Business Case solution for the Marketing Department of Daily Needs Delivery

Assignment Taken

Content write-Up for Promotions with Design

1. Branding

Branding is the most important aspect of promotions and all the products of DND must carry the brand name over their packaging. This will help in Brand recognition among our customers. For this following is to be done by DND-

>Printing of the brand logo on all products and items being delivered by DND to its customers.

(Refer Image 1- Official Logo)

>For all kinds of our milk products, a design of cow symbolizing freshness and purity would be used. This would help build up trust of the customers in our brand.

(Refer Image 2- Branding Design)

>Along with this, the delivery team of DND will be provided with uniforms that bears the name of the company so as to create a sense of belonging as well as to make them the face of our company. People tend to recognise brands with their logos and that helps in creating a positive image for the company as well as to promote its products.

(Refer Image 3 and 4- Tshirt Design)

2. Offline Promotions        

For offline promotions, DND will be advertising in newspapers across the city in which it operates along with digital hoardings in major malls of those cities. Digital hoardings are very effective in catching people’s attention and moreover, the print media will help DND reach non dense areas and expand its market.

For hoardings we plan to outsource a small video which gives a description about our products and the delivery partners can be shown delivering our products to satisfied households and families. Customers satisfaction on receiving the products should be shown as this appeal to mass audience and positive impact would be more.

 

3. Online Promotions

Facebook advertising will be our area of interest when it comes to online advertising since our target audience majorly uses Facebook for social media and interactions. Advertisements and webinars on Facebook highlighting our products and services and regular competitions for new users will help us to gain customers through such social media. Moreover, the launch of our new products and services will be done through social media promotions so that our company can reach a wider audience segment and cater to their needs.

 

4. Radio Commercials

Radio commercials will prove to be very effective as we are targeting non-dense areas with such commercials and it is also a fact that people remember what they listen and not what they see thus this is an important tool. Such commercials will highlight our USPs as well as will also inform the audience about the launch of our new products and services in the future. Radio commercials will be run during the weekends as the impact and the number of audience on such days is high as compared to weekdays.

 

5. Brand Sponsorship

DND aims at empowering women in rural and non-dense areas with low household income so that they can support their families and stand up on their own. Therefore, DND would be employing local women in non-dense areas for its deliveries in nearby households and in the future, would like to tie up with strong, independent women role models of the country who have proved their mettle in their respective fields.

6. Promotional offers and contests

To promote our products and to increase our customers, DND will be coming up with promotional offers and schemes every month for its customers. Offers like cashbacks, referral bonuses and discount coupons will be provided to our customers as well as competitions will be held with the launch of new products to create a captive audience and gain new customers. This will help DND in creating brand recognition among its customers as well as also to increase customer retention.

 

 

Annual Budget Breakdown

 

• Cost of packaging and branding                 = 4,80,000 Rs.
• Cost of T-shirts                                                  = 48,000 Rs.
• Cost of Caps                                                       = 2,000 Rs.
• Cost of newspaper advertisement            = 1,34,400 Rs.
• Cost of online promotion                              = 3,72,000 Rs.
• Cost of radio commercial                              = 2,74,500 Rs.

Total cost                                                                            = 13,10,900 Rs.

 Currently total allocated budget to the marketing department = 24,00,000 Rs.

Case Understanding

Daily Needs Delivery (DND) is an Indian daily need delivery start-up founded in 2017 which primarily delivers dairy products like milk, paneer and curd in Bangalore, Delhi and Hyderabad. It operates primarily through an app. Main USP of this company is providing convenience for the customers through early morning delivery, customization of orders in the app and manage or subscribe for monthly deliveries. From the Business Case Scenario, one of the problems being faced by the marketing department is the stagnant service to the subscribed customers in non-dense areas since the company is hesitant to operate in such areas. The underlying reason behind this is that the company won’t be able to recover the cost if it starts operating in such non dense areas which will lead to further losses to the company. This problem is resulting in the increase in the churn rate of customers living in non-dense areas who have subscribed to the company’s services and a demand for refund being claimed for wallet recharge. Moreover, Daily needs delivery is also facing issues with its consumer feedback and complaints redressal system since complaints are registered through the corporate office’s email address which is tough to find and results to be a cumbersome process for the customers. Another problem being faced by the marketing department is the increase in customer attrition from 3.28% in FY 2017-18 to 8.02% in FY 2018-19. Also, even though DND has a decent marketing budget, the company lacks in promotion and advertising which hinders the expansion of the company. It also makes it difficult for DND to become a known and recognisable brand among its customers. All these problems that are being faced by Daily needs delivery are resulting in customer dissatisfaction as well as increase in the threat of traditional competitors and new entrants into the market of DND which will cause further decrease in its products sales. STP for Daily Needs Delivery LLP • Segmentation- It is done on the basis of age, income level and geography. DND has a presence in 3 cities, Bengaluru, Delhi and Hyderabad with plans to expand in non-dense areas and to other metro cities in near future. • Targeting- For the company to penetrate the market and become a known brand, our target segments would be- Region - Metro cities (Currently operating in Bengaluru, Delhi and Hyderabad) Age Group - 18-65 years old Income - Above 20,000Rs. /month • Positioning- For millennials, working households, elderly persons, Daily Needs Delivery is perfect app-based solution to the lack of time, nuisance and hardships of morning shopping by providing early morning doorstep delivery of their customized requirement of dairy based products and breakfast essentials.

BCS Solution Summary

Problems being faced by the Marketing department of DND • Service in non-dense areas DND plans to employ and empower local women in non-dense areas for delivery of its products to households. These women in such areas will act as a Hub for us to store our products in refrigerators according to the demand of the customers in that area and deliver accordingly. • Customer Grievance Management System Integration of customer grievance management system within the app of Daily needs delivery that the customers can access through their mobile phone and can use to lodge and address their complaints. • Increase in customer retention rate Promotional offers and contests will be lunched for the customers along with cashback and referral schemes to attract new customers as well as to retain the current customers thereby increasing brand loyalty.

Solution

Solutions to the problems being faced by the Marketing Department

 

• Service in non-dense areas

One of the problems being faced by the marketing department is the stagnant service to the subscribed customers in non-dense areas since the company is hesitant to operate in such areas as the recovery of operating cost in such areas is not possible.

Due to this, the company is facing the risk of losing customers as well as a demand for wallet recharge refunds.

To overcome this problem, DND plans to employ and empower local women in such non-dense areas for delivery of its products to households. These women in such areas will act as a Hub for us to store our products in refrigerators according to the demand of the customers in that area and deliver accordingly. One such hub in small localities with subscribers is to be set up with the help of local women who would like to be employed and partner up with DND for deliveries of our products to customers in their localities. These women will be paid an income based on the number of their monthly deliveries as well as provided incentives for achieving target deliveries in a month.

In the future, these women will be provided with a refrigerator for storage of our products when the demand rises.

Initially, DND will project demand for 2 days and supply those to the local hub who in turn will deliver to our customers. This will reduce the delivery cost (to deliver in the local hubs) due to less frequency.

Overtime, as DND will get more data, the demand estimation will be more precise.

Employing local women will also enable women empowerment. At the same time, the unit delivery cost to deliver products to our customers will be lower.

This will help us to reach the customers in non-dense areas and provide deliveries of our products to them. This was a major issue being faced by DND since it was resulting in customer attrition and losses to the company since the unsubscribed customers were demanding a refund on wallet recharges.

Moreover, this would have also caused bad reputation and has also increased the threat of new entrants and traditional competitors into our market.

 

• Customer Grievance Management System

Another issue being faced by the customers of DND is the cumbersome process of complaint redressal. The complaints are lodged through the email address of the corporate office of DND which is tough to find and due to this, most of the complaints don’t reach the company. This is resulting in dissatisfaction among the customers and is another reason of high churn rate.

The solution to this problem is the integration of customer grievance management system within the app of Daily needs delivery that the customers can access through their mobile phone and can use to lodge and address their complaints. This will result in faster complaint addressal and hence customer retention to a great extent. The complaints will directly reach the customer complaint redressal team along with the IT department and can be looked upon by the middle level management. This will help in taking fast actions within the company and work for maximum benefit to our customers.

 

• Increase in customer retention rate

Since there is also an increase in the number of inactive users of the app with the increase in the number of app installations, the marketing department needs to come up with a solution to it. The number of inactive users increased from 3.28% in FY 2017-18 to 8.02% in FY 2018-19 which needs to decrease. For this, we will promote referrals through customers and will offer 50% cashback on first 2 orders to our new customers as well as 50% cashback to users who refer new users to the app. In this way, we will increase our sales as well as customers to the app and through cashback, the customer will also use our app wallet. This will help increase our customers through app and will also help in retaining the customers of Daily needs delivery. Also, we would be promoting our brand and its product across all the cities where we operate which will further help us to gain new customers and create a brand image among our target segment.

 

 

Marketing strategies for DND products for the next financial year

 

• Vertical Integration

At present, DND is sourcing its products from sellers and wholesale dealers and concentrating on its deliveries. In the future, DND aims at implementing a fully functional vertically integrated supply chain that will help DND cut the costs and also to provide homogenous products of impeccable quality to its customers. Additionally, DND will own arrangements to process the milk and produce other by-products like curd, paneer etc. in different territories. This will provide DND the required flexibility to operate and the autonomy. This will help DND to manage sales during sudden fluctuations in demand.

 

• Multi-branding

DND will cater to competing products under the same banner. In the future, DND will manufacture a range of products, similar by genre, and cater to the consumers. The main motto is to create a stronghold in the market with the products of the same brand and leave minimum or no space for the competitors’ products. Creating competition among own products is a perfect way to grab hold the market and eliminate the threat of new entrants into the market.

 

• Flanking

DND will use this typical strategy where the same product will be sold in different volume and packaging. For an instance, the milk, curd and paneer will be sold in in different quantities and qualities so that it can grab all the segments in the market. Moreover, in the future when we will come up with more products under our brand name, there will be multiple type of quantity and quality being provided to the customers for the same product. It is a good strategy for almost all FMCG products available in the market and will help DND to expand within the market and gain more customers.

 

• Extension of the brand

DND will soon come up with its own range of products under its own branding in the near future.  When DND has already established a brand name, it will use the popularity as the fuel to add more products with the same name and skyrocket the sales. The extension and diversification of the brand also add more value. It is a typical strategy used to make a product quickly recognized by the target audience.

 

• Portfolio Enhancement

With the growth of our business and increase in the number of our customers, DND will add different products to our portfolio to cater the varying needs of the customers. This will help in expansion within the market as well as in product line building. With the increase in our brand recognition, customers will prefer our products over the new entrants in the market and this will also reduce the threat of new entrants into our market segment.

The tentative stagewise portfolio enhancement schedule is given below:

• Year 1: Other milk based or cultured products like Buttermilk, Yogurt and Flavored milk
• Year 2: Ghee, Cheese, Lassi
• Year 3: Sweets & Ice Creams (From other manufacturers)
• Year 4: Own branded Milk Products and sweets, Vegetables and Spices

 

• Expansion

In the coming 5 years, DND targets to cover all Tier 1 and Tier 2 cities with an average target of 1000 families in Tier 1 cities and 700 families in Tier 2 cities each within one year. This expansion is necessary for the company to grow and penetrate the market so as to become a known brand all over India. Currently we cover 3 Tier 1 cities. The projection of the expansion is as follows:

Year 1: Expansion into 2 more Tier 1 and 2 Tier 2 cities

Year 2: Expansion into 1 more Tier 1 and 5 Tier 2 cities

Year 3: Expansion into 7 more Tier 2 cities

Year 4: Expansion into 6 more Tier 2 cities

Year 5: Expansion into 5 more Tier 2 cities

 

This way, DND is supposed to cover all Tier 1 and Tier 2 cities within 5 years.

Conclusion

If DND works on its problems according to the solutions provided for the business case, it would start being profitable from November 2020. Along with that, a large number of gain in customers is expected within an year along with increase in the retention rate as well as the app downloads for DND.

Attached File Details

View Attachment file (Tshirt Design 2.png) View Attachment file (Tshirt Design 1.png) View Attachment file (Image 1- Official Logo.jpeg) View Attachment file (Image 2- Branding Design.jpeg)