Furthermore the company should explore, if price sensitivity is as important of a factor as originally thought how price sensitive are the customers? Are there certain segments that are willing to pay more for the high levels of service that Moore Medical offers? If so then these customers need to be segmented down further than by the current six market divisions of physician, podiatrist, EMS, public sector, industrial and reseller. For instance, if some correctional facilities (within the public sector) are willing to pay more for a product then schools (also within the public sector) simply because they have more funding this segment should be sub-segmented and tested. Testing can be a way to obtain this market knowledge from Moore's customers. Sales reps could approach several customers within each segment and sub-segment and emphasize their valued status to the company and at the same time indicate that prices are marginally increasing. Price sensitive customers will baulk at the change but loyal customers will acknowledge the high levels of service that they currently receive and continue their patronage. In order to find out why past customers left it would be beneficial for Moore to attempt to attract them back with low prices to see if prices were in fact the main reason for their departure. If the customer is not swayed back there is a very good chance that they are either getting better service elsewhere or had a problem along the way with Moore's products and thus are not interested in starting the relationship back up. This knowledge would be key to Moore Medical as it seems that speculation is all they have as to why penetration rates and shares of wallet were dropping. Additionally, this analysis could turn up a segment, similar to the pharmaceutical market, which is not profitable and should be dropped in order for the company to become profitable once again.…
