Tupelo's sales model

1 Tupelo Medicals target customer were small to medium sized hospitals, clinics with an
average of 1-10 physicians.

2 The company had distribution centers majorly in south supporting 60% of entire customer base.

3 Company’s sale is driven by an outside sales force and they were charged with contract
negotiations.

4 Negotiated contracts with individual customers represented the majority of the company’s
volume

5 For customer with 10 or fewer physicians, the sale representative had autonomy
over the contract price
Tupelo’s Pricing Strategy
1 List price was based on a cost-plus methodology with the cost being the laid-in-
cost (LIC)

2 The customer and the company would sign a one-year, non-binding contract , with price
renewal occurring on the ninth month of each account’s rolling year.

3 The contract terms included the ability to change price during the one-year term
by an amount defined in the negotiation, usually 5-20%.

4 Commission of sales team was based on percentage of revenue purchased by each

customer
Recommendations : Strategic
1 Three members
need to work
hand in hand to
capture the
impact of
dynamic pricing.
2
Sales force should
be paid
commission
based on
percentage profit
& not on
percentage