Oct, 2017     

Distribution Network revamp for medical equipment player


The client was a medical equipment player based in India. The client wanted to find out the potential market size and the growth prospects for the industry over the next 20 years to assess and strategize the revamping of the medical equipment distribution network to fuel growth. Our approach involved making tools and models to estimate the market size and identify the good distributors.

A deep understanding of the current market scenario in the medical equipment industry was required to make accurate future forecasts on market sizes and growth rates. So, we decided to develop a mathematical model on the basis of several parameters to determine the future size.

As the first step, we conducted interviews with the many stakeholders in this industry – customers, doctors and equipment operators to gain an understanding of the important parameters on which the industry depends. Following these inputs, we segmented the market into 4 pillars – customer segment on the basis of the location of service availed (hospital, nursing home or diagnostic centres), the geography, the hospital size and the type of device (by usage).

We administered a brand awareness survey among customers to see the brand recall rate. We were able to identify the client's strengths and weaknesses according to this analysis. We determined that Hospitals form the largest segment of the industry, and in North India, Delhi has the highest market for it. We also found that the small-sized hospitals were the majority segment to target and the device with the highest market value was Colour Doppler. Brand Recall survey revealed that the client's brand is known in Tier-3 and Tier-4 cities for its cheap priced but high-quality products. It was also evident from this survey that the client has a lack of a certain range of products.

The second part of the analysis dealt with assessing the distribution network for gaps on the basis of ratings. We developed a comprehensive distributor rating tool on the following parameters – client exclusivity, size of the dealer & its regional market share and infrastructural support in terms of support staff and service staff. We rated the 22 dealers working with the client and found out the ratings. We also identified benchmark ratings for dealers and the scores to be considered good and bad. We identified the dealers which were high on the scale, and a majority of them proved to hold a relatively smaller market share.

The client used the findings and recommendations to assess its distribution partners in the region and re-evaluate their growth strategy. The customer related findings prompted the client to acquire a European medical equipment player to enhance their product portfolio, entering into a new market and enhancing their growth strategy.