Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e- Implementing and
Controlling Marketing
Plans: Evolution and
Revolution
Text © The McGraw−Hill
Companies, 2002place
price
promotion
product
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ct
received but were producingslim profit margins. So man-
agement asked employees
throughout the company to
make suggestions on ways to
improve how the firm wasimplementing its strategy.
They came up with a variety of
suggestions.
For example, Allegiance
carries over 100,000 products.Some it manufactures, but it
also sells products produced
by thousands of other suppli-
ers. It seemed that this variety
was what hospitals needed.Yet many of the employee
concerns were related to the
massive assortment of goods.
Moreover, when marketing
managers did a careful analy-sis of sales by region andproduct line they found that
the company’s profitable level
of sales was masking a prob-
lem: 57 percent of the
products accounted for just2 percent of sales. Further
analysis showed that these
same products accounted for
a larger than average share of
the total costs. While theywere waiting to be ordered,
they were sitting in ware-
houses all over the country,
running up storing costs. By
analyzing sales within productcategories, marketing man-
agers were able to see where
there was duplication and
what they could drop. After all,
they probably didn’t need togive hospitals a choice among47 different types of bedpans.
Then they worked to make
distribution of the products
they kept more efficient.
Products that hospitalsorder frequently—popular
styles of gloves, caps, nee-
dles, and sutures—are
stocked in the 68 regional
distribution centers close tocustomers. Items that hospi-
tals order somewhat less
frequently—like odd sizes of
surgical gloves—are shipped
nationwide from a single distri-bution center in Illinois. The
changes allowed the firm to
cut out 30 local warehouses
and still offer hospitals a
just-in-time delivery program