87295780-Tata-Croma

UNIVERSITY OF MUMBAI

PROJECT ON

A STUDY INTO THE CONSUMER PREFERENCE TOWARDS CROMA

MASTERS OF COMMERCE (BUSINESS MANAGEMENT)

SUBJECT: RESEARCH METHODOLOGY

SEMESTER III 2013-14

IN PARTIAL FULFILLMENT OF THE REQUIREMENT UNDER SEMESTER BASED

CREDIT AND GRADING SYSTEM FOR POST GRADUATE (PG) PROGRAMME

UNDER FACULTY OF COMMERCE

SUBMTTED BY

ALI JAMAL

ROLL NO. 24

PROJECT GUIDE

DR. MS RAJESHWARY G.

K.P.B. HINDUJA COLLEGE OF COMMERCE 315 NEW CHARNI ROAD MUMBAI

400004

M.Com (BUSINESS MANAGEMENT)

3rd SEMESTER

A STUDY INTO THE CONSUMER PREFERENCE TOWARDS CROMA

SUBMITED BY

ALI JAMAL

ROLL NO. 24

CERTIFICATE

This is to certify Mr. ALI JAMAL of M.Com Business Management semester 3rd 2013-2014 has

successfully completed the project on “A Study into the Consumer Preference towards Croma” under the

guidance of Dr. Ms Rajeshwary G.

Project Guide _________________________

Course Coordinator _________________________

Internal Examiner _________________________

External Examiner _________________________

Principal _________________________

Date: ________

Place: Mumbai

DECLARATION

I Mr. ALI JAMAL the student of M.Com Business Management 3 rd Semester (2013-2014) hereby declare

that I have completed the project on “A Study into the Consumer Preference towards Croma”

The information submitted is true and original to the best of my knowledge.

Mohammed Raza Merchant

(Signature)

ACKNOWLEDGMENT

My sincere Thanks to Dr. Ms Rajeshwary G, K.P.B. Hinduja College of Commerce, Mumbai

for her valuable guidance and support at all time.

Also, I would like to thank and remember my neighbours & friends for their effort and helping

hand.

Every effort has been made to enhance the quality of work. However, I owe the sole

responsibility of the shortcoming, if any, in the study.

ALI JAMAL

Roll No. 24

M. Com - III Semester

TABLE OF CONTENT

Sr. No TOPIC PAGE

1 Introduction 1

2 History & Background 4

3 Mission ,Vision & Values 5

4 Objectives of the Study 6

5 Significance of the study 8

6 SWOT Analysis 9

7 Initiatives towards the Customers 13

8 Factors Behind the Success of Croma 20

9 Competitors of Croma 27

10 Industrial Growth Of Croma 31

11 Conclusion 33

12 Questionnare & Bibliography 35

INTRODUCTION

Tata croma, they help you buy..It is cromas’s motto.. Croma is promoted by Infiniti Retail Ltd, a

100% subsidiary of Tata Sons. Woolworths, one of the world’s leading retailers, provides

technical and strategic sourcing support, ensuring that you buy nothing but the best.

Croma's first store opened on October 9, 2006 at Juhu in Mumbai, and it's rolling out many more

stores across India. So, no matter where you are, if you want high-quality products, backed by

advice you can trust, head for the nearest Croma.

Infiniti Retail Limited is a 100% subsidiary of Tata Sons. The company has launched Croma, a

national chain of mega stores of consumer electronics and durables. Infiniti Retail Ltd., owns and

runs Croma's retail operations in India, while Woolworths provides technical support and

strategic sourcing facilities from its global network.

Croma has stores in 7 places in india,namely gujarat,delhi ncr,pune,mumbai,chennai,hyderabad

and bengaluru..the total numbers of stores it has is approximately 50 across india.croma has also

opened croma zip stores in many airports of the country ex.mumbai. You can shop for 6000

products across eight categories in a world-class ambience.at croma Friendly, theyll-trained and

knowledgeable store advisors will give you sound and personalised advice so that you can make

informed buying decisions about any technology or consumer electronics product.

The Croma chain of stores offers, in different cities of India, a wide range of consumer

electronics products across categories and brands. The stores are spread over 12,000 to 20,000 sq

ft and have more than 6,000 products and 180 brands in eight categories: home entertainment,

small appliances, white goods, computers, communication, music, imaging and gaming software

CROMA SO FAR

Croma’s first store came up in 9th October, 2006. At Mumbai, within 6 month second store came

up at Malad in Mumbai. The store has wide display provided detailed information of the product

which made decision quicker for the customer and reduced service time. Infiniti Retail has

decide to open 28 stores by the end of 2007. Croma wanted to be the best in the business of retail

by providing everyday best price and deep discounting because they don’t want to lose any

customer. Croma took the help of durables from Woolworth because Croma didn’t had it and it

was trying to establish Croma wanted to provide a wide range of variety to its customers.

Tata invested Rs. 320 Crore in Croma to increase it retail stores into Bangalore and Delhi by

December 2007. In March 2008, Dell ties up with Croma. With increasing inflation, Croma has

decided to improve its logistics efficiencies. Croma outsourced its product through Woolworth

so during recession, they decide to get the products from the local vendors like LG, Samsung,

Sony abd HP. This saved the cost in the supply chain and increased their bottom-line.

In 2009, Croma started selling the application forms for Tata Nano; they will give discount of

Rs. 300 in selected products across any range for every purchase of application form. Nano will

also be find space in the retail store. It was decide to open 52 retail store by FY 10 and 100 retail

stores by FY12. Tata group invested Rs. 150 Cr for the brand expansion of Croma. In September

2009 Tata sons decide to dilute its stake by selling some percentage of stake to the Private Equity

investors because it wanted to focus on its own brand and product categories.

In 2010, Croma launched its own brand of LED and LCD TVs to increase their sales to 20%. By

June 2010, the marginal issues have come up bettheyen the local vendors, because they have

include the local vendors in their supply chain.

From the start of Croma in 2006 till today, Croma has registered two digit growths. It has also

included the local vendors which has saved their cost but increased their profits. Croma has took

the help of Woolworth for sourcing, strategies and technical support. Croma has expanded

throughout the country and is still expanding with megastores and zip stores formats. It has also

started his own brand has established itself in the country.

Market Share

Croma holds a good market position of about 18% in consumer durable and electronic retail

segment. The biggest competitor is eZone which is 37% strong follotheyd by NEXT with 27%,

reliance digital has 13% and others at about 5%.

STORES

Tata Croma is operating in two formats, the Megastore and the Zip store. The Zip stores are

found in airports also.Megastores are large format stores, the store size ranges from 15000 –

20000sq. ft, is theyll planned and designed for world class in store experience and backed by

robust after sales service. The stores are in Mumbai, Pune, Bangalore, Chennai, Aurangabad,

Delhi NCR, Hyderabad, Punjab and Gujarat. The stores in Mumbai ranges from 15000-22000 sq.

ft in area, in Bangalore the size is 22.000 sq. ft. the Croma Zip stores has size ranges of 2500 –

6000 sq. ft.

There are total 62 stores consisting of 38 stores in the high streets and 24 stores in the malls

spread over 7 cities and 2 states in India. There are 6 Zip stores; 1 in Santacruz airport, Vashi and

Fort in Mumbai, 1 in Delhi airport, 1 in T3 Domestic airline and T3 international airline.

DISRTIBUTION OF STORES ACROSS INDIA.

CITIES/STATES HIGHSTREETS MALLS ZIPSTORES

MUMBAI 6 8 3(Santacruz

Airport,Fort,And

Vashi)

PUNE 4 2 -

BENGALURU 10 2 -

CHENNAI 4 - -

HYDERABAD 3 - -

AURANGABAD - 1 -

DELHI NCR 9 5 3(Delhi Airport, T3

domestic and T3

international)

PUNJAB (Jalandhar

and Amritsar)

2 - -

MISSION

The mission pf the enterprise is to create unique customer satisfaction thorough

innovation , quality , productivity,human resource development continuously

strivingf o r e x c e l l e n c e w i t h p r i d e i n o u r v a l u e s a n d confidence in

our approach.|

The overall mission of Croma is to be the first choice of the customers

VISION

The vision of CROMA is to be the number onein the retail in electronics and durablesproducts in India,

through quality productsand delivery services (for larger products e.g..Washing machine, refrigerator etc )

CROMAshould imbibe a world class system to bringin delight to all our associates and the societyat large.

VALUES

Leadership With Trust

As any 'Tata person' will tell you, there's something positively distinctive, something less than

completely explainable, about working for the group — the experience is cast in a hue quite

different from the ordinary

The Tata name in itself is a unique asset representing leadership with trust.

By developing a structure, systems and a workplace culture that provides challenging jobs,

rewards performance and delivers opportunities continuously, we are striving to get the best

outof,our,most,valuable,asset—ourpeople.

Powering that quest is an entire range of human resource initiatives aimed at realizing the

potential of and, consequently, maximizing the returns from Tata employees. Robust leadership-

development systems that accelerate the development of current and potential leaders, a

performance culture that's calibrated through rigorous processes, and reward mechanisms that are

amongthebestinthecorporate world.

Our relationship with our employees is a bond that continues to be nourished with compassion

and care. The richness of this relationship, fashioned by a tradition of compassion and empathy,

represents a workplace culture that goes way beyond work. As an example we can cite that long

before many western industrial nations followed suit, this company introduced the eight-hour

working day (1912), maternity leave (1928) and even profit sharing for its employees (1934).

The Tatas have implemented many such “firsts” - the list is long and still growing. As a part of

the TATA group we are committed to the tradition of always being fair and benevolent to our

people.

Expansion Plans

Tata Croma is the India's first national, large format, retail chain for consumer electronics and

durables.Croma is owned and run by Infiniti Retail Limited, a 100% subsidiary of Tata Sons.

Woolworths Ltd, the Australian retail giant, provides technical support and strategic sourcing

facilities from its global network.

Brand Philosophy

If service wasn't important.

If technology wasn't complex.

If variety wasn't confusing.

We would have no reason to be in business.

We help you buy.

At Croma, shoppers are offered one of widest ranges of products and brands in consumer

electronics and durables and a shopping experience that's truly world-class. Shoppers can choose

from a number of products across eight categories which are

1.Own brand of Tata Croma       2.Computer     3. Home Entertainment    4.Communication

5.Large Appliances    6.Small Appliances    7.Gaming     8. Imaging

Apart from that Croma, plans to launch new products in niche categories such as jewellery

cleaners, renegotiate rentals with owners and increase its presence in metros to boost revenues.

The chain is planning to launch 10 to 15 new products in smaller home appliances and

specialized wellness products and expand the current private label portfolio under the ‘Croma’

brand. 

Reason for selecting Tata Croma

Currently, India’s consumer durable market is estimated at Rs 32,000 crore. There is growing

interest for new age products such as LCD-TVs and DVD players. Meanwhile, the penetration of

the basic, largest dollar items such as ovens, washing machines and refrigerators is also

increasing. India too, has witnessed a similar phenomenon, with the urban consumer durables

market growing at almost 10 %p.a., andthe rural durables market growing at 25% p.a. 

Tata Croma is a dominating player in this space. These retail chain are seeing sales growth of

15% month-on-month. The company’s turnover is around Rs 1,000 crores. To make their

presence in all over India Tata Croma has announced to open 100 croma stores within three years

including 22 stores in the current financial year. This expansion plan is exclusively for the Class

II and III towns. As Ranchi comes in the Class II towns & devoid of such type of Electronic

retail chain, so we can plan to open the store in Ranchi.

They help you buy TATA CROMA, first store came up on October 9th, 2006. Infiniti Retail operates a

national chain of multi-brand electronics stores under the brand name Croma. It is a wholly owned

subsidiary of Tata Sons, the holding company of the Tata Group.

The company, headquartered in Mumbai, has a technical and sourcing agreement with Australian

retail giant Woolworths until October, 2011 when they parted. Under the arrangement Infiniti

Retail owns and runs retail operations in India while Woolworths provides technical support and

strategic sourcing facilities through its global network.

EXECUTIVE SUMMARY

Retailing

Definition

Philip Kotler 

“Retail includes all the activities involved in selling goods or services to the final

consumers for personal or non-business use.”

Meaning

 The word retail is derived from the French word ‘retaillier’ which means to cut off or to

break bulk.Retailing is the set of business activities that add values to the products and servicessold to consumers

for their personal or family use All retailing is not done in stores.Example of non-store retailing include

internet sales or direct sales or catalog sales.

OBJECTIVE OF THE STUDY

After almost five years of its inception the company isventuring into online retailing space. The

company calls it a new strategy to tap the large number of net savvy customers and plans to cash

on online retail space that is getting hotter with each passing day. A source from the company

puts that it is eyeing on implementing some unique features like cash on delivery to its upcoming

online shop so as to suit customers of all types.

Tata Croma is also planning on adding 10 more stores to take the total count of its stores to 75 all

over India. Already Tata Sons has allocated Rs. 200 crore for this exercise. Also, a dedicated

after sales service facility is in the offing for its customers. For the first phase, the service centers

would be opened at Delhi, Mumbai and Bangalore and cater to Croma branded products

Competition

But the going may not be easy for Tata Croma as there are established players in the space. For

instance, the Future Group, with its online retail portal FutureBazaar.com is eyeing on having at

least 10% of its total retail sales from this medium. Probably, they may have bigger plans for that

to happen

And other players including eBay, FlipKart etc. may also give a big competition to the upcoming

Tata Croma online store. While eBay needs no introduction further in terms of its share of the

cake, Flipkart, an upstart in this segment, is gaining much popularity these days owing to its

dedicated services and support. There are others too that have established themselves quite theyll

in online retailing.

Product

6000 products, 180 brands, 50 categories

31% revenues from computer and laptops

6-8% from ‘Croma’ label goods

Consumer durables and electronics include – Televisions, Refrigerators, Air conditioners,

washing machines, Kitchen appliances, Gaming devices, Computers and laptops, Mobiles and

accessories, cameras, etc.

Target Segment

Value for money – best products with reasonable pricing, Best discounts and offers, Warranties

and guaranties,

FINANCIAL POSITION OF CROMA

Croma has generated 657 crore of 2008-09. Croma has generated around 1000 crore revenue at

the end of 2009. Tata Group has invested around 50 crores capex in year 2009 into Croma.

Company has recently received 200 crore from Tata group to fund network expansion and other

activites.

For Year 2010-11, Total Revenue for Infiniti Retail’s total revenue stood at Rs. 1549 Crore. But

Company has not break even yet, althoughsince the last five years, Infiniti has managed to grow

by over 50% annually.

Turnover

Year Revenue

2007-08 Rs 667 Cr

2008-09 Rs 1000 Cr

2009-10 Rs 1021 Cr

2010-11 Rs 1700 Cr

IMAPCT OF SLOWDOWN

During the slowdown, Croma decided to go for revenue sharing because the rentals are and it

constitutes 30% - 40% of the total cost per store. Croma also changed their supply chain by tying

up with the local customers. The last slowdown has made all the retailers to work faster and also

made Croma to act faster. Croma renegotiated, increased the retail size and revenue sharing

during the slow down.

During the recent recession, Croma decided to renegotiate the rental, controlling administrative

expenses and investing in the IT firms to increase profits. At present, Croma has negotiated

rental for 70% of its properties and is implementing ERP solutions by investing in IT which will

not only save cost but also increase their profits.

DIFFERNECE BETTHEYEN TATA CROMA AND WOOLWORTH

The 5 year old agreement bettheyen Tata Croma and Woolworth has come to an end and has lead

to parting of the alliance. The Australian based company wanted to deepen the die-up if the

Indian government allotheyd direct investment in the retail market. The Woolworths view this

agreement in a big picture and they wanted to be as a sourcing company. The disagreement by

the Croma has taken the Woolworths by surprise because they didn’t find the reason as time

bound. The reason for separation was not the investment or money matter. Croma has started

building its warehouses in Mumbai, Bengaluru and Chennai though Infiniti Retail has been using

the warehouses of the Woolworth for the retail business, Woolworth has been in the retail

business for last 85 years and they have been providing strategy and technical help in the retail

business for the development of Croma. Croma has been making business relation with large and

small companies to carry on their business in the country. After having all the information

gathered, both the companies decide to split.

The split will effect Croma because till now they haven’t been established properly and they are

making warehouse throughout the country for the supplies of the products. Woolworth has been

providing them the retail strategy and technical support which Croma lacked and they will be

still lacking. Croma is still developing so strategy is required to enter into every corners of the

country which the Croma will lack and also the technical support.

Brand Philosophy

If service wasn't important, If technology wasn't complex, If variety wasn't confusing, They

would have no reason to be in business,they help you buy.

The reason why people could choose croma over other stores are many and a few stated by

company are stated below:::

Widest range of products

Choose from 6000 products across eight categories

They help you buy

Sound and knowledgeable advice from theyll-trained advisors to help you make informed buying

decisions.

A name you can trust

Croma is promoted by Infiniti Retail Ltd, an initiative of the Tata group, a brand that stands for

trust and reliability globally.

Customer commitment

Croma not only gives you a world-class shopping experience, but also backs it with great after-

sales service.

Great deals and offers

Croma periodically offers exciting deals on all your favorite products.

A first of its kind

Consumer electronics and durable retail is a fragmented segment and has been largely catered to

by regional players.

Croma is the first of its kind

Large-format, specialist and pan-Indian

After information technology & outsourcing, retail is going to be the next big thing . Experts are

predicting a gigantic shift from unorganized to organized retail.

So, Indian retail is sitting at the threshold of a complete metamorphosis. Currently organised

retail is only 3 to 6 per cent whereas the total retail turnover in India was 250 million dollars last

year. But organised retail is growing at a speed of 40 per cent. The pie is large enough." At

croma the buyer is spoiled for choice, with nearly 6,000 products and 180 brands to choose from.

RETAILING.

Retailing includes all the activities selling goods or services directly to final consumers for

personal ,non business use.CROMA IS A SPECIALITY STORE SELLING ELECTRONICS.

SEGMENTATION.

THE croma stores directly SEGMENTED the areas they wanted to work upon i.e cities with high

per capita income or simply metro cities..the stores are designed in a contemporary fashion with

state of the art architecture to give you the best experience while you shop.The plan was only

made after realizing that every class needs a product which can deliver that required economy of

scale in terms of price and quality.

TARGETTING.

Marketers in Woolworths,then decided to target people with disposable incomes in middle class

and classes above them who have a sense of indulgence while shopping and are looking for the

right price with quality and which can be tested physically with live demos. The value-based

retail business has received a

phenomenal acceptance from the customers

POSITIONING:

As it was a tata enterprise concern people wanted to believe it and as per the deals and the type

of aggressive marketing they did with introducing low prices with combo deals and seasonal

sales .basically,their concept and style worked for them.In the beginning only it got a huge

customer base and if they look at the facts margin in durables retail is wafer-thin and hence scale

is the single-most important thing.

COMPETITORS NOW

Next,a venture by VIDEOCON group did a business of Rs 1,100 crore in FY 2010 and expects

around Rs 1800 crore business this year. Croma, hotheyver, did much more business per store

with its turnover touching Rs 1,000 crore in FY 10. Ajit Joshi, managing director and chief

executive of Infiniti Retail, which runs Croma Stores, wants to double the turnover in this

financial year. Next, the consumer durable and electronic chain promoted by the Videocon

Group, is the largest player in the market and has 526 stores already – over 10 times than

Croma’s. Next plans to add 300 more stores by the end of this fiscal. The other leading players in

this segment are Kishore Biyani's Future Group which runs 36 standalone stores of eZone and 16

shop-in-shops, and Reliance Digital with 39 stores. Tatas have so far invested Rs 280 crore in the

business.

SWOT ANALYSIS

Strengths: Being a tata concern it already had consumer trust and a huge capital.best marketers

theyre taking up the task of marketing it.ex.ajit joshi.also On an average, a Croma store costs

bettheyen Rs 3.5 crore and Rs 5 crore, including infrastructure and the inventory. “that means

foreseeing the market share tata could easily venture and succeed,

the weakness:it was heading into a market which was already being dominated by next{videocon

group},which plans to open another 300 stores soon ,reliance digital. the strategy had to be full

proof .

OPPORTUNITIES:

CROMA had a large opportunity ahead because of the increasing retail business.the sector is

growing tremendously at a fast rate.

THREATS:

THREATS theyre the players in the market which had already invested huge in retailing and

theyre having a good market share already..threats theyre also the local dealers and distributors

which theyre blooming because of personal factors like loyalty etc.

Croma has also got another Tata firm TCS to implement the SAP system in its back end

operations. Earlier it was using the software of its back-end partner Woolworths.

The Indian consumer durable and electronics market is estimated to be around Rs 80,000 crore

and is expected to grow at 10-12 per cent this year.

Croma is growing in terms of size, reach and turnover. Croma’s growth rate so far is more than

50 per cent in terms of turnover and it has aggressive plan for the coming years.  The company’s

strategy is to penetrate deeper in the cities it is operating in. This will aid operational efficiency

and allow Croma to garner higher market share.

electronics retail has not been impacted and has been growing at an impressive rate right through

the festive period. Year 2010 will establish us as a leader in the electronics retail category.

BEHAVIOUR OF CONSUMERS:CONSUMER BEHAVIOUR

As even I visited croma and analysed there for an hour .I found out dat customers when they

enter get to see a lot of products and variations,they feel delighted because of the neat and good

ambience and most of them do find a product which suits there need.And a salesman told me that

most of customers look for products ranging bettheyen 15000-20000.they have over 6ooo types

of products.consumers are accepting it and buying from it.it has increased its market share

rapidly and croma intents to reach 100 store mark by 2012..

PRODUCTS:

Apart from there in house products like lcd tv, led tv,washing machines,sofas,refrigerators, table

fans etc. You can choose from a number of products across eight categories. Croma has over180

brands and 6000 products for you to choose from. Plush stores, spread over nearly 20,000 sq

feet, with strategically planned products and category lay outs allow you to make hassle-free

purchases.There are deals all the time that people go for.. Mother’s day, Father’s day, Diwali,

Christmas, they celebrate all occasions with offers that make them special for you. now it has

over 100 consumer electronic products under its portfolio ranging from accessories like head

phones, pen-drives to high-end products like LCD and plasma screen TVs..

ABOUT CONSUMER DURABLE GOODS INDUSTRY

Durable goods are those which don’t wear out quickly, yielding utility over time rather than at

once. Examples of consumer durable goods include electronic equipment, home furnishings and

fixtures, photographic equipment, leisure equipment and kitchen appliances. They can be further

classified as either white goods, such as refrigerators, washing machines and air conditioners or

brown goods such as blenders, cooking ranges and microwaves or consumer electronics such as

televisions and DVD players. Such big-ticket items typically continue to be serviceable for three

years at least and are characterized by long inter-purchase times.

Performance

In the past 10 years, the global market has witnessed a surge in demand as economies such as

Brazil, Mexico, India and China have opened up and begun rapid development, welcoming

globalization with élan. The consumer durables industry has always exhibited impressive growth

despite strong competition and constant price cutting, and the first contraction since the 2001

dot-com bust has been due to the global recession. Given the strong correlation between demand

for durables (both new and replacements) and income, the industry naturally suffered during the

2008-2009 period. However, projections for current year going forward are very optimistic, as

consumers resume spending, and producers launch new enticing variants to grab new customers.

Leading players include Sony Corporation, Toshiba Corporation, Whirlpool Corporation and

Panasonic Corporation.

Developing countries such as India and China have largely been shielded from the backlash of

the recession, as consumers continued to buy basic appliances. In fact, China has been ranked the

second-biggest market in the world for consumer electronics. Despite the recession, their strong

domestic economy and growing high-income population have buoyed demand leading to

aggressive market growth.

There is growing interest for new age products such as LCD-TVs and DVD players. Meanwhile,

the penetration of the basic, largest dollar items such as ovens, washing machines and

refrigerators is also increasing. India too, has witnessed a similar phenomenon, with the urban

consumer durables market growing at almost 10 %p.a., and the rural durables market growing at

25% p.a. Some high-growth categories within this segment include mobile phones, TVs and

music systems.

The Indian consumer durables industry has witnessed a considerable change in the past couple of

years. Changing lifestyle, higher disposable income coupled with greater affordability and a

surge in advertising has been instrumental in bringing about a sea change in the consumer

behavior pattern. Apart from steady income gains, consumer financing and hire-purchase

schemes have become a major driver in the consumer durables industry.

In the case of more expensive consumer goods, such as refrigerators, washing machines, color

televisions and personal computers, retailers are joining forces with banks and finance

companies to market their goods more aggressively. In addition, change in policy, such as the

WTO FTA in 2005 resulted in zero customs duty on imports of all telecom equipment, thereby

improving the pricing and affordability of imported goods.

Challenges

The biggest threats to the local industry going forward are supply-related issues pertaining to

distribution and infrastructure, as well as demand issues due to competition from imported

goods. The lack of well developed distribution networks makes it especially challenging to

penetrate the fastest growing rural areas economically. In addition, regular power cuts and poor

road linkages make systematic production, assembly and delivery problematic.

On the demand side, customers have increasing choice from both domestically produced and

imported goods, with similar features. This homogeneity makes it difficult for players to remain

ahead of the competition.

MNCs hold an edge over their Indian counterparts in terms of superior technology combined

with a steady flow of capital, while domestic companies compete on the basis of their well-

acknowledged brands, an extensive distribution network and an insight in local market

conditions. The largest MNCs incorporated in India are Whirlpool India, LG India, Samsung

India and Sony India and homegrown brands are Videocon, Godrej Industries and IFB.

Future Prospects

Overall, the industry’s future remains robust, and interested applicants will benefit from a

holistic learning experience; Many of the research, sales, marketing and advertising related roles

will necessitate a good on-the-job learning of target audiences, who may well be a totally new

segment, based in never-before visited Class II and III towns. In addition, those with technical

backgrounds will be able to leverage their knowledge and experience to constantly develop and

innovate the product variants. With more MNCs growing their Indian businesses, there is great

potential to also learn best-in-class systems and management skills.

During FY07, volume share of the single largest consumer durable was colour TVs at 30%,

followed by refrigerators and air conditioners at 18% and 13% respectively. Washing machines

and other assorted consumer durables captured a share in the total volume by 5% and 34%

respectively.

 FY07 witnessed the highest number of TV sets being sold when compared to the previous two

corresponding years. As per CMIE, growth in sale of TV sets was slower at 14.3% during FY07

when compared to a 21% growth in the previous year. On the demand side, domestic

consumption of refrigerators declined by almost 4% between FY05 and FY08, while imports

climbed. The imposition of anti-dumping duties on import of colour picture tubes will hit the

manufacturing costs of CTVs produced in India. Further, the reduction in the general rate of

excise duty (CENVAT) from 16% to 14% as proposed in the Union Budget for FY09 will not

have any effect on the selling price of colour TVs. This is because the combined effect of rising

input costs and a higher interest burden will negate the effect of such reduction.

The key growth drivers for the Indian consumer durables industry:

Rise in disposable income: The demand for consumer electronics has been rising with the

increase in disposable income coupled with more and more consumers falling under the

double income families. The growing Indian middle class is an attraction for companies

who are out there to woo them.

Availability of newer variants of a product: Consumers are spoilt for choice when it

comes to choosing products. Newer variants of a product will help a company in getting

the attention of consumers who look for innovation in products.

Product pricing: The consumer durables industry is highly price sensitive, making price

the determining factor in increasing volumes, at least for lower range consumers. For

middle and upper range consumers, it is the brand name, technology and product features

that are important.

Availability of financing schemes: Availability of credit and the structure of the loan

determine the affordability of the product. Sale of a particular product is determined by

the cost of credit as much as the flexibility of the scheme.

Rise in the share of organised retail: Rise in organised retail will set the growth pace of

the Indian consumer durables industry. According to a working paper released by the

Indian Council for Research on International Economic Relations (ICRIER), organised

retail which constituted a mere four percent of the retail sector in FY07 is likely to grow

at 45-50% per annum and quadruple its share in the total retail pie 16% by 2011-2012.

The share will grow with bigger players entering the market.

Innovative advertising and brand promotion: Sales promotion measures such as

discounts, free gifts and exchange offers help a company in distinguishing itself from

others.

Festive season sales: Demand for colour TVs usually pick up during the festive seasons.

As a result most companies come out with offers during this period to cash in on the

festive mood. This period will continue to be the growth driver for consumer durable

companies.

Major hurdles and challenges plaguing the Indian consumer durables sector:

Threat from new entrants, especially global companies: The domestic consumer durables sector

faces threat from newer companies, especially from global ones who have technologically

advaced products to offer.

Rivalry and competition: Presence of a large number of players in the domestic consumer

durables industry leads to competition and rivalry among companies. Threat from rivalry and

competition poses a threat to domestic companies.

Potential markets remaining yet untapped: A large segment of the domestic market, mostly the

rural market is yet to be tapped. Tapping this yet untapped and unorganised market is a major

challenge for the Indian consumer durables sector.

Threat from substitute products/services: The domestic consumer durables industry is plagued by

threats from substitute products. Easy accessibility to theatres/multiplexes, especially in urban

areas has turned off the viewership from TV to a large extent. With the advent of a horde of FM

radio stations, radio sets have now substituted TVs.

Customer power with respect to availability of choice: The availability of a wide product line on

account of most products being homogeneous, poses a threat for companies operating in the

consumer durables sector. Customers have the choice of both domestically produced and

imported goods, with similar features.

According to CMIE statistics, domestic consumption of refrigerators witnessed a decline

between FY05 and FY08, while exports grew. From 3% of the total consumption in FY05,

exports grew to7% of the total consumption in FY08. On the supply side, domestic production of

refrigerators in the total supply remained at the same levels in the past three years ended FY08.

At 99% each in FY06-08, the share of production reported a mere 100 basis point increase over

FY05, as imports slided. The refrigerator industry posted a sluggish performance since the

beginning of FY09 on the back of volatile steel prices. The first quarter saw a production growth

of a mere 50 basis points to 2.18 mn units, as per CMIE.

 Sales of Consumer Electronics Companies

The consumer electronic goods industry underwent a slowdown during the last quarter of FY08.

According to CMIE, the industry witnessed a slower 10.5% growth in the Mar 08 quarter

compared to a substantial 17.4% growth in the previous corresponding quarter. Domestic

consumer electronic companies together reported a subdued sales growth of almost 17% in

FY07, on the back of a robust 40.5% growth in FY06. While the larger companies reported

robust growth in sales, it was the smaller ones whose sales were negatively affected that

eventually brought down the industry sales growth.

INDUSTRIAL GROWTH

The industrial sector grew in moderation during FY08 at 8.5% on the back of a comparatively

higher growth of 11.5% during the previous fiscal. The country’s real GDP grew by 9% during

FY08; a tad lower than 9.6% in the previous fiscal. The consumer durables segment witnessed a

fall in production particularly for items where consumer preferences have shifted towards newer

products. Shifting in the consumption pattern coupled with rising input costs of steel, iron ore

etc, may further affect the production levels of these goods. On the supply side newer variants of

consumer durables on the back of technological advancements have flooded the market, whereas

on the demand side it is the prospering middle class and consumerism which have led to

changing demand patterns.

CONCLUSION

Most of the customers before purchasing compared the

products with some other stores.

Croma is the store where customers believe that the price of the

product is moderate.

Proximity to house or office is the major reason why people

prefer croma which is situated off the Air Port road Yerwada,

and the other reason is that the price of the products is

moderate as compared with other store.

Overall quality of croma is good. But there is scope to improve

it more.

The Product offering according to the customers was good.

The customers of croma said that the physical aspect of croma

was excellent. They liked the layout the spacing of the store and

the ambience.

Most of the customers agree to the tag line of croma “Croma

Helps You Buy”

QUESTIONARE

The following topics or issues will also be considered in the project

1) How is Vendor Management carried out in a Retail Store?

2) How is merchandising carried out?

3) What are the retailing strategies used by Croma Retail?

4) What are the pricing adjustments and strategies undertaken by Croma Retail?

5) Method followed to assemble the data.

6) Sources used to get the information.

7) Tools used during collection of data

BIBLIOGRAPHY

http://www.watblog.com/2011/08/02/tata-croma-to-launch-an-online-store/

http://www.tata.com/company/profile.aspx?sectid=oH90Rc8X7Dg=

http://in.finance.yahoo.com/news/Tata-Group-Infiniti-Retail-contifyinvestment-

115097139.html?x=0

http://articles.economictimes.indiatimes.com/2010-01-27/news/27597485_1_formats-croma-

vineet-kapila

http://articles.economictimes.indiatimes.com/2009-05-10/news/27646997_1_croma-rentals-erp-

solutions

http://articles.economictimes.indiatimes.com/keyword/croma/recent/2