recently imported 15000 units of sugar testing machines to test the sugar levels without taking blood samples. For deciding the marketing strategy, the Chief Executive Officer of the company called a meeting of the marketing heads of different zones.

In the meeting, Sandeep, the North Zone Marketing Head, suggested that since the machines were sophisticated they need to visit hospitals to personally, explain its working to the hospital staff who would be using the machines. He also suggested that additional trained people may be recruited for the same. 

Himanshu, another Zonal Head, added that since a lot of money had been spent on the import of the machines, the company was short of funds to pay to the additional staff as suggested by Sandeep

Rahul, a newly appointed Zonal Head of South Zone suggested that since the size of the order is not large, a detailed study of the factors determining the choice of channels of distribution is required before making the right choice.

1) Identify the factor influencing the choice of channels of distribution which were discussed in the meeting.

2) Also, explain briefly the other consideration to be taken care of in each factor identified in part (a).

Medi Instruments Ltd. Is a company dealing in the distribution of medical instruments. The company recently imported 15000 units of sugar testing machines to test the sugar levels
without taking blood samples. For deciding the marketing strategy, the Chief Executive Officer
of the company called a meeting of the marketing heads of different zones. In the meeting, Sanjay, the North Zone Marketing Head, suggested that since the machines were sophisticated they need to visit hospitals personally to explain its working to the hospital staff who would be using the machines, He also suggested that additional trained people may be recruited for the same. Hitesh, another Zonal Head, added that since a lot of money had been spent on the import of the machines, the company was short of funds to pay the additional staff, as suggested by Sanjay.

Revansh, a newly appointed Zonal Head of South Zone, suggested that since the size of the order was not large, a detailed study of the factors determining the choice of channels of distribution was required before making the right choice.

1) Identify the factors influencing the choice of channels of distribution which were discussed in the meeting.

2) Also, explain briefly the other considerations to be taken care of in each factor identified in
part (a).

Answer 1

1) Factors influencing the choice of channels of distribution which were discussed in the meeting are

• Product-related factors- ‘Machines were sophisticated they need to visit hospitals personally to explain its working to the hospital staff who would be using the machines.
• Company characteristics- ‘The company was short of funds to pay the additional staff.
• Market factors- Size of the order was not large.

2) Product-related factors- Machines are complex products requiring technical details. Thus, shorter channels would be more suitable.

Company characteristics- There financial strength of the company determines the channel of distribution used by it. Shorter channels of distribution require greater funds. However, in the given case, the company is short of funds and thus would opt for indirect channels of distribution.

Market factors- The size of the order determines the choice of channels of distribution which the company opts. Since the size of the order is not large, the company should go for a large number of intermediaries.