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D'Facto

2nd September 2013

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Table of Contents
Background Problem Statement 3 4

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

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Background
Formed in 1912 at Chicago, Illinois, DFacto Corp is an American multinational beverage corporation of nonalcoholic beverage concentrates and syrups. The company currently offers more than 500 brands in over 200 countries or territories and serves over 2.5 million bottles every day, earning annual revenue of $1.5 billion globally. In India, Dfacto Corp has been operating since 1972 and has over $400 million revenue annually. The company is the market leader in aerated drinks which are sold throughout India. Apart from aerated drinks, Dfacto Corp also 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 their discounting 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 discounting strategy 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 the national level.

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

www.pwc.com/dfacto

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. The company 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 the company 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 sales data, 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 is similar 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 allocated appropriate budget for pursuing few channels to market the product, and expects most effective and innovative channels, which have high return on investment. Make reasonable assumptions of the costs for 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 sports drink for each week along with the expected revenue generated using the modified discount strategy, in an easy to understand, well formatted manner. Use the template 2013_D'Facto_Solution_format.xls to create the aforementioned excel sheet. Excel sheet named "2013_D'facto_Weekly_Price_and_Strategy_Calculation_[Team_No]", with the analysis and calculations involved in coming up with the modified discount strategy, in an easy to understand, well formatted manner. Word document named 2013_D'facto_Discount_Strategy_Description_[Team_No]" outlining the steps used to create the above excel sheets. Presentation named 2013_D'facto_Discount_and_Marketing_Strategy_[Team_No]" outlining your hypothesis, 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 $ Y and the discount provided is $ y, then the cost of investment is $ (A * y).

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