Project 1

FoodFox Brand outline

Set up in 2012, FoodFox is an online delivery service that aggregates food orders from
different restaurants and delivers it to the consumer. The brand has been around for four years
now and has a significant reach and connect. The brand now needs to focus on its revenue
metrics in order to consolidate its position in the market.   
The process of ordering food on the FoodFox website is simple:
1. User registers on the FoodFox website (sign-up)
2. Chooses the food product he/she wants
3. Enters the desired location for food delivery
4. Pays for the service by cash-on-delivery or via e-money
Brand promotion
FoodFox uses multiple digital channels in order to reach its audience and acquire customers.
Data Exhibit 3.2 given in the next segment tells you the top 3 channels that have performed
well for FoodFox. These channels can either be any combination of platforms such as Google
Search + Google Display Networks, or stand alone platforms such as Facebook. For the
purpose of this case, the specifics of the channel platforms are not as important as the overall
channel metrics themselves.

Part 1
  Channel 1 Channel 2 Chann
Direct cost of INR 50/conversion to first
Channel (INR) order 0 400
Discount coupon value (in
INR) 200 200 200
Channel Reach 1000000 500000 50000
Conversions to sign-up 10% 10% 2%
Conversion to first order 50% 50% 50%
Orders in subsequent months
per consumer 10 5 20
Average order size 200 200 200
FoodFox Margin 25% 25% 25%
Retention rate 75% 80% 60%
 INDEX
The number of online
users that are exposed
Channel reach
to the ad via the
channel

The percentage of people

Conversion to sign ups exposed, who have signed
up (registered) on the
website

Conversion to first order The percentage of people

(out of the signed up users)
who have ordered
Cost incurred by FoodFox
Cost of channel in order to advertise on
the channel
A one-time discount value
Discount coupon value per consumer given to
every user who has
ordered

Orders in subsequent Orders from Jan to

months Dec 2016 (this is after the first
order which has a discount value
of ₹200)
The value of a consumer
Avg order size
order in rupees
Rs. 50 (per conversion to
Cost of Channel 1
first order)

Answer The Following

Q1. As we have seen in the module, customer acquisition cost or CAC is a very important revenue
metric for any business. Considering that FoodFox, as a business entity, operates in an extremely
competitive and cash-burning industry sector, it becomes imperative that it tracks the revenue
metrics across all its promotion channels. For this exercise, calculate the CAC that FoodFox incurred
for Channel 1 for the given time period of Jan 2016 to December 2016.

A. 208
B. 250
C. 200
D. 50

Instructions:

1. Refer to the data exhibit 3.2 to answer this question

Answer:

250

Q2. Another important revenue parameter that you have learnt about is the lifetime value or the
CLV. Considering this, calculate the CLV for FoodFox for Channel 3 if its retention rate is 60%.

A. 1,980
B. 2,500
C. 2,292
D. 2,134

Instructions:

1. Refer to the data exhibit 3.2 to answer this question

2. The retention rate given is for the period from Jan 2016 to Dec 2016

Additional Hints:

1. You can calculate the churn rate as (100 - retention rate) %

2. For this example, use the acquisition cost in the CLV formula as taught in the module
lectures
3. Take the margin (which is same as profit) as 25% of the order value

Answer:

Part 2
Ready to Market

For Food Fox prepare the following based on the information provided about the brand. Make
assumptions wherever necessary
1) Marketing objective
◼ Eg: Marketing objective for Zomato gold would be to obtain 10000 members in the year
2020-2021. This follows the SMART goal framework

2) Define the Value Proposition

◼ FOR ......... (target customer)WHO ......... (statement of the need/opportunity)OUR .........
(product or service/category)THAT ......... (statement of benefit)UNLIKE ......... (closest
competitor)OUR OFFER ......... (primary differentiator)

3) Define the Empathy Map

4) Define The Buyer Persona