2013_d'facto_problem

7/29/2019 2013_D'Facto_Problem

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www.pwc.com/dfacto

D'Facto

2ndSeptember 2013


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www.pwc.com/dfacto

2013. All rights reserved. Diamond Management & Technology Consultants, PwC US Subsidiary

Table of Contents

Background 3

Problem Statement 4


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Background

Formed in 1912 at Chicago, Illinois, DFacto Corp is an American multinational beverage corporation of non-alcoholic beverage concentrates and syrups. The company currently offers more than 500 brands in over 200countries or territories and serves over 2.5 million bottles every day, earning annual revenue of $1.5 billionglobally.

In India, Dfacto Corp has been operating since 1972 and has over $400 million revenue annually. The companyis the market leader in aerated drinks which are sold throughout India. Apart from aerated drinks, Dfacto Corpalso manufactures a sports drink named Energ-I which is being sold at selected stores in India.

Dfacto Corp feels Energ-I has a lot of potential to increase its revenue, therefore it strives for innovative and

impactful marketing ideas combined with rewarding discount strategies. The company feels that theirdiscounting strategy for Energ-I is off the mark and hence they are losing revenue. Traditionally the discounts

were decided by the stores at a regional level but now the firm wants to implement a pan-India discountingstrategy which will be followed by all the retail outlets.

The CMO of the company, Mr. Bala Singhania, has hired PwC-Diamond to develop the discount strategy at thenational level.


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Problem Statement

As PwC-Diamond you are expected to deliver on the following fronts:

Modify the discount strategy for Energ-I, such that its revenue for the coming year is maximized. Thecompany is also planning to launch a pan-India marketing campaign for the discounts in price,therefore they want the price of the beverage to be the same across all the stores at any point of time. It

will give discounts for a maximum of 20 weeks, and no discounts for the rest of the year. Since thecompany is not certain about the discount strategy; it does not want to spend more than $2 million as

cost of investment1 on discounts in the next year. One years (October 11 September 12) point of salesdata, provided in the file: 2013_D'facto_Weekly_Sales_Data.xls, lists the weekly volume and revenue(in $) of the sports drink for each store. Assuming the sales pattern and volume for the coming year issimilar to the one provided in the historical data, devise a discount strategy to match Dfacto Corps

requirements.

Propose suitable channels to market the discount strategy of Energ-I. The client has allocatedappropriate budget for pursuing few channels to market the product, and expects most effective andinnovative channels, which have high return on investment. Make reasonable assumptions of the costsfor the different channels to come up with the marketing strategy.

The following files have to be submitted as deliverables:

Excel sheet named "2013_D'Facto_Solution_[Team_No]", with the final price and volume of the sportsdrink for each week along with the expected revenue generated using the modified discount strategy, inan easy to understand, well formatted manner. Use the template 2013_D'Facto_Solution_format.xlsto create the aforementioned excel sheet.

Excel sheet named "2013_D'facto_Weekly_Price_and_Strategy_Calculation_[Team_No]", with theanalysis and calculations involved in coming up with the modified discount strategy, in an easy tounderstand, well formatted manner.

Word document named 2013_D'facto_Discount_Strategy_Description_[Team_No]" outlining thesteps used to create the above excel sheets.

Presentation named 2013_D'facto_Discount_and_Marketing_Strategy_[Team_No]" outlining yourhypothesis, approach, execution & final recommendations of the discount and marketing strategy.

1 Cost of Investment is defined as the revenue lost, when no lift in volume is observed in the discount period. For example, if the company

was selling A number of bottles at a base price of $ Yand the discount provided is $ y, then the cost of investment is $ (A * y).

2013_d'facto_problem

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