25-Feb-00 Current date

manu. By Gino in typical Gino mkt share of Gino share

1999 margin (%) china (unit wise) (Rmb) 1999
20 14% 27217500
Domestic
329000
25 8% 16893000
Commercial
49000
20% 30.00 < 3% 8905000
Industrial
Growth 3000
381000 53015500

unit
1999 sold units
Total
Jinghua Fung Wayip Sold to Feima
Domestic
4354 3075 3458 10887 350
Commercial
876 433 568 1877 50
Industrial
37 48 52 137 3

5267 3556 4078 12901

Fonded 1931 Over 50 type of burners Competitive edge

china 1995 Weishaupt - has own distributor chanel and own sales for

OEM Customers 1- B2B process

2- Word of mouth ( from current usres and design insti)

Wayip South china Guangzhou only gino Lost sales of ind. Burners
Fung Central coastal city Shanghai Textile Feima manuf.
Jinghua Northern city Shanghai Boiler manuf. Feima looking for additional 10% discount

Revenue spilt up 80-20

Change incentive motive from unit based to rmb base

 Avg Transf. Price RMB Total wise)
mkt (Price est. range
Imp factors China Boiler mkt
(sold units)
Price 310 makers,250 units 2500 194 mln 79900
77500
Price & sevice 22000 units 9000 198 mln 20080

Reliabilty 60 makers 65000 221 mln 2920

3400 units
102900

unit RMB RMB

Current Business Business from Feima in Revenue from distributors RMB
Feima Manu.
from Feima case of OEM Jinghua Fung Wayip
1055 875000 2373750 10885000 7687500 8645000

163 450000 660150 7884000 3897000 5112000

71 195000 2076750 2405000 3120000 3380000

1289 1520000 5110650 21174000 14704500 17137000

times increase 2.36 39.94 27.74 32.32

cost advantage 10-20 % lower prices than others

ibutor chanel and own sales force as well.

End Customers Governments

50 3250000 RMB/year
1200 in 1999 year
nal 10% discount
 Pricing Of Burners rmb
Transfer price 1
Base price 1.484
Public price 2.3744 60% gross
Contract price 1.89952 on 20% discount
margin fr ratailer 0.21875 on contract price as base

Business from Feima in case giving

them 10% discount on Contract
price
Noveber 2004 Boots known for Health and beauty products Retail
75000 ppl 130 countries
1883 est. pvt company 1300 stores in UK

UK Hair care market

Brand sales directly prop. With advertising expenditure
60 Major brands none is higher than 9%
Exp. Grwth 1-3%
Severe price competition

Competitors
P&G pantene 8.4% uk mkt share
alberto culver 150 stores in UK
L'Oreal century old brand 500 brand 2000 products
5% mkt share UK

Consumers
Changing preferences each decade
too many choices
basic and premium product
Genral belief to change brands gives better results

*For ease of calculation suppose

previous sales 100 units

Promotion Option1
buy2 get 1 free Est.
free least ex. Of all 3 to 300 % including free products 3 times
Non imitable option 60% Prmotional buyers
in %
New sales 300 units old sales 100 units sales increas 200
Retailr profit 79.8 euro old profit 159.6 euro retailer profit cha -50 if born by retailer
Manu. profit -153.216 euro old profit 28.728 euro Manu. Profit chan -633.333 if born by Manu.
% sales increase per unit % drop in manu.profit 0.315789
% sales increase per unit % drop in Retailer profit 4
Promotion Option3
Coupan 50p of 150% increase 1.5 times
redeem in current visit 50% Prmotional buyers
in%
New sales 150 units old sales 100 units sales increas 50
Retailr profit 164.4 euro old profit 159.6 euro retailer profit cha 3.01 if born by retailer
Manu. profit -31.908 euro old profit 28.728 euro Manu. Profit chan -211.069 if born by Manu.
% sales increase per unit % drop in manu.profit 0.236889
Retailer profit increases with increased sales

Our Choice 3 for 2

non imitable
can attract customers inside store, more appealing than others
diverse sale option
most increase in sales and customers
Max sales % increase for per unit % drop in profit, as promotional campaign aims for sales maximization
 cosmetics pharma opticians for men/ IS
1968 1969 1987 1999
1983

Boots obj about hair care mkt

Build new mkt with celeb endorse & create emo. Attac. Bw consume
per unti licence fee for use of celeb name

Retailers
tesco 1800 stores 4500 employee
supermkt Sainbury 700 stores
Morrison 400 stores

H&B retailers superdrug 700 stores 10000 products new products each year
25% pharmacy afordable trendy products

Challenge
No media adver no product variation
Flyer adv at stores signage at stores

Product premium basic

250 ml Avg price 3.99 2
ind. Retailers Margin 40% 25%
Retailer margin 1.596 0.5
cost to retailers 2.394 1.5
Manu. Margin 12% 12%
manu. Cost 2.10672 1.32 minm
Manu. Margin 0.28728 0.18

Promotion Option2
sample gift with regular purchase
sample cost 0.93 euro
Est. 170% of current sales 1.7 times
40% Prmotional buyers
New sales 170 units old sales 100 units
if born by retailer Retailr profit 113.22 euro old profit 159.6 euro
if born by Manu. Manu. profit -109.26 euro old profit 28.728 euro
% sales increase per unit % drop in manu.profit
% sales increase per unit % drop in Retailer profit
 Promotion Target
Sales volume to go up
uplift consumer from basic product
build brand equity

if born by retailer
if born by Manu.
e & create emo. Attac. Bw consumers and brand

new products each year

afordable trendy products

in %
sales increas 70
retailer profit chan -29.0602 if born by retailer
Manu. Profit chang -480.334 if born by Manu.
0.145732
2.408797
 who's who
Current date Jan 2010 Jen mcdonald head digital marketing
Mobile banking launch May2007 douglas brown Vp mobile dev.
david Carrel VP stratey @ starcom

Cost/txn in 2009 2008 2012

Mobile banking 0.1 smart phone user 10% 46%
IVR 0.13 YoY rate 0.4645
Call centre 0.39
ATM 0.16
Branch 1.34

Mobile banking: SMS Mobile payments: Local mobile payments

phone based website Mobile commerce
apps P2P

mobile mkt 5-6 times higher than email channel

Cost / thousand impressins
mobile 10-12
online 5-15
video 20-25
digital marketing Current status 4 mln users in less than 3 yrs, faster than online adoption rate
Current challenge long run & short run position
ratey @ starcom app? increase funtion, new app or refuse to add complexity to app
Brown reluctancy 1- slow down of app
2-not sure if customers want these extra features on app
Carrel stance 1- its another platform to diferntiate, others banks have started
2- or can have dif app for dif target grps.

Inputs - ASK
1. Mobile banking users expected to double in 4 years (to 40mn)
2. Annual number of mobile banking transactions expected to increase 150% in 4 y
3. Mobile banking share of P2P payments expected to rise to 1% by 2014 (over US
4. Mobile banking expected to ensure financial inclusion of non-banked users (Gar

App should be mindful each of the above features/ constraints viz.

1. High traffic/ scalability
2. High value/ number of transactions - security (incidentally, which is the 2nd maj
3. High penetration/ interconnection/ architecture of be modified for P2P connecti
4. Should be simple/ easy to use - Must budget for first time mobile users

Considering overall cost savings in long run, and BofA's size, initial cost of develo
For ref: 2008 profits of USD 4008mn v. max app development costs < USD 1mn

Cost savings (assuming 100% cannibalization from other channels) - 2014 alone
Particulars Assumption (if any) Amount Units
Mobile Banking users Constant Market share 14 mn users
No. of Transactions Same ratio of user/transactions 700 mn transactions
Cost of mobile banking Cost/ transaction * no. of transac 70 mn USD
Cost of IVR Next Best Alternative 91 mn USD
Savings - One Year Worst Case Scenario 21 mn USD

Further, costs of mobile banking are largely fixed costs (except, say, specific server rentals, etc.)
Thus, as scale increases, average cost of mobile banking is bound to decrease further, unlike IVR or physical b
 3- building apps means extra cost 40-50K

ted to increase 150% in 4 years (to 2.50 mn)

se to 1% by 2014 (over USD 3bn in flows)
n of non-banked users (Gartner group input)

ntally, which is the 2nd major reason for non-adoption of mobile banking)
e modified for P2P connection (UPI etc)
time mobile users

s size, initial cost of development must not be a major impedimenting factor, provided design is scalable
pment costs < USD 1mn

rentals, etc.)
her, unlike IVR or physical banking, which call for proportionate increase in investment