DND CASE ANALYSIS - MARKETING DEPARTMENT

Assignment Taken

Case Understanding

BCS Solution Summary

Solution

. The problems marketing faced by the sales and the marketing department of the company:

Problems face by the sales force:

• Customer complaints of non-delivery of ordered products.
• Improper delivery of products- delivery of wrong products.
• Delivery of stale products.
• Incomplete delivery- missing products that have been ordered but not delivered.
• Delivery personnel not showing up for duty.
• Loss of inventory due to the perishable nature of the products.

Solutions:

The sales force is the key to the profitability of the firm. Since, the entire business of the firm is dependent on the timely and correct delivery of the ordered products, it is imperative for the sales force to be at its best. Only a well-motivated sales force can ensure the sustained competitive advantage for the firm on the long run.

Therefore, the management of DND has to:

• Incentivize the delivery personnel. This can be in the form of monetary benefits like bonus for surpassing sales targets apart from the regular salary or it can be other benefits like medical insurance for the delivery person and one his/her family member or vehicle maintenance for the delivery person and so on. These initiatives on the company’s behalf will motivate the delivery personnel and would reduce the problem of absenteeism significantly.
• Training the sales force on the correct delivery of the products. Extreme care has to be taken when it comes to packaging the exact goods required by the customer. Since, this is a new company even a small mistake blows out of proportion and hurts the future prospects of the company.
• DND must also maintain a healthy relationship with its suppliers. Being a new player in the market, it has to foster a productive relationship with these suppliers who are major players in the market and who supply in huge volumes to the well-established grocery chains in the country. Only then, DND will have an influencing hand in the bargaining and negotiations process when it aims to expand its business in the later years, both product wise and geographically.
• All the people involved in ensuring that the order reaches the customer’s doorstep need to be in line with the company’s mission and vision. They need to have a feeling of being part of something new and good. This thought process in the minds of the sales force would be a driver for them to show up for work every day, work with passion and focus. Nurturing, such a sense of ownership will be a much stronger motivating factor than monetary benefits that they are entitled to.
• The company should also maintain only the necessary amount of inventory required or face loss of products due to the perishable nature of the products sold.
• In order to give a more wholesome buying experience from DND, the company has to come up with an omnichannel communications system. This system would ensure constant engagement with the customer and would ensure the quick redressal of any order or delivery related problems the customer is facing. This conversation with customer will give the company the much-needed firsthand information about the company’s performance and the adequacy in the level of customer centricity the company currently maintains.
• Another step that the company can take in ensuring lesser complications at the time of delivery is to use sophisticated tools like customer product code (CPC) and standardize the products delivered. Once, the product is standardized, it will be much easier for the delivery person to deliver the right goods to the customer.

Problems faced by the marketing department:

• Positioning- DND positioned itself as a deliverer of daily household groceries. The company started out with delivering milk and its derivative products. Though they had sophisticated mobile applications that customers could use and a sales force that could deliver those orders, the company however couldn’t find traction. This can be possibly attributed to the comparison of this company’s services with those of the regular milk vendors who have been serving people for years. This, along with delivery issues added to the company’s woes.
• Targeting- DND targeted a very general population with no special focus on a particular segment of customers. The exclusivity that the company wanted their customers to enjoy, was lost because many people were being targeted.

Solutions:

• The company should position itself as a “premium provider of home delivery service of groceries” at least for the initial years before it moves down market. The company must be re-orient itself as a competitor for the well-established companies in the grocery home delivery market space. It should be seen as an alternative for established players like Grofers, Big Basket, Amazon etc. rather than as an alternative to the local milk vendors. It is this high-end image and exclusivity that can save the company from its current turmoil.

In order to have the above-mentioned image and mind share among the customer’s, DND has to target the right customers. The service provided by DND is ideally suited for the “urban upper middle-class households” where both the husband and the wife go to work. Their day ends somewhere around six or seven in the evening and they visit the groceries on their way home, in order to have the essential items for the next day. Since, DND is currently operating in the well-developed cities of Hyderabad, Bengaluru and Delhi where people are more open to the startup culture and are willing to try services from new players, targeting the above-mentioned customer group would give the company the right kind of recognition it needed. DND can also price the products slightly above those of the brick and mortar stores because these customers are not that price sensitive as long as their energy is being saved

Revenue generation expected in a month:

 Assuming order of:

 2 one litre milk packet = 2*50 = Rs.100

 1 500gm paneer            = 1*150 = Rs.150

 1 250gm curd                = 1*40   = Rs.40

 Total                                            = Rs.290 per order

Categorizing customers into three types: Platinum- 6 orders per week

                                                                  Gold      - 4 orders per week

                                                                  Silver     - 2 orders per week

Given 6500 people currently use the app: We can assume- Platinum: 50 people

                                                                                              Gold:        250 people

                                                                                               Silver:    6200 people

Therefore, the total revenue generation per month: Rs.1,58,92,000

MANAGEMENT PRINCIPLES USED TO DEVELOP THE SOLUTION:

1. Positioning
2. Segmentation
3. Sales force management
4. Integrated marketing communications
5. Customer relationship management

Conclusion

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