AI cries foul at sales tactics

February 27, 1991

Acoustic Imaging was the subject of negative and misleading commentsby competing ultrasound sales representatives earlier this year,according to Daniel E. McNulty, president and CEO of the Phoenixcompany. The competitive jibes began surfacing in January

Acoustic Imaging was the subject of negative and misleading commentsby competing ultrasound sales representatives earlier this year,according to Daniel E. McNulty, president and CEO of the Phoenixcompany. The competitive jibes began surfacing in January afterAI laid off 18 people of a total work force of 375. Most of thereductions involved indirect functions, including marketing (SCAN1/16/91).

AI heard from existing and potential customers that competingsales representatives had been inflating the layoff figures andspeculating about the November suicide of a top AI engineer involvedwith the company's color-flow Doppler development effort, McNultysaid. The executive wrote a letter to CEOs at competing ultrasoundvendors to complain about these activities.

"Some of your sales representatives have greatly exaggeratedthe extent and implications of this restructuring, and have therebydamaged Acoustic Imaging's ability to market our product,"McNulty said in his letter. "In addition, some of your representativeshave taken a personal tragedy and tried to imply erroneously thatit was indirectly related to our color-Doppler project. This tacticis beneath the high standards we know you have. We expect youto stop these destructive actions, and, should they persist, wemay be forced to take legal action."

McNulty has been heartened by the rapid and positive responseto this letter, he told SCAN. "I am actually quite pleased.I think I am getting constructive feedback back from these companies,"he said.

Although the ultrasound vendor did not release its color-flowDoppler product at the 1990 Radiological Society of North Americameeting as initially intended, the revised introduction of coloris on schedule, he said.

AI is developing a color-flow system based on patented maximumentropy method (MEM) technology (SCAN 12/12/90). Physicians willbe shown the MEM color-flow product integrated into the AI 5200ultrasound system beginning in April, he said.

While growth in the ultrasound market softened last year, AIcontinued to sell its system even without color-flow Doppler,McNulty said. The vendor had 17 orders for the unit in Decemberalone, he said.

From the 1988 introduction of the 5200 through January, AIhas had over 300 orders and shipped 280 units, McNulty said.

Ultrasound sales made through Dornier, AI's German parent company,are also on the rise. Dornier handles sales of the AI ultrasoundscanner in Europe and Japan. AI expects to ship as many systemsinternationally this year as it will ship to customers in theU.S., McNulty said.

Dornier, which holds five of the eight seats on AI's boardof directors, has appointed one of those directors, Reinhard Warnking,as a point man for interaction with McNulty.

Warnking, who was at one time an ATL executive in Europe, isalso responsible for building the AI European sales network andcoordinating any new acquisitions Dornier may make in the ultrasoundfield. AI continues to be responsible for its own system design,manufacturing and marketing, McNulty said.

McNulty, meanwhile, expects to hire a senior-level sales andmarketing executive within the next month, he said. This executivewill be responsible for expanding AI's marketing effort once thecolor system is launched later this year.