Marlow Chemicals: Where Should the Acquisition Budget Go?

Marketing
hard40 min0 submissions
BCG
Scenario

Marlow Chemicals is a mature-stage specialty chemicals business in India. The CMO has ₹141 Cr of annual acquisition budget and has been asked to justify next year's plan.

Last year's spend and results:

ChannelSpendNew customersCost per acquisition
Paid search — non-brand₹70 Cr2,719₹257448
Paid search — brand₹20 Cr3,357₹59577
Paid social₹30 Cr1,075₹279070
Affiliates & retargeting₹21 Cr1,404₹149573

Unit economics:

  • Average revenue per user: ₹1230 per month
  • Gross margin: 55%
  • Monthly churn: 4.8%

The board has asked for a 37% increase in new customers next year without an increase in budget. The CMO's instinct is to move money into brand search, which shows by far the lowest cost per acquisition.

Supporting data

channels

spendchannelnew customers
70Paid search — non-brand2719
20Paid search — brand3357
30Paid social1075
21Affiliates & retargeting1404

derived hints

ltv
14094
blended cac
164816
customer lifetime months
20.8

unit economics

arpu monthly
1230
gross margin pct
55
monthly churn pct
4.8
Your task

Recommend an allocation. Your answer should provide:

  1. Analysis — the unit economics and each channel's true efficiency, computed rather than described.
  2. Risks — what your reallocation depends on, and what would change your mind.
  3. Recommendation — a specific budget shift, and how you would prove it works before committing fully.

State any assumptions you make.

Ready to move forward? Up next: Granite Materials: Where Should the Acquisition Budget Go?Next question
How you'll be graded

100 points, 60% to pass.

  • recommendation20
  • channel judgement25
  • problem structuring25
  • quantitative analysis30
Hint
Reveal suggested structure

LTV and payback; per-channel CAC; incrementality of brand and retargeting; test-and-scale allocation