Ortho 500 Sales strategy

FormPrint
FormPrint was established in 1998, and designed 3 dimensional
prototypes through patent protected technology
technology FormPrint
FormPrint mainly
!ocused on health"care application #y end o! $013, FormPrint had
sales o! %&$9 'illion

FormPrint
FormPrint is launching ortho500,
ort ho500, a new 3( printing system which
could print custom e)os*eleton
e)os*eleton orthopedic splints, braces and
cast according to the body o! each patient +he planned price !or
this Ortho 500 product is %8,000 and the target mar*et is
outpatient department across -S, which had a mar*et share o!
1.. million -S(

Ortho 500 Strengths   ease o! use, o/erall per!ormance

ea*ness  Functionality

#ut as per the sur/ey !or 3( printing the !unctionality o! the

system was not that important

! ortho500 !ailed to establish a leading mar*et share in

e)os*eletal
e)os*eletal bracing in $01&, Formprint2s
Formprint2s medical product di/ision
could !ace layos

'anagement (ilemma
4ow to mar*et Formprint2s new orthopedic 3( printing system
Should they enter the mar*et through ndependent sales
representati/e or should they go with Formprint2s sales
representati/e

hich will reap them a ma)imum bene6t

Solution
Since FormPrint is entering into a new mar*et and on tight
budget n this situation, blended o! S7"(irect sales approach
would result in more !a/orable results

ach Formprint2s sales representati/e cost about % &00,000, this

cost to company is not concerned or not with respect to selling
ortho 500

! we allocate an addition o! % .5,000 to % &00,000, and

considering the le/el o! e)pertise o! FormPrint sales
representati/e o/er period o! 1$ months i! the Sales
representati/e can achie/e target o! selling  Ortho 500 printing
system Since the e)pected sales cycle is 0 days

1 ost to Sales Person &00,000 -S(

$ Ortho 500 Sales target allocation .5,000 -S(
3 Sales cycle !or Ortho 500 0 days
& )pected Sales o! 'achine in a 
year
5  +otal re/enue generation !rom &08,000 -S(
Ortho 500:per sales person;
  +a) $3< &08,000"
938&=398,1 -S(

From the abo/e table, at 8,000 -S( pricing o! Ortho 500 the
sales representati/e cannot achie/e their target co/ering the cost
o! selling based on the Sales cycle o! 0 days #ut i! the
allocation o! .5000 is considered within the + o! &00,000 -S(,
then this will be a pro6table model

#ased on the pre/ious e)perience employing S7 FormPrint has to

hire to manage these S7 and the cost >umped to 3.< o! the
sales #ut instead o! hiring management can assign $ S7 under
the FormPrint sales representati/e

?ow let us consider the cost aspect with respect to ndependent

sales representati/e
1 ndependent Sales 7epresentati/e
ost o! Sales :$3< o! Sales;@Plus 1.,$0& -S(
ta)
Sales ycle o! ortho 500 0 days  units Per Annum
 +otal re/enue generated &08,000 -S(
7e/enue a!ter ta) 30&,.. -S(
ost o! Sales on total re/enue 103,$$&

 +he #ene6t in case o! S7 is that, FormPrint will ha/e /ery less
6)ed cost !actor ith S7 there is no initial ris* because FormPrint
will not be responsible !or their health and retirement bene6ts

 +hus FormPrint has to shell out commission o! $3< plus $3< as

ta)

e can ha/e an agreement with S7, such that i! he !ails to

per!orm his responsibilities they can terminate his contract, i!
there is no producti/ity

hen S7 deli/ers signi6cant amount o! re/enue to FormPrint,

then FormPrint can hire him !ull time with + ait !or the sales
cycle to complete and e/aluate the !easibility o! continuing with
them

! the cost to company is less than annual sales done by them, we

can train them !urther and continue with S7sB else !all bac* on in
house sales reps

 +he only issue with S7 is

1; +here cannot be complete control o! independent sales

representati/e
$; +he training aspect depends on the ability o! S7, which
cannot be measured