DunnHumby

Corporate Challenge

By:
Divakar V – 2019SMF6544
Abhishek Rao Yelluri – 2019SMF6510
S Austin Prince – 2019SMF6643
 Introduction
Market Trends Demand Scenarios

Face masks have become an essential commodity after the The demand for face masks depends on some key scenarios
spread of novel coronavirus
The demand depends majorly on the whether the lockdown gets relaxed
Huge surge in demand for Face masks among the customer or removed completely

The companies are struggling to keep up with the demand
The prices of masks have increased by more than 100%
Our client Apna Bazar has decided to sell masks to capitalize
on the demand
Another major factor would be whether wearing face masks while
coming out is compulsory or optional
The demand is also based on whether the store is located in urban or
rural area
These variables gives rise to 4 types of demand scenarios

Types of mask Lifetime Face Masks adoption cycle

Cotton Masks-Type 1 1 month

Surgical Masks-Type 2 1 -4 weeks

N95 masks- Type 3 1-2 weeks

The lifetime of the masks depend on the socio-economic class. We can
assume surgical masks are used By Lower middle class for 1 month,
Middle class for 2 weeks and Upper middle class for 1 week. Upper
Middle Class use the N95 masks for 1 week and Middle class use it for 2
weeks
We can safely assume that adoption of face masks would start at the Early majority
phase when the lockdown gets relaxed or removed because that’s when people
would start travelling extensively and would need face masks to protect themselves.
We can assume 16% of people already have masks

2
Market Size Estimation
Assumptions – Fixed Variables For urban population

Customer Base = 15 million. The total population of Delhi- NCR is 46 million so Below 21 21 - 60 Above 60
we can assume that all the family members are there in customer database. Lower middle 30.92% * 41.32% = 30.92%* 51.74% = 30.92%* 6.94% =
class 12.78% 16.00% 2.15%
Ratio of customers belonging to urban and rural is 0.975: 0.025 (similar to the ratio
of the population of Delhi in urban rural) Middle class 39.08% * 41.32% = 39.08% * 51.74% = 39.08% * 6.94% =
Source: pg 16 Demographic report 16.15% 20.22% 2.71%
Percentage of Customers in rural belonging to 3 socio economic classes.
Lower Middle class – 10.95% , Middle class – 56.38%, Upper Middle class – Upper Middle 30% * 41.32% = 30% * 51.74% = 30% * 6.94% =
class 12.4% 15.52% 2.08%
32.67%. (assumed to be similar to the percentage of people in Delhi belonging to
these classes) Source: pg 31 MPCE 68th report
Percentage of Customers in urban belonging to 3 socio economic classes.
Lower Middle class – 30.92%, Middle class – 39.08%, Upper Middle class – 30%. Assumptions – Dynamic Variables
(assumed to be similar to the percentage of people in Delhi belonging to these
There would be some people who don’t follow regulations because of negligence.
classes) Source: pg 31 MPCE 68th report
Like in case of people travelling in two wheelers don’t wear helmets even though
The customers in each socio-economic class can be segregated into 3 age
they know it can lead to deaths. Similarly people would be negligent to wear the
groups and the percentage belonging to these age groups are below 21 –
face masks. We estimate the percentage of these people by people not wearing
41.32% , 21 to 60 – 51.74%, above 60 – 6.94% . (assumed to be similar to the
helmets. The reason for negligence are 16% don’t wear helmet because they
percentage of people in Delhi belonging to these age groups) Source: pg 11
believe they are not required to by the law, while 22% don’t wear it simply due to
Demographic report
the force of habit. The study also reveals that 13% don’t wear helmet due to the
Now applying these percentages to the different socio-economic class for
cost of it, while 29% believe not wearing helmet bring more comfort while riding.
both rural and urban population
These reasons also apply for not wearing face masks. The base number for
For Rural population
various scenario is taken based on these and varied based on the socio-
Below 21 21 - 60 Above 60
economic class and age.
Lower middle 10.95% * 41.32% = 10.95% * 51.74% = 10.95% * 6.94% =
class 4.52% 5.66% 0.76% For Example: When wearing masks is mandatory by law then the reason for not
wearing masks would go down by 16% based on above data. For upper middle-
Middle class 56.38% * 41.32% = 56.38% * 51.74% = 56.38% * 6.94% = class people 13% of people who didn’t buy helmet will not apply.
23.30% 29.17% 3.91%
Upper Middle 32.67% * 41.32% = 32.67% * 51.74% = 32.67% * 6.94% =
class 13.50% 16.90% 2.27%
3
Estimation of Opportunity Size
Scenario – wearing masks optional- lockdown relaxed/ removed
Lockdown relaxed - No educational institutions, No Entertainment places, No social
gatherings
Rural Lockdown removed – Schools, colleges which have exam would function,
Entertainment places like mall, theatres would be open, Social gatherings with limitations.
Class Age Need Negligence Cotton Surgical N95 Total Masks
<21 30-50% 50-60% 0.68-1.36% 0.68-0.90% 0.00% 1.36-2.26% The Need and the Negligence values are varied based on the age and socio-
Lower Middle 21-60 70-80% 60-80% 2.38-3.63% 0.91-1.59% 0.00% 3.97-4.53% economic factors. Since educational institutions would not function in relaxed
Class
60> 50-60% 30-40% 0.11-0.18% 0.27% 0.00% 0.38-0.46% phase people with age < 21 going out in relaxed will be lesser than in locked
removed stage. Also people under age 21-60 would be going out more, so Need %
<21 40-50% 30-40% 0.00% 2.80-4.66% 6.52-6.99% 9.32-11.65%
is higher. Senior citizens are the most vulnerable so the Need and Negligence
Middle Class 21-60 80-90% 40-50% 0.00% 9.33-13.13% 13.13-14.00% 23.34-26.25%
would be higher in their case.
60> 80-90% 20-25% 0.00% 0.63-0.88% 2.50-2.64% 3.13-3.52% The values are in range because the need and negligence would be different for
<21 50-60% 20-30% 0.00% 1.35-2.43% 5.40-5.67% 6.75-8.10% Lockdown removed and relaxed stage. The need of masks increase when
Upper Middle 21-60 85-90% 40-50% 0.00% 5.74-7.61% 7.61-8.62% 14.37-15.21% lockdown is removed but the negligence increases because people might think the
Class
60> 90-95% 10-15% 0.00% 0.20-0.32% 1.83-1.84% 2.04-2.15% situation has become normal.
Scenario – wearing masks mandatory- lockdown relaxed/ removed
Urban Rural
Class Age Need Negligence Cotton Surgical N95 Total Masks Class Age Need Negligence Cotton Surgical N95 Total Masks
<21 30-50% 45-50% 1.72-3.51% 2.11-2.87% 0.00% 3.83-6.39% Lower <21 40-70% 40-45% 0.72-1.43% 1.09-1.74% 0.00% 1.81-3.17%
Lower Middle 21-60 80-90% 55-70% 7.04-10.08% 4.32-5.76% 0.00% 12.80-14.40% Middle 21-60 65-80% 50-55% 1.84-2.49% 1.84-2.04% 0.00% 3.68-4.53%
Class Class
60> 50-60% 30-35% 0.32-0.45% 0.75-0.84% 0.00% 1.07-1.29% >60 40-50% 25-30% 0.08-0.11% 0.23-0.27% 0.00% 0.31-0.38%
<21 40-50% 30-40% 0.00% 1.94-3.23% 4.52-4.84% 6.46-8.07% <21 50-75% 25-30% 0.00% 2.91-5.24% 8.74-12.23% 11.65-17.47%
Middle
Middle Class 21-60 85-95% 40-50% 0.00% 6.87-9.60% 9.60-10.31% 17.19-19.21% Class 21-60 80-85% 35-40% 0.00% 8.17-9.92% 14.88-15.17% 23.05-25.09%
60> 80-90% 20-25% 0.00% 0.43-0.61% 1.74-1.83% 2.17-2.44% >60 50-55% 15-20% 0.00% 0.29-0.43% 1.66-1.72% 1.95-2.15%
<21 50-60% 20-25% 0.00% 1.24-1.86% 4.96-5.58% 6.20-7.44% <21 60-80% 20-25% 0.00% 1.62-2.70% 6.48-8.10% 8.1-10.8%
Upper
Upper Middle 21-60 90-95% 40-50% 0.00% 5.59-7.37% 7.37-8.38% 13.97-14.75% Middle
Class 21-60 85-90% 30-35% 0.00% 4.31-5.32% 9.89-10.06% 14.2-15.38%
Class
60> 90-95% 10-15% 0.00% 0.19-0.30% 1.68-1.69% 1.87-1.98% >60 60-70% 10-15% 0.00% 0.14-0.24% 1.22-1.35% 4
1.36-1.59%
 Estimation of Opportunity Size and Weekly Demand Estimation
Scenario – wearing masks mandatory- lockdown relaxed/ removed Weekly Demand - Estimation
We assume that adoption of face masks follow diffusion curve. So the customers
Urban
who would have masks already is 16%.
Class Age Need Negligence Cotton Surgical N95 Total Masks
<21 45-80% 35-40% 2.01-4.09% 3.74-6.13% 0.00% 5.75-10.22% We can also assume the following timeline for the adoption of Face masks. Early
Lower
Middle 21-60 70-85% 45-50% 5.04-6.80% 6.16-6.80% 0.00% 11.2-13.6% majority phase – 2 weeks, Late majority phase – 2 weeks, laggards – 4 weeks.
Class
>60 45-55% 20-25% 0.19-0.30% 0.77-0.89% 0.00% 0.96-1.19% Assumption of the life span of the face masks is based on the socio-economic class.
0.00% 1.94-3.43% 7.75-10.29% 9.69-13.72% This decides when the customer would buy the mask again.
<21 60-80% 20-25%
Middle Cotton Masks: 1 month – LMC
Class 21-60 85-90% 30-35% 0.00% 5.16-6.37% 11.83-12.03% 16.99-18.4%
Surgical Masks: 4 weeks – LMC, 2 weeks – MC, 1 week - UMC
>60 55-60% 10-15% 0.00% 0.15-0.24% 1.34-1.38% 1.49-1.62%
N95: 2 weeks – MC, 1 week – UMC
<21 65-90% 15-20% 0.00% 1.21-2.23% 6.85-8.93% 8.06-11.16
Upper
Middle 21-60 90-95% 25-30% 0.00% 3.49-4.42% 10.32-10.48% 13.81-14.9% Early Majority Phase – 1st week
Class new customers – 17%. Rural – 0.43%, Urban – 16.58%
>60 65-75% 5-10% 0.00% 0.07-0.16% 1.29-1.41% 1.36-1.57%
Rural customer Split up: LMC – 0.05%, MC – 0.24%, UMC – 0.14%.
Potential market size LMC – Lower middle class This would further be split into
MC – Middle class Below 21 21-60 above 60
The total potential market for Apna Bazar would be
UMC – Upper Middle class
Customers in rural = 15 *2.5% =0.375 million LMC 0.02% 0.03% 0.00%
urban = 15 * 97.5% = 14.625 million MC 0.10% 0.12% 0.02%
UMC 0.06% 0.07% 0.01%
Total Masks when mandatory: 66.11 – 80.56% (Rural), 69.31 – 86.38% (Urban)
wearing masks mandatory- lockdown relaxed = 66.11% * 0.375 + 69.31% * 14.625 = Urban customer Split up: LMC – 5.12%, MC – 6.48%, UMC – 4.97%
10.38 million Below 21 21-60 above 60
wearing masks mandatory- lockdown removed = 80.56% * 0.375 + 86.38% * 14.625 = LMC 2.12% 2.65% 0.36%
12.94 million MC 2.68% 3.35% 0.45%
UMC 2.05% 2.57% 0.34%
Total Masks when optional: 64.66 – 74.13% (Rural), 65.56 – 75.97% (Urban)
wearing masks optional - lockdown relaxed = 64.66% * 0.375 + 65.56% * 14.625 = 9.83 The number of masks can be calculated by multiplying the respective population
million group with negligence during relaxed and removed. Cotton masks are bought by LMC
wearing masks optional - lockdown removed = 74.13% * 0.375 + 75.97% * 14.625 = people. So % of LMC in both rural and urban for new customers is multiplied by
11.39 million their respective negligence values plus the old customers whose mask’s life
period is over. 5
Weekly demand and Order Estimation
Cotton Masks Calculation
Lockdown relaxed – Wearing Mask Mandatory
0.02%(New customer Rural LMC Below 21) * 40%(negligence) + 0.03%(New
customer Rural LMC 21-60) * 50% + 0 %(New customer Rural LMC 21-60) *25% + 0
* 25% + 2.12% (New Customer Urban LMC Below 21) * 35% + 2.65% * 45% + 0.36% *
20% = 2.02%
Lockdown removed – Wearing Mask Mandatory
0.02%(New customer Rural LMC Below 21) * 45%(negligence) + 0.03%(New customer
Rural LMC 21-60) * 55% + 0%(New customer Rural LMC 21-60) * 30% + 2.12% (New
Customer Urban LMC Below 21) * 40% + 2.65% * 50% + 0.36% * 25% = 2.28%
Lockdown relaxed – Wearing Mask Optional
0.02% * 50%+ 0.03% * 60% + 0 * 30%+2.12% * 45% +2.65% * 55%+ 0.36% * 30% =
2.54%
Lockdown removed – Wearing Mask Optional
0.02% * 60%+ 0.03% * 80% + 0 * 40%+2.12% * 60% +2.65% * 70%+ 0.36% * 35% =
3.07%
Old or Repeat customers – Since the lifetime of cotton masks is 1 month, we can
assume 25% of the customers who already own cotton masks would buy it. The potential
customer base is LMC and we assume that 50% of them owns cotton masks and others
surgical masks. The lifetime is 1 month, we can assume 12.5% of each 50% come back
again to buy cotton masks and surgical masks every week. UMC customers who bought
N95 and Type 2 last week mask would come again. We 25% of each 50% MC
Customers would buy N95 and surgical masks again, since Lifetime is 2 weeks for them.
Old Customers – 16%. Rural – 0.4% , Urban – 15.60% .
Rural customer Split up: LMC – 0.04%, MC – 0.23%, UMC – 0.13%.
Urban customer Split up: LMC – 4.82%, MC – 6.10%, UMC – 4.68%.
Repeated buyers buying cotton masks = (4.86/2) * 12.5% = 0.30%
Total cotton masks Required for week 1 - (2.02% + 0.30%) – (2.28% + 0.30%)
(Mandatory) or (2.54 + 0.30%) – (3.07% + 0.30%) (Optional)
Cotton masks – 0.24 to 0.33 million (Mandatory) or 0.27 to 0.38 million (Optional)
Surgical masks – 0.77 to 1 million (Mandatory) or 0.79 to 0.97 million (Optional)
N95 Masks – 1.62 to 1.93 million or 1.38 to 1.50 million (Optional)
Total No. of customers = 16.991 to 17.004% (M) or 17.002 to 17.005% (O)
Note: One important thing to note here is, the customer base varies for every
scenario. So even though the percentage for optional is higher, in absolute number
the masks estimated is higher for Mandatory.
Early Majority Phase – 2nd week (only repeat customers will vary)
Repeat customers: UMC – 1st week
new customers – 17%. Old Customers – 33%.
Cotton Masks – 0.3% masks extra sales = 0.27 to 0.36 million(mandatory) or 0.30
to 0.41 million (Optional)
Surgical mask – 0.87 to 1.16 million (Mandatory)) or 0.94 to 1.19 million (Optional)
N95 Masks – 2.04 to 2.43 million (Mandatory) or 1.73 to 1.86 million (Optional)
Total No. of customers = 22.111 to 22.115% (M) or 22.112 to 22.116%
Late Majority Phase – 3rd week (only repeat customers will vary)
Repeat customers: UMC – 1st week, 2nd week, MC – 1st week
new customers – 17%. Old Customers – 50%.
Cotton Masks – 0.27 to 0.36 million (Mandatory) or 0.30 to 0.41 million (Optional)
Surgical mask – 1.15 to 1.58 million (Mandatory) or 1.32 to 1.64 million (Optional)
N95 Masks – 2.99 to 3.54 million (Mandatory) or 2.52 to 2.65 million (Optional)
Total No. of customers =33.931 to 33.945% (M) or 33.932 to 33.936%
Late Majority Phase – 4th week (old customers: UMC – 1st , 2nd , and 3rd week)
new customers – 17%. Old Customers – 67%.
Cotton Masks - same as last week
Surgical Masks – 1.07 to 1.48 million (Mandatory) or 1.24 to 1.63 million (Optional)
6
N95 Masks – 2.88 – 3.43 million (Mandatory) or 2.43 – 2.58 million (Optional)
Weekly demand and Order Estimation
Laggards – 8th week
Total No. of customers = 32.331 to 32.335% (M) or 32.132 to 33.336%
UMC – 1st ,2nd ,3rd ,4th, 5th,, 6th 7th week MC – 3rd ,4th ,6th week LMC – 3rd week
new customers – 4%. Old Customers – 96%.
Laggards – 5th week ( No. of new customer would vary from last week)
Cotton Masks – Same as last week
UMC – 1st ,2nd ,3rd ,4th week MC – 1st ,3rd week LMC - 1st week
Surgical masks – 1.86 to 2.69 million (Mandatory) or 2.29 to 2.94 million (Optional)
new customers – 4%. Old Customers – 84%.
N95 Masks – 5.42 to 6.41 million (Mandatory) or 4.53 to 4.7 million (Optional)
Cotton Masks – 0.28 to 0.39 million (Mandatory) or 0.32 to 0.46 million (Optional)
Total No. of customers = 55.281 to 55.285% (M) or 55.282 to 55.306%
Surgical masks – 1.38 to 1.95 million (Mandatory) or 1.61 to 2.05 million (Optional)
N95 Masks – 3.63 to 4.3 million (Mandatory) or 3.04 to 3.19 million (Optional)
Total No. of customers = 44.161 to 44.165% (M) or 44.162 to 44.186%

Laggards – 6th week (only repeat customers will vary)

UMC – 1st ,2nd ,3rd ,4th, 5th week MC – 2nd ,4th week LMC – 2nd week
new customers – 4%. Old Customers – 88%.
Cotton Masks – Same as last week
Surgical masks – 1.52 to 2..14 million (Mandatory) or 1.75 to 2.23 (Optional)
N95 Masks – 3.85 to 4.56 million (Mandatory) or 3.30 to 3.37 (Optional)
Total No. of customers = 47.214 to 47.219% (M) or 47.215 to 47.239%

Laggards – 7th week

UMC – 1st ,2nd ,3rd ,4th, 5th,, 6th week MC – 1rd ,3th ,5th week LMC – 3rd week
new customers – 4%. Old Customers – 92%.
Cotton Masks – same as last week
Surgical Masks – 1.76 to 2.53 million (Mandatory) or 2.14 or 2.72 million (Optional)
N95 Masks – 5 to 5.91 million (Mandatory) or 4.18 to 4.34 million (Optional)
Total No. of customers = 51.751 to 51.756% (M) or 51.752 to 51.776%