assignment 2_group 7 b

8/13/2019 Assignment 2_Group 7 B

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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



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



• 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



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



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



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



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



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



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



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



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



• 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



Thank You

assignment 2_group 7 b

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