Solution to Case Study 2 : Snapdeal : Assignment 1

1. Customer value proposition:

Short comings –

The existing model provided the customers with convenience and permanent availability but lacked the touch & feel experience.

Solution –

Creating an online platform (website) for coupon deals where in the customers can explore various options available and then select the deals they want. A coupon code can then be sent as an sms to the registered mobile number. (with approx. 90 million internet users in india in 2010 this would have provided an ideal channel).

This would also help in providing a delightful customer experience. eg- ease of search.

2. Revenue Streams :

Short comings –

Existing model was that of charging a subscription fees from the customers but the TG was actually not willing to pay which is evident from the drop in customer numbers.

Solution –

· Instead of charging the customers the coupons should be provided for free & the revenue should come from commissions from merchant partners on the basis of number of customers/number of coupons used.

· The online platform will also open another opportunity of data based revenue model. The consumer browsing/ buying behaviour etc. can become a useful database for the Retailers & going forward even for the manufacturers which can be monetized.

3. Channels :

Short comings –

The existing direct sales channels leads to high customer acquisition cost. This coupled with the fact that the switching cost for the customer is almost zero (leading to low customer loyality) puts more pressure on the revenue.

Solution –

Group buying through corporate sales. This would help in getting bulk customers which in turn would help in getting better deals/margins from merchant partners. Also the average cost of acquisition per customer would be significantly less.

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