CASE BRIEF

enParadigms

SalesProTM simulation

SalesPro distribution business briefing document

enParadigm Performance Solutions

 SalesPro simulation case brief | 2

Copyright enParadigm Performance Solutions. All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in

any form or by any means, electronic, mechanical, photocopying, recording or otherwise
without prior permission from enParadigm Performance Solutions.

enParadigm Performance Solutions

A-102, Sagar Tech Plaza A, Saki Naka Junction
Mumbai 400 072
www.enParadigm.com, talktous@enparadigm.com.
 SalesPro simulation case brief | 3

Contents

1. INTRODUCTION 4
a. Chairmans Memo 4
b. CEOs Briefing 4
2. PRODUCT INFORMATION 6
3. GEOGRAPHY INFORMATION 6
4. DISTRIBUTORS 7
5. SCHEMES AND PROMOTIONS 7
6. LOGISTICS AND SUPPLY CHAIN 9

enParadigm Performance Solutions

 SalesPro simulation case brief | 4

Memo
From: Ted Lobo, Group Chairman, Lobo Group of Companies
Subject: Welcome to Lobo Group

Team,

Welcome! You have been handpicked from the industry by Lobo groups recruiters to help
set up Lobo groups new venture. You hold a lot of responsibility on your capable shoulders.

As of today, your company has achieved success in industries as diverse as manufacturing,

infrastructure consulting and financial information services. To build the company of the
future, the board of Lobo group has decided to aggressively pursue emerging technologies,
like the Internet of Things. As a start, we have set up a new company Lobo Tech, and
acquired a company that has developed smart lighting technology. The smart bulb will be
the first product that Lobo Tech will bring to the market. We see the simple light bulb as a
pre cursor to an inevitable technological revolution.

You will be responsible for setting up and managing the sales infrastructure for our smart
lighting products. In many ways, your performance will determine the future of our new
venture.
All the best!

CEOs Briefing
You will be briefed by
Roshan Varma, CEO, Lobo Technologies
Roshan is a serial entrepreneur who has started and built multiple companies, from which
he has had successful exits. His most recent venture, a company that was developing
innovative smart lighting technology, was acquired by Lobo Group, and Roshan was
appointed as the CEO of Lobo Technologies

Its good to meet all of you again. As the Chairman would have mentioned, you have
the responsibility of setting up the sales infrastructure for Lobo Technologies.

The technology for our products was developed by my earlier company which was
acquired by the Lobo Group. The basic technology of our product has its roots in the
Internet of Things, which is a network for physical objects that allow devices like
enParadigm Performance Solutions
 SalesPro simulation case brief | 5
bulbs, refrigerators etc. to exchange data with other connected devices, especially
smartphones.

In the short term of one year, we will be importing our goods from an exclusive
manufacturer in China. Only once we validate the market potential, will we think about
building a manufacturing facility.

I will now give you a brief on our products, our geographies and your responsibilities in
managing the sales infrastructure of our company.

Product Information
Smart lighting is lighting technology that is designed and optimized for energy efficiency. The
system will include high efficiency LED bulbs, sensors and automated controls that make
adjustments based on conditions like occupancy and availability of daylight. Smart lighting
systems will also let you control the lighting from mobile devices, allowing you to set the
brightness, colour, and many other customizable features.

While the idea is not new, it is only recent advances in the technology of the Internet of
Things and efficiencies in manufacturing technology that allow smart lights to be
manufactured at scale at a viable cost.

Lobo Technologies will go to market with 3 different kinds of smart lighting systems, each
with a different level of light output, measured in Lumens.

Lux Pulse Eon

MRP 1000 800 500

Cost 450 400 450

Light Output
1800 1600 1400
(Lumens)
% share of
12% 32 % 56 %
category vol.

enParadigm Performance Solutions

 SalesPro simulation case brief | 5

Geography Information
After extensive market research, we have identified the geographies where we will launch
our product offerings. We will be entering in a phased manner, launching in Dawn in the
first month, followed by Zion in the second month and finally Mordor in the third month.

Dawn Zion

Mordor

Dawn:

This is the first geography that we have entered. This is primarily an urban region and we
forecast healthy demand for all our product categories, including the premium variants.

Zion:

We will be launching in Zion in your first month and you will need to appoint a distributor
here as your first task. This is a semi urban region, so the demand will be muted for the
premium variants.

Mordore:

is primarily a rural region, so the volumes are going to be lower. Also, bulk of the volumes
are going to be coming from our cheapest variant.

enParadigm Performance Solutions

 SalesPro simulation case brief | 5

Distributors
Distributors are critical in our go-to-market plan. It will be your responsibility to finalize trade
parameters in each region. We need to sign on with a quality channel partner, as their level
of capital, infrastructure and market standing will have an impact on our performance.

Since our company is new to the consumer goods space, it will not be easy for us to sign on
high quality distributors. The better terms we offer in favour of the Distributors, the higher
the likelihood of getting an edge over the competition. At the same time, you need to ensure
that the interests of the company are safeguarded.

Typically, Distributors look for certain specific commitments from a company (below). We
have set the maximum limits that we can offer distributors on these parameters. It is up to
you to decide the actual offering within these limits. Once a distributor is selected, you will
have the option of replacing the distributor only at the beginning of every quarter.

Parameter Range

Distributor margin 1% - 5%
Distributor attraction

Retailer margin 1% - 10%

Inventory norms 10 days 30 days

Credit period 0 days 28 days

ATL Spend commitment 0 Lacs 10 Lacs

Offering to the distributor

Schemes & Promotions

In order to boost sales, you can, at your discretion, operate schemes and set targets that
are in line with our business goals. You have a few options at your disposal:

Activation Budgets:
You can choose to have separate activation budgets for promoting individual product
lines in each geography. The allocation can be anything upto Rs One Lakhs

enParadigm Performance Solutions

 SalesPro simulation case brief | 5

Distributor Schemes

By offering schemes to our distributors, we will be able to periodically boost primary sales.
But, distributors will not purchase more than 20% of what they expect to sell. Also, the
distributors will offset the additional quantity purchased with reduced orders in the
following month.

Target based incentives:

These schemes are linked to the targets that we set for our distributors, and are applicable
across all three products. You can offer your distributor incentives if they achieve the
monthly targets across all three products. Keep in mind that the targets have to be realistic
if they are to be achieved.

Price discount:

Price discounts can be offered on individual products to the distributors on the invoice price
at which they purchase goods from the company. You can offer a maximum of 2% discount
on each product over and above the committed margin.

Retailer Schemes

To boost secondary sales in a given month, you can offer quantity discounts and hold
trade meets for retailers. A quantity discount scheme will provide a certain number of free
units for every 10 units that a retailer purchases. Trade meets, when held, are an avenue for
the retailers to engage with the company. A good trade relationship will help the sales of our
products in the market.

ATL Promotions

As we know, it is essential to execute point-of-

Impact

sale (POS) marketing in order to ensure that

the consumer is aware of and purchases our
companys product.

For this, you can utilise your ATL budget, upto a

maximum of Rs. 10 Lacs per month. This will be
used to put up billboards and POS
advertisements. Promotional Expense

enParadigm Performance Solutions

 SalesPro simulation case brief | 5

Market Coverage
A crucial differentiator for success in our business is going to be the availability of our
products to the end customer. If our product is not available in the retail shelves, the
customer will purchase a competitors product.

So, it becomes essential to ensure that we maximize our outlet coverage. You will need to
decide the actual outlet coverage in your geography. However, increasing outlet coverage
comes at a cost. Under our standard agreement, we will be reimbursing 50% of the
distribution costs incurred by the distributor. This is a trade-off that you will have to
manage.

Salesforce:

Some front line sales people have already been hired for you, but you will need to plan the
future salesforce requirements. Their job role is primarily to be in the market and ensure
the availability and visibility of our products in the retail shelves. At the same time, they will
also need to manage relationships with retailers in their specific area.

The front line salesforce will be required to visit every retail outlet that is covered by the
distributor once a month. In addition, you have the option of assigning Premium outlets.
Your salesforce will ensure that they visit these outlets twice in a month.

You will also need to manage the trade off between the outlet coverage and the number of
your frontline salesforce, as this will affect the time they spend at each outlet. To ensure
maximum effectiveness, ensure that your salesforce spends atleast 40 60 minutes per
outlet (including travel time).
Impact on Demand
Impact on demand

Time spent at outlet Outlet coverage

Your sales team will be paid a salary of Rs 50,000 per month. You have the option of hiring
and retrenching your salesforce. Any hiring or retrenchment decision is to be taken one
month in advance. The hiring/retrenchment cost is Rs. 20,000 per person.

enParadigm Performance Solutions

 SalesPro simulation case brief | 5

Supply Chain & Logistics

Product supply

Our supply chain will be working on a replenishment model. The entire supply chain and
logistics from factory to distributor will be managed by a central team, so that you can focus
on generating sales. However, the supply chain function relies on your forecasts to plan
dispatches. So you need to ensure that your forecasts are as accurate as possible.

Inventory

Our distributors will be required to keep an inventory cover that has been set by you and
mutually agreed upon. Taking into account the agreed inventory norms and the sales
forecast, the required quantity of stock will be dispatched to the companys regional
warehouse for onward supply to the distributor godowns. You will incur an inventory
holding cost of Rs. 50 per unit per month for the stock that is lying in the company
warehouse.

Airfreight

Since we are a new company in a new industry, we will try to not have any stockout
situation. In the event that your forecast is less than the actual sale, we will ship additional
stock by air. However, the airfreight cost is Rs. 100 per unit, and is an expense we need to
avoid.

enParadigm Performance Solutions