Agilent Technologies

A Report on

B2B Marketing Strategies And Overview of

Prepared by

Anshuman Sharma (08PG 289) Ashwin Ravi (08PG 293) Avinash M.N. (08PG 295) Nishant Mahajan (08PG 319) Rajiv Rajagopal (08PG 338) Vignesh V (08PG 281)

Under the Guidance of Prof. V. Sekhar

Bangalore

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TABLE OF CONTENTS Page No. Company Overview

3

Agilent’s Core Competencies

7

Agilent’s Business Ooverview

9

Agilent’s LSCA Market

13

Agilent’s Marketing Channels

17

Agilent’s Pricing Strategies

20

Agilent’s Human Resource Policies

22

Agilent’s Marketing Strategies

26

Agilent’s Sources of Suitable Competitive Advantage

31

References

33

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Chapter I

Company Overview

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Agilent is the world’s premier measurement company & a technology leader in communications, electronics, life sciences and chemical analysis exclusively focused on measurement operates in electronic and bio-analytical measurement instruments. Agilent is known for its premium quality & innovative measurement solutions enabling the customers and partners to deliver the products and services that make a measurable difference in the lives of people everywhere. Agilent holds many product and market leadership including being first worldwide in overall test and measurement products, gas chromatographs and liquid chromatography/mass spectrometry & is a leading test and measurement equipment supplier to the telecommunications industry. Agilent Technologies originally with Hewlett-Packard, as part of a corporate realignment separated from in the year 1999 creating two different companies. Agilent continues to support the values that made HP’s company a success: dedication to innovation; trust, respect and teamwork; and uncompromising integrity, speed, focus and accountability to meet customer needs and to create a culture of performance that draws on the full range of people’s skills and aspirations. Agilent had net revenue of $5.8 billion in fiscal year 2008 more than half of which was generated from outside the United States. Agilent maintains facilities in about 30 countries, with worldwide headquarters in Santa Clara, Calif. Its global presence offers a distinct competitive advantage, with R&D, manufacturing, sales and support capabilities serving customers around the world. Agilent Technologies has acquired players like SSI, Colloidal Dynamics, TILL Photonics and many more has made Agilent a big player in the analytical market and still is continuously growing. Agilent's electronic measurement business provides standard and customized electronic measurement instruments and systems, monitoring, management and optimization tools 4

for communications networks and services, software design tools and related services that are used in the design, development, manufacture, installation, deployment and operation of electronics equipment and communications networks and services One of the Agilent Technologies' major fields of focus is Life Sciences and Chemical Analysis. Agilent's Life Sciences and Chemical Analysis (LSCA) group is a world leading provider of instrumentation, supplies, software and services to life science and chemical analysis markets which in financial year 2005 accounted for approximately 40% and 60% of LSCA's $1.42 billion in revenue, globally. As a leading manufacturer of advanced products and instruments in the areas of gas and liquid chromatography, mass spectrometry, network data systems, gene expression analysis, bio-informatics and laboratory-on-a-chip technology, Agilent is able to provide comprehensive solutions for nucleic acid analysis, gene expression analysis, genotyping, protein and peptide analysis, drug discovery, drug development, and drug manufacturing. Agilent’s life sciences and chemical analysis business is comprised of three entities: •

The Life Sciences Solutions Unit (LSSU) provides a comprehensive set of tools and solutions for genomics, proteomics, metabolomics, and drug discovery-developmentmanufacturing which has standardized the way researchers collect, purify and quantitate and produce DNA, RNA, proteins, and metabolites.

•

The Materials Sciences Solutions Unit (MSSU) focus is to develop a microscopy and optical spectroscopy business for Agilent that can be leveraged into the electronics, materials testing, life sciences and chemical analysis markets.

•

The Chemical Analysis Solutions Unit (CASU) provides a range of traditional chemical analysis solutions such as gas chromatography and mass spectrometry solutions to existing customers in the chemical, environmental, hydrocarbon processing, semiconductor, food and forensic industries, and homeland security

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The Life Sciences business also called as LSSU business targets•

Pharmaceutical Companies

•

Biotechnology Companies

•

Academic and Government Laboratories

•

Contract Research Organizations and Contract Marketing Organization Whereas for the chemical analysis business, Agilent focuses on the following markets:

•

Petrochemical

•

Environmental

•

Food Safety Forensics

•

Bioagriculture

•

Homeland Security

Agilent India Agilent Technologies in the year 2001 established an IT enabled, captive services organization in India supporting the global business operations and is based in Gurgaon. Agilent currently has offices in Gurgaon, Delhi, Bangalore, Mumbai, Chennai,

Hyderabad,

Ahmedabad

and

Chandigarh.

Agilent

India

employs

approximately 1800 professionals in Marketing, Sales and Customer Support, R&D, Engineering Services and Support and Transaction processing. It is the first IT-enabled services organisation of the company to support the global operations of the company. Being a 100% Export Oriented Unit, it allows Agilent to increase its presence in India and also leverage the high-quality and cost-effective software and transaction processing talent available in the country. Quality at Agilent India emphasizes on process improvements, innovation, Customer satisfaction and Loyalty. All these initiatives are driven through multiple platforms like Ideas to Innovate (i2i), Network to innovate (n2i) forum, execution of cross functional

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Lean Sigma projects and execution of customer loyalty programs etc. It also encourages employee development by delivering specific Lean and Six Sigma trainings. Agilent has a customer support centre in Bangalore. The Test and Measurement customer support centre located in Bangalore holds an ISO 9002 certification and is an NABL accredited Calibration Centre in India. Agilent has a research and development (R&D) centre in Bangalore housing 140 staff, its eight facilities outside the US, which besides showcasing its complete life science related technology offerings, serves as a training and demo centre for customers in India. The company currently has offices in seven metros and new offices are planned in Goa and Pune in the next six to eight months. Company’s 10-acre greenfield campus at Manesar, being developed at an outlay of $35 million (approximately Rs 165 crore), is nearing completion and would be fully operational by this year end. The campus, a centre of excellence for life sciences will employ 1,500 employees, catering to Agilent’s captive operations.

Agilent’s Core Competencies •

Agilent believes in serving premium quality products to the customer that are innovative to leave the modern technology demand behind

•

The Agilent measurement solution products carry modern design, ease in operations and are extremely rugged having a long working life

•

Agilent operates with a dedicated service team division having Agilent focusing on after sales services and service strategies to maintain good customer relationships which is a demanded quality by any B2B firm in the modern time

•

Agilent has a dedicated R&D team taking care of ever growing technology needs

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•

Agilent is the World leader in Gas Chromatographs & high fidelitysensitivity electronic measurement instrument that tells for almost 90% of gas chromatographs used across the world bearing Agilent logo

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Chapter II

Agilent’s Business Overview

9

Agilent Technologies operate in two divisions having separate products, different markets, and completely different marketing and business strategies viz. Electronic measurement business handled by the Electronic Measurement Group Division (EMG) and the Bio-Analytical measurement business handled by Life Sciences And Chemical Analysis Division (LSCA) which has further divisions handling life sciences business (LSSU) and chemical analysis business (CASU).

Agilent Technologies

Electronic Measurement Business (EMG)

Bio-Analytical Measurement Business (LSCA)

Life Science Solution Unit (LSSU)

Chemical Analysis Solution Unit (CASU)

Agilent’s Business Divisions

Electronic Measurement Business The electronic measurement business handles the markets includes organisations requiring communications testing and general purpose testing for various instruments, electronic

equipments,

communication

infrastructure,

internet

technology

infrastructure, mobile communication instruments In communications test, Agilent sells products and services for the following types of networks and systems: •

Fiber Optics Networks

•

Transport Networks

•

Broadband and Data Networks

•

Wireless Communications

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•

Microwave Networks.

•

Solutions to enable network, service and customer assurance for network operators.

For General purpose test the Agilent products include: •

General Purpose Instruments

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Modular Instruments and Test Software

•

Digital Design Products

•

Parametric Test Products

•

High Frequency Electronic Design Tools

•

Electronics Manufacturing Test Equipment

•

Thin-film Transistor Array Test Equipment

Bio-Analytical Measurement Business Agilent’s bio-analytical measurement business focuses on life sciences and chemical analysis. Within life sciences, Agilent’s markets include: •

Pharmaceutical Companies

•

Biotechnology Companies

•

Academic and Government Laboratories

•

Contract Research Organizations and Contract Marketing Organization

Within chemical analysis, Agilent focuses on the following markets: •

Petrochemical

•

Environmental

•

Food Safety

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•

Forensics

•

Bioagriculture

•

Homeland Security

The key product categories for the bio-analytical measurements business include: •

Laboratory Informatics and data management solutions

•

Gas Chromatography

•

Liquid Chromatography

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Mass Spectrometry

•

Microarrays

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Microfluidics

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ICP-MS

•

Reagents

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Capillary electrophoresis

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Lab automation

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Atomic-Force Microscopy

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Scanning Probe Microscopy

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Particle analyzers

•

Consumables and Services

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Chapter III

Agilent’s LSCA Market

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LSCA Market in India The modern organisations with modern labs needed commercial and high fidelity hardware systems and software solutions which were specially developed for based on the organisation’s lab management requirements such as pharma industry and thus needed a lot of customisation and modification to meet the specific needs, For E.g. a very specific format for reporting requirements. Agilent’s solutions are successful in increasing the processing speed; compatibility with third-party software and the reduction in resource, workstation and other hardware costs.

India represents a different kind of market opportunity when compared to the western markets because India is growing and moving very fast in terms of technology with a growth rate of 7-10 percent a year for the LI market. India has a huge potential pharma market growing primarily due to the expansion of the western pharma companies' efforts in outsourcing some parts of the drug discovery process making here. India serve to have a huge LI market focused more on petrochemicals in comparison to life sciences when looked at the size, growing purchase potential and requirements. Even during recession, India and China are the only two life sciences markets that are potential to continue growing for the next two years. The Indian pharma sector as a potential target market for LI products has been very small, but it has been growing at 25-30 percent per year. Though affected by recession, still the market shows positive signs of growth. More and more generics and bio products will develop as technology grows and a need for more outsourcing might happen, which will lead to the surge in new CROs (Clinical Research Organisations). Stem cell research, a current hot topic around the world, will also see an increase in activity, which will likely lead to these firms seeking support from skilled scientists in India. Since India’s joining the WTO in 2005, the Indian Pharmaceutical sector has grown vary rapidly and alongside has arisen a major concern about the regulatory requirements from both market access and company liability perspective. Thus big 14

growth potential for Agilent is expected in pharmaceuticals as well as in other regulated industry areas like chemicals etc.

Indian Pharmaceutical Players

Sun Pharma Lupin Labs Zydus Cadila Aventis IPCA Labs Torrent Pharma Novartis Dishman Pharma Wockhardt Pfizer Glenmark Pharma Serum Institute of India Nicholas Piramal Ajanta Pharma Cipla Sandoz Abott Johnson & Johnson Dow Chemicals

Ranbaxy Teva Pharmaceuticals Jubilant Organosys Fresenius Kebi Vita Life Panacea Biotech

Biocon Glaxo Smith Kline Aurobindo Pharma Astra Zeneca Dr. Reddy’s Advinus

Figure 11: Indian Pharmaceutical Market Players

With the major pharma markets existing in West and South region and north pharma growing very rapidly, there is a huge opportunity in the Indian market for laboratory hardware and software solutions from Agilent.

Various important accounts for Agilent’s LSCA division include: •

Teva Pharmaceuticals

•

Panacea biotech

•

Ranbaxy 15

•

Zydus Cadilla

•

Wochhardt

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Cipla

•

Johnson and Johnson

•

Biocon

•

Dow Chemicals

•

Glaxo Smith Kline

•

Dr. Reddy’s

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Chapter IV

Agilent’s Marketing Channels

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Agilent uses the following as potential distribution channels for its product line unde LSCA division: •

Direct sales

•

Distributors

•

Resellers

•

Manufacturer’s Representatives

•

Telesales

•

Electronic commerce

Direct sales is accomplished method of utilizing the communication channel of personal selling whereby various direct interaction are made between the customer representative and the Agilent account manager out of clear pull-demand as being generated by the customer as well as pushing the new product to the customer done during the interaction by the account manager. Direct sales call for efficient interaction and customer relationship maintenance as being done by Agilent for not only the end user but also the buying centre individuals. Distributors are effective channels used by Agilent in the areas not covered by major accounts thus distributors perform the direct function of the account managers. This channeling strategy is followed in remote areas like Kerela, Madhya Pradesh which are not covered by the territory account managers and the business is handled by the distributors only and in exchange, distributors are provided good margin by the organization. Resellers are used by Agilent to market the products to direct customers usually the small pharma and biotech players that are not covered by the account managers and distributors. Such customers are smaller in size and thus are in direct contact with Agilent resellers that market the products for Agilent. Manufacturer’s representatives are the end users in the customer’s organization that work towards marketing the product inside the organization. They are not a part of 18

the buying centre yet have an indirect affect on the purchase made by the purchase department. These are generally the end users of the products working in the laboratory that don’t have the authority to affect the purchase decision but send their inclination towards Agilent up the hierarchy thus aiding Agilent’s marketing. These people are managed through effective customer relationship maintenance and other non monetary benefits. Telesales is another strategy used by Agilent for marketing its products whereby cold calls are made by the assistant sales executives to ask for potential requirements by any unexplored market or market players and further the brand equity is used to effectively market its products to the consumers. e-Commerce is another effective marketing channel including direct mails, resourceful website having direct response applications, customer query mail reply centre etc.

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Chapter V

Agilent’s Pricing Strategies

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Agilent follows the premier pricing strategy for the Agilent brand products as the products are very high in quality and lot of efforts and resources are spent in R&D of the products thus giving them a premium value. Product price quoting is also decided by global prices operating in international markets by Agilent which fluctuate every month depending on various factors and is thus quoted in dollars for the products are completely imported from China and United States. These products are strategically priced without import tax which is levied and included in the final quote. Prices are later manipulated so that after inclusion of tax, the product remains competitive in Indian LSCA market which faces very strong competition on price fronts. Also various negotiation circumstances including various scenarios demanding competition breaking and various cases covering the need for maintaining good customer relationship thus demanding prices to be discounted which through direct selling and negotiation talks are decided.

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Chapter VI

Agilent’s Human Resource

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Agilent continues to support the values that made its parent company HP, a success. These values form the core of Agilent’s strong and award winning HR strategies 1. Dedication to innovation 2. Trust, respect and teamwork 3. Uncompromising integrity, speed, focus and accountability to meet customer needs 4. To create a culture of performance that draws on the full range of people’s skills and aspirations. Agilent’s most important HR policies include: •

Electronic job posting on internal server whereby job postings are automatically forwarded to the suitable applicants internally

•

Harassment-free work environment having a separate body working towards the same

•

Anti drug policies focussing on timely addiction diagnostics for employees

•

Non-discrimination policy towards race, cast, creed, or language

•

Employee network group guidelines that allow a complete social network of the employees online to work effectively and build coordination skills

•

Open Door Policy whereby An open door policy guarantees that employees can go above their boss to seek assistance from the boss's supervisor. An open door policy provides Agilent employee access to any manager or supervisor including even the CEO

•

Education Assistance Program where Agilent provides performing employees to complete their education that is financed by Agilent specially for Management Education

•

Employee and Family Assistance Program (EFAP) whereby Agilent manages the counselling and health related cover for the Agilent employees and their family members 23

Some Shared HR Practices Followed By Agilent Include: •

Open communications within hierarchy where the flat hierarchy is explained and every employee has the complete right to contribute to the company’s growth in his/her way

•

Share in company's success whereby ever performing employee aiding to company’s success is treated likewise in monetary or non monetary terms.

•

Provide development opportunities are provided whereby various training workshops internationally and locally are organised to give the employees enough exposure alongside other personality building activities conducted like adventure trips etc.

•

Competitive pay practices are provided beyond the market average thus motivating the employees in an effective way

•

Flexible work hours are present where every employee has the right to design his/her work schedule and work according to it. Even out of office and work from home benefits are available

•

Creative, energetic and innovative work environment is present in the company

•

Mother’s Room is a benefit provided for the new mothers and a Quiet Room available for employee’s time alone to meditate.

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Agilent Technologies is a fortune 500 company & has been honoured with awards like: •

Best Employer by the Business World-Great Places to Work Study in 2007

•

One of the Top Ten Best Employers in India by the Economic Times-Hewitt Study on 13th April 2007.

•

One of the Top 10 Best Employers in India by the Business Today – Mercer Study, 2006

•

One of the Top 20 Best Employers by the CNBC-Hewitt study in 2004

•

HR Excellence Award conferred by Hindustan Times and NDTV for HR best practices.

•

One of the Top 10 in the 2001-2002 Hewitt-Business Today Best Employer survey.

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Chapter VII

Agilent’s Marketing Strategies

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Where Does Agilent Go Wrong? Marketing Lab analytical instruments is a hard game with fierce competition eating away market share every second and thus it becomes extremely important to tap on every single opportunity available to make a mark in the niche market being operated on.

Agilent carries very strong brand equity as compared to its competitors because of being in the premium quality and precision analytical instruments market, catering to the increasing needs of the modern labs. The brand equity is so strong that loyalty is very easy to develop towards the hardwares among the end users.

The saying goes- “Whoever strikes first stays!” Agilent entered the software market very late for the Client Server networking, never realizing the potential which the competitor Waters capitalized upon and set up networks in all the major LSCA market players in the north region and got them loyal. Agilent when entered the market with its competitive product EZChrom under its portfolio, the software was successful but not to the extent Water’s Empower software in direct competition was. The reason behind this was the huge spending these LSCA players made into Waters Client Server Networking and also because of the excellence of the software, none of the key players wanted to shift. Thus, even bringing EZChrom in the market could not gather enough market share for Agilent in the Client Server networking business.

Core Marketing Strategy for Agilent’s Products Selling new systems would be a strategy to drive Agilent’s business. The requirements from an existing customer base are always different from requirements of prospective customers. Prospective customers tend to focus on the latest technology 27

and new types of functionality, whereas existing customers tend to focus more on requirements to improve the depth of existing functionality and practical features to aid the day to day running of the LI. Channeling of the development resources is very important in order to remain competitive and effectively support their existing customers. Focus should be to try to generate the majority of revenue from software license sales to new customers, followed by implementation service revenue, support and maintenance fees. For any LI part system set up in a laboratory, the initial cost estimates for upgrading LI products can appear high and can often be the trigger for evaluating replacing the LI with a new (generation) product. Furthermore, end-users are frequently exposed to competitive LI vendor marketing materials and may well push hard to replace the already existing LI solutions with a new system. Thus it becomes important to make the customer understand and evaluate the situation and try keeping him loyal.

Possible Strategies to Regain Market Share Agilent currently faces competition in the hardware market in many segments from vendors such as Waters, Dionex, Shimadzu, Perkin Elmer, and Thermo etc. These vendors are bringing new and new innovation in the market to remain competitive and Agilent is also working hard to remain in the lead.

Situations for sales become even difficult in organisations who are loyal to competition especially the competition software solutions with customers preferring hardwares from the competition whose LI solution they are using to keep the cost down.

In big player laboratpries like those of Teva Pharmaceuticals where competition was able to set up the client server networking they exercise pressurization for their hardwares by using even unethical marketing. The competition on instances ahs even set up very high costs for user licenses to control Agilent instruments that the overall 28

cost of purchasing the instrument and license becomes very high and customer in turn prefers the competition. Such a problem has even led to monopolization of competition in the lab of the customer.

Thus it becomes very difficult to compete in such environment with no scope for sales left. Thus it becomes important to realize the potential of such organisation beforehand and with long term maintenance of relationship, it could be possible to tap on the opportunities as they arrive.

Thus it becomes crucial‘To Sell Hardware, Just Sell the Software Solution First!!!’ Thus it becomes important for Agilent marketing to focus and consider LI solutions as a priority to improve future sales.

Even in the new market, setting the pace and looking for new market for product expansion instead of just remaining aggressively competitive has always been a marketer’s key tool bringing profit producer and improving market share for the organisation. Agilent has lacked in realizing such opportunities where small enterprises with huge potential including the drug manufacturers, formulation makers etc having modern labs and thus facing a need for modern analysis hardware and most importantly software solutions to satisfy compliance alongside improving the efficiency in the labs and improving lab management as a whole. These are not focused on, which later gets taken by competition. There is thus a strong need of setting up the customer base in these accounts and thus be the first to cater to the needs of these accounts making them loyal with hardware and software solutions in the future thus growing with the customers as a whole, maintaining relationships as time progresses.

There is always a need to keep searching for opportunities to remain competitive in the market and thus there is a strong need for keep looking for new markets and accounts 29

that have coming application requiring lab management or database management solutions thus becoming overall effective in the market. Thus Agilent needs to work upon tapping such opportunities especially in various new ventures and organisations who have never been an Agilent customer like Panacea Biotec and others.

Marketing through support is important as support is always in contact with the end users who support majorly in decision making for hardware and software solutions. This calls for efficient marketing for this requires efficient Internal Marketing Communication about the software solution so that not only the marketing and sales but even the support team which is directly in touch with the end users, plays a major role in the business and thus could help improve the situation.

Customer grievances related to LI solutions must be dealt with priority. Also efficient training and timely updates about the features could be provided to end users to make them loyal towards Agilent LI to help in any future client server updating when the time comes to tap on the opportunity.

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Chapter VIII

Agilent’s Sources of Sustainable Competitive Advantage

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Agilent Laboratories is Agilent’s central research organization based in Santa Clara, California, along with additional locations in Beijing, China; Leuven, Belgium; and South Queensferry, Scotland. Agilent Laboratories works to create competitive advantage through high-impact technology, driving market leadership and growth in Agilent’s core businesses and expanding Agilent’s measurement footprint into adjacent markets.

Agilent

Laboratories is able to identify and enable synergies across Agilent’s businesses to create competitive differentiation and compelling customer value. Agilent spends largely on R&D currently utilises half of the revenue generated worldwide for R&D purposes thus bringing out promising and innovative solutions.

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References

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REFERENCES WEBSITES •

http://be.agilent.com (Agilent Internal Server)

•

http://www.expresspharmaonline.com/20090415/management02.shtml

•

http://www.crisil.com

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http://www.arcweb.com/

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http://biospectrumindia.ciol.com/content/CoverStory/109031010.asp

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http://www.controlglobal.com/industrynews/2009/042.html

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http://www.limsfinder.com/BlogDetail.aspx?id=3281_0_2_0_C

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http://www.scientific-computing.com/news/news_story.php?news_id=561

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http://www.laboratorytalk.com/news/agi/agi532.html

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http://www.laboratorytalk.com/news/agi/agi449.html

•

http://www.scientificcomputing.com/laboratory-information-management-

082506.aspx •

http://chromatographyonline.findanalytichem.com/lcgc/Agilent-OpenLAB-ECM-

puts-you-in-control/ArticleStandard/Article/detail/579062

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