The role of a GPO is to negotiate favorable contracts with manufacturers through exclusive contracts for the hospitals they represent. GPO's are prevalent in the industry and most full-line hospitals are members of GPO's. In addition, psychiatric hospitals are moving more towards membership with GPO's. The selling to a GPO entails obtaining a large amount of testing, product research, and end-user data. In addition, a low price is key to an acceptance of a bid proposal.
Most agreements have two-year firm prices.
This alternative would require the least amount of sales force, however large amounts of end-user acceptance data will be required. Zif has made initial contact with Tenet and Amerinet, two of the largest GPO's with over 1500 hospital memberships each. The most effective form of selling to psychiatric hospitals is through direct contact with hospital nursing managers, hospital infection control managers, and purchasing managers, thus pulling our product through the channel via end-user demand for our product. In addition, the use of samples and testing is key to decision making. Based on these findings, Zif will pursue strong marketing partnerships for the promotion of the Zif safety syringe.