Interview Transcript

Your client is a shop owner near a temple. Recently, he is facing a sharp decline in profit. You have been hired as a consultant to identify the reasons and give recommendations.

I would like to ask a few clarifying questions as I’d like to understand more about our client before I begin to analyze the case.

• At what type of location is the temple located, is it a tourist place?
• How long has our client been in this business?

The temple is a small tourist place located in a village. Our client has been in this business for the last 7 years.

Ok so as it is a tourist place, I can assume that there are few competitors in the locality as well. So what are the products sold by the client and the competitors?

Yes, there are competitors present and the products sold by the competitors are the same as ours.

Also, what is the price band of our competitors? And how long has the client been facing a decline in profits?

The products sold are of two categories. The first one is an individual item and the second is a combo in a basket. The client has competitive pricing but is facing a decline in profits from the last 2 months.

Do all the competitors face the same problem or is it specific to our client? Also could you please elaborate more on the combos sold by our client?

The problem is specific to our client only and the combos sold are as follows:

• Basket 1- Flower, Small packet of sweets
• Basket 2- Flowers, a packet of sweets, coconut, and a cloth
• Basket 3- Rose Flowers, ½ kg of Sweets, coconut, cloth, and a diya

Thank you for the information. I would like to take 30 seconds to make a structure

Alright

As we know that Profits= Revenue – Cost. So is it a cost-side problem like is there any increase in the cost of raw materials or a revenue-side problem?

The costs of raw materials remain the same. It is a revenue-side problem. 

Since it is a revenue-side problem. Revenue is equal to the number of customers multiplied by the selling price. Also, there is a possibility of a problem with the product mix of the client. So in which aspect do you want me to dive in?

So there is no change in the selling prices. The number of customers coming to shop has reduced. Also, you can suggest some changes in the product mix too.

Since the number of customers coming to shop has reduced. There could be 3 possible reasons for the same. Firstly, is there any recent construction which made the shop inaccessible for the customers?

Secondly, there could be some quality issues with the product. Lastly, there could be some additional changes made by the direct competitors. Or anything else you think I am missing?

You have included all the possible factors. So there is no construction in the locality so the shop is accessible to the customers. The quality of the product is the same. Yes, there is a problem with the competitors.

In that case, is there any change in the price or the products? Or are there any additional services provided? For example, giving special services for senior citizens, Priests for some special worshipping of God, or service keeping footwear of the visitors?

So the prices and products are the same as they were before but recently he has started giving services of keeping footwear for free at his shop for the customers.

In that case, is there any change in the price or the products? Or are there any additional services provided? For example, giving special services for senior citizens, Priests for some special worshipping of God, or service keeping footwear of the visitors?

So the prices and products are the same as they were before but recently he has started giving services of keeping footwear for free at his shop for the customers.

Ok, so I have identified the problem. Since our competitor has started a free footwear-keeping service for all the customers, the footfall has increased there since everyone wants to keep their footwear before entering the temple.

Fair enough. Now we can move on to the recommendations part.

• Can provide free footwear and water services for handwashing
• Can provide VIP pooja Thalis and baskets facilities
• Can provide the facility of VIP Darshan
• Can provide special facilities to senior citizens like wheelchairs, TV aarti

Thank you for the approach, I think we can end our discussion here.

Case Facts

• Store is running a business for the last 7 years.
• Temple is a small tourist place located in a village.
• Provide Basket combos and Individual items
• Decline in profits from last two months.