I have been meaning to write about this for a LONG time.

This comment blows my mind, and makes me realize I MUST write about this today!

"the "gift bags" are not free, the hospital is charged shipping and handling. The s &h makes up for the cost of the bags. Formula is also not free pay S&H also. Think about it if you were a money making company, would you give large amount of your product away?"


Wow, if the hospitals are paying for s & h, boy have the formula reps got the hospitals fooled!!!!

This situation makes me think of the old saying "people will only treat you the way you allow them to".

The HOSPITALS hold ALL the power over the formula co's, if only they just used it.

The management of the formula company will look at formula like any other product.  Many of the managers will have been marketing and sales people in other industries with other products, and will analyze and decide their marketing strategies the same way.  They don't know/care about the CODE, etc. or any ethics involved in giving samples to health care workers etc.  What they are doing is the same thing I would have done in the industries I worked in.  They just see it as another product to sell.

Compared to many consumer products, formula sales is quite a challenge.  After all, you've got brand new customers every year, and they will only buy your product for about a year.  Then you have to go find new customers to buy your product.  The customers know practically nothing, and care nothing about your product until they need it.  So you can't sell to them much before they give birth, certainly not before they are pregnant.  You can't increase sales by getting them to use more (babies will only eat so much).  You can't increase sales by getting them to use it for other purposes (coffee creamer???)  All you can do is constantly try to quickly grab onto those new customers, for a year.

And to the customers, the formulas basically look and are all the same.  To the customers, they look technical.  There is no way the average customer can look at the ingrediant list and evaluate which formula might be better than the other.

The more the customer cannot differentiate one product from its competitor, the more vulnerable they will be to rely on an "experts" recommendation.  YOU are the experts.  You, whether you realize it or not, are the sales force for the formula cos.  And you are not even on the payroll!  The formula co's have co-opted the hospitals, doctors, nurses and WIC to be their sales force.  We know that people are likely to just continue using the formula brand they were given in hospital, or in a sample bag.

Those contracts to distribute samples and use their formula as the hospital/WIC choice would be the MOST IMPORTANT thing in their marketing plan.  I know they spend on advertising, and promo items, and samples, and diaper bags, but they will LIVE and DIE by those exclusive distribution contracts.  Not for the $ the contract sale itself may bring (that's why they give the formula free to hospitals anyhow) but the advertising and future sales it will bring as the moms buy the formula all year.

Believe me, if you held out for them to pay s & h, they would.  They would get their reps to deliver it by hand, wrapped in gold foil, if you made them!  Sales reps who lose hospital contracts will soon be unemployed, along with their sales managers.

Sales reps are masters of the bluff and negotiation, and get a rush from what cutting the best deal for their company.
Unfortunately, from my experience in dealing with purchasers from many industries, very often institutional buyers have nowhere near the negotiation skills to match the sales reps.

Sorry for long post and rant.  Hope it was somewhat enlightening.

Janice Reynolds
former sales & marketing rep
(sounds like "former alcoholic" or something, doesn't it?  But perhaps, like alcoholics, once a sales rep, always a sales rep!).



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