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Visual merchandising is the activity of promoting the sale of goods, especially by
their presentation in retail outlets. (New Oxford Dictionary of English, 1999, Oxford
University Press)
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Rosemary Varley (2001) indicated that visual merchandising is used for aspect of
product management that is concerned with presenting the product within a retail
outlet to its best advantage.
Ko Floor (2006) observed that Visual Merchandising injects life into the store as well,
dramatizing the brand and merchandise offer.
Nirupama Pundir observes that visual merchandising is the “icing on the cake”. It’s
the first tactical representation of projected merchandise that the customer will see.
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Research Methodology adopted
Research in common parlance refers to search for knowledge
The term research refers to the systematic method consisting of enunciating the
problem , formulating a hypothesis collecting the data , analyzing the facts and
reaching the certain conclusions either in the form of solution towards the concern
problem or in certain generalization for some theoretical formulation .
Research Methodology is a way to systematically solve the research problem .It may
be understood as a science of studying how research is done scientifically.
For completing the project work, data inputs were collected from the following
sources:
Primary Data:
Collected data through discussion with the Sales manager/Area sales
manager of PepsiCo.
Secondary Data:
Collected data from personnel manual of Pepsi.
Collected data from different magazines, journals, News papers and Internet.
Research method being followed is Survey Method and Observations. The
sampling unit is the basic unit containing the elements of the population to be
sampled. Sampling unit for the study include different retailers of Central Delhi.
After covering particular market data digging is performed and consolidated results
of each market is shown in organization in graphical format along with
suggestions/scope of improvement to maximize market penetration of our product.
This easy to understand data present the unbiased picture of market to the
organization and helps them to create value for their product to customers by giving
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them better services, higher management by letting them know their soft spots and
finding areas of immense potential in markets .Output of this survey was given as
feed back to Territory Development Manager and Area Sales Manager ,which when
consolidated is presented to upper management ,discussed in organizational
reviews .Area wise input is given to central executive of that region enabling him to
know the opportunities available for him to do more business which in term helps him
to achieve his target and ultimately yielding to better appraisal and growth in firm.
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FMCG Industry Snap Shot:
FMCG industry size
In Rs billion MAT DEC 2008 MAT DEC 2009
FMCG Industry Size 1,023.9 1,161.1
Growth rate (%) 13.4%
Source: AC Nielson
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Indian FMCG industry size estimated at
around US$ 25 bn.
Steady double digit growth in the
sector
Personal care & Food products dominate the
sector
Many categories are currently small
andoffer huge potential
Rural India contributes c. 33%
of the overall FMCG sector
Category Wise Share of Sector:
Hair Care7%
Food Products40%
Personal Care20%
household 4%
others5%
baby care2%
OTC products4%
hair care7%
fabric care11%
Source: AC Nielson
40% share of food products in F.M.C.G offers whole set of opportunity for juice
segment.
FMCG Growth: urban and rural
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Juice Market -India
Indian Juice industry has emerged as a great opportunity for non-alcoholic drinks
market and poses great opportunity for many firms.
According to RNCOS (industry research firm) latest research, “Indian Non-Alcoholic
Drinks Forecast to 2012”, the juice market (including both fruit and vegetable) has
emerged as a fastest growing segment of the Indian non-alcoholic drinks market
over the recent past. Market research foresees the Indian market for fruit/vegetable
juices to grow at a CAGR of around 24% (in volume terms) and around 30% (in
value terms) from now till 2012.
It is learnt that convenience and natural taste together with health-consciousness
has played an important role in the growth of Indian juice market in recent years.
Sales have been boosted by the changing lifestyle of the Indian middle-income
group amid rapid urbanization. Furthermore, it has been seen that cola sales have
fallen dramatically after rising health concerns associated with it and this seem to
have benefited the fruit beverage industry. Tetra packs have emerged as a boon for
providing practically fresh and preservative-free juice.
Number of Indian players have been entering or expanding their portfolio into the
segment, after acknowledging the enormous future market potential. Dabur India, for
instance, recently planned to expand its offering under flagship fruit drink brand
'Real'. It is also planning to add two more variants as it eyes a bigger pie of the
Indian fruit-based juice market. Another player, Parle Agro, the maker of mango
drink Frooti, announced its entry into the 100% juice market in late 2008. Other
major brands include PepsiCo’s Tropicana and Coca-Cola’s Minute Maid.
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India: Consumption Story
Estimated juice market in India is worth RS 600Crore.So with an ever-growing
customer base of Middle- Class, juice making companies will have wider access to
consumers who can shell out money to buy juices.
So we can say with ever increasing disposable income and increasing awareness
among consumers there is immense potential in Juice market in upcoming years.
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Segmentation analysis for fruit juice
Introduction:
India is the second largest market for foods and vegetables in the world. The
production of fruits account for 48.5 million tones. However, the fruit juice market
has not been fully tapped because of poor infrastructure and storage facilities, and
highly unorganized market.
However, with people turning more health conscious, the non-carbonated beverages
have become one of the fastest growing businesses. The major growth drivers in
fruit juice market are increase in health consciousness, disposable incomes, and
more sophisticated cocktail culture. The category of fruit juices are dominated by
Pepsi with its brand Tropicana, Dabur Foods with its brand Real, Coca Cola India
with its brand Maze. The market now has a variety of fruit juices like 100 % fruit
juice, nectar, fruit drinks, fruit-based milk drinks and fruit-based soya milk.
Geographic segmentation:
The fruit juice market share is concentrated in the metros like Delhi, Mumbai, Kolkata
and Chennai; mini metros like Benguluru, Hyderabad, Pune, Chandigarh,
Ahmadabad and small cities like Ludhiana, Amritsar and Jalandhar.
The growth of the fruit juice market increased with the proliferation of the
supermarkets and malls in the metros and mini-metros.
As a growing category, fruit juices must fight the battle to win the shelf space of
markets. Hundreds of new beverages are introduced every year. Even though more
supermarkets are being built in a larger size, their shelf space is still unable to
accommodate all of these new beverages in the market.
Demographic segmentation:
The regular consumers of fruit juices are children, educated housewives, executives,
working professionals, young health-conscious adults and the ageing population.
The fruit juice companies have targeted all the age groups by different juices. The
customized packaged fruit juices are targeted at kids below 6 years. They are
available in number of flavors and fortified with calcium which is required in higher
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quantities by children below 6 years of age. Further, they are available in 200 ml
packs which are just right for kids.
The different pack sizes like the half and one liter pack are aimed at increasing the
in-home consumption of juices.
Fruit juices are an instant source of energy which helped in tapping the
sportspersons and kids who are actively involved in sports. For example, Pepsi’s
Tropicana has tied up with equestrian sports and polo clubs to build bridges with the
well-heeled young adults.
The increasing cost of health care has helped widen the customer base to the
ageing population. Also, as fruit juices are rich in energy and nutrients, ill and post
surgery patients on liquid diet have increased the customer segment.
Socio-economic segmentation:
The fruit juice market has shown a tremendous growth in the recent years. One of
the major reasons for this is the increase in the disposable income. Generally,
individuals belonging to higher and middle socio-economic strata are the regular
consumers of packaged fruit juices. However, the 65 ml packs of mango Frooti
launched in Pune by Parle Agro for Rs. 5 has aimed at broadening the socio-
economic customer segment.
Psycho graphical segmentation:
Healthy living is a growing trend. However, fruit juices have more to offer than just
health. They provide an easy gateway to a healthy lifestyle. Consuming fruit juices is
almost an effortless switch compared to dieting or exercising and it does not require
major behavioral change. Active and health oriented people are no longer the
primary consumer of fruit juices. Nowadays, the consumer base for fruit juices is
broader. These products attract a wide range of consumers ranging from those
having specific health needs to those simply looking for healthy refreshments. In the
next few years, the fruit juice industry will be challenged by these savvy, confident,
and opinionated consumers. They no longer see these beverages as simple thirst
quenchers with health benefits. They see these products serving other needs that fit
a simple and logical proposition, such as ease of preparation, high level of
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availability, ergonomic packaging, portability, and other factors that make up an
individual's perception of value.
In order to attract the kids segment, the Tetra packs have animated fruit characters
which communicate the fun, taste, and nutrition aspect. Moreover, the parents can
give their children a portable beverage that is a healthy alternative to the nutritionally
bankrupt soft drinks. They are designed in such a way as to fit in the Tiffin boxes.
Further, there has been an increasing interest in more natural, organic products.
Consumers perceive this as the next best thing to having a fresh fruit. Convenience
is no longer the selling point, the naturalness is.
However, there are certain consumers who are wary of packaged food, as they feel it
has preservatives and are not fresh. Thus, companies like PepsiCo, Dabur Foods
Ltd. have developed preservative free fruit juice offering consumers with a great
taste and wholesome nutrition of freshly squeezed juice in hygienic and attractive
packs.
However, despite of health benefits, some youngsters love to drink only carbonated
soft drinks. Thus, some companies have developed carbonated fruit juices which do
not contain caffeine and caramel coatings that are harmful to health.
The increased consumer interests in fruit juices can also be attributed to the addition
of minerals, vitamins and herbs associated with health, vigor, longevity and
enhanced quality of life,. There is a niche which is now demanding more top quality,
premium products and produced with added vitamins, minerals, fibs, soy or omega-
3. There are niche customers who take juice as a part of their diet and do not bother
about the taste.
For many consumers, flavor is the deciding factor. While orange, apple and mango
dominate the market, other juices such as grapefruit, watermelon and orange-
carrot combination are also appealing to some. In order to match the traditional
taste buds, traditional recipes like Aaam ka Panna and jamun variants have been
introduced in the market.
Conclusion:
Product development and positioning will need to become more targeted, shifting
from mass market to a mass customized approach in which particular audiences
are identified by lifestyle, ethnic group and other factors. Thus, the fruit market is
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very lucrative. Among the market drivers are the increasing cost of healthcare,
ageing population, consumer health awareness and choice and scientific evidence
of certain ingredients.
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Details of Actual work undertaken
Tropicana-Impulse Buy
PepsiCo sees Tropicana as an Impulse buy in India hitherto and not a planned
purchase. Aim of Tropicana division is to make it a planned purchase within Indian
community and make it a part of consumer’s daily breakfast. Impulse buy means an
unplanned buy .When a family is going to market for grocery shopping, name of
Tropicana Juice is never mentioned in the shopping list. It is only at the moment
when consumer enters a shopping store and sees Tropicana he picks it up and buy.
So SHELF-VISIBILITY is an important facet for sales of Tropicana. F.M.C.G goods
like tooth paste, soap are planned purchase.
Aim of Tropicana Division In PepsiCo’s Gurgaon office is to make Tropicana a
planned purchase rather than an impulse buy.
Tropicana: Extremely Lucrative product for Retailer
Being a great health product for consumer it is also a very lucrative product for
retailer as well. It offers a trade down margin of 15% in addition to additional
scheming that can go up to 5% for Traditional Trade. Margin of Distributor is 5%.
For easier assimilation look at the below table
Tropicana 1 L Price INR
Cost Distributor 62.10
Cost Retailer 65.21
Cost Consumer (M.R.P) 75
Margin Retailer 9.78
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So a 1L pack of Tropicana with M.R.P 75INR cost 65 INR to Retailer generates a
handsome margin of 9.7 INR. So a Wills Navy cut Cigarette costing 5INR generates
margin of 50paisa to retailer. So on selling 20 cigarette retailer generates a revenue
equivalent to selling 1 L Tropicana. So a sale of 100 INR retailers of 20 cigarettes
makes the same amount from sale of 75INR Tropicana 1L.
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Classification of Market: Delhi & NCR
In Delhi Tropicana and Gatorade is sold in 3 trades
1. Traditional Trade-Traditional Trade is defined as all that trade that flows through
traditional outlets, such as kiosks, corner shops, local mom and pop shops, open
markets, etc. It represents all trade with the exception of that which flows through
retail chains, supermarkets, or super stores
Key Characteristics
a) Traditional trade is characterized by a large complex network of
independently owned retailers and distributors carrying primarily local or
regional brands.
b) It is the prevailing form of consumer trade in emerging markets.
c) It can be difficult to penetrate for both national and multi-national firms given
its highly fragmented nature, yet it serve as the conduit for reaching the
largest percentage of the consumer population
Importance of Traditional Trade can be very easily judged by the following data
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Modern Trade
Stand Alone
Modern Trade
Traditional Trade
Market Classification:Delhi&NCR
For Tropicana division Traditional Trade forms heart of their business, so they
make their best to maximize the penetration at T.T.
Modern Trade:- Modern Trade is defined as all that trade that flows through retail
chains, supermarkets, or super stores, etc.
Key Characteristics:-
a) Above an indexed covered area (different users have different indices but
safe to say 3000 sq. ft. as the minimum)
b) SKUs above an index number (again, different for different users, but again
safe to peg it at above 2500)
c) Bulk Buying/ Inventory management
d) PAN India Presence.
e) Discounting (and frequently passing it out to customers as well)
f) Self Service with electronic billing and credit
g) Example: Big bazaar, Wal-Mart, , Reliance Fresh
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S.A.M.T:-To much of the extent it is similar to M.T but it may/may not have
multiple chains of stores
.Example:-Garg -Dastak, Needs (18 stores in Gurgaon ,SRS ,Big Apple,
EzeeDay
Jan Feb Mar Apr May Jun Jul Aug Sep0
5
10
15
20
25
30
35
Tropicana Share % T.T
20082009
Shar
e %
Jan Feb Mar Apr May Jun Jul0
5
10
15
20
25
30
35
Tropicana Share% M.T
20082009
Shar
e %
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Understanding Market Scenario:-Faridabad
Initially to have a better understanding of how things work and to get doubt cleared
we were instructed to meet Central Executive of Faridabad for two days.
Market Covered
Sector Covered Number of Shops
28 5
29 4
30 6
Mom and Pop Shops 12
Modern Trade Vishal Mega Mart,SRS
Smart Facts-Faridabad
a) Suburban City-Over 2 Million Population
b) Generate about 60% revenue of Haryana State
c) 50% I.T collected Haryana comes from Gurgaon & Faridabad
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Learning’s: Faridabad-
Understanding Reporting Hierarchy and Responsibilities:-
One Central executive is responsible for execution of Tropicana in Faridabad. He
leads a team of three P.S.R (Pepsi sales representative) and three merchandisers
Before the morning visit start C.E talks with all P.S.R’s and list down progress of
previous day, compares it with actual target and gives them the feedback. Also he
asked for the current days plan and any issues being faced by them. Task of C.E is
to execute so it’s his responsibility that Products are being executed in the market up
to the mark, sort out any grievance that P.S.R is having issues with, fix out pricing of
Shop in Shop.
P.S.R is responsible for taking orders; managing new customer base and
merchandiser are responsible for doing visual merchandising on all the shops.
Mode of transportation for merchandiser is bicycle and for P.S.R is motor cycle.
Each P.S.R covers daily 30 shops and merchandiser 25 shops.
Every P.S.R has a Tropicana route book. It contains the following fields
a) Name of Shop.
b) Stock Details of Retailer
c) Order Details –Previous Order Details, Current order details
d) Replacements if any
This route book serves as input for distributor for order processing. Also data from all
P.S.R is consolidated by C.E and presented to Area Sales manager.
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Myopic Hierarchy View-Faridabad
This is a myopic hierarchy because it sees the market from a grass root level and
deals with people that only interact with retailers on a daily basis.
Understanding -Merchandising/ Displays: -
Proper merchandising and display at the store level promotes sales; it promotes the
consumer to switch over to the displayed brand ignoring existing brand loyalties; it
persuades him to buy “now” rather than latter; and it makes him buy more than the
originally intended quantity. All these are essentially sales promotional functions. While
advertising can only make a consumer aware of the product or generate a desire for it,
merchandising/ display often motivates a consumer to buy a product instantly. Point of
purchase displays are one of the most widely used sales promotions tools. With the
proliferation of brands, innovative displays have become a prerequisite for success. In
the store brands compete with each other for consumer’s attention.
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Central Executive-1
P.S.R-3 Merchandisers-3
Display Enhance Counter Pull
Display at the point of purchase can be rightly describe has a “clincher” in the marketing
process. When awareness and interest has been created in the consumers mind
through advertising and other promotional measures, a good display in the store can
help to clinch a sale. The displays are also effective in inducing brand switching. A
consumer normally goes to a retail outlet to purchase his usual brand. At the retail
outlet, a good display of a competition brand can command his attention and he may
buy the competing brand. In other word Good display can lead to impulse buying and
brand switching. A good display is the surest way to attract the consumers. It pulls the
consumers to the consumers. In fact, displays have their origins in the age old saying
that “goods well displayed are half sold”.
Display can be of various types- window display, wall display, counter display, aerial
display, or floor display, depending on where it is fixed. Display materials to constitute a
large spectrum, like posters, danglers, stickers, mobile wobblers, steamers, balloons,
etc. To enhance the display effect, manufacturers use several gadgets and approaches.
Illuminated designs, motion displays, sky writings, etc., add to the display effect. Some
companies organize display units locate them at vantage points within the store to
attract store traffic. Skillfully designed and strategically located display units can
enhance the sales appeal. More and more firms are going in for innovative displays to
give their brands visibility.
Distributor’s Role
There is one distributor that serves entire Faridabad region. Along with Tropicana he
also deals with other products of Godrej Ambi Pure, Parachute hair oil to name a
few. Distributor is appointed by the company and following points are taken into
consideration while appointing a good distributor.
a) Distributor needs to have good market reputation and links.
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b) He should have good infrastructure to carry out day to day operational
activities-distributor must possess a warehouse, vehicle for delivering order
and manpower who can work as P.S.R and Merchandisers.
c) Other products that distributor sells also plays an important role and tells
about reputation and worthiness of distributor.
Salary of P.S.R and Merchandiser is paid by the distributor that later is reimbursed
by the company, .P.S.R and Merchandisers are not on company pay roles.
It must be noted that it is the Distributor and P.S.R who sells the product and not the
Company official. So an assiduous distributor is required to ameliorate the product.
Understanding Mechanics of Distribution Channel
The supply chain of products in the FMCG market in India is one of the longest
supply chains an industry could really have. There are as many as 5 levels of
intermediaries involved in the entire supply chain through which a product passes
before reaching the end consumer. What has been observed is that even though
these FMCG companies are big multinationals and Indian but face a major challenge
of making their products available in the market in the right quantities and in the right
time. This is simply because these companies don’t really have a wide network of
sales agents and other force which is required and is ideal for catering their products
to the markets.
This aspect is taken over by distributors, wholesalers and retailer whose margins on
these products actually double the price of these products when a final consumer
buys it. The margins kept by these intermediaries range from 2% to 5%.
The products in this industry are transported from manufacturing units via c & f
agencies or warehouse to distributors who further sell the same to wholesalers or
stockiest who finally sell it to the retailers in the market. These products are
transported either via roadways or railways within the domestic markets and
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normally don’t take more than a week to reach the retailers. FMCG products are
normally a high volume ball game and products have to essentially be available in
the market at all given points of time and at all given points of purchase and
therefore the distribution activities are highly volatile and dynamic. The supply of
products takes place virtually on a daily basis in fixed quotas or otherwise, to
retailers as per their requisitions and the anticipation of demand and the
performance of products in the recent past. All such criteria are taken into
consideration before the quantum of products being dispatched to the next level of
intermediary. Since it’s a volume game, manufacturers make all possible efforts to
boost sales and promote their distributors to earn more and more orders from the
retailers and wholesalers. A close check is maintained on the flow of the products on
a daily, weekly, fortnightly and monthly basis to determine the trend in the business
and flow of products and consumption. This activity also helps to find out drawbacks
of the distribution system, if any, and rectify them within time.
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34
Tropicana is manufactured in India in Pune. From Pune goods are supplied to Carry
and forward agent .Carry and forward agent furthers supplies it into two divisions:-
1) C&F Agent directly send the goods to Modern Trade like Big Bazar ,Spencer
2) C&F Agent send it to distributor.
Distributor further can sell the goods to retailers or wholesalers.
1) Wholesalers further sell goods to retailer which then is received by the
consumers.
2) Retailers receiving goods directly from company’s distributor can sell goods to
consumers.
Advantages of purchase from Companies Distributor over Wholesalers.
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WholeSalers Company Distributor
Credit for 15 days
Replacement of expired goods
Merchandiser visit to shop
Customer Satisfatction
No Credit Policy
No replacement
No merchandising
Distributor Web in Delhi &NCR (Faridabad &
Gurgaon)
So there are total 12 distributors doing business for Tropicana.
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North Delhi3 distributors
East Delhi1 distributor
South Delhi 4 disrtibutors
West Delhi2 distributors
Gurgaon2 distributors
Faridabad1 distributor
Central Delhi1 distributor
2007 2008 2009 2010
0.91.2
2.5
3.85
Average Turnover per disributor(Rs Crore)Avge Turnover
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Faridabad Market:-
Faridabad is a developing city .Population is unevenly spread, some places are lying
vacant and some places are densely populated. Since, it is a growing market
retailers are very friendly .Width wise coverage is excellent and the company is
working on the concept of depth. It implies that number of shops covered is healthy,
but since it’s a growing depth of Tropicana can be grown, means more cases can be
sold.
In sector 28 there are line of shops that only keep Tropicana and not Real. People
are buying Tropicana and scheme of one glass free is doing wonders for company.
But places where Modern Trade and Traditional trade are located nearby concept of
cannibalization can be seen. A M.T offers Tropicana at Rs 60 where as T.T is selling
the same thing for Rs 75.So consumer prefers to go to M.T rather than T.T
Visual merchandising needs to tighten up .Attractive merchandising are missing
Proper Utilization of P.O.P material needs to be done.
Consumer trends differs according to areas (sector) Counter's Infrastructure & Stock
Holding Capacity differs according to the areas
Also consumer still think of Tropicana as imported product and very few people know
that it is a product of PepsiCo. So customer awareness is lacking
Since Faridabad is a growing city many educational institutes, hotels, private
organizations are mushrooming in the city, so there lies a big opportunity for
Tropicana to sell.
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S.W.O.T analysis of Faridabad Tropicana Market
39
Width-wise excellent coverage(e.g.: outlets covered,facings,stock ) Aggressive sales team.Tropicana monopolyExcellent Push strategy implied.Tropicana 100% enjoys image of quality health product among health conscious.Constantly updating counter network.Latest glass promotion.
Strengths
Visual Merchandising -Meager share of eyeball of customerLacking PULL STRATEGY in terms of V.M. Big fish eating small fish-independent retailers suffering.Still looked upon as Imported product vis-a-vis Real.Unlike C.S.D, dedicated chillers for Tropicana missing
Below are the consolidated findings for Central Delhi
81
Consolidated Graphical Findings West Delhi
82
23%is the exclusive share of Tropicana whereas for real figure stands at 14% with both being together present at 28%.35% is the no juice market.
Market Share in %
Out of 169 shops covered in central Delhi there are 23 shops where only real is present,39 shops have only kept Tropicana ,48 have kept Tropicana -Real both and 17 shops are the new shops discovered where hitherto neither Real nor Tropicana is present.
Market Share In Figures
Tropicana is completely absent from Sadar Bazar.Chandni Chowk -present in 2 shops onlyGatorade is completely absent from Sadar Bazar,Chandni Chowk.
Market Gaps
Karol Bag,Pahar Ganj,C.PGole Market,Jahnde WalanEast Patel nagar,Rajinder Nagar
Tropicana Domination
South Patel Nagar,Sadar Bazar,Chandni Chowk
Real Domination
Gatorade is present in only 17 shops Ideally Gatorade should have been present in 89 shops
Gatorade Presence
Best Performer-East Patel Nagar,Rajinder Nagar,South Patel NagrPoor Performer-C.P,Pahar Ganj,Paharganj,Karol Bag