Marlow Chemicals: Is the Growth Worth What It Costs?
Marlow Chemicals sells specialty chemicals subscriptions in India. Growth has been strong and the board has asked whether it is profitable growth.
Marketing spends ₹63 Cr a month and acquires about 2,795 new customers in that time. Average revenue per user is ₹3219 a month at a 60% gross margin. Monthly logo churn runs at 5.1%.
Roughly 80% of new customers come through paid channels; the rest arrive organically but are counted in the same blended figure. The CMO reports a healthy LTV/CAC and wants to double the budget.
spend
- new customers per month
- 2795
- monthly marketing spend cr
- 63
- paid share of new customers pct
- 80
economics
- arpu monthly
- 3219
- gross margin pct
- 60
- monthly churn pct
- 5.1
derived hints
- blended cac
- 225403
- payback months
- 116.7
- ltv gross margin basis
- 37855
- implied lifetime months
- 19.6
Advise the board. Your answer should provide:
- Analysis — CAC, LTV on a margin basis, the ratio, and payback in months. Show the working.
- Risks — what the blended number is hiding.
- Recommendation — scale, hold or cut, and where.
State any assumptions you make.
80 points, 60% to pass.
- recommendation20
- market analysis20
- risk assessment15
- financial analysis25
Reveal suggested structure
CAC = spend / customers acquired. LTV = ARPU x gross margin x 1/churn. Judge on payback period and on unblended channel economics.