Using this in a case: growth and new product cases
What to ask, what to calculate and what to say when a case is about winning customers, growing sales or launching something new.
Key takeaways
- In a growth or launch case, write the customer maths first: sales = buyers x purchases per buyer x price, split by segment or channel.
- The consumer goods brief shows how brands, shelves and promotions work in one industry from end to end.
- The strong answer turns the question into a sum, says which branch probably matters and why, and asks for the data that decides it.
Key idea
In a growth or launch case, write the customer maths first: sales = buyers x purchases per buyer x price, split by segment or channel. Each idea in this module is a branch of that sum. Then put numbers on the two or three branches where this business most likely wins or leaks.
What to ask
- Who buys today, by segment, and which segment earns the profit?
- Why do they choose us over the next best option, and what would they pay?
- Where does the funnel leak: reach, trial or repeat?
- How many customers come back: a cohort table or a repeat rate?
- Which channels do we sell through, and what does each keep per unit?
- What does a new customer cost, and how do we know the marketing caused them?
What to calculate
- Contribution by segment, not revenue by segment.
- The funnel: people at the top x each stage's rate, with repeat buyers counted separately.
- The settled customer base (new customers / churn) when retention is the question.
- Contribution per unit by channel, and per customer over several orders for direct selling.
- Paid CAC, payback and break-even ROAS when marketing spend is the question.
- For a launch: new units x contribution, minus contribution lost on your own products (cannibalization), minus launch cost.
Worked case
A dairy brand in Saudi Arabia wants 20 percent more revenue
The prompt
A fictional dairy brand in Saudi Arabia sells a yoghurt drink to 2 million households, each buying 20 times a year at SAR 5 net to the brand: SAR 200 million of revenue at a 30 percent contribution margin. It wants 20 percent more revenue within two years. Three ideas are on the table. A: get into 3,000 more convenience stores, winning 250,000 new buying households at 12 purchases a year, with SAR 1.5 million of listing fees. B: a loyalty and multipack offer that lifts existing households from 20 to 22 purchases a year, costing SAR 2.5 million. C: a protein drink for gym-goers, bought by 300,000 households 15 times a year at SAR 8, with a 35 percent margin, SAR 6 million of launch cost, and 25 percent of its revenue taken from the existing drink. Which ideas should it back? (Figures are illustrative.)
This structure comes from the goal maths: revenue = buying households x purchases per household x price. Idea A adds households through a channel, idea B adds purchases per household, idea C adds a new product for a new segment.
The structure
- Revenue gap = 20 percent of SAR 200 million; close it at the best contribution
- More buyers: wider distribution (A)
- More purchases per buyer: loyalty (B)
- Key: New segment and product: protein drink, net of cannibalization (C)
Working it through
1. The gap
20 percent of SAR 200 million.
Revenue gap (SAR millions):200 × 0.2 = 402. A: revenue
250,000 households x 12 purchases x SAR 5, in SAR millions.
Idea A revenue (SAR millions):0.25 × 12 × 5 = 153. A: net contribution
30 percent margin minus SAR 1.5 million of listing fees.
Idea A net contribution (SAR millions):15 × 0.3 - 1.5 = 34. B: revenue
2 million households x 2 extra purchases x SAR 5.
Idea B revenue (SAR millions):2 × 2 × 5 = 205. B: net contribution
30 percent margin minus SAR 2.5 million.
Idea B net contribution (SAR millions):20 × 0.3 - 2.5 = 3.56. C: gross revenue
300,000 households x 15 purchases x SAR 8.
Idea C revenue (SAR millions):0.3 × 15 × 8 = 367. C: net new revenue
Minus the 25 percent taken from the existing drink.
Idea C net new revenue (SAR millions):36 - 36 × 0.25 = 278. C: net contribution
35 percent on the new drink, minus 30 percent on the SAR 9 million lost, minus SAR 6 million launch cost.
Idea C net contribution (SAR millions):36 × 0.35 - 9 × 0.3 - 6 = 3.99. Ideas A and C together
Net new revenue from both.
A plus C net new revenue (SAR millions):15 + 27 = 42
The recommendation
The brand should back the protein drink and the convenience store push, which together add about SAR 42 million of revenue, enough to close the SAR 40 million gap. First, the protein drink is the largest prize at SAR 27 million of net new revenue and SAR 3.9 million of contribution in year one, even after the launch cost and the sales it takes from the existing drink; from year two, without the launch cost, it earns about SAR 9.9 million a year. Second, more stores add SAR 15 million and SAR 3 million of contribution at low risk. The loyalty offer earns a similar SAR 3.5 million on paper, but making existing buyers buy more often is the hardest lever to move, so test it in one region first. The main risk is that gym-goers try the protein drink and do not come back. As a next step, run a three-month test in Riyadh gyms and stores and track the repeat rate before the national launch.
Next steps: Test the protein drink in one city and track repeat purchase, not only trial; Check which convenience chains reach households we do not reach today; Run the loyalty offer in one region against a region without it.
The interviewer asks: "How would you grow this brand?"
A list of marketing ideas
"We could do social media, influencers, a loyalty app, new flavours, discounts and a rebrand."
Built from the customer maths
"Revenue is buying households times purchases per household times price. Today we reach 2 million households at 20 purchases. For a brand like this, growth usually comes from more buyers, so I would start with distribution gaps and new segments, then check whether repeat is healthy. Can I see sales by channel and our repeat rate?"
Why the stronger answer wins: The strong answer turns the question into a sum, says which branch probably matters and why, and asks for the data that decides it. The weak one lists tactics with no way to rank them.
What to say
- Lead with the answer and the number: "Back the protein drink and wider distribution; together they add about SAR 42 million."
- Give the reasons in customer terms: which segment, which stage of the funnel, which channel.
- Name the risk that the customer maths exposes: weak repeat, high CAC, sales taken from your own products, a retailer reacting.
- End with a test that measures cause: a pilot region, a held-back group, or a cohort you can compare.
A subscription video service in Indonesia says revenue growth has stalled even though sign-ups are at a record high. What is the most useful first piece of data to ask for?
The consumer goods brief shows how brands, shelves and promotions work in one industry from end to end. The strategic moves library covers channel shifts, going direct to consumer and pricing moves, with the numbers to check.
Read the consumer goods industry briefGoing direct, opening a marketplace, bundling and premiumisation are all decisions about customers and channels. Each move page shows when it creates value and when it destroys it.
Browse the strategic movesIn a launch case, a new flavour sells SAR 10 million, but 40 percent of its buyers would otherwise have bought your existing flavours. What revenue does the launch really add?
You have finished the maths in a growth case. How should you open your answer?
Sources for this lesson (1)
- Recognized public explanations of case-interview concepts and terms
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