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BioCell – Losing a Loyal Customer*

CASELET, SALES AND DISTRIBUTION MANAGEMENT
ET Cases - FLAME, 5 Pages
AUTHOR(S) : Dr. Gurudas Nulkar, Adjunct Faculty, Head of Strategy and General Management, Symbiosis Centre for Management and HRD, Pune

Case Preview

BioCell – Losing a Loyal Customer

"What? We lost the BioCell order! I can’t believe they don’t want to buy from us! All our products are performing to their satisfaction and they have awarded our services last year!" said K. Unni (Unni) to Kannan, his Product Manager, who had given the news. "Get me Sumant on line," he shouted out to his secretary. Unni, the Founder and Head of Thermochem Corporation1 (Thermochem), couldn’t quite come to terms with this news. His secretary tried calling Sumant Bharadwaj (Sumant), Senior Sales Engineer at Thermochem and the account manager for BioCell.

Unni had successfully led the company to become a star channel partner of Thermax Limited (Thermax)2, India’s leading manufacturer of industrial boilers, water and sewage treatment equipment, founded in Pune in the year 1966. Based in Bangalore, Thermochem was doing a business of over INR50 million for Thermax. Thermochem has a team of twelve sales engineers and two product managers, who had helped Thermax’s market share to grow to nearly 50% in small industrial boilers and 40% in water treatment equipment, in Karnataka, in a short span of ten years.

Losing the BioCell order was unexpected for Unni. Thermochem was bidding for an order of 12 units of US-18 Water filter softener (Annexure I), which amounted to INR1.86 million3. While this was not a large order, BioCell was a prestigious account for Thermax and a loyal customer since 2011. Moreover, BioCell was a good reference in securing orders with biotech and pharmaceutical customers. Losing this order could set a precedent at BioCell to look for cheaper alternatives to Thermax products...........


1 Thermochem Corporation Pvt. Ltd. was established in 1987 as a Thermax Channel Associate for Karnataka, Kerala and Coimbatore regions, currently serving over 1,000 customers. The company is head quartered in Bangalore and supplies Thermax products such as Water Treatment chemicals for Boilers, Cooling Towers, Effluent Treatment, Ion Exchange resins and Liquid Process Filters. They also provide Annual Maintenance Contracts for efficient operations (http://www.thermochem.net/about-us.html).

2 The Thermax Group is an INR4,704 crore ($750 million) company, in the business of engineering solutions to the energy and environment sectors. The company is headquartered in Pune, India and operates globally through 33 International offices and 13 manufacturing facilities - 7 of which are in India and 6 overseas (https://www.thermaxglobal.com/about-us/).

3 Each unit of US-18 Water filter softner costs INR155,000.

Teaching Note Preview

BioCell – Losing a Loyal Customer

Synopsis

This caselet highlights a typical ‘order lost’ situation in B2B organizations. Sumant, the Sales Engineer, has lost an order from BioCell, who has been a loyal customer for long. Sumant works with Thermochem Corporation, a channel partner of Thermax Limited. Thermax’s products are working well with BioCell so much so that Thermochem’s services have been awarded by them. The current order was for water filter-softners to be used in BioCell’s laboratories. Sumant’s key competition for this order was a lesser known company called Sri Ganesh. Since this was a new-comer with whom BioCell has had no business till date, Sumant believed that this order would be easy for Thermax. Despite his strong relations and his negotiation skills, Sumant was unable to stop BioCell from placing the order on Sri Ganesh. Sumant convinced his boss that since the application was a relatively non-critical one for BioCell, there was no way they would have forgone an opportunity to save money.

Teaching Objectives

This caselet can be used in the Business Marketing course in MBA programs and in Executive Education programs. The case is useful in analyzing an industrial buying situation. The key objectives of the case are to:

(i) Apply the industrial buying model to an actual situation
(ii) Differentiate the various members in the Decision Making Unit (DMU)
(iii) Analyze the value proposition for each member of the DMU
(iv) Demonstrate how to shift from product-feature approach to a solution-selling approach

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Product code: SDM-2-0006, SDM-2-0006A

Abstract

**ET CASES – FLAME INDUSTRY EXPERIENCE CASE AWARD for presenting the MOST INNOVATIVE INDUSTRY EXPERIENCE CASE

This caselet discusses the loss of a loyal customer in a B2B situation. Thermax is a manufacturer of industrial boilers, combustion equipment and water treatment plants. Thermax supports their customers through their franchisee – Thermochem Corporation in Bangalore. BioCell has been their loyal customer since many years.

Thermax has just lost an order for 12 units of water treatment equipment from BioCell, to a small unknown player, who has no record of supplying to BioCell. The case states the facts of the order lost and how the sales engineer of Thermochem handled the situation. Various players are subtly arranged in the case and participants will need to examine their roles in the buying decision.

The caselet is useful in explaining the model of industrial buying behavior and Decision Making Unit (DMU), and how this can be useful in communicating the right value of your offering, to the relevant DMU. The caselet helps participants understand how to move from selling a product to selling a solution, in a B2B situation.



Pedagogical Objectives

This caselet can be used in the Business Marketing course in MBA programs and in Executive Education programs. The case is useful in analyzing an industrial buying situation. The key objectives of the case are to:
(i) Apply the industrial buying model to an actual situation
(ii) Differentiate the various members in the Decision Making Unit (DMU)
(iii) Analyze the value proposition for each member of the DMU
(iv) Demonstrate how to shift from product-feature approach to a solution-selling approach

Case Positioning and Setting

The caselet is intended for a Business Marketing class in post-graduate and Executive Education programs for the module of Sales and Distribution. Participants will analyze an industrial buying situation and learn how to develop a sales pitch based on this analysis.

* 4th FLAME International Conference on Research and Teaching Cases, June 21st 2018 & June 22nd 2018



This Case Pack Includes:
- Abstract
- Caselet
- Teaching Note (**ONLY for Academicians)
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