Meridian case starts

Q1. should Meridian create a separate sales force for GingerSnap?

Based on the information provided, it may be of benefit for Meridian to create a separate sales force for
GingerSnap. There are several reasons for this:

1. Different Product, Different Skills: Although GingerSnap is a similar product to Meridian's terminal-
based POS system in terms of functionality, it is different in form factor (being tablet-based and cloud-
based) and pricing structure (it is a subscription service with lower upfront costs). These differences
may require different sales tactics and a different level of expertise.
2. Need for Specialization: Creating a dedicated sales team for GingerSnap could allow Meridian to
develop a group of specialists who are deeply knowledgeable about the product and can sell it
effectively. These specialists may be more successful in selling GingerSnap to customers due to their
more thorough understanding of the product.
3. Cannibalization: If Meridian's existing sales force sells both GingerSnap and the terminal-based POS
system, they may be biased towards the terminal-based system due to the larger upfront sales dollars it
brings. This can lead to less attention being given to GingerSnap and ultimately result in reduced sales
for the tablet-based system.
4. Address Different Market Segments: The market for GingerSnap is different from that of the terminal-
based POS system. GingerSnap is more suited to smaller restaurants and chains, while the terminal-
based system is more suitable for larger, full-service restaurants. A separate sales team can better
address the different needs and preferences of these two market segments.
5. Flexibility: A separate sales force can provide a more flexible response to market trends. If the market
starts moving more towards tablet-based POS systems, having a dedicated sales team for GingerSnap
will put Meridian in a better position to take advantage of this trend.

Overall, having a separate sales force for GingerSnap could allow Meridian to more effectively sell and market
the product, and to better serve its targeted market segments. However, Meridian would need to consider the
additional costs and challenges of setting up and managing a separate sales team.

Q2. should it simply fold it into the existing sales effort and allow Meridian’s existing direct sales force to
sell the product?

This approach also has benefits and might be considered by Meridian depending on their capacity and strategic
plans:

1. Cost Efficiency: Integrating the GingerSnap product into the existing sales force could be more cost-
efficient. Hiring and training a new sales team requires a significant investment while utilizing the
existing team would be less costly.
2. Quicker Time to Market: Using the existing sales force could potentially lead to a quicker time to
market. The existing team already has established relationships and communication channels, which
could be leveraged for GingerSnap.
3. Understanding of Company and Products: The existing sales force already understands the company's
culture, objectives, and products. They have knowledge and understand the terminal-based POS
system, which could potentially transfer to selling GingerSnap.
4. Incentives and Rewards: By offering proper incentives and rewards, the company can motivate its
current sales team to promote GingerSnap as actively as they do the terminal-based POS system.

However, this approach also has some potential downsides:

1. Product Focus: The sales team might be less focused on GingerSnap if they have to sell both products,
reducing their effectiveness.
2. Overworked Staff: If the existing sales team is already at capacity with the existing product, adding
GingerSnap could lead to overwork and burnout.
3. Different Markets: GingerSnap is targeted towards a different kind of customer, and the current sales
force may not have the reach or understanding of these customers.
Overall, integrating GingerSnap into the existing sales effort could work if the sales team can effectively sell
both products and the company can create a strong incentive structure. The decision should consider the sales
team's capacity, market factors, and how well the existing team can adapt to selling a different type of product.

Q3. how should sales reps be compensated for selling GingerSnap? Sales reps should be compensated
according to the characteristics of the products they are selling. Given that GingerSnap is a subscription-based
product with lower upfront costs but potentially high recurring revenue, Meridian might consider incorporating
both these aspects into the compensation structure.

1. Combination of Base Salary and Commission: While maintaining a base salary to ensure consistent
income, Meridian could offer a commission structure tied to both the number of new GingerSnap
contracts secured and the value of the recurring revenue associated with these contracts.
2. Quota and Bonus System: As a performance incentive, reps could be set sales quotas for GingerSnap.
Those who meet or exceed such quotas could receive bonuses.
3. Upside for Upselling: If there's a potential to upsell additional services or higher-level subscriptions to
GingerSnap customers, reps should be incentivized for these sales as well.
4. Long-term Incentive Plan: Since the GingerSnap model relies on building recurrent revenue streams
over time, it might be beneficial to have a long-term incentive plan. For example, reps could receive a
percentage of the recurring revenue from accounts they manage, incentivizing them to maintain
customer relationships and ensure contract renewals.
5. Revenue Increment Target: Create a structure where reps get progressively higher commission rates as
they bring in more revenue. This would incentivize them to sell more GingerSnap subscriptions.
6. Growth Metrics: Considering GingerSnap is a new product, reps could be incentivized based on other
growth metrics such as the number of new customers acquired, or expansion into new markets.

Creating the right compensation strategy would be vital to align the sales force with the company's goal of
successfully driving the adoption of GingerSnap in the market. The compensation should be designed such that
it promotes a healthy, competitive environment among the reps, ensuring those that perform well are rewarded
suitably, thereby continuing to maintain their motivation level.

Also, Meridian needs to closely monitor the sales of their terminal-based product. They could consider adjusting
the compensation structure for terminal-based sales if they find that the focus on GingerSnap is impacting
terminal sales adversely.

Q4. Would this compensation strategy affect sales of Meridian’s terminal-based product?

Yes, changes in the compensation structure to incentivize selling GingerSnap could potentially impact sales of
Meridian’s terminal-based product.

There's always a risk in any sales organization that if one product is incentivized more than another, sales reps
will naturally gravitate towards selling the product that earns them more. This could either reduce the attention
to the terminal-based product or force the sales team to focus more on selling GingerSnap. Here are specific
ways the compensation strategy could affect sales of the terminal-based product:

1. Focus Shift: If the commissions are significantly higher for GingerSnap sales, sales reps may focus on
pushing this new product to customers, even those who would be better suited for the terminal-based
product.
2. Cannibalization: While focusing on selling GingerSnap, sales reps could end up cannibalizing the
market for the terminal-based product if customers switch from terminal-based system to GingerSnap.
3. Neglect: There is a risk that sales reps may neglect the upselling or continuous support required for the
terminal-based product if they are focused on selling GingerSnap due to higher commissions or
incentives.
4. Reduced Motivation: If sales reps feel that the focus has shifted from the terminal-based product
without corresponding rewards for them, it could lead to reduced motivation to sell the terminal-based
product effectively.
However, a well-balanced and carefully thought-out compensation strategy can avoid these disadvantages. If the
company offers attractive incentives for both products, it will not be necessary for the sales reps to shift their
attention entirely to GingerSnap.

It is important to communicate the strategic importance of both products, and the company could consider
providing training and support to ensure that the sales team can successfully sell both products. Clearly
communicated sales targets for both products could also keep reps focused on selling both the terminal-based
system and GingerSnap in line with company strategy.

Q5.should the sales effort be focused by type of client—specifically customer size or type of restaurant?

Given that Meridian Systems is about to introduce a new tablet-based system - GingerSnap, it could be
advantageous to shift the sales strategy to a more specialized approach. The introduction of GingerSnap will
likely attract different types of clients compared to the terminal-based systems, which might warrant a different
sales approach.

Large chains of restaurants, especially those that are tech-savvy and seeking innovation, might be more
interested in GingerSnap due to its mobility and cloud-based features. Meanwhile, small to medium-sized
restaurants, which generally look for stability and are more sensitive to price, might still prefer the existing
terminal-based system. Hence, it could be beneficial to specialize the sales force based on customer size to
specifically cater to the distinct needs and preferences of these different customer groups.

Moreover, considering the type of restaurant could also be beneficial. For example, fast food restaurants often
require quick and efficient ordering processes, which could be facilitated by GingerSnap. Meanwhile, fine
dining restaurants might prioritize a stable and reliable system over a mobile one due to their more complex
operations. Therefore, adopting a sales strategy that takes into account the specific needs and characteristics of
different types of restaurants could enhance the effectiveness of the sales force.

In conclusion, Meridian Systems should consider specializing their sales approach by customer size and type of
restaurant. This will enable them to more effectively cater to the diverse requirements and preferences of their
customers, and subsequently optimize their sales outcomes. Careful HR planning and training will be required to
successfully implement this specialized approach. The new product introduction provides a good opportunity for
Meridian systems to revisit and refine its sales strategy to better align with its extended product portfolio and
market dynamics.

Q6. There is no internal support for an inside sales model. Some RSMs and SDs feel threatened by an
inside approach or see it as a step down from the current sales approach. They insist that in-person
selling by skilled and well-paid reps will give us the best closing percentages. But at what cost per sale?

While it's true that in-person selling has its advantages, such as building strong personal relationships with
clients and being able to present products in a more engaging manner, it's also typically more costly and time-
consuming compared to the inside sales model. As Meridian Systems ventures into offering its new product,
GingerSnap, a consideration of an inside sales model could be beneficial.

The inside sales model would involve representatives primarily selling remotely through phone calls, emails,
and online meetings. This model often cost less in terms of travel and entertainment expenses, and could allow
for a higher volume of customer contacts per day. In particular, this model could be effective for selling
GingerSnap, a more tech-oriented product, to more tech-savvy customers who are comfortable with remote
communication and online product demonstrations.

However, the concerns of the current RSMs and SDs should not be dismissed. Their apprehension about an
inside sales model might indicate that the change could be met with internal resistance, which could jeopardize
implementation and effectiveness. Communication and training would be crucial to help the current sales team
understand the benefits of the new model and develop necessary skills to excel in it.
Moreover, Meridian Systems could potentially adopt a hybrid model, which involves both in-person and inside
selling. This allows sales reps to use the most appropriate sales approach according to the nature of the customer
and the complexity of the deal, maximizing the benefits of both models. For a successful transition, it would be
crucial to develop a compensation structure that motivates the sales team to use both inside and in-person selling
techniques depending on the situation.

Q7. Having an inside sales force would be a new challenge. A hybrid approach, with an inside sales force
for small accounts and a direct sales force for larger ones, is more complicated. Our venture capitalists
have been very patient, and we are profitable, although not at the levels we’d like. Our investment in the
tablet product has been a drag on earnings, but that is behind us now. If we focus on larger customers,
that longer sales cycle will be a further drag on earnings, compared with going for some quick wins. But
the tablet-based sector is rapidly growing and shaking out. Can we afford to wait longer than we already
have?

Transitioning to a hybrid model of an inside sales force for smaller accounts and a direct sales force for larger
ones has its challenges. However, if implemented effectively, it can bring about significant benefits. The inside
sales force can efficiently manage a larger volume of smaller accounts by leveraging technology and
automation, while the direct sales force can focus on developing deep relationships with larger clients and
securing big-ticket sales.

It's crucial to note that focusing on larger customers might indeed result in a longer sales cycle and initially
dampen earnings, but it can also provide more significant, long-term revenues as these larger clients typically
have higher buying capacities.

Given that the tablet-based sector is expanding quickly, waiting further might result in missed opportunities. A
more proactive approach could position Meridian Systems to capture a share of this growing market and secure
a competitive edge. However, this needs to be balanced against the necessity to manage sales costs and maintain
profitability.

To help ease financial pressure while pursuing larger clients, Meridian could explore strategies such as offering
volume-based pricing and incentives to encourage larger sales or securing longer-term contracts that can
distribute the revenues more evenly over time.

Additionally, investing in sales training and enablement tools to equip the inside sales teams to deal with both
small and large accounts and ensure a seamless transition between the two when necessary, can also be
beneficial.

Q8. Should we worry about cannibalizing our terminal-based product if the percentage margins on the
SaaS product are higher?

Cannibalization can be a valid concern especially when margins on the new product (in this case, GingerSnap,
the SaaS product) are higher. However, it's not always a negative thing and can sometimes be a strategic move,
especially if the newer product caters to changing market demands or technology trends, as in Meridian's case.

Here are a few factors to consider:

1. Market Trend: Tablet-based SaaS systems in the restaurant industry are rapidly gaining traction.
Sticking to terminal-based products could mean missing out on this growing segment.
2. Customer Preference: If customers are leaning towards more modern, flexible, and efficient solutions,
not offering a competitive SaaS solution could potentially risk losing market share to competitors who
do.
3. Profitability: While higher margins on the SaaS product might initially lead to a decrease in terminal-
based product sales (and potentially overall revenue), it could lead to higher profitability in the long
run.
4. Cost and Resources: The resources and costs to maintain the terminal-based system might outweigh the
profits it generates, especially if market preference continues to shift towards mobile and cloud-based
solutions.
Therefore, although cannibalizing the terminal-based product is a risk, it might be a necessary and strategic
move towards better aligning Meridian Systems' product offerings with market trends and customer preferences.
The company should ensure that it manages this transition carefully, communicates clearly with its customers,
and continues to provide robust services and support during this period to retain customer trust and loyalty.

Q9. What’s the net gain if we swap out our terminals for tablets?

The net gain from swapping out terminals for tablets would depend on various factors, such as cost savings from
reduced maintenance and upgrading, increased sales from reaching a broader market segment, and potential
higher profitability driven by higher margins on the SaaS product. Here are a few aspects to consider:

1. Maintenance and Upgrade Savings: Tablets, especially software-as-a-service (SaaS) solutions, typically
require less physical maintenance than traditional terminals. Updates can be performed remotely and
automatically with no requirement for technician visits or physical replacements.
2. Reach: Tablet-based systems appeal to a broader market segment, providing the opportunity to increase
sales by reaching smaller restaurants or those looking for a more modern and mobile solution.
3. Profitability: As discussed in the case, the margin on the SaaS solution is higher than that of the
terminal solutions. Even though the upfront cost.

IRATE case starts

Q1. It was clear that the territory had good potential, but the question was, “Is the potential really being
tapped?”

This case focuses on challenges faced by Amit Kumar, the area sales manager of NutriPack India, a
multinational FMCG organization. Upon his arrival, he finds that his predecessor has grown the company’s
business tremendously in Maharashtra, achieving a 32% compound annual growth rate. However, he also
discovers that retail distribution in India is much more complex and operates at slim margins.

Amit identifies retail coverage as a weak link due to the fact that NutriPack India covers 750 outlets compared
to their competition's reach to over 1,800 outlets. He believes that expanding retail coverage is the way forward,
which would require higher investments and greater commitment from distributors.

One such distributor, Sachin Mandore of the Jalgaon district, is reluctant to invest further without understanding
the need for increased investment and its impact on his business's profitability. He questions whether it would be
more profitable to bank his money rather than expanding his business.

In the midst of this, Amit is tasked with justifying the need for further investments to Mandore as well as
convincing him of the potential profitability of those investments. He needs to figure out a viable strategy to
ensure not just continued partnership with Mandore but also incremental growth and expansion for NutriPack
India.

Q2. what was the best step forward so that Mandore was convinced about his 2011 investments and
would willingly approach the matter of further investment for retail expansion (to at least match the HFD
competition’s coverage)?

The best step forward for Amit Kumar to convince Sachin Mandore about his 2011 investments and further
investment for retail expansion involves a few strategic moves:

1. Providing Detailed Analysis of Returns: Kumar should prepare a comprehensive report analyzing the
performance of Mandore's 2011 investments. This includes demonstrating the revenue increase,
customer expansion, brand visibility, etc., resulting from the 2011 investments.
2. Showing the Potential of Market Expansion: Kumar should also provide market data, competitive
analysis, and growth trends in the FMCG industry. This data can help Mandore see the potential of
 retail expansion and the overwhelming opportunity being missed by not matching the competitor's
coverage.
3. Offer Incentives: Kumar can consider providing added incentives to Mandore in line with the
increased investment. The incentives could be in the form of increased margins on expanded or new
distribution channels, promotional assistance, or a more flexible credit system.
4. Reinvestment of Profits: Kumar can emphasize the importance of reinvesting profits into the business
for continued growth and expansion. He can also compare the ROI of business expansion with the
fixed returns of a bank investment.
5. Plan for Risk Mitigation: To alleviate Mandore's concerns about risks associated with further
investment, Kumar can present risk mitigation strategies, such as the diversification of product lines or
markets and contingency plans in case of business downturns.

The above strategies would provide a holistic picture of the business potential while addressing Mandore's
concerns, thereby increasing the chances of securing his further investment for retail expansion.

Q3: What were the potential risks and challenges that Amit Kumar might face in expanding retail
coverage?

Answer:

1. Increased Operational Expenses: Expanding retail coverage means that the business is growing and
so are the operational expenses. This includes hiring more personnel for sales, customer service, and
logistics, increasing the capacity of warehouses to handle more inventory, earmarking more funds for
marketing and promotions, and investing in more delivery trucks or outsourcing logistics which all add
to the business costs.
2. Market Competition: With expansion comes exposure to a larger competitive landscape. The Indian
FMCG market is dominated by several major players, presenting a far greater competitive challenge
than the business faced in its current operational scope. NutriPack India would have to formulate
strategies to compete effectively with these other brands and make a mark in the new markets.
3. Managing Credit: The concern with managing credit balances might become even more of a
challenge pressuring cash flows. As the number of retailers increases, the company might have to
provide credit sales to remain competitive which could result in more outstanding receivables and
potential payment delays.
4. Resistance from Existing Distributors: Convincing existing distributors like Mandore to invest more
in expanding sales might be a big challenge. Distributors might resist changes that require them to
contribute more capital without guarantee of instant increased returns and this could slow down the
planned expansion.
5. Cultural and Geographical Diversity: India is a highly diverse country with a rich tapestry of
cultures, languages, and consumer behaviour varying greatly across regions. This diversity could be a
challenge in formulating a one-size-fits-all business strategy. It could also pose logistics and supply
chain challenges.

Q4: What strategies could Amit Kumar employ to overcome these challenges?

Answer:

1. Efficient Operations Management: Implementing efficient operational practices can help in reducing
the costs incurred in expanding operations. This involves everything from optimizing delivery routes
for reducing fuel and maintenance costs to applying lean inventory management principles to avoid
excess stock or stockouts. Additionally, use of technology and data analytics can help in increasing
operational efficiency.
2. Market Penetration Strategies: Overcoming competition requires planned market penetration
strategies. These include understanding the preferences of consumers in the new markets and tailoring
the product offerings and marketing communications to meet these preferences. Competitive pricing
strategies, aggressive promotions and using unique selling propositions effectively can help in
distinguishing NutriPack in new markets.
3. Robust Credit Management: Credit sales are a part of any business, but a robust credit management
system can help in mitigating the risks associated with it. This could involve clearly outlining credit
 terms and conditions, making credit sales only to reliable customers with a good payment record, or
offering discounts on prompt payments.
4. Engaging the Distributors: To overcome resistance from distributors, it is important to engage them
actively in strategy formulation and discuss clearly the mutual benefits that the expansion would bring.
Regular meetings, open communication, and addressing their concerns promptly can help in building a
long-term business relationship.
5. Customized Approach: Recognizing and respecting the diversity in India, a customized approach for
different regions could be a way to handling the challenges arising from it. This could include using
local languages in marketing communications, developing region-specific products, hiring local sales
personnel who understand the language and culture of that region, and building a flexible and
responsive supply chain that can cater to the unique needs of each region.

Q5: How can market research support the expansion plans of NutriPack India?

Answer:

Market research would play a critical role in NutriPack India's expansion plans in multiple ways:

1. Understanding Customer Behavior: Market research can help identify trends in consumer behavior,
preferences, and needs. This information can be used to tailor the products and marketing strategies to
better resonate with the target audience in the new areas.
2. Competitor Analysis: In-depth information on competitors, their products, pricing, and strategies can
help NutriPack gain a competitive edge. Understanding their strengths and weaknesses could give clues
on gaps in the market that NutriPack can exploit.
3. Market Segmentation: Market research can also help segment the market based on various
demographic, geographic, behavioral, and psychographic factors. This segmentation can help in
delivering tailored products and messages to each segment, thereby increasing the efficiency and
effectiveness of marketing efforts.
4. Identifying Potential Growth Areas: Market research can identify areas with the highest potential
growth. By focusing on these areas, NutriPack can maximize returns on their investments in expansion.
5. Risk Assessment: Finally, thorough market research can identify any potential risks or barriers that
could hinder NutriPack’s expansion, such as regulatory issues, cultural obstacles, or infrastructural
challenges. This can allow NutriPack to proactively develop strategies to navigate these challenges.

Q6: What steps should NutriPack India take in order to succeed in the expanded market?

Answer:

1. Enhance Product Portfolio: Based on the competition and customer preferences in the new market
regions, it might be necessary to introduce new products or tweak existing offerings to better cater to
the tastes and preferences of consumers in these regions.
2. Build Strong Relationships with Distributors: For a seamless distribution process, it is essential to
establish good relationships with distributors. Offering them attractive incentives and margins,
providing necessary training, and ensuring frequent and transparent communication can help build a
strong network of motivated and loyal distributors.
3. Invest in Marketing and Advertising: To create brand awareness and visibility in the new markets,
NutriPack will need to invest in amplified and targeted marketing and advertising efforts. Utilizing
various channels such as digital media, television, radio, print media, and outdoor advertising could
help reach a larger audience.
4. Prioritize Customer Service and Satisfaction: Superior customer service can set NutriPack apart
from its competitors. This may include offering dependable after-sales service, handling customer
complaints promptly and efficiently, ensuring timely delivery of products, and maintaining consistent
product quality.
5. Stay Agile: The Indian market is diverse and dynamic. Keeping a close eye on market trends, staying
flexible, and being ready to adapt quickly to changes in customer preferences or market conditions is
crucial for sustaining success.

Q7: How can NutriPack India consolidate its existing markets while planning for the expansion?
Answer: While expansion offers new possibilities of growth, it is important for NutriPack India to not lose focus
on existing markets. They can consolidate their position by:

1. Improving customer service: Enhancing after-sales service, incorporating customer feedback and
addressing grievances effectively can significantly boost customer satisfaction, resulting in better
retention and loyalty in the existing markets.
2. Increasing brand visibility: Organizing local events, leveraging point of sale advertising, and creating
targeted marketing communications can build recognition and loyalty towards the brand in its existing
territories.
3. Introducing rewards/loyalty programmes: This can reinforce existing customers' attachment to the
brand and can also attract new customers.
4. Regular training to sales staff: This ensures that the sales team is well-versed with the product
knowledge and can effectively compel customers to buy the product.
5. Revisiting distribution networks: Periodically evaluating distribution networks can help identify any
bottlenecks or inefficiencies that can be rectified to improve overall distribution.

Q8: What steps should NutriPack India take to maintain the quality of the product during the expansion?

ANSWER:

1. Consistent production standards across locations: To ensure that the quality of the product remains
the same across different markets, it is important to set and maintain consistent production standards.
These standards including using the same raw materials, and following the same production process
across all manufacturing units.
2. Quality control: Implementing stringent quality control checks at every step of the manufacturing
process to catch any potential issues or defects early on can help ensure the product's quality. Regular
audits to ensure adherence to these checks could also be useful.
3. Training to workforce: Training the workforce about the importance of quality and showing them
how to maintain it through day-to-day operational practices can improve and maintain quality.
4. Supplier quality assurance: Selecting suppliers who can provide consistent, high-quality raw
materials and periodically evaluating their performance can prevent potential quality issues due to
inferior raw materials.
5. Customer feedback: Regularly garnering customer feedback about the product can provide valuable
insights into any potential quality issues and can be used to make necessary improvements.

Q9: What role does the negotiation in the supply chain play in NutriPack India’s expansion plans?

ANSWER: Negotiation plays a crucial role in the supply chain, particularly in NutriPack India's expansion
plans.

1. Cost reduction: Through negotiation, NutriPack can work on reducing the cost of goods sold by
bargaining better prices from suppliers. This can directly impact the business's bottom line.
2. Efficient distribution: Negotiating with distributors can ensure better terms in terms of timely
delivery, efficient distribution processes, and even costs.
3. Strong relationships: Effective negotiation can lead to stronger relationships with suppliers and other
supply chain partners, which can prove beneficial in the long term, particularly in times of market
volatility or crisis.
4. Risk mitigation: Negotiation can help frame better contracts that factor in potential risks and
uncertainties, ensuring smoother supply chain operations in the face of contingencies.
5. Sustainability: In an age where sustainability is increasingly important, negotiation can also focus on
implementing sustainable practices in the supply chain, such as sourcing from suppliers who are
committed to practicing environmentally friendly processes.