Internet Marketing Discussion


Read case study and highlight facts that are important. Then, download the Word file, answer the questions

CASE 2-8 Ultrasound Machines, India, China, and a
Skewed Sex Ratio
General Electric Co. and other companies have sold so many ultrasound machines in India that tests are now available in small towns
like Indergarh, where there is no drinking water, electricity is infrequent, and roads turn to mud after a March rain shower. A scan
typically costs $8, or a week’s wages.
GE has waded into India’s market as the country grapples with
a difficult social issue: the abortion of female fetuses by families
who want boys. Campaigners against the practice and some government officials are linking the country’s widely reported skewed
sex ratio with the spread of ultrasound machines. That’s putting
GE, the market leader in India, under the spotlight. It faces legal
hurdles, government scrutiny, and thorny business problems in one
of the world’s fastest-growing economies.
“Ultrasound is the main reason the sex ratio is coming down,”
says Kalpana Bhavre, who is in charge of women and child welfare
for the Datia district government, which includes Indergarh. Having a daughter often is viewed as incurring a lifetime of debt for
parents because of the dowry payment at marriage. Compared with
that, the cost of an ultrasound “is nothing,” she says.
For more than a decade, the Indian government has tried to
stop ultrasound technology from being used as a tool to determine
gender. The devices use sound waves to produce images of fetuses
or internal organs for a range of diagnostic purposes. India has
passed laws forbidding doctors from disclosing the sex of fetuses,
required official registrations of clinics, and stiffened punishments
for offenders. Nevertheless, some estimate that hundreds of thousands of girl fetuses are aborted each year.
GE, by far the largest seller of ultrasound machines in India
through a joint venture with the Indian outsourcing giant Wipro
Ltd., introduced its own safeguards, even though that means forsaking sales. “We stress emphatically that the machines aren’t to be
used for sex determination,” says V. Raja, chief executive of GE
Healthcare South Asia. “This is not the root cause of female feticide in India.”
But the efforts have failed to stop the problem, as a growing
economy has made the scans affordable to more people. The
skewed sex ratio is an example of how India’s strong economy has,
in unpredictable ways, exacerbated some nagging social problems,
such as the traditional preference for boys. Some activists are accusing GE of not doing enough to prevent unlawful use of its machines
to boost sales.
“There is a demand for a boy that’s been completely exploited
by multinationals,” says Puneet Bedi, a New Delhi obstetrician. He
says GE and others market the machines as an essential pregnancy
tool, though the scans often aren’t necessary for mothers in low-risk
Prosecutors in the city of Hyderabad brought a criminal case
against the GE venture with Wipro, as well as Erbis Engineering
Co., the medical-equipment distributor in India for Japan’s Toshiba
Corp. In the suits, the district government alleged that the companies knowingly supplied ultrasound machines to clinics that were
not registered with the government and were illegally performing
sex-selection tests. The penalty is up to three months in prison and
a fine of 1,000 rupees.
Both companies deny wrongdoing and say they comply with
Indian laws. A GE spokesman said its legal team would be looking
into the charges.
Vivek Paul, who helped build the early ultrasound business in
India, first as a senior executive at GE and then at Wipro, says
blame should be pinned on unethical doctors, not the machine’s
suppliers. “If someone drives a car through a crowded market and
kills people, do you blame the car maker?” says Paul, who was
Wipro’s chief executive before he left the company in 2005. Paul
is now a managing director at private equity specialists TPG Inc.,
formerly known as Texas Pacific Group.
India has been a critical market to GE. Its outsourcing operations have helped the Fairfield, Connecticut, giant cut costs. The
country also is a growing market for GE’s heavy equipment and
other products. The company won’t disclose its ultrasound sales,
but Wipro GE’s overall sales in India, which includes ultrasounds
and other diagnostic equipment, reached about $250 million in
2006, up from $30 million in 1995.
Annual ultrasound sales in India from all vendors also reached
$77 million in 2007, up about 10 percent from the year before,
according to an estimate from consulting firm Frost & Sullivan,
which describes GE as the clear market leader. Other vendors
include Siemens AG, Philips Electronics NV, and Mindray International Medical Ltd., a new Chinese entrant for India’s pricesensitive customers.
India has long struggled with an inordinate number of male
births, and female infanticide—the killing of newborn baby girls—
remains a problem. The abortion of female fetuses is a more
recent trend, but unless “urgent action is taken,” it’s poised to
escalate as the use of ultrasound services expands, the United
Nations Children’s Fund said in a report. India’s “alarming
decline in the child sex ratio” is likely to exacerbate child marriage, trafficking of women for prostitution, and other problems,
the report said. As discussed in Chapters 4 and 5, recent census
figures show sex ratios still favoring boys to girls by a wide margin in India.  
GE sells about three times as many ultrasound machines in
China as in India. In January, the Chinese government pledged to
improve the gender balance, including tighter monitoring of ultrasounds. Some experts predict China will be more effective than
India in enforcing its rules, given its success at other populationcontrol measures.
Boys in India are viewed as wealth earners during life and lighters of one’s funeral pyre at death. India’s National Family Health
Survey showed that 90 percent of parents with two sons didn’t
want any more children. Of those with two daughters, 38 percent
wanted to try again. Although there are restrictions on abortions in
this Hindu-majority nation, the rules offer enough leeway for most
women to get around them.
GE took the lead in selling ultrasounds in the early 1990s soon
after it began manufacturing the devices in India. It tapped Wipro’s
extensive distribution and service network to deliver its products to
about 80 percent of its customers. For more remote locations and
lower-end machines, it used sales agents.
cat12354_case2_CS2-1-CS2-29.indd 25
4/3/19 11:05 AM
Part 6 Supplementary Material
The company also teamed with banks to help doctors finance
the purchase of their machines. GE now sells about 15 different
models, ranging from machines costing $100,000 that offer sophisticated color images to basic black-and-white scanners that retail
for about $7,500.
To boost sales, GE has targeted small-town doctors. The company has kept prices down by refurbishing old equipment and marketing laptop machines to doctors who travel frequently, including
to rural areas. GE also offered discounts to buyers inclined to boast
about their new gadgets, according to a former GE employee. “Strategically, we focused on those customers who had big mouths,” said
Manish Vora, who then sold ultrasounds in the western Indian state
of Gujarat for the Wipro-GE joint venture.
Without discussing specific sales tactics, Raja, of GE Healthcare South Asia, acknowledges the company is “aggressive” in pursuing its goals. But he points out that ultrasound machines have
broad benefits and make childbirth safer. As the machines become
more available, women can avoid making long trips into cities
where healthcare typically is more expensive, he says.
Indian authorities have tried to regulate sales. In 1994, the government outlawed sex selection and empowered Indian authorities
to search clinics and seize anything that aided sex selection. Today
any clinic that has an ultrasound machine must register with the
local government and provide an affidavit that it will not conduct
sex selection. To date, more than 30,000 ultrasound clinics have
been registered in India.
GE has taken a number of steps to ensure customers comply
with the law. It has educated its sales force about the regulatory
regime, demanded its own affidavits from customers that they will
not use the machines for sex selection, and followed up with periodic audits, say executives. They note that in 2004, the first full
year it began implementing these new measures, GE’s sales in India
shrank by about 10 percent from the year before. The sales decline
in the low-end segment, for black-and-white ultrasound machines,
was especially sharp, executives say. Only in 2006 did GE return
to the sales level it had reached before the regulations were implemented, according to Raja.
Complying with Indian law is often tricky. GE cannot tell if
doctors sell machines to others who fail to register them. Different
states interpret registration rules differently. GE also is under close
scrutiny by activists battling the illegal abortion of female fetuses.
Sabu George, a 48-year-old activist who holds degrees from Johns
Hopkins and Cornell universities, criss-crosses the country to spot
illegal clinics.
The criminal case in Hyderabad against Wipro-GE, a company
representative, three doctors, and an ultrasound technician followed an inspection that found one clinic could not produce proper
registration and had not kept complete records for two years. A
team of inspectors seized an ultrasound supplied by Wipro-GE.
The inspection team’s report said it suspected the clinic was using
the machines for illegal sex determination.
The owner, Sarawathi Devi, acknowledged in an interview that her
clinic, Rite Diagnostics, was not officially registered at the time of the
inspection. She said the ultrasound machine was owned by a “freelance” radiologist who had obtained proper documentation for the
Wipro-GE machine but was not there when the inspectors had arrived.
She denied the clinic has conducted sex determination tests. Later, Dr.
Devi’s records show, she registered the clinic with the government and
bought a Wipro-GE machine, a sale the company confirms.
The court case was part of a wider dragnet spearheaded by
Hyderabad’s top civil servant, District Magistrate Arvind Kumar.
cat12354_case2_CS2-1-CS2-29.indd 26
During an audit last year, Kumar demanded paperwork for 389
local scan centers. Only 16 percent could furnish complete address
information for its patients, making it almost impossible to track
women to check if they had abortions following their scans. Kumar
ordered the seizure of almost one-third of the ultrasound machines
in the district due to registration and paperwork problems. A suit
also was lodged against Erbis, the Toshiba dealer.
GE’s Raja says that, in general, if there’s any doubt about the
customer’s intent to comply with India’s laws, it doesn’t make the
sale. “There is no winking or blinking,” he says.
A Wipro-GE representative is scheduled to appear at the Hyderabad court hearing. An Erbis spokesman said he was unaware of
the case in Hyderabad. A court date for Erbis had not been set.
A visit to the clinic in Indergarh, a town surrounded by fields
of tawny wheat, shows the challenges GE faces keeping tabs on
its machines. Inside the clinic, a dozen women wrapped in saris
awaited tests on GE’s Logiq 100 ultrasound machine. The line
snaked along wooden benches and down into a darkened basement.
On the wall, scrawled in white paint, was the message: “We don’t
do sex selection.”
Manish Gupta, a 34-year-old doctor, said he drives two hours
each way every week to Indergarh from much larger Jhansi City,
where there are dozens of competing ultrasound clinics. He said
even when offered bribes, he refuses to disclose the sex of the fetus.
“I’m just against that,” Dr. Gupta said.
But he is not complying with Indian law. Although the law
requires that clinics display their registration certificate in a conspicuous place, Dr. Gupta’s was nowhere to be seen. When Dr.
George, the social activist, asked for the registration, he was shown
a different document, an application. But the application was for a
different clinic: the Sakshi X-ray center. Dr. Gupta said the proper
document wasn’t with him, adding: “I must have forgotten it at
Asked by The Wall Street Journal about the clinic, the local chief
magistrate of Datia district called for Dr. Gupta’s dossier later in
the day. When a local official arrived, “Sakshi X-Ray center” had
been crossed out on the application. In blue pen was written the
correct name, “Sheetal Nagar,” the part of Indergarh where the
clinic is located.
It’s not clear how Dr. Gupta procured the GE machine. Dr.
Gupta said he bought it from a GE company representative, but
he declined to show documents of ownership. GE says it does not
comment on individual customers.
Like the rest of India, the Datia district government has taken a
number of steps to try to boost the number of girls in the district.
For girls of poor families, the local government provides a place
to live, free school uniforms, and books. When they enter ninth
grade, the government buys bicycles for them. Yet the low ratio of
girls born had not budged much over the past decade, according to
Bhavre, the district government official.
Ultimately, says Raja, head of GE Healthcare in South Asia, it’s
the job of the government, not companies, to change the prevailing
preference for boys. “What’s really needed is a change in mind-sets.
A lot of education has to happen and the government has to do it,”
he says.
India’s Ministry of Health, which is now pursuing 422 different
cases against doctors accused of using ultrasounds for sex selection, agrees. “Mere legislation is not enough to deal with this problem,” the ministry said in a statement. “The situation could change
only when the daughters are not treated as a burden and the sons
as assets.”
4/3/19 11:05 AM
Cases 2 The Cultural Environment of Global Marketing
Most recently, both Siemens and GE have introduced handheld
ultrasound machines, only slightly larger than an iPhone. Initially
they will sell for under $10,000.
Source: Peter Wonacott, “Medical Quandry: India’s Skewed Sex Ratio Puts GE Sales
in Spotlight,” The Wall Street Journal, April 18, 2007, pp. A1, A8. Licensed from Dow
Jones Reprint Services, Document J000000020070418e34i00032; Paul Glader, “GE
Is Latest to Make Handheld Ultrasound,” The Wall Street Journal, February 12, 2010,
What should GE management do in India about this problem, if
anything? In China?
cat12354_case2_CS2-1-CS2-29.indd 27
4/3/19 11:05 AM
Baruch College, Zicklin School of Business
Department of Marketing & International Business
Case Study Assignment – Ultrasound Machines, India, China,
and a Skewed Sex Ratio

Ultrasound – a killing machine in India?
Sting Operators
India’s Skewed Sex Ratio Puts GE Sales in Spotlight
Tracking devices in all ultrasound machines soon
Why many Indians prefer sons over daughters?
Read the case study and review links above. Then do your best to provide answers to
the questions below:
What should GE management including the marketing team do in India about this
problem, if anything?
Baruch College, Zicklin School of Business
Department of Marketing & International Business
Indian police raid illegal ultrasound centres to save unborn girls
What type of digital marketing campaign would you run in India given the
sensitivities around this issue?
What types of websites would you advertise in?
Should the marketing strategy and tactics you proposed in India be the same or
different in China? Please elaborate on your answer.

Purchase answer to see full

Order your essay today and save 15% with the discount code: VACCINE

Order a unique copy of this paper

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
Top Academic Writers Ready to Help
with Your Research Proposal