Question

Direction: Read the following scenario and answer the THREE questions that follow.
Dhan, a poor but enterprising 15-year-old, resided in the world’s largest slum in a metropolitan city, along with her widowed mother. The densely packed slum housed about a million people, mostly in rickety one room tenements, connected by labyrinthine lanes and by-lanes. Dhan’s mother worked intermittently as a daily wager in a small savoury factory. For a 15-year-old, Dhan’s life was hectic. She spends two hours every day in fetching water for the household, packing breakfast and lunch for her mother. In addition, she had to prepare supper. On her mother’s insistence, Dhan also attended an evening bridge school run by an NGO. Dhan’s dream was to provide a comfortable life to her mother and take her family out of poverty. Of late, Dhan observed that the customers to a nearby tea-cum-savoury stall (TCS), were mostly the slum dwellers, who thronged the stall for its low prices and lack of alternatives. Further, Dhan gathered that the TCS could not cater to all of its customers, and the owner still made a neat Rs.800 profit per day. Dhan saw that a probable first step towards her family’s economic independence could be to own her own TCS.
Dhan with her ingenuity finds a way to scale up her production capacity on her own terms. Though Dhan’s TCS has become the famous “Dhan Dhana Dhan” brand within the slum, it is still unknown to the outside world. Thus, Dhan embarks on the next challenge of creating a market for savouries amongst the masses in the metropolitan region.
From the following, choose the BEST option that will help Dhan to sell her products, at the lowest price, to a maximum number of metropolitan customers?

• A. Overwhelm the metropolitan residents with digital advertisements on Instagram.
• B. Reach out to the malls and high-end retail stores in the metropolitan region through a few marketing executives to sell the products
• C. Hire a celebrity who currently endorses a diamond jewellery brand to endorse the “Dhan Dhana Dhand” brand
• D. Hire a few sales executives to sell products of Dhan Dhana Dhan brand
• E. Engage slum dwellers commuting daily to metropolitan region for work, to sell the products on commission basis

Answer 1

Answer: (E)

To determine the best option for Dhan to sell her products at the lowest price to a maximum number of metropolitan customers, we need to evaluate each option based on cost-effectiveness and reach:

1. Digital advertisements on Instagram: This would entail a significant marketing budget and may not directly reach the targeted customer demographic effectively for immediate sales. Thus, it might increase costs without guaranteeing direct sales.
2. Reaching out to malls and high-end retail stores: This approach could lead to high operational and marketing expenses, including logistics. Moreover, this clientele might not align with Dhan's product price point.
3. Hiring a celebrity endorser: This option would be exceptionally costly and is generally used for upscale branding, not necessary for initial expansion targeting price-sensitive customers.
4. Hiring sales executives: Although it could increase reach, hiring full-time staff involves significant fixed costs, potentially making the product less affordable.
5. Engaging slum dwellers commuting for work to sell on commission: This strategy leverages Dhan's community ties, minimizes fixed costs by paying on a commission basis, and utilizes existing commuter networks for distribution, ensuring low-cost scalability and direct reach to a broader audience.

Given these considerations, the BEST option to help Dhan achieve her goals is to engage slum dwellers commuting daily to the metropolitan region for work, to sell the products on a commission basis. This method offers a cost-effective solution with effective reach and distribution potential.