Marketing Proposal for an Indian Startup named "Daily Needs Delivery (DND)"

Assignment Taken

1). Challenges and solutions related to sales and marketing. 2). Marketing Plan for next financial year. 3). Content Write-up for Promotions. 4). Organization Tag-Line.

Case Understanding

Founded in 2020, Daily Needs Delivery (DND) is an Indian startup focused on daily need deliveries, primarily specializing in dairy products like milk, paneer, and curd across Bangalore, Delhi, and Hyderabad. Operating primarily through its app, DND's key selling points include early morning delivery, customizable orders, and the option to manage or subscribe to monthly deliveries. Within the business case scenario, the marketing department is grappling with various challenges. One notable issue is the stagnant service to subscribed customers in less populated areas due to the company's reluctance to operate in such regions. The hesitancy stems from concerns about cost recovery and potential losses. This predicament contributes to an elevated churn rate among customers in non-dense areas, leading to refund demands for wallet recharge. Additionally, DND faces challenges with its consumer feedback and complaint resolution system, with complaints registered through the corporate office's email address, creating a cumbersome process for customers. The marketing department is also contending with a rise in customer attrition and a disparity between the company's decent marketing budget and its insufficient promotion and advertising efforts, hindering brand recognition and expansion. These challenges contribute to customer dissatisfaction and pose a threat from traditional competitors and new entrants, potentially decreasing product sales. The segmentation, targeting, and positioning (STP) strategy for DND involves segmenting based on age, income level, and geography. Presently operating in Bengaluru, Delhi, and Hyderabad, DND plans to expand into non-dense areas and other metro cities. The target demographic includes individuals aged 18-65 with an income above Rs. 20,000/month. Positioning DND as an app-based solution for millennials, working households, and the elderly, the company aims to address the time constraints and inconveniences of morning shopping by offering early morning doorstep delivery of customized dairy products and breakfast essentials.

BCS Solution Summary

The Marketing department at DND confronts several challenges, such as extending services to less populated areas. To address this, DND plans to enlist local women in these regions, empowering them as hubs for product storage and efficient delivery. Simultaneously, the integration of a customer grievance management system into the Daily Needs Delivery app is underway, providing users with a mobile-friendly platform to register and resolve complaints. To augment customer retention, DND is implementing promotional offers, contests, cashback, and referral schemes. The comprehensive solution also involves analysing and rectifying the current positioning of the company in the minds of customers, acknowledging the misalignment with the targeted customer segment. Additionally, a marketing plan for the upcoming financial year has been devised, along with projections for the app's expected reach over the next decade. This holistic approach aims to not only solve immediate challenges but also strategically position DND for long-term success.

Solution

Management Principles Used for the Solution –

• Segmentation, Targeting & Positioning (STP)
• Sales Force Management
• Integrated Marketing Communication
• Customer Relationship Management (CRM)

Challenges encountered by the Sales Team -

1. Instances of customers lodging complaints about undelivered products.
2. Incorrect product deliveries, leading to customer dissatisfaction.
3. Distribution of expired or stale products.
4. Incomplete deliveries, with certain ordered items missing from shipments.
5. Absence of delivery personnel, resulting in service disruptions.
6. Inventory losses attributable to the perishable nature of the products.

Solutions to the challenges encountered by the Sales Team -

The pivotal factor influencing the firm's profitability lies in the effectiveness of the sales force. Given that the entire business hinges on the prompt and accurate delivery of ordered products, maintaining an optimal performance level is crucial for the sales team. A motivated sales force becomes instrumental in securing a sustained competitive advantage for the firm in the long term.

Consequently, the management at DND must undertake the following measures -

1. Provide incentives for delivery personnel, such as monetary rewards like bonuses for exceeding sales targets in addition to regular salaries. Other benefits, like medical insurance coverage for the delivery person and a family member, or support for vehicle maintenance, can be implemented. Such initiatives would serve to motivate the delivery personnel and significantly alleviate the issue of absenteeism.
2. Conduct thorough training for the sales force on the accurate delivery of products, emphasizing the utmost care in packaging the precise goods requested by the customer. Given the newness of the company, even minor errors can have disproportionate impacts, potentially harming the company's prospects.
3. Cultivate and maintain a strong relationship with suppliers, particularly since DND is a newcomer in the market. Establishing productive ties with major suppliers who cater to established grocery chains in the country is essential. This approach will grant DND more influence in bargaining and negotiations, facilitating business expansion both in terms of products and geographical reach in the years to come.
4. Ensure alignment of all individuals involved in the delivery process with the company's mission and vision. Fostering a sense of being part of a new and positive venture among the sales force can act as a powerful motivator, surpassing mere monetary benefits.
5. Keep inventory levels at a minimum to prevent losses due to the perishable nature of the products.
6. Implement an omnichannel communications system to enhance the overall customer experience, enabling continuous engagement and swift resolution of any order or delivery-related issues. This direct interaction with customers provides valuable insights into the company's performance and its current level of customer centricity.
7. 7. Utilize sophisticated tools like Customer Product Code (CPC) and standardize delivered products to streamline the delivery process, making it easier for the delivery personnel to ensure the accurate delivery of goods to customers.

Solutions to the challenges encountered by Marketing Team –

1. Addressing Service Gaps in Sparse Areas: In grappling with challenges related to delivering services in less populated regions, the marketing department faces a predicament in providing adequate services to subscribed customers residing in non-dense areas. Operating in such locales becomes financially burdensome due to the difficulty in recovering operational costs. The consequence is a potential loss of customers and an uptick in requests for wallet recharge refunds. To tackle this issue, DND envisages engaging and empowering local women in these non-dense areas for product delivery to households. These women will serve as hubs, storing products in refrigerators based on customer demand and delivering accordingly. Establishing such hubs in small localities with subscribers involves partnering with local women who seek employment and collaboration with DND for product deliveries. These women will receive income based on monthly deliveries, with incentives for meeting target delivery numbers. As demand grows, they will be equipped with refrigerators for product storage. Initially, DND will project a two-day demand and supply products to the local hubs, reducing delivery costs due to decreased frequency. Over time, as DND accumulates more data, demand estimation will become more precise. The employment of local women not only facilitates women's empowerment but also lowers unit delivery costs, enabling DND to reach customers in non-dense areas, resolving a significant issue that led to customer attrition and losses, as unsubscribed customers demanded refunds on wallet recharges. Additionally, this approach safeguards against a tarnished reputation and mitigates the threat of new entrants and traditional competitors in the market.
2. Revamping Customer Grievance Management: Another hurdle faced by DND customers pertains to the arduous process of complaint resolution. The existing system, where complaints are channelled through the corporate office's email address, proves challenging for customers to locate, resulting in many complaints going unaddressed. This dissatisfaction contributes to a high churn rate. A proposed solution involves integrating a customer grievance management system directly into the Daily Needs Delivery app. This enables customers to lodge and address complaints conveniently through their mobile phones, leading to faster complaint resolution and significantly enhancing customer retention. Complaints will be directed to the customer complaint redressal team and the IT department, with oversight from middle-level management. This streamlined approach ensures swift actions within the company, maximizing benefits for customers.
3. Boosting Customer Retention Rates: To counter the rising number of inactive users amidst increased app installations, the marketing department must devise an effective solution. The percentage of inactive users surged from 3.28% in FY 2020-21 to 8.02% in FY 2021-22, necessitating a reduction. The proposed strategy involves promoting referrals through existing customers and offering a 50% cashback on the first two orders for new customers, along with a 50% cashback incentive for users who refer new customers to the app. This approach aims to stimulate sales, attract new customers, and bolster the utilization of the app's wallet through cashback incentives. By implementing this strategy, DND seeks to not only retain its existing customer base but also cultivate brand awareness across all cities of operation, fostering brand loyalty among the target demographic.
4. Positioning and Targeting DND initially positioned itself as a provider of daily household groceries, commencing operations with the delivery of milk and its by-products. Despite offering sophisticated mobile applications and an efficient delivery system, the company struggled to gain traction. This lack of success could be attributed to unfavourable comparisons with traditional milk vendors who have established longstanding relationships with customers. The company's woes were further compounded by challenges in the delivery process. Additionally, DND faced difficulties due to its broad targeting approach, which lacked a specific focus on any customer segment. The envisioned exclusivity for customers was compromised as the company cast a wide net, impacting its ability to create a distinct and tailored service experience.

Strategic Roadmap for DND Product Marketing in the Upcoming Financial Year

1. Vertical Integration:
   •    Current State - DND presently sources products externally, focusing on deliveries.
   •    Future Direction - Implementing a fully integrated supply chain to cut costs, ensuring quality, and processing by-products locally, providing autonomy and flexibility. This strategy equips DND to adeptly manage sales during demand fluctuations.
2. Multi-Branding:
   •    Current State - DND operates under a single brand, offering varied products.
   •    Future Vision - Manufacturing a range of theme-related products under one brand to consolidate market presence and limit space for competitors. Fostering competition among DND products strategically solidifies market dominance and minimizes the threat of new entrants.
3. Flanking:
   •    Current State - DND sells products in standard volumes and packaging.
   •    Future Strategy - Employing a flanking approach, DND will diversify its product offerings, selling the same items in different volumes and qualities. This adaptable strategy ensures market expansion and increased customer base, particularly as new products are introduced.
4. Extension of the Brand:
   •    Current State - DND has an established brand name.
   •    Future Initiative - Leveraging the existing brand to introduce a range of products, capitalizing on current popularity to drive sales. The extension and diversification contribute to heightened brand recognition, facilitating rapid identification by the target audience.
5. Portfolio Enhancement:
   •    Current State - DND offers a specific product range.
   •    Future Expansion - DND will diversify its portfolio to meet evolving customer needs, gradually introducing items such as Buttermilk, Yogurt, Flavoured milk, Ghee, Cheese, Lassi, Sweets & Ice Creams. The aim is to include own-branded milk products, sweets, vegetables, and spices.
6. Expansion:
   •    - Current State - DND currently covers a limited number of Tier 1 cities.
   •    - Outlook - Over the next five years, DND aims to strategically expand, targeting specific family counts in Tier 1 and Tier 2 cities. This phased expansion plan is designed to establish DND as a recognized brand nationwide, reducing the coverage gap and enhancing market presence.

The organization needs to reposition itself as a formidable competitor in the established landscape of grocery home delivery, presenting itself as an alternative to well-known industry leaders like Grofers, Big Basket, and Amazon rather than local milk vendors. This elevated image and sense of exclusivity are crucial for steering the company away from its current challenges.

To establish this desired image and capture customer mindshare, DND must strategically target its audience. The services offered by DND are most suitable for where both spouses are working, typically concluding their day around six or seven in the evening. These individuals often visit local grocery stores on their way home to secure essential items for the next day. Given that DND currently operates in highly developed cities like Hyderabad, Bengaluru, and Delhi, where residents are open to embracing startup culture and trying out services from emerging players, focusing on this specific customer segment would garner the right recognition for the company. DND can also consider pricing its products slightly above those of traditional brick-and-mortar stores since this customer group is generally less price-sensitive, prioritizing the convenience and energy-saving aspects of home delivery.

In pursuit of these diverse strategies, DND endeavours to fortify its market position, broaden its product range, and secure widespread recognition and acceptance among consumers throughout India. This comprehensive approach positions DND for sustained growth and success in the dynamic marketplace.

Financial Plan for Next Year – Daily Needs Delivery (DND)

Assumptions -

• Average revenue per order – Rs. 300
• Current User Base (Monthly) –

1. Premium Users – 100 (5 orders / week)
2. Standard Users – 500 (3 orders / week)
3. Basic Users – 5200 (2 orders / week)

Total Users – 5800

• Expected Growth Rate – 24% (Assuming a steady increase in installation of app and user base)

Calculations –

• Monthly Revenue Calculation

1. Premium Users –
   • 100 * 5 * 4 (weeks in a month) * 300 = Rs. 600,000
2. Standard Users –
   • 500 * 3 * 4 * 300 = Rs. 1,800,000
3. Basic Users –
   • 5200 * 2 * 4 * 300 = Rs. 12,480,000

Total Monthly Revenue – Rs. 14,880,000

Revenue for 1st Year – Rs. 178560000

Budget Allocation for Marketing –

Total Monthly Budget (Assumed) – Rs. 8,533,333 (Approx 57% of monthly revenue)

1. Advertisement – Rs. 1,866,667

Reason - To increase brand visibility, attract new users, and promote special offers or discounts.

2. Customer Communication & Support - Rs. 1,066,667

Reason - To enhance customer experience, provide efficient support, and maintain strong communication channels.

3. Training and Development - Rs. 533,333

Reason - To invest in the continuous training of delivery partners, ensuring efficient and reliable services.

4. Quality Assurance - Rs. 1,333,333

Reason - To implement rigorous quality control measures, ensuring product freshness and customer satisfaction.

5. Expansion in Non-Dense Areas: Rs. 1,066,667

Reason - To penetrate new markets, attract users in less densely populated areas, and foster overall business growth.

6. Loyalty Programs - Rs. 800,000

Reason - To incentivize repeat orders, reward loyal customers, and increase customer retention.

7. Data Analytics - Rs. 533,333

Reason - To invest in data-driven decision-making, optimizing operations, and identifying opportunities for improvement.

8. Partnerships and Collaborations – Rs. 1,333,333

Reason - To establish strategic partnerships with local businesses, influencers, or platforms to expand the user base and enhance brand image.

This allocation strategy aims to create a balanced and comprehensive marketing approach, addressing various aspects such as brand visibility, customer satisfaction, employee training, quality control, market expansion, customer retention, data-driven decision-making, and strategic collaborations. The budget distribution is aligned with the overall marketing goals and objectives of Daily Needs Delivery.

Monthly Monitoring and Evaluation Plan for Daily Needs Delivery -

1. Track Customer Satisfaction Metrics –

• Utilize the app to collect customer feedback on delivered products.
• Monitor online reviews and ratings on the app and relevant platforms.
• Analyse customer support interactions to identify recurring issues.
• Regularly assess Net Promoter Score (NPS) through surveys.

2. Monitor the Effectiveness of Delivery Operations –

• Implement real-time tracking systems for deliveries through the app.
• Monitor delivery timelines and adherence to the 5 AM - 8 AM delivery window.
• Track the number of successful deliveries versus reported issues.
• Gather feedback from the 80-member delivery partner team on challenges faced.

3. Analyse the Success of Marketing Campaigns -

• Track daily and weekly app installs and uninstalls.
• Monitor user engagement metrics, including active users and order frequency.
• Analyse the conversion rates of marketing campaigns, especially those promoting monthly subscriptions and referrals.
• Assess the correlation between marketing efforts and the sales of milk, curd, and paneer.

4. Conduct Quarterly Reviews -

• Evaluate financial performance against monthly and yearly projections.
• Review customer satisfaction scores and feedback for each city.
• Analyse the impact of marketing strategies on revenue for each product category.
• Assess the effectiveness of training programs for the 80-member delivery partner team.
• Identify areas for improvement in quality assurance processes to reduce product losses.

Key Performance Indicators (KPIs) to Measure -

1. Customer Satisfaction
2. Delivery Operations
3. Marketing Campaigns
4. Quarterly Reviews

Adjustment Strategies -

1. Customer Satisfaction –

• Implement targeted improvements based on specific customer feedback.
• Address recurring issues promptly to enhance overall satisfaction.

2. Delivery Operations –

• Optimize delivery routes based on feedback and real-time data.
• Provide additional training to delivery partners on identified challenges.

3. Marketing Campaigns -

• Refine campaign strategies based on user feedback and conversion rates.
• Adjust targeting to optimize subscriptions and referrals.

4. Quarterly Reviews -

• Implement operational changes based on quarterly financial performance.
• Modify marketing strategies for better performance and market penetration.
• Adjust training programs and quality control measures based on quarterly assessments.

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OPTIONAL ASSIGNMENT

1. Organisation Tagline -

“Deliver Daily Delight: Bringing Freshness to your Doorstep, Everyday!”

2. Content Write-Up for Promotions with Design

Strategic Branding for DND: Elevating Recognition and Trust

• Packaging Reinforcement -

Official Logo Integration - Every product from Daily Needs Delivery (DND) will proudly showcase our distinctive logo, ensuring seamless brand recognition among our valued customers.

Symbol of Purity - Our milk products will feature a design portraying a cow, symbolizing purity and freshness. This design aims to build trust and confidence in the minds of our customers.

Branded Uniforms - The DND delivery team will sport uniforms proudly displaying our company name, transforming them into the friendly faces of our brand. This not only fosters a sense of belonging but also establishes a positive brand image.

• Offline Promotions -

Newspaper Advertising - DND will engage in impactful newspaper advertisements across the cities of operation. This approach will not only reach the urban population but also extend our presence to non-dense areas, contributing to market expansion.

Digital Hoardings - Dynamic video content on digital hoardings in major malls will vividly portray our products' journey from delivery partners to satisfied households, fostering a positive and relatable image.

• Online Promotions -

Facebook Advertising - Leveraging the popularity of Facebook, DND will conduct targeted advertising and webinars. Engaging competitions and product/service launches will be amplified through social media promotions, ensuring a wide reach and relevance.

• Radio Commercials -

Strategic Broadcasting - Radio commercials will be strategically deployed during weekends in non-dense areas. Utilizing the auditory medium, these commercials will highlight DND's unique selling propositions (USPs) and introduce new offerings.

• Brand Sponsorship -

Empowering Women - DND is committed to empowering women in rural and non-dense areas. Local women will be employed for deliveries, contributing to their economic independence. Future plans involve collaborating with influential women role models to inspire and uplift communities.

• Promotional Offers and Contests:

Monthly Specials - DND will regularly roll out enticing offers, including cashbacks, referral bonuses, and discount coupons. Monthly competitions tied to new product launches will captivate audiences, fostering brand recognition and ensuring customer retention.

Through these strategic initiatives, DND aims not only to deliver quality products but to cultivate a strong and positive brand identity, reaching diverse audiences across regions.

Following is the promotional Write-up sample for Daily Delivery Need's online campaign - 

Conclusion

The proposed solutions not only serve as a robust remedy to salvage DND's current reputation but also lay the groundwork for sustained expansion and diversification. The initial focus revolves around rejuvenating customer trust, leveraging existing customer bases, and orchestrating geographical and product-oriented expansion over the upcoming years. This transformative journey hinges on a vastly improved sales force and delivery infrastructure, fortified by seamless communication channels dedicated to resolving customer queries and issues promptly. A pivotal catalyst for future success is the strategic standardization of product offerings across diverse geographical regions. Standardization emerges as a linchpin in mitigating complexities associated with delivering accurate products to customers' doorsteps, fostering a more streamlined and efficient operational framework. Moreover, addressing the challenge posed by the perishable nature of goods demands a meticulous overhaul of inventory management. The impracticality of storing products for extended periods underscores the urgency of implementing sophisticated inventory strategies. These strategic enhancements will not only optimize storage but also ensure a constant flow of fresh products, aligning with customer expectations and market demands. In essence, the multifaceted approach outlined here not only serves as a turnaround strategy for DND's current challenges but positions the company for resilient growth. By fortifying its operational foundations and embracing strategic standardization and inventory management, DND is poised to emerge as a market leader, delivering not just daily needs but also surpassing customer expectations in the long run.

Attached File Details

View Attachment file (Financial Projections.pdf)