Project Report on Summer Training On To Study The Working Procedure & Marketing Strategies of Aadhar Retail Ltd Submitted to Punjab Technical University In the partial fulfillment of the requirements for the award of Degree of Masters of Business Administration(MBA) 2009-2011 Submitted by: Gagandeep Singh University Registration No.95182239101 DEPARTMENT OF MANAGEMENT
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Project
Report on Summer Training
On
To Study The Working Procedure & Marketing Strategies of
Aadhar Retail Ltd
Submitted to Punjab Technical University
In the partial fulfillment of the
requirements for the award
of
Degree
of
Masters of Business Administration(MBA)
2009-2011
Submitted by:
Gagandeep Singh
University Registration No.95182239101
DEPARTMENT OF MANAGEMENT
SHREE ATAM VALLABH JAIN COLLEGE
LUDHIANA
DECLARATION
I GAGAN DEEP SINGH declare that the project report entitled “STANDARD
OPERATIONAL PROCEDURE AND ITS ADHERENCE RELATED TO AADHAAR
RETAIL MARKETING”, is the produce of my sincere effort. This Summer Internship
Project Report is being submitted by me alone, at SHREE ATAM VALLABH JAIN
COLLEGE, for the partial fulfillment of the course MBA, and the report has not been
submitted to any other educational institutions for any other purpose.
GAGAN DEEP SINGH
2
PREFACE
As a part of MBA degree, it is required for every student to undergo summer training in
an industrial or commercial organisation to get a practical exposure of actual situation
existing in the industry.
I have undertaken my training in AADHAAR RETAILING LTD, LUDHIANA. The
duration of my training was eight weeks.
When I joined AADHAAR RETAIL LTD. , I believed that ‘’RETAIL IS IN EVERY
BIT OF YOUR LIFE” I believe that now I will answer my entire enigma and asked for
queries .During this humble month old stay in the organization , I have made a very
modest attempt in understanding and presenting my ideas as well as enriching experience
through this report .
3
ACKNOWLEDGEMENT
No endeavour can be successful without the active cooperation of the people concerned
with it, which was fourth coming in full during this study. It is extremely difficult to find
words which can do justice to this sort of cooperation; I got in the planning & execution
of this study.
I am deeply indebted to Mr. Anchal Bindal(Sr. Manager HRA) who allowed me to
take training in this esteemed branch of Aadhaar Retailing ltd. and without whose
cooperation my training would not been possible.
I feel lucky to complete my project under the able and competent guidance of Mr. Ajay
Dwivedi. (State Head Punjab) and Mr. Muneesh Kaushal (Asstt. Marketing
Manager) and take the opportunity to express my sincere thanks to Mr Sumant
(Sr.Operation Manager) and Mr. Naresh Dutt(Sr. Distribution Manager) and
Mr.V.K. Pandey (Store Manager) for valuable guidance in planning & execution of
this study.
I am extremely grateful to Mr.Ashok Biyani(DIRECTOR) and my research guide Mr.
RAJNISH JAIN (FACULTY OF MBA) and other faculty members for their whole
hearted co-operation.
I extend my deepest gratitude to all those persons who supported me all through my
project. My interaction with all these people has left a long lasting impression in my mind
that will influence my project and my behaviour for all times to come
.
Once again I extend my whole hearted thanks to all the supporters and advisors for
their help.
4
Gagandeep Singh
TABLE OF CONTENTS
Sr. No Description Page No.
1EXECUTIVE SUMMARY
6
2INTRODUCTION TO RETAIL MARKETING
7-23
3COMPANY PROFILE S HISTORY
24-35
4 INTRODUCTION TO - S. O. P. 36-55
5 SWOT ON AADHAR RETAIL LTD 56-65
6 OBJECTIVE OF STUDY 66
7 RESEARCH METHODOLOGY 67-71
8 DATA ANALYSIS AND INTERPRETATION 72-81
9 CONCLUSION 82
10 RECOMMENDATIONS AND SUGGESTIONS 83
11 BIBLIOGRAPHY 84
5
EXECUTIVE SUMMARY
In today economy, one needs money to make money. Marketing is the life
blood of business and there must be continuous flow of funds in and out of
business enterprise. Money makes the wheel of business run smoothly.
Sound plan and efficient production system and excellent marketing network
are all hampered in the absence of adequate funds. In modern economy, the
rate of finance has increased due to large scale industrial production. It has
resulted in increasing the demand of funds in an organization.
Retail Marketing is a growing sector in all around the world.Retailing
includes all the activities involved in selling goods or services directly to
final consumers for personal, non business use. Basically retail marketing is
globalize in urban areas but now company’s are also interested in rural areas
and moving towards it .
Retailing is emerging as a sunrise industry in India and is presently the
largest employer after agriculture. In the year 2004, the size of Indian
organized retail industry was Rs 28,000 Crore, which was only 3% of the
total retailing market. Retailing in its present form started in the latter half of
20th Century in USA and Europe and today constitutes 20% of US GDP. It is
the 3rd largest employer segment in USA. Organized retailing in India is
projected to grow at the rate of 25%-30% p.a. and is estimated to reach an
astounding Rs 1,00,000 Crore by 2010. In India it has been found out that
the top 6 cities contribute for 66% of total organized retailing. With the
metros already been exploited, the focus has now been shifted towards the
tier-II cities**. The 'retail boom', 85% of which has so far been concentrated
6
in the metros is beginning to percolate down to these smaller cities and
towns. The contribution of these tier-II cities to total organized retailing
sales is expected to grow to 20-25%.
Introduction to Retail Marketing
Retail forms the core business activity at Future Group and most of its businesses in the consumption space are built around retail. Future Group’s retail network touches the lives of more than 200 million Indians in 73 cities and 65 rural locations across the country. The group currently operates around 1,000 stores spread over 16 million square feet of retail space. Present in the value and lifestyle segments, the group’s retail formats cater to almost the entire consumption expenditure of a wide cross-section of Indian consumers.
Led by Pantaloon Retail, the group’s flagship company, the group manages some of India’s most popular retail chains like Pantaloons - a chain of fashion destinations, Big Bazaar - a uniquely Indian hypermarket chain, Food Bazaar - a supermarket chain that blends the look, touch and feel of Indian bazaars with aspects of modern retail like choice, convenience and quality and Central - a chain of seamless destination malls. Some of its other formats include Ethnicity - India's first concept store, which recreates the experience of a traditional ethnic market in a modern retail format, Brand Factory, Planet Sports, aLL, Top 10 and Star and Sitara. The group also operates India’s most popular online shopping portal www.futurebazaar.com.
Retailing of products and services related to home building and home improvement is led through the group’s formats, Home Town, a large-format home solutions store, along with specialized formats for home furniture and home furnishing through, Collection i and Furniture Bazaar and consumer electronics through eZone and Electronics Bazaar.
The group also operates India’s leading rural retailing chain, Aadhaar that is present
in over 65 locations in retail showroom in India. Aadhaar, an agri-service cum rural
retail initiative, provides a complete solution provider for the consumer.
The term marketing refers to an art of selling product by satisfying consumer needs.
Marketing deals with identifying and meeting human and social needs. Retail marketing
takes place when at least one party to a potential exchange thinks about the means of
achieving desired responses from other parties. Retail marketing is also related to getting,
keeping, and growing customers through creating, delivering,and communicating
superior customer value.
The 'marketing mix' is a set of controllable, tactical marketing tools that work together to achieve company's objective Elements of the marketing mix are often referred to as 'the
8
1-PRODUCT
A product is a bundle of benefits which are being offered to consumer. Thus a good
product makes its marketing by itself because it gives benefits to the customer.
2-PRICE
Pricing is basically setting a specific price for a product or service offered. In a simplistic
way, Kotler and Armstrong (2004) refer to the concept of price as the amount of money
that customers have to pay to obtain the product.
9
3-PLACE-DISTRIBUTION
The place is where you can expect to find your customer and consequently, where the
sale is realized. Knowing this place, you have to look for a distribution channel in order
to reach your customer.
In fact, instead of "place" it would be better to use the word "distribution" but the MBA
lingo uses "place" to memorize the 4 Ps of the marketing mix!
4-PROMOTION
Promotional strategies include all means through which a company communicates the
benefits and values of its products and persuades targeted customers to buy them
Promotion has four distinct elements - advertising, public relations, word of mouth and
point of sale.
Significance of Retail Markets
The retail markets are estimated to be growing fastly in the middle class area. The
potentiality of rural markets is said to be like a 'woken up sleeping giant'. These facts are
substantiated in a study of market growth conducted by various researches. In recent
years, rural markets have acquired significance in countries like China and India, as the
overall growth of the economy has resulted into substantial increase in the purchasing
power of the rural communities. On account of the green revolution in India, the rural
areas are consuming a large quantity of industrial and urban manufactured products. In
this context, a special marketing strategy, namely, rural marketing has taken shape.
Sometimes, rural marketing is confused with agricultural marketing – the later denotes
IN LINE = “1” POINT NOT IN LINE = “0” POINT MAX.POINTS:
S.NO
CRITERIA POINTS
A REGISTERS1.
STAFF ATTENDANCE REGISTER
2.
STAFF IN & OUT REGISTER
3.
STAFF CASH DECLARATION REGISTER
4.
OUTSOURCED MANPOWER ATTENDANC
5.
STORE OPENING CLOSING REGISTER
6.
STORE KEY HANDOVER REGISTER
7.
CUSTOMER ENTRY TRACKER
8.
CUSTOMER RETURN GATE PASS
9.
UN CLAIMED BAGGAGE REGISTER
10.
LOST & FOUND
11.
STAFF PURCHASE REGISTER
39
12.
DSP REGISTER
13.
INWARDING REGISTER
14.
OUTWARD REGISTER
15.
GATE PASS – FORMAT
16.
DAMAGE & EXPIRY REGISTER
17.
SCARP REGISTER
18.
SCARP SALES REGISTER
19.
SIS GOODS MOVEMENT REGISTER
20.
FREE GIFT REGISTER
21.
PRODUCT EXCHANGE & RETURN REGISTER
22.
OPERATIONS LOG BOOK
23.
VISITOR'S REGISTER
24.
FUEL REGISTER
25.
GODOWN OPERATING REGISTER
26.
GODOWN KEY LOG BOOK
40
27.
AGRI DAILY TRANSACTION REGISTER
B
CHECK THE FOLLOWING 1. CHECK ALL PREVIOUS DAYS RECEIPTS & DOCUMENTATION COMPLETE 2. RECEIVING PROCEDURE IS ADHERED TO3. FILING OF ALL DOCUMENTS ( STN / CHALLANS / INVOICES )4. STAFF ATTENDANCE TIME (Attendance Register signed by all employees regularly)
(Check on employees on rolls are physically present or not in the store)
5. HOUSE KEEPING STANDARDSa) FLOORb) SHELFc) GODOWN
6. STAFF GROOMING STANDARDS (CHECK ID CARDS)7. STORE OPENING/CLOSING PROCESS (SEALING OF LOCKS)8. CHECK STOCK CONTROL LEDGER MAITENANCE 9. CHECK DATE & SIGNATURE ON OPERATION’s MANAGER VISIT
( As per Schedule ) Last Visit mr.sumant dt.06.07.10 C COMMERICAL INFORMATION ( Forwarded to State Accounts )
1. TOTAL PHYSICAL CASH ON HAND: 2. PETTY CASH - 3. SALES CASH - Cash Sales on Date 07.07.104. OTHER CASH (If Any) – 5. CASH DEPOSITED IN BANK ( For Previous Day’s Sales ) – ( Last Cash Deposit in
bank on08.07.10
TOTAL POINTS ACTUALPERCENTAGE OBTAINED
A Standing Operating Procedure: A set of instructions covering those features of operations which lend themselves to a definite or standardized procedure without loss of effectiveness. Also called SOP. See FM 6-0 or FM [1][edit] Major Stages in the Preparation of an SOP ManualThe preparation of an SOP manual is an involved task and usually involves three major stages:1. Business systems and process study by intensive interaction with process owners, managers, operatives, etc. to understand in detail the tasks that are performed.2. Preparation of the draft manual
3. Finalisation of the draft manual after discussion with users where any errors are corrected and process improvement recommendations are discussed and accepted or rejected.[edit] Contents of a Standard Operating Procedure (SOP) ManualThis section describes the possible contents of an SOP manual for an organization. Almost any type of organization – whether profit-making or otherwise - could use this template since the manual is concerned with business processes and operations.1. Objectives of the SOP Manual
An SOP manual typically describes the standard operating procedures (SOPs) followed for various business processes within an organizationIts main objectives are:a. To systematically record all current business policies, processes and procedures currently followedb. To clearly indicate the flow of actions performed from beginning to end of the process chainc. To inculcate a culture of “CONTROL CONSCIOUSNESS” among process owners and operativesd. To observe shortcomings in these policies, processes and procedures and make suitable recommendations for improvements in the policies, process effectiveness, process efficiency, internal controls and compliance, as applicable, ande. To serve as a basis for disseminating knowledge on the above among employees dealing with the relevant business functions, to enable adequate training to be imparted to concerned personnel with a view to making the business operations person-independent.f. To act as a reference guide for Internal Audit, which assesses the extent to which the SOP is complied with.
2. Organization Structure
This is a macro organization chart showing the hierarchical or reporting relationships in the organization or business unit for which the manual is prepared.
3. Summaries of Business Processes
Each business process (such as procurement, sales and marketing, planning, quality assurance, production, maintenance, etc.) is summarized, and each summary could contain the following information:a. Objectives of the business processb. Micro organization (functional) structure chart
c. Duties and responsibilities of each designated person involved in the processd. List of tasks performede. Summary of RecommendationsThe summary of recommended policies and procedures (e. above) lists, for each business process, the (“As-is”) practice, its risks/shortcomings, and the recommended (“To-Be”) practice, with its expected benefits. Indicate along with each recommended practice the area of improvement envisaged (Efficiency / Effectiveness / Control / Compliance).
4. Detailed Chapters for Each Business Process
Each business process has a chapter containing the following sections:a. Objectives of the business processb. Summarized Block Diagram of process flowc. Detailed Process Flowchartd. Outputs and inputs of each step in the process to clearly bring out the inter-dependencies between various functional units in the organization and between the organization and its internal and external stakeholders (customers. suppliers, etc.)e. Detailed textual description of process steps in strict logical sequence. The steps would include both computer-based and manual procedures and are to be described precisely and in the correct sequence. The text and the detailed process flowcharts should match.f. The description in e. above should include descriptions of procedures to handle exceptions, i.e., exceptional but anticipated events.g. Internal controls employed in the procedures to ensure that they are correctly and completely executed. Internal controls may be built into computerized business application systems such as ERP systems (like data entry, document preparation or report generation) or may be administrative controls exercised in the non-computer procedures of a business process.h. Recommendations to improve the effectiveness, efficiency, control or statutory compliance of policies, processes and procedures which would replace the current policies, processes and procedures if accepted by users (if thought essential, desirable or practical, as applicable) after intensive discussions.i. Exhibits of documents, reports, computer data entry screens, manual registers, etc. that are referred to as inputs to and outputs from specific proceduresj. Accounting flow clearly showing which financial accounting general ledger accounts are operated wherever specific business transactions need to be recorded in the books of account.
43
5. Appendices
One or more appendixes may be added at the end of the manual, but at least the following are recommended:a. List of inputsb. List of outputsc. Alphabetical glossary of terms[edit] Military useIn military terminology SOPs describe a procedure or set of procedures to perform a given operation or evolution or in reaction to a given event. There is a popular misconception that SOPs are standardized. However, the very nature of an SOP is that it is not standardized across a large military element (such as a corps or division) but rather describes the unique operating procedure of a smaller unit (such as a battalion or company) within that larger element. "Standing" operating procedures take effect until further notice, at which time the issuing authority amend or dissolve them. Therefore, the military more correctly uses the term "standing operating procedure" in lieu of "standard operating procedure."Unit members typically promulgate SOPs, based on unit experience and local conditions. They are normally approved by the unit's Officer Commanding or Commanding Officer.SOPs often offer guidance where official doctrine does not cover a situation, or treats a situation only in extremely broad terms. SOPs are often used to provide practical detail to the some times high level guidance of official doctrine.Where official doctrine exists, SOPs will usually, at least in general terms, adhere to the official doctrine. However SOPs may on occasion ignore official doctrine, especially when a service/corps generally regards official doctrine as out-of-date, inadequate or incorrect.SOPs also differ from standing orders in that personnel may legally disregard or interpret them, as required by the situation; however, acting contrary to a posted command-signed SOP is generally considered the same as violating a published order and punished accordingly.[edit] Clinical ResearchIn clinical research, the International Conference on Harmonisation (ICH) defines SOPs as "detailed, written instructions to achieve uniformity of the performance of a specific function". Organizations involved in clinical research—whether pharmaceutical companies, sponsors, contract research organizations, investigator sites, ethics committees or any other parties—require SOPs to achieve maximum safety and efficiency of the performed clinical research operations. All people and sites involved in clinical studies (both at the sponsor and at
the investigative sites) must have appropriate SOPs in place in order to conduct clinical research in compliance with current regulations.In the United States of America, the ICH GCP (good clinical practice) Step 5 Guideline (Section 3.2.2) also suggests that an Institutional Review Board (IRB) have its own SOPs or written standard procedures.[citation needed] This itself proves[citation needed] that the presence of SOPs form an integral part of clinical trials at all levels.Inspections target these quality documents since the most frequent reported deficiencies during inspections are the lack of written SOPs and/or the failure to adhere to them. The risk of GCP non-compliance is high at organizations with a poor availability of clinical-research-specific SOPs. The risk of GCP non-compliance is also high where SOPs exist but the staff or the people for whom they were written lack awareness of them or of the need for them.The training of staff using SOPs therefore becomes very important, so that staff actually become aware of why and how SOPs can play an important role in fulfilling the ICH and other regulatory requirements.[edit] Good business and manufacturing practiceAn SOP is a written document or instruction detailing all steps and activities of a process or procedure. These should be carried out[by whom?] without any deviation or modification to guarantee the expected outcome. Any modification or deviation from a given SOP should be thoroughly investigated[by whom?] and outcomes of the investigation documented[by whom?] according to the internal deviation procedure.All quality impacting processes and procedures should be laid out[by whom?] in Standard Operating Procedures (SOPs). These SOPs should form the basis for the routine training program of each employee. SOPs should be regularly updated to assure compliance to the regulatory requirements and the working practice. A minimum review schedule of 3 years is recommended[by whom?]. Changes of SOPs are in general triggered by process or procedural changes / adjustments. The internal site change-control procedure should manage these changes.Part of the activity list of such changes should be to update the related SOP. SOPs should be in place for all quality systems plus the specific operational activities on site. The structure of an SOP System and the total amount of individual SOPs should be carefully taken into consideration[by whom?]. Too many SOPs could lead to a collapse of the SOP System. System SOPs should not be mixed up to keep systems and interaction between quality systems easy.[2] ISO 22000 essentially requires the documention of all procedures used in any manufacturing process that could affect the quality of the product.[3][edit] Information-technology industry useThe information technology industry uses the terms "Standard Operating Procedure" and "SOP" interchangeably to describe a best-practice approach to executing
tasks related to the production and maintenance of hardware and software, as well as to incident and change management. A number of packages may aid in the automation of the execution of information-technology SOPs for large enterprises, note for example Creekpath, iConclude and Stratavia's Data Palette.
Competitors of aadhar retail ltd
Big retail charms small towns, inflation no problem
IndiaRetailBiz, an aggregator blog, attempts to aggregate the best of news, views, research, trends, and every thing else that is relevant to India’s booming retail business.India’s organised retail business, despite policy impediments and opposition from political activists and traditional retailers, is growing by leaps and bounds, thanks among others to favourable demographics, rising disposable incomes, growing economy, and rapid urbanisation.We at IndiaRetaiBiz are working towards capturing every aspect of the excitement associated with the evolving sector.We will always strive to provide timely, interesting, useful, authentic, relevant and consistent information on Indian retail sector. As India, being a part of the globe, can not operate in isolation, we will also attempt to cover international news, views, and developments that in our opinion, in the near or long term, may have bearing on India’s retail sector.IndiaRetailBiz is owned by Delta Systems (P) Ltd- an Ahmedabad based management consultancy, which offers professional consultancy services in the area of strategic enterprise management with emphasis on strategic marketing and retail management.IndiaRetailBiz welcomes reader comments, suggestions and contributions, which may kindly be communicated via ‘comment box’ provided below.We reserve the right to edit the contents of comments before their publication. All information and views expressed in comments section are that of its writer and IndiaRetailBiz neither subscibes nor is responsible for correctness or otherwise of their content. As a matter of policy, we do not encourage comments that seek to promote private business or advance personal career. In most situations, we will also be not be able to provide additional information on a news item unless it is available in public domain. For any such information, readers are requested to get in touch with concerned entity directly either through its web site or through e-mail.
FROM HINDUSTAN TIMES
47
Shopping in a supermarket is no longer just for well-heeled metro citizens. About a year after organised retailers hit the dusty trail to smaller towns, they are finding a broad market base as value-for-money shopping meets youth power courting a new symbol of enhanced lifestyle.
Even big villages may be ready for an expansion paralleling Wal-Mart’s US success, and farmers are among a new tribe of smart shoppers, say industry insiders.
The Future Group’s value store Big Bazaar has been wooing customers in towns such as Sangli and Alwar, and now covers 56 towns and cities across country. These include places like Siliguri, Darjeeling, Meerut, Ambala, Ahmednagar, Bharuch, Anand, Hubli, Udupi and Palakkad – hardly the kind of places you would associate with self-service or credit card shopping.
“Smaller towns and cities in tier II and III category shows tremendous growth prospect for the organised retail industry.
These are the towns where aspirations of the youth are high,” said Rajan Malhotra, Big Bazaar’s chief executive officer.
“The competition will get hotter in the smaller towns and cities in about five years,” he said.
As much as 70 per cent of Big Bazaar stores are in the so-called Tier II and III cities. The retailer plans to add 45 to 60 stores in the current July-June financial year, most of them in specks on the map.
Delhi-headquartered Vishal Retail who already has a presence in 80 cities plans to raise this count to 120 cities by the end of this financial year.
“We are possibly the only retailer who has such a large footprint across the country. In fact it’s not just Tier II cities, but we have a presence in Tier III and Tier IV cities as well,” Manmohan Aggarwal, CEO, Corporate Affairs, Vishal Retail, told Hindustan Times.
Inflation has not affected sales either.
“Inflation does have a marginal impact but as value retailers, it is at these times that we can get the customer to come to our stores in droves because of the offers we give them,” reasoned Aggarwal.
Vishal Retail plans to invest Rs 300 crore this year towards its expansion plans.
Aadhar Retailing Ltd, a small joint venture between the Future Group and Godrej, where the former holds 70 per cent stake, has even courted villages – and shoppers include farmers, a class rarely associated with supermarket shopping.
“Aadhar provides farmers with solutions to problems regarding their agricultural output, which includes what kind of crop can they plant and when, along with techno-commercial suggestions to help them give a better output. We also provide them with insurance products to cover their risk and supermarkets for their daily needs,” said Arvind Choudhury, CEO, Aadhar Retail.
But he adds that both the merchandise and price points are different in rural areas.
Vishal Retail’s Aggarwal said customer tastes at their stores in cities such as Udhampur, Bhagwada and Badola were not very different from those in bigger cities such as Mumbai where the retailer has set up stores in suburbs such as Dahisar and Mulund.
“Not only did we become the preferred destination for shopping for value seeking customers but were also able to attract new customers through Food Bazaar’s Monthly Bachat Bazaar (savings plan). We also took a conscious decision to not increase the cost of our private label brands for the next six months,” Malhotra said.
49
Easy Day,
Bharti Retail Ltd, a subsidiary of Bharti Enterprises, launched Easy Day, the company's first food and grocery store, at Ludhiana in western Punjab. The stores cover an approximate area of 2,500 to 4,500 square feet.
Retailers are on a constant lookout for newer and better ways to attract potential customers, to increase their existing footfalls and to convert visitors into customers. But, do retailers realise what encompasses the customer’s shopping expectations? What motivates them to prefer one store over another? And what influences their decision at the time of purchase? Is it value for money or in-store experience?
Retailers, in a bid to drive in more footfalls and ensure consumer loyalty, generally focus on in-store experience, especially if the target customer belongs to A or A+ category in terms of socio-economic classification (SEC).
No doubt, in-store experience plays an important role in satisfying the discerning
50
shopper, but value for money cannot be ignored.
In a poll question, “Is the consumer more receptive to value-for-money deals than in-store experience”, asked by IndiaRetailing, 78.95 per cent of the respondents supported value for money, while just 7.37 per cent vouched for in-store experience; the remaining 13.68 per cent preferred to stay neutral.
BVK Raju, director, Q-mart Retail Ltd, firmly believes it's in-store experience that plays a more significant role than value-for-money deals. “Price proposition plays a role to some extent, but in totality it is the experience that drives the customer. Customer aspirations evolve continuously and so do their expectations. Once the focus is only on value, retaining customer loyalty becomes a big challenge. Retailers must, therefore, focus more on retail experience, rather than on price, to competitively differentiate themselves.”
Raju further emphasises, “If the shopping experience is pleasant and enjoyable, the customer will come back, irrespective of any deals... the total shopping experience is what will drive the business in the long run.”
Siddharthan Sundaram, director, retailer services, The Nielsen Company, however, does not agree with Raju. “During the economic slowdown in 2008-09, consumers were looking for offers and promotions and the expectation continues even today. As a result, retailers have been announcing new promos/schemes regularly to attract more footfalls and have started focusing on introducing store brands at a lower price (than the established brands). The in-store experience may play a role if the store is new and big, but that is not consistent,” he reasons.
Commenting on the poll question, Esha Anand, head – marketing and visual merchandising, Hypercity Retail (India) Pvt Ltd, says, “It depends on the customer segment you are targeting. SEC A, B customers are more experimentative, cosmopolitan and progressive. They have aspirations for a better lifestyle. Increasing exposure to international trends and lifestyle, coupled with rising levels of affluence, has fuelled the desire to move up the social ladder."
Vishnu Vardhan, head operations, Ruci & Idoni, agrees. “It depends on who we are targeting – customers belonging to A and A+ categories don’t just shop, they want to enjoy shopping; when they go to the market, they look for a comfortable, hassle-free place to enjoy shopping.”
Stressing that there are many customers who put value first and are limited by the extent to which they can spend, Dev Amritesh, senior vice-president, marketing, Domino’s Pizza India, says, “We must recognise that in some occasions, categories and in certain mood states, customers attach a lot of premium to experience. The trick is to know what these occasions, categories and mood states are, in order to exploit them.”
So, clearly, as experts point out, one doesn't take precedence over the other. Not
51
all customers are value conscious; some of them are willing to spend more in order to get hygiene, good customer service, or simply a favourable in-store experience. Both, therefore, have their roles to play, and which one to focus on depends solely on the targeted customer segment.
Modern Food Retail: A tough balancing act
Diwakar Kumar 20 Jul 2009
The story has been read 1381 times.
The primary challenge in food retail, no doubt, is its supply chain, which is
making things difficult for retailers and food processors to procure quality
produce at competitive costs directly from farmers in India. Last year at the India
Retail Forum held in Mumbai, this prime challenge was centrestage for retailers
to sidestep efficiency bottlenecks of the modern marketplace. The Indian supply
chain for fresh and processed food is extremely poor and characterised by
panoptic wastage and poor handling. A food retailer’s supply chain must be short
and tightened by professionally-drawn efficient practices to avoid long chain of
products from farm to fork, failure of which costs a retailer not just efficiency and
just-in-time inventory control, but also results in a higher cost-of-operations
burden.
Last week, we posted an open question for our audience to poll on, on our sister
website www.imagesfood.com -- Food retailers should adopt the following
strategy to stay out of financial trouble in a slump: 1. Cut costs, 2. Increase
revenue, 3. Combination of the two. Over 19.05% of the respondents supported
cost cutting, 33.33% were in favour of increasing revenues and 47.62% polled for
a combination of the two strategies.
Food safety and security are essential concerns for grocery retailers of all sizes.
But the main challenge lies in boosting revenue, even as the cost of operations
rise and sales appear to be slowing. A good retailer respects the value of always
being in-stock, which in turn depends on highly efficient supply chain, inventory
management and demand forecasting. In many cases, maximising square foot
returns can entail additional spends – on upgraded cold chain systems,
technology-enabled SCM, shopper data mining or hosting promotional events in
alliance with suppliers, among on others.
Sunil Sanklecha, managing partner of the
Chennai-based supermarket chain Nuts ‘n’
Spices, points out that every penny a retailer
spends is out of profits, but every penny of the
revenue is not profit. Cutting cost while
simultaneously increasing the revenue is the
mantra of any business model. “To increase the
revenue is every businessman’s challenge;
retailers must rework their strategies very frequently as today’s strategy may not
work after one year. One has to constantly work on strategising the business
model in alignment with market shifts,” he suggests.
He further adds, “We must also understand that cost cutting does not work
everywhere; cutting down on the basic infrastructure and basic customer services
is a no-no. We need to cut costs only in the areas where the input is not
“Rather than trying to fit the
world to our business model, we
need to fit the business model to
the real world that exists."
--Devangshu Dutta, chief
executive, Third Eyesight.
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productive.”
In many cases, business projections are also unrealistically high; there are
locations where the expected change-over from the kirana to modern retail has
been over-estimated, and the business has been modelled with costs that are in
line with the over-expectation of revenue.
In his Union Budget presentation earlier this month, India’s Union Finance
Minister (FM) Pranab Mukherjee underscored the urgency of reviving growth, by
identifying that the country’s immediate economic challenge is to return to nine
per cent GDP growth, failure of which will cause considerable loss of revenue for
the government and will affect the pace of job creation in certain sectors of the
economy and the investment sentiments, all features of the domestic economy in
the last two quarters of year 2008-09.
In an attempt to ensure balanced and equitable development, Mukherjee has
widely increased the allocations to social development schemes, which would
play a vital role in boosting rural development and demand.
In the context of the nation's food security, the declining response of agricultural
productivity to increased fertiliser usage in the country is a matter of concern.
And the decision to move from a product-based fertiliser subsidy mechanism to a
nutrient-based one and the move towards a market pricing regime for petroleum
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products should increase India’s economic efficiency. "To ensure balanced
application of fertilisers, the Government intends to move towards a nutrient
based subsidy regime instead of the current product pricing regime. It will lead to
availability of innovative fertiliser products in the market at reasonable prices.
This unshackling of the fertiliser manufacturing sector is expected to attract fresh
investments in this sector. In due course it is also intended to move to a system of
direct transfer of subsidy to the farmers," he announced.
Assuming that the FM’s rural wishlist finds realisation, will his announcements
succeed in spurring demand from India’s non-urban markets? If yes, how long
will it be before measurable gains start to kick in?
Responding to our weekly opinion poll question, Union Budget 2009-10 will
boost rural consumption in -- a) Short term, b) Medium term c) Long term on the
website, 53.57% of the respondents opted for short term, 35.71% for medium
term, and 10.72% polled for long term.
Clearly, the majority of visitors to our site expect the FM’s announcements to
result in rural prosperity fairly rapidly.
The government has given more emphasis on domestic consumption so that rural
Indians may one day be turned into valuable consumers. "With more money in
the hands of rural Indians, the opportunity for rural retail is brighter than ever.
All such products and services that improve productivity and/ or enhance rural
incomes will sell well. These could be agri inputs, lighting solutions, education
products, mobile phones, transportation, health services etc. With increased
incomes, products that improve quality of life – branded FMCG and household
appliances – also sell well," noted S Sivakumar, Chief Executive of Agri
Businesses, ITC Ltd.
FM remained stuck to the UPA government's ‘Inclusive Growth’ theme by
continuing its focus on the Aam Aadmi, but has done little to cheer Corporate
India and FMCG industry in particular. While on the one hand the government
has left untouched key matters like corporate tax, it has, on the other hand, hiked
Minimum Alternate Tax (MAT) which would lead to higher tax outgo and erode
the benefits accrued from the removal of Fringe Benefit Tax (FBT). "The
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government's move to reinforce its intent on introducing national-level Goods
and Services Tax (GST) by April 1, 2010 is a welcome step, but there's still no
clarity on the road forward. While Mukherjee has said that consensus is emerging
among the various stakeholders, what's missing is clarity on how various duties
would be merged with GST, and a clear schedule of dates for its smooth
implementation," said Amit Burman, Vice Chairman, Dabur India Ltd.
Commenting on the same Viney Singh, managing director of Max Hypermarkets
India Pvt. Limited says, "The FM’s announcement towards inclusive development
-- PMAGY, NREGA, SGSY-- in the 2009-10 budget should definitely boost rural
consumption."
"The extent of the boost will largely be a function of the efficiency and timeliness
with which these schemes are implemented. The past record on these counts has
been quite dismal," he further adds.
"The success of the monsoons will be another important influencer of rural
consumption. The progress of the monsoons has so far been poor, but there is
still some time wherein a recovery is possible."
The Government has announced a series of measures -- interest subvention on
farm loans, increase in allocation for NREGS by 144%, increase in target for
agricultural flow, Rs 20 billion earmarked for rural housing scheme in NHS,
allocation under the Indira Awas Yojana increased by 63% and under the RGGVY
increased by 27% -- to increase rural income.
Referring to these announcements, Thomas Varghese, CEO, Aditya Birla Retail
says, "These measures will result in increased money supply in rural areas as well
as sectoral growth and hence boost rural consumption in the short to medium
term. Increased credit flow is also likely to lead to stabilisation of rural demand,
which will also result in more stable consumption patterns."
"The government has ensured more liquid cash and rural India is one of the
particular areas where I would prefer to tack my business in coming days. So, I
believe that the current budget will boost the rural sector which will bring
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remarkable change in the long term," concludes Ambeek Khemka, Group
President, Vishal Retail.
Overview
"Hariyali Kisaan Bazaar" - a rural business centre, is a pioneering micro level effort, which is creating a far-reaching positive impact in bringing a qualitative change and revolutionizing the farming sector in India. It is also an example of how well meaning corporates can contribute to development of agriculture by building sustainable business models.
DCM Shriram Consolidated Ltd. (DSCL), capitalising its over 35 years of experience in the agri-input markets & first hand knowledge of Indian farmers, is setting up a chain of centres aimed at providing end-to-end ground level support to the Indian farmer & thereby improving his "profitability" & "productivity".
The key constraints of the Indian farming sector, being addressed by "Hariyali" are:
• Lack of last mile delivery mechanism of modern agriculture know-how & practices.
• Lack of availability of critical good quality agri-inputs. • "Middlemen" driven farmer interface. • High cost credit. • Lack of direct access to buyers of varied & high value crops.
Hariyali Kisaan Bazaar
The "Hariyali Kisaan Bazaar" chain, seeks to empower the farmer by setting up centres, which provide all encompassing solutions to the farmers under one roof.
Each "Hariyali Kisaan Bazaar" centre operates in a catchment of about 20 kms. A typical centre caters to agricultural land of about 50000-70000 acres and impacts the life of approx. 15000 farmers.
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Each centre is engaged in:
• Bridging the last mile: Provides handholding to improve the quality of agriculture in the area. Provides 24X7 support through a team of qualified agronomists based at the centre.
• Quality Agri-Inputs: Provides a complete range of good quality, multi-brand agri inputs like fertilizers, seeds, pesticides, farm implements & tools, veterinary products, animal feed, irrigation items and other key inputs like diesel, petrol at fair prices.
• Financial Services: Provides access to modern retail banking & farm credit through simplified and transparent processes as also other financial services like insurance etc.
• Farm Output Services: Farm produce buyback opportunities, access to new markets & output related services.
• Other Products and Services:Fuels, FMCG, Consumer Goods and Durables,Apparels etc.
These centers provide the much needed respect/dignity and freedom to the Indian farmer. In the near future, Hariyali Kisaan Bazaars plan to move beyond agri to meet the other needs of farmers as customers.
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Technology as an important enabler
IT has been a critical backbone to the chain of centres. It is being used to provide online support on latest technical advancements, weather forecasts, mandi (market) prices, fair & transparent billing to farmers as well as in maintaining extensive farmer databases with micro information about the farmers' field to provide customized service to the farmers.
Farmer Response
So far over 302 Hariyali outlets hav been set up across eight states- Haryana, Punjab, Uttar Pradesh, Rajasthan, Chattisgarh, Madhya Pradesh,Maharashtra and Andhra Pradesh
The ground-level agri-support is already yielding results in the farmer's fields. Whether it is adoption rate of high yielding seeds, right doses of fertilization, productivity of cattle-
feed, moisture conservation measures, adoption of new crops/allied occupations or adoption of new technologies like zero tillage, the farmers in catchment of Hariyali centres are already way ahead of the national averages.
Future Plans
Hariyali Kisaan Bazaar has plans to rapidly scale up the operations & create a national footprint covering all the major agricultural markets of the country. This would mean catering to cultivable land of over 30 million acres and touching the lives of over 10 million farmers
. We regard our agri business as a key growth driver for us. We believe that the agricultural sector is a high potential area where we, with our expertise and strengths accumulated over decades of presence in this sector, can add considerable value and capitalise on emerging opportunities. Over the years through our various agri-businesses we have developed extensive working relationship and knowledge about the farmers.
Our agri business offerings comprise agricultural inputs, both manufactured and merchandised, outputs, distribution and services. Our agri-inputs include Urea, Seeds and Pesticides manufactured by us. Additionally, we are also engaged in the marketing of a range of other agri inputs SSP, and other nutrients such as Zinc Sulphate, soluble fertilisers etc.
In terms of agri outputs, we manufacture and market sugar and its by-products – Molasses and Bagasse. With the objective to move towards providing total “ Solutions” to the farmers, we have initiated a “ Rural Retailing” initiative recently which we believe holds immense promise in terms of untapped opportunities, scalability and growth potential.
Being implemented under our “Hariyali Kisaan Bazar” initiative, we offer multiple products and services to the rural and farming community, including agri inputs, diesel and petrol ( under alliance with BPCL) ,consumer goods, durables, apparels, insurance, agronomy advisory, credit, and contract farming as a part of this initiative. It is proposed to extend the offerings to other products and services over a period. All of our agri business activities are supported by a strong “Shriram” brand equity that our products enjoy in the marketplace.
All our agri business units are supported by a robust and extensive distribution and retail network. From about 3,000 retail outlets five years ago, we now have more than 6,000 retailers where all our manufactured and merchandised products are available to the
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country's farming community. We also have around 900 wholesalers to distribute our agri products, a large number of these have been with us for 3-4 decades.
We offer online agronomy services to farmers through 100 centres – Shriram Krishi Vikas Kendras – established by us across the country that operate with the objective to increase farmer profitability by providing them effective agronomy services. We have a team of 102 agricultural graduates, recruited from local institutions and universities, and 15 development officers who work along with farmers to assist them in their endeavours. To ensure that our agronomists provide knowledgeable and unconditional advice, we have not assigned any sales responsibilities to our agronomists. The Shriram Krishi Vikas Kendras help upgrade farming methods and also provide assistance to the farming and rural community in the educational, hygiene and sanitation needs of the community as well as health care support for animal husbandry. Such initiatives have made us one of the most reliable and trusted partners of the Indian agri community.
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Strengths, Weaknesses, Opportunities and Threats (SWOT).SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors.
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In SWOT, strengths and weaknesses are internal factors.
For example:
A strength could be:
• Your specialist marketing expertise.• A new, innovative product or service.• Location of your business.• Quality processes and procedures.• Any other aspect of your business that adds value to your product or service.
A weakness could be:
• Lack of marketing expertise.• Undifferentiated products or services (i.e. in relation to your competitors).• Location of your business.
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• Poor quality goods or services.• Damaged reputation.
In SWOT, opportunities and threats are external factors.
For example:
An opportunity could be:
• A developing market such as the Internet.• Mergers, joint ventures or strategic alliances.• Moving into new market segments that offer improved profits.• A new international market.• A market vacated by an ineffective competitor.
A threat could be:
• A new competitor in your home market.• Price wars with competitors.• A competitor has a new, innovative product or service.• Competitors have superior access to channels of distribution.• Taxation is introduced on your product or service.
SWOT Analysis of Aadhar retailStrengths
• Aadhar retail is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store.
• Aadhar retail has grown substantially over recent years, and aadhar has experienced good expansion.
• The company has a good competence involving its use of information technology to support its national logistics system. For example, it can see how individual products are performing store-by-store at a glance. IT also supports AADHAR RETAIL's efficient procurement.
• A focused strategy is in place for human resource management and development. People are key to AADHAR RETAIL business and it invests time and money in training people, and retaining a developing them.
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Weaknesses
• AADHAR RETAIL is the smallest grocery retailer rural area and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control.
• Since aadhar sell products across many sectors (such as clothing, food,non food or stationary etc), it may not have the flexibility of some of its more focused competitors.
Opportunities
• To take over, merge with, or form strategic alliances with other retailers, focusing on more rural area or some middle class specific markets such as Region.
• The stores are currently only trade in a relatively small number of cities. Therefore there are tremendous opportunities for future business in expanding consumer markets, rural Indian area.
• New locations and store types offer aadhar opportunities to exploit market development. They diversified from large super centres, to local and mall-based sites.
• Opportunities exist for aadhar to continue with its current strategy of small, super centres in mostly rural area
Threats
• Being number one means that you are the target of competition, locally and globally.
• Being a global retailer means that you are exposed to political problems in the countries that you operate in.
• The cost of producing many consumer products tends to have fallen because of lower manufacturing costs. Manufacturing cost have fallen due to outsourcing to low-cost regions of the World. This has lead to price competition, resulting in price deflation in some ranges. Intense price competition is a threat.
Introduction
Retailing includes all activities involved in selling goods or services directly to final consumers for personal, non-business use. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing.
Any organization selling to final consumers – whether a manufacturer, wholesaler or retailer- is doing retailing. It does not matter how the goods or services are sold (by person, mail, telephone, vending machine or internet) or where they are sold (in store, on the street, or in consumer's home).
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There are 3 types of retailers:
1. Store retailer2. Non Store retailer3. Retail Organization
From the assortment point of view, Store retailers* are of 5 types:
1. Specialty Store2. Departmental Store3. Super market4. Convenience Store5. Discount Store
* = Definition of the store retailer types is provided in the glossary.
From customers service point of view:
1. Self-service retailing: Many customers are willing to carry out their own locate-compare-select process to save money.
2. Self-selection retailing : Customers find their own goods, although they can ask for assistance.
3. Limited service retailing: These retailers carry more shopping goods, and customers need more information and assistance. The stores also offers services such as credit & merchandise-return privileges.
4. Full service retailing: Salespeople are ready to assist in every phase of the locate-compare-select process.
Although majority of goods & services is sold through stores, non-store retailing has been growing much faster than store retailing.
Major non-store retailer types:
1. Direct Selling: It deals with door-to-door or at home sale parties i.e. it involves one-to-one or one-to-many selling.Example > Eureka Forbes, Amway, Mary Kay Cosmetics.
2. Automatic Vending: Example > ATM
3. Buying services: Is a store less retailer serving a specific clientele-usually employees of large organizations-who are entitled to buy from a list of retailers who have agreed to give them discounts in return for membership. Example > Amazon.com
4. Direct marketing: It involves direct response marketing. The different forms of direct marketing are: Direct mail, catalog marketing, telemarketing, television direct response marketing and electronic shopping.Example: Dell Computers
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Retail Organization mainly falls into 4 major categories:
1. Corporate chains: Example > Pantaloons, Westside2. Retail Co-operative: Example > Amul, Samavaika, Khadi Gram Yudog3. Consumer Co-operative: Example > Apna Bazar 4. Franchise Organization: Example > Monginis, Café Coffee day.
Global Scenario
Retail stores constitute 20% of US GDP & is the 3 rd largest employer segment in USA. China on the other hand has attracted several global retailers in recent times. Retail sector employs 7% of the population in China. Major retailers like Wal-Mart & Carrefour have already entered the Chinese market. In the year 2003, Wal-Mart & Carrefour had sales of US $ 70.4 Crore & US $ 160 Crore respectively.
The global retail industry has traveled a long way from a small beginning to an industry where the world wide retail sales is valued at $ 7 x 10 5 Crore. The top 200 retailers alone accounts for 30 % of the worldwide demand. Retail turnover in the EU is approximately Euros 2,00,000 Crore and the sector average growth is showing an upward pattern. The Asian economies (excluding Japan) are expected to grow at 6% consistently till 2005-06.
On the global Retail stage, little has remained same over the last decade. One of the few similarities with today is that Wal-Mart was ranked the top retailer in the world then & it still holds that distinction. Other than Wal-Mart's dominance, there's a little about today's environment that looks like the mid-1990s. The global economy has changed, consumer demand has shifted & retailers' operating systems today are infused with far more technology than was the case six years ago.
e= estimate.
Indian Scenario
Retailing in India is the largest employer after agriculture. It employs almost 7% of the total work force in India and has a contribution of 14% to the national GDP. In the year 2004 , the size of Indian organized retail industry was Rs 28000 Crore, which was only 3% of the total retailing market. Organized retailing is projected to grow at the rate of 25%-30% p.a. and is estimated to reach an astounding Rs 1,00,000 Crore by 2010. The contribution of organized retail is expected to rise from 3% to 9% by the end of the decade. The projection for the year 2005 is Rs 35000 Crore.
Though with a population of a billion and a middle class of 300 million (upper middle class= 40, Middle class =150 & lower middle class = 110), organized retailing is still at its infancy in India. The great Indian middle class is estimated to grow to over 60 Crore by 2010 making India one of the largest consumer markets of the world. It is projected that by the year 2010, 65% of the Indian population will be in the age group of 10-49 years, which makes the scenario even more attractive. India has the largest retail network with 1.2 Crore outlets but only 4% of them are larger than 500 sq. feet in size. USA on the other hand has 9 Lakh outlets catering to more than 13 times the total retail market size of India. Thus India has the highest number of outlets per capita in the world with a widely spread retail network but with the lowest
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per capita retail space (@ 2 sq.ft. per person). AT Kearney has ranked India as the 2nd most attractive retail market after Russia, in its Global Retail Development Index 2004 report.
Retailing, one of the largest sectors in the global economy, is going through a transition phase in India. For a long time, the corner grocery store was the only choice available to the consumer, especially in the urban areas. This is slowly giving way to international formats of retailing.
Let us look at the evolution process:
Detailing reasons why Indian organized retail is at the brink of revolution, the IMAGES-KSA report says that the last few years have seen rapid transformation in many areas and the setting of scalable and profitable retail models across categories. Indian consumers are rapidly evolving and accepting modern formats overwhelmingly. Retail Space is no more a constraint for growth. India is on the radar of Global Retailers and suppliers / brands worldwide are willing to partner with retailers here. Further, large Indian corporate groups like Tata, Reliance, Raheja, ITC, Bombay Dyeing, Murugappa & Piramal Groups etc and also foreign investors and private equity players are firming up plans to identify investment opportunities in the Indian retail sector. The quantum of investments is likely to skyrocket as the inherent attractiveness of the segment lures more and more investors to earn large profits. Investments into the sector are estimated at INR 2000 - 2500 Crore in the next 2-3 years, and over INR 20,000 Crore by end of 2010.
Few of India's top retailers are:
1. Big Bazaar-Pantaloons: Big Bazaar, a division of Pantaloon Retail (India) Ltd is already India's biggest retailer. In the year 2003-04, it had revenue of Rs 658.31 crores & by 2010; it is targeting revenue of Rs 8,800 Crore.
2. Food World : Food World in India is an alliance between the RPG group in India with Dairy Farm International of the Jardine Matheson Group.
3. Trinethra : It is a supermarket chain that has predominant presence in the
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southern state of Andhra Pradesh. Their turnover was Rs 78.8 Crore for the year 2002-03.
4. Apna Bazaar : It is a Rs 140-crore consumer co-operative society with a customer base of over 12 lakh, plans to cater to an upwardly mobile urban population.
5. Margin Free : It is a Kerala based discount store, which is uniformly spread across 240 Margin Free franchisees in Kerala, Tamil Nadu and Karnataka.
Wholesale trading is another area, which has potential for rapid growth. German giant Metro AG and South African Shoprite Holdings have already made headway in this segment by setting up stores selling merchandise on a wholesale basis in Bangalore and Mumbai respectively. These new-format cash-and-carry stores attract large volumes from a sizeable number of retailers who do not have to maintain relationships with multiple suppliers for all their needs.
SWOT Analysis
A SWOT analysis of the Indian organized retail industry is presented below:
Strength:
1. Retailing is a " technology-intensive" industry. It is technology that will help the organized retailers to score over the unorganized retailers. Successful organized retailers today work closely with their vendors to predict consumer demand, shorten lead times, reduce inventory holding and ultimately save cost. Example: Wal-Mart pioneered the concept of building competitive advantage through distribution & information systems in the retailing industry. They introduced two innovative logistics techniques – cross-docking and EDI (electronic data interchange).
2. On an average a super market stocks up to 5000 SKU's against a few hundreds stocked with an average unorganized retailer.
Weakness
1. Less Conversion level : Despite high footfalls, the conversion ratio has been very low in the retail outlets in a mall as compared to the standalone counter parts. It is seen that actual conversions of footfall into sales for a mall outlet is approximately 20-25%. On the other hand, a high street store of retail chain has an average conversion of about 50-60%. As a result, a stand-alone store has a ROI (return on investment) of 25-30%; in contrast the retail majors are experiencing a ROI of 8-10%.
2. Customer Loyalty: Retail chains are yet to settle down with the proper merchandise mix for the mall outlets. Since the stand-alone outlets were established long time back, so they have stabilized in terms of footfalls & merchandise mix and thus have a higher customer loyalty base.
Opportunity
1. The Indian middle class is already 30 Crore & is projected to grow to over
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60 Crore by 2010 making India one of the largest consumer markets of the world. The IMAGES-KSA projections indicate that by 2015, India will have over 55 Crore people under the age of 20 - reflecting the enormous opportunities possible in the kids and teens retailing segment.
2. Organized retail is only 3% of the total retailing market in India. It is estimated to grow at the rate of 25-30% p.a. and reach INR 1,00,000 Crore by 2010.
3. Percolating down : In India it has been found out that the top 6 cities contribute for 66% of total organized retailing. While the metros have already been exploited, the focus has now been shifted towards the tier-II cities. The 'retail boom', 85% of which has so far been concentrated in the metros is beginning to percolate down to these smaller cities and towns. The contribution of these tier-II cities to total organized retailing sales is expected to grow to 20-25%.
4. Rural Retailing: India's huge rural population has caught the eye of the retailers looking for new areas of growth. ITC launched India's first rural mall "Chaupal Saga" offering a diverse range of products from FMCG to electronic goods to automobiles, attempting to provide farmers a one-stop destination for all their needs." Hariyali Bazar" is started by DCM Sriram group which provides farm related inputs & services. The Godrej group has launched the concept of 'agri-stores' named "Adhaar" which offers agricultural products such as fertilizers & animal feed along with the required knowledge for effective use of the same to the farmers. Pepsi on the other hand is experimenting with the farmers of Punjab for growing the right quality of tomato for its tomato purees & pastes.
Threat
1. If the unorganized retailers are put together, they are parallel to a large supermarket with no or little overheads, high degree of flexibility in merchandise, display, prices and turnover.
2. Shopping Culture: Shopping culture has not developed in India as yet. Even now malls are just a place to hang around with family and friends and largely confined to window-shopping.
Conclusion
To conclude, it can be said that though the global retail industry has reached its maturity, the Indian retail industry is still at its infancy. But with the huge potentiality existing in the Indian market, it is expected to grow in leaps and bounds in the near future.
Instead of comparing the total global retail industry with the Indian retail industry, lets compare Wal-Mart alone with the Indian retail industry & put forward few interesting facts:
1. Retail Sales of Wal-Mart for the year 2003 was US $ 25,632.9 Crore; higher than the size of Indian retail industry.
2. The size of any Wal-Mart store is much higher than the size of any existing shopping mall in India.
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3. Wal-Mart has over 4,800 stores, which is unparallel to any of the India's large format store.
4. New stores opened annually by Wal-Mart are about 420, much higher than all organized Indian retailers put together.
5. The sales per hour of $2.2 Crore are incomparable to any retailer in the world.
6. Wal-Mart has around 30,000 suppliers throughout the world and more than 600,000 SKU's on its web site, a number that cannot be compared.
7. Daily customers are about 1.57 Crore (almost equivalent to Mumbai's entire population).
8. Time between each Barbie Sale at Wal-Mart is just two seconds (same rate at which babies are produced in India!)
Overall, it can be said that " Retail Industry" in India will emerge as one of the best 5 Business sectors in this decade.
Glossary
Specialty Store: Narrow product line with deep assortment, viz apparel stores, book stores etc. A clothing store would be a single line store, men's clothing store would be limited line store & men's custom-shirt store would be a super specialty store.Example: The limited, The Body Shop.
Departmental Store: Several product lines-typically clothing, household goods, home furnishings- with each line operated as a separate department managed by specialist buyers or merchandisers.Example: Sears, Bloomingdale's.
Supermarkets: Relatively large, low-cost, low-margin, high volume, self-service operation designed to serve total needs for food, laundry & household maintenance products. Example: Kroger, Safeway.
Convenience Stores: Relatively small store located near residential area, open long hours, seven days a week and carrying a limited line of high-turnover convenience products at slightly higher prices.Example: 7-Eleven, Circle K.
Discount Store: Standard merchandise sold at lower prices with lower margins and higher volumes. True discount stores regularly sell merchandise at lower prices and offer mostly national brands.Example: Wal-Mart, Kmart.
Off-price retailer: Merchandise bought at less than regular wholesale prices & sold at less than retail; often-leftover goods, overruns and irregulars obtained at reduced prices from manufacturers or other retailers.
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Factory outlets are owned and operated by manufacturers and normally carry the manufacturer's surplus, discontinued or irregular goods.Example: Mikasa(dinnerware), Dexter (shoes)
Independent off-price retailers are owned & run by entrepreneurs or by divisions of larger retail corporations.Example: T.J.Maxx, Filene's Basement.
Warehouse clubs (or wholesale clubs) sell a limited selection of brand name grocery items, appliances, clothing and other goods sold at deep discounts to members who pay an annual membership fees. Warehouse clubs serve small businesses & group members from government agencies, nonprofit organizations and some large corporations. They operate in huge, low-overhead, warehouse like facilities & offer few frills.They offer rock bottom prices- typically 20% to 40% below super market and discount stores prices but make no home deliveries and accept no credit cards.Example: Sam's Clubs, Max Clubs.
Superstore: Averages 35,000 square feet of selling space traditionally aimed at meeting consumers' total needs for routinely purchased food and non food items. Usually offer services such as laundry, dry cleaning, shoe repair, check cashing & bill paying.
A new group called "category killers" carries a deep assortment in a particular category & a knowledgeable staff.Example: Borders books & Music, IKEA.
Combination stores are a diversification of the supermarket store into the growing drug-and-prescription field. Combination food & drug stores average 55,000 square feet of selling space.Example: Jewel & Osco stores.
Hypermarkets range between 80,000 and 220,000 square feet and combine supermarket, discount & warehouse retailing principles. Product assortment goes beyond routinely purchased goods & includes furniture, large & small appliances, clothing items and many other items. Bulk display & minimum handling by store personnel with discounts offered to customers who are willing to carry heavy appliances and furniture out of the store. Hypermarkets originated in France.Example: Carrefour and Casino (France), Pyrca, Continente and Alcampo (Spain), Meijer's (Netherlands).
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OBJECTIVES OF STUDY
"Any task without sound objectives is like Tree without roots". Similarly in case of any
research study undertaken, initially the objectives of the same are determined and
accordingly the further steps are taken on. A research study may have many objectives
but all these objectives revolve around one major objective which is the focus of the
study. In this study, the focus is on the emergence of retail markets as the most happening
market on which every marketer has an eye. And so this study will be based on studying
the emergence of retail market in various contexts.
The following are the objectives of this research study :-
♦To study the present scenario of rural retail marketing in India.
♦ To study aadhar products and services
♦ To analyze the marketing strategies of aadhar and suggest new strategies
♦To make a comparative study of aadhar in rural market
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RESEARCH METHODOLOGY
Research Methodology is a way to systematically solve the research problem. In it we
study the various steps that are generally adopted by a researcher in studying his research
problem along with logic behind them.
TYPES OF RESEARCH
1 Descriptive research
2 Analytical research
3 Qualitative research
4 Quantitative research
DESCRIPTIVE OR EX-POST FACT RESEARCH:-
To conduct the research work accurately, we conducted the descriptive research. It
includes surveys & fact-finding inequity of different kinds.
ANALYTICAL RESEARCH: _
In it we have to use the fact & information already available & analyses of these to make
an evaluation of project.
QUALITATIVE RESEARCH:-
In selecting the appropriate research design of the study & the type of data needed, the
choice of data collection techniques is four grouped.
It is done for:-
1Consumer needs
2 Consumer’s preferences for brand
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3In depth understanding of consumers
4Availability for consumer
QUANTITATIVE RESEARCH:-
Quantitative research is obtained to rate the different aspects on parameter i.e. image of
brand, brand equity, expectation of customers, awareness among customer for scheme,
switch ability of customers etc.
METHODOLOGY:-
The project include both primary & secondary source of data. The data collected through
these sources has organized, analyzed & interpret so as to draw conclusion &to arrive at
appropriate recommendations.
1. A primary source of data includes the personal interview from various accounts
officers in the enterprise.
2. The secondary sources of data include annual report, website of Aadhaar Retailing Ltd.
Company which contains the details which is helpful for making my project report.
STEPS IN RESEARCH METHODOLOGY:-
1.Collection of data
2.Organisation of data
3.Presentation of data
4. Analysis of data
5. Interpretation of data
COLLECTION OF DATA :-
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Both the primary & secondary data has been collected from the market & company. The
company provided the secondary data & primary data is collected through the medium of
face-to-face interaction & interview from various persons in the enterprise.
ORGANISATION OF DATA :
Data once collected the further processing is done, the data collected by me are carefully
done through in a useful & relevant manner &properly organized.
PRESENTATION OF DATA :-
The data collection is of no use unless & until it is given in the presentable form. Thus
after proper organization the data is given in presentable form with the complete details,
with the help of bar diagram, pie carts etc.
ANALYSIS OF DATA:-
The data is carefully analyzed keeping in the consideration both the pros & cons for the
purpose of arriving at concrete conclusion.
INTERPRETATION OF DATA:-
After carefully analyzed the data, it has been aptly interpreted in order to give concrete
conclusion & proper recommendation.
Research in common parlance refers to a search to a search for knowledge. One can also
define research as a scientific and system search for pertinent information on a
specific topic. In fact research is an art of scientific investigation.
Research Design: - The research design makes it clear weather the study is exploratory or conclusive in nature and whether it is case statistical or experimental in design. The study is a cross sectional study because the data were collected from many source’s. For the purpose of present study a related sample of population was selected on the basis of convenience.
Data collection method: - There are four basis data collection approach in research,
They are :-
-Primary data
-Secondary data
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-Analysis of case studies
-Observation
Primary consideration in sampling is as follows:-
-Population
-Sample frame
-Sampling unit
-Sampling size
-Sample plan.
Analysis - Data are useful only after analysis. Data analysis involves converting a series of
recorded observation into descriptive statement and inferences. Nature of sampling
process, the measurement instrument and the data collection method the type is analysis
is to be used. Inference and Report-Once the data is analyzed statistically putting various
constrain; I conclude certain facts that can be summed up as interface of the research
process. Finally the whole thing becomes presentable as report.
RESEARCH METHODOLOGY USED IN THE PROJECT
Research is the art of scientific investigation. It is the scientific investigation in order to
find out facts and solution of a particular problem. It is the search for knowledge.
1 Research instruction Questionnaire, personal interview
2 Questionnaire form Structured
DATA COLLECTION
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Data Collection from Secondary and primary sources
Secondary Data –
Books, Magazines and Published data and information, report on the labours
Primary Data –Questionnaire, Interviews
Data Sources:There are two types of data were taken into consideration i.e. Secondary
data and primary data. The secondary data has been used to make the analysis because we
have no much sufficient time and resources to collect the primary data.
Secondary Data:
Secondary data is that data which is collected for other purpose. This is indirect
collection of data from sources containing past or recent past information like annual
reports, balance sheet, books, newspapers and magazines etc.
Collecting the Information:
For this research methodology, we were collecting information with the help of annual
reports, balance sheets and other company’s publications.
Analyse The Information:
In this research methodology the next step is to extract the pertinent finding from the
collected data. We tabulated this collected data and develop the means of analyzing the
data. There are so many tools for financial analysis but we mainly concentrate on the
ratio Analysis and supportive information taken from the other means i.e. comparative
financial statements with its major components viz. common size statement, comparative
financial statement.
Problems related to rural retail marketing
Barter system.
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Underdeveloped people and underdeveloped markets
Lack of proper physical communication facilities.
Many language and Dialects.
Dispersed population and trade.
Poor road connectivity.
poor availability of dealers.
low destiny of shops per village and high variation in their concentration.
poor storage system,leading to inadequate stocking .
Inadequate Media coverage for rural communication.
Highly credit driven market and low investment capacity of retailers.
Data Analysis and Interpretation
1) Have you ever been visited Aadhar retail ltd?
a) Yes b) No
Response Response in no. Response in %Yes 45 75%no 15 25%Total 60 100%
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2)Do you need discount or quality in product?
a) discount b) quality
Response Response in no. Response in %DISCOUNT 45 75%QUALITY 15 25%Total 60 100%
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3) For how long have you been dealing with the Aadhar retail ltd?
a) 1 year b) 2 years
Response No. Of respondents Percentage1 year 40 672 years 20 33Total 60 100
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4) Are you satisfied with the customer service offered?
RESPONSE NO. OF RESPONDENTS PERCENTAGEGood 15 25Average 30 50Need to be improved 15 25Total 60 100
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5) On what basis Aadhar retail ltd is better than other retail outlets?
9)How frequently do you visit Aadhar Retail outlet?
• Daily
• Once in a week
• Fortnightly
• Monthly
Time period No. of respondents PercentageDaily 5 8Once in a week 15 25Fortnightly 30 50Monthly 10 17Total 60 100
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10)what medium of advertisement do you respond to?
medium respondent percentagemagazine 10 16T.V(local cable channel) 20 34News paper 25 41OTHER 5 9TOTAL 60 100
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11)How much rating will you give to this store?
rating respondent percentageaverage 20 34very good 12 20Excellent 13 22can’t say 15 24Total 60 100
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12) Any recommendations???
CONCLUSION
The concept of Retail Marketing in Indian Economy has always played an influential role in the lives of people. In India, leaving out a few metropolitan cities, all the districts and industrial townships are connected with rural markets.The rural retail market in India is not a separate entity in itself and it is highly influenced by the sociological and behavioral factors operating in the country. The rural population
in India accounts for around 627 million, which is exactly 74.3 percent of the totalpopulation. The Registrars of Companies in different states chiefly manage: The rural retail market in
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India brings in bigger revenues in the country, as the rural regions comprise of the maximum consumers in this country. The rural market in Indian economy generates almost more than half of the country's income. Rural marketing in Indian economy can be classified under two broad categories. These are:
• The market for consumer goods that comprise of both durable and non-durable goods
• The market for agricultural inputs that include fertilizers, pesticides, seeds, and so on
RECOMMENDATIONS & SUGGESTIONS
PRICING
Pricing is the major element for retail marketing so cheaper price product are affordable
for middle class people they need more discount more schemes with purchase.
IMPROVEMENT IN TECHNOLOGY
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Technology is the major part of the retail area without nothing is
possible through media and electrification we improve the lifestyle of
people.
MAINTAIN THE QUALITY STANDARD
Quality standard is also very important part of market because some people are quality
oriented customer.
ESTABLISHMENT OF DISTRIBUTION CHANNELS
Retail market certainly offer a big attraction to marketers, it would be naïve to think that
any company can enter the market without facing any problem and walk away with
sizable share .but there are large number of small marketers and shopkeepers .ke a good
distribution channel.
Underdeveloped people and underdeveloped markets
Lack of proper physical communication facilities so trained people.
Provide more discounts and offers to people
Increase publicity and add to the company
Many language and Dialects
Make the idol distribution channel in for particular consumption area
Improve the electrification in the villages.
More add to their company in news paper through media.
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Motivate to increase investment capacity of retailers.
BIBLIOGRAPHY
WEBSITES
www.google.co.in
www.alibaba.com
www. Aadhar retailing ltd.com
www.wikipedia.com
www.retail industry.com
REFERENCES:
Aaker, Kumar, Day, (2005), “secondary and exploratory research”
Marketing Management, John Wiley & Sons, Inc 7th ed., p 102-121
McDaniel, Gates, (2001), “creating a research design”
Marketing Research Essentials, South Western Publications, 3rd ed., .
Miller, T.W, (2001), “Can We Trust Data of Online Research”
Marketing Research, vol.13, Issue 2, p 26-32
Zickmund, W .G.,(2002), “Exploring Marketing Research”