BioCell – Losing a Loyal Customer*

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 Corporation (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), 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 million. 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...........

Assignment Questions

I. What are the various product categories in the B2B segment? Discuss about the Purchase Orientation of the product presented in the caselet. What was the Buy Class?
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Exhibit

Exhibit I: Laboratory Glassware

Annexure

Annexure I: Water Filters and Softeners

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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