assignment 2_group 7 b
TRANSCRIPT
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Dailyvery
By
Name Roll Number M Divya Deepthi 2012PGP188
Subhram Saha 2012PGP374
Tejas Lakhe 2012PGP402
V Darshana 2012PGP415
Vidush Arya
2012PGP431
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The service offering• “Dailyver” provides point-to-point delivery service within a city (Mumbai-to start with).
• The service will be charged based on time taken and distance to be covered, for the delivery.
• Delivery will mostly happen using public transport. For urgent deliveries a premium will be
charged and alternative mode of transport will be used.
Payment
The customer has an account wherein money is deposited inadvance. It works like a pre-paid account Money is debited from this account, when purchase is madeor when delivery is done
Delivery processAt every ‘hub’ in an area, there is
dedicated manpower for collectionand for delivery.
Once the ‘collection boy’ picks up the
item to be delivered, it is kept alongwith the order details in the hub
The ‘delivery boy’ picks up any item
ready for delivery and goes to thedestination
Tracking
The complete process is updated from time to time througha common file that is shared
In case customer places an order with insufficient details,the customer is contacted by the ‘collection boy’
Customer ordering
Customer goes online and mentions the point of pick-up andpoint of delivery
If a purchase is to be done at the pick-up point, the detailsof the purchase are mentioned in the online form along with
customer contact details
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• Dailyver will compete on convenience and timely delivery, by
tapping the potential of technology.
• To start with, this technology is available free, and hence, will notinvolve high investments.
• This will be a service that is high on customization
•
Dailyver’s conscious choice is to not compete on price, because itwishes to attract only those customers who value convenience
higher than price.
• Target market: Affluent households with annual income level aboveRs 10 lakh
Service Dimensions
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Customer Management system
• Customers expect that the products deliveredto them should be exactly what they hadordered
Right Product
• Customers expect that the ordered goodsshould be delivered within a particular timeframe
Right Time
• Customers expect that the ordered items shouldbe delivered at the right place
Right Place
• Customer expects the service offering to be of aparticular price range
Right Price
Customer Expectations Management of Expectations
Clarity ofOrder
• The order receiving systems will bedesigned to ensure that the customerrequests are specific and objective
Likelihood of
Delivery
• Customers will be informed whetherthe delivery of order is possible within
5 minutes of placing the order
Probabledelivery Time
• Customers will also be informed aboutthe probable time it will take to deliverthe order
Price of the
order
• Customers will be informed about the
service charges immediately after theorder is placed
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Employee Management System
The employees would be
freshers from local 2 tier and 3 tier colleges or
Delivery employees with prior experience with e commercecompanies
They would be trained on The technology they would have to use
How to maximize customer satisfaction i.e, what to do when acertain item the customer requested for is unavailable etc
The job design would be:
Shift system- 3 shifts a day 8.30am to 5 pm, 4.30pm to 1am,12.30am to 9am
Employees have to take rotations in the shifts
The employees would be expected to do the work of a typicaldelivery person
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Employee Management System
Performance would be measured based on
Customer satisfaction rating that would be given on delivery
Distance travelled / No. of orders handled : An optimal value for
this ratio would be decided and the employees would be
measured on how close they are to the ratio This system can work with high attrition and hence spending
an inordinate amount on employee retention wouldn’t be
justified
Nevertheless the following measures would increase
employee loyalty:
A community kind of culture
Routing customers to them if they wanted to complement them
for the service
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Target Customer Profile
• Working families facing time crunch willuse our services to get important itemsdelivered to them
Working Families
• People staying away from the city whodo not have easy access to manyproducts will employ our services toget the goods from the city
People staying faroff from the city
• People who want things to be deliveredin extreme emergency situations willemploy our services
ExtremeEmergencySituations
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Behavior Expected from Target Customer
• Expected Behavior
• In order to ensure that the customer’s expectations
are met, it is necessary that the order given by the
customer is objective in nature
• Steps to ensure compliance with expected
behavior
• The online order form should be objective
• Moreover once the order is received, the collectoremployee should confirm the order with the customer
over the phone
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Mechanism for attracting customer
Bill Board AdvertisingSocial Network
• Promotion of the
service through social
network will help
us to reach a largerpercentage of the
target market
• Promotion through
social network will be
cost effective
• Creatively designed
bill board campaign
will be very effective
in attracting the targetmarket
• Promotion through
this medium will be
cost effective
Promoting in malls
• Reach of this kind of
promotion will also
very high
•
Promotion throughmalls will cost
more as compared to
other methods of
promotion
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Funding Mechanism
The funding mechanism will start off with charging a premium
Once the company achieves economies of scale it would be prudent
to shift to providing superior service at a lower operational cost than
competitors
Transparent costing system:
The basic parameter on which the customer would be charged
would be the distance of travel for the delivery
This would help make the customer feel the charges are justified
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Metropolitan City MUMBAI
Population 13830884
Area (sq. km.) 603
Population Density 22937
Each Segment Area (sq.
km.) 13
Total no. of segments 48
Factors affecting the cost to deliver:
a) Time (urgency) Within half a day Rs. 30
b)Distance Within 2 km Rs. 30
Rates varying by time: 30%increase per slab from half a day to
<2hrs
<2hours 85.68
Commision by
time
2hrs-4hrs 65.91 Average 54.26
4hrs-6hrs 50.706-8hrs 39.00
>8hrs 30.00
Rates varying by
distance:30%
increase per slab from within 3 kms
to >12kms
<2 km 30.00
Commisssion by
distance
2 km-6 km 39.00 Average 54.26
6 km-9 km 50.70
9 km-12 km 65.91>12 kms 85.68
Customer Commission
Customer
Commission
Max(Commision by time, Commision by
Distance) Average 54.26
Source: India Census 2011, Municipal Corporation of Greater Mumbai (MCGM) website
Revenue Generation:
Average person per household 3
No. of Household 4610295
% household with annual income >10 lakh rupees 10%
Household with annual income >10 lakh rupees 461029
Household density per segment 9603Average orders per month per household 3
Total orders per month per segment (50% reach) 14404
Average revenue per order 54.26
Total Revenue per month per segment 781557
Total Company Revenue per month Rs. 3,75,22,220
# Assumption 24 working days a month
Cost to Company:
Fixed Cost
ERP for a Mid sized company like ours Rs. 20,00,000
Two-wheelers for local travel (cycles) Rs. 3,000 Rs. 43,22,151
Furniture and Fittings @ Rs. 70,000 Rs. 33,60,669
Total Fixed Cost Rs. 96,82,820
Variable Cost
Rent per month
Apartment 1 Bed Room in City Centre Rs. 25000
Apartment 1 Bed Room Outside City Centre Rs. 15000
Segments in City centre 70% 34
Segments Outside City Centre 30% 14
Cost of Rent per Month Rs. 10,60,143
Telecom cost per month Rs. 3 per call 20,74,633
No. of order a person can handle each day 20
Manpower per segment 30
Salary per month per person Rs. 15000
Total Manpower Cost Rs. 2,16,10,756
Average order size per delivery 1.5
Average Railway ticket cost per travel Rs. 15
Cost of Monthly Railway travel per segment Rs. 1,44,043
Miscellaneous transport cost per segment Rs. 48000
Total Transportation Cost Rs. 92,19,901
Total Variabel Cost to Company per month Rs. 3,39,65,433
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• The manpower requirements can be varied according to the
business that we are getting and thereby stabilizing the bottom-line
• More we expand in and around the city revenue will increase
• More the orders the order size per delivery will increase and in turnreduce our overall cost
• The fixed component of the business in very limited so exit from the
business will be easy
• From the above calculations we can come to the conclusion that the
proposed solution is financially viable
Total Company Revenue per month Rs. 3,75,22,220
Total Variable Cost to Company Rs. 3,39,65,433
Contribution Rs. 35,56,787
Total Fixed Cost Rs. 96,82,820
Return on Investment 10.23%
Financials
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Thank You