Research Project Report On “Marketing Strategies of Vishal Mega mart”
SUBMITTED TO PUNE UNIVERSITY In Partial Fulfillment of Requirements For the Award of Requirement of Masters of Business Administration BY GAURAV TYAGI MMM- II Roll No:- 25 PROJECT GUIDE MANISHA LANDE ACADEMIC YEAR 2010-2012 SINHGAD INSTITUTE OF BUSINESS ADMINISTRATION & RESEARCH KONDHWA, PUNE- 48
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PREFACE A man can become perfect with a perfect knowledge and experience. As a student of business management, we have studied many theories in the classroom but any professional degree is incomplete without practical knowledge of concerned field. And the same case is with management studies, management is incomplete without knowing practical application of theories studied. I have experienced and understood the practical importance of these theories on this training. More books and theoretical knowledge can’t help you in any field whether it is management or technical. Only thing can help you is practical knowledge. This development day provides a golden opportunity to the students for getting a perfect knowledge and experience. I come to know how the management of company is actually being done. How decisions are made? How people behave and decide what to purchase? As a part of my learning in management field and requirement of MMM program, I have been given an opportunity to grab practical knowledge in the area of marketing and I had selected “VISHAL MEGAMART”. I have made my best efforts to get knowledge and experience. During the day, I had collected necessary information, and I present all the necessary information to understand well.
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ACKNOWLEDEMENTS The project work is pursued as a part of MMM curriculum at Pune University Pune. I would greatly rejoice to express emphatically with profound sense of gratitude and highest veneration, my sincere thanks to Pro-Manisha Lande for giving me guidance for this Project. The project is undertaken as training at Vishal Mega-Mart. The project is done under expert supervision and guidance of Mr. Ashish Kumar (Store Manager, Vishal Mega-Mart). I am thankful for him. I am short of words to express my respect & honor to my parents and family members & friend who showered their blessings, affection, encouragement, & inspiration, without which this report would not have been finalize. I also express my sincere thanks to my friends who helped me differently in the completion of my work. Last but not least, I also thank all those people whom I met at Vishal Mega-Mart during my internship and helped me to accomplish my assignments in the most efficient and effective manner.
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DECLARATION I,GAURAV TYAGI, hereby declare that the project report on “MARKETING STRATEGIES OF VISHAL MEGA MART” is a result of my own work and my indebtedness to other work publications, if any, have been duly acknowledged.
Place: Pune
Signature
Date: 21/09/2010 GAURAV TYAGI
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EXECUTIVE SUMMARY “A comparative study of effectiveness of different promotional strategies (schemes) with reference to vishal mega mart” All this information has collected regarding the project through primary and secondary data. This report highlights on the understanding the marketing strategies of vishal mega mart and their effect on sales of the products. From the questionnaire & the data collected from net & other resources and find market potential of big bazaar. The limitation of this thesis is sample size. The sample size for this thesis is only 100 respondents. The methodology adopted by me for this thesis is to conduct a survey. I have prepared questionnaire for the survey. The objective of this thesis is understood marketing strategies of vishal mega mart and its effect on the sales of its services and products. The finding of the thesis is that customer is interested in products and services given by Vishal Mega Mart & give different type of promotional activity for the effective market potential.
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CONTENTS S.NO.
CONTENTS
PAGE NO.
1.
Preface
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2.
Acknowledgement
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3. 4. 5.
Declaration Executive Summary Chapter 1. Introduction Introduction of Indian Retail Industry Objective of the Study Limitations of the Study
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Scope of the Study Chapter 2. Research Meathodology
8 12 13-14 15 16-20
Company Profile
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Vision
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Marketing Strategy Chapter3. . Data collections and Analysis Swot Analysis Questionare
37 45-47 45 47
Chapter4. Findings Findings
60 60-62
Chapter 5. Conclusion and Suggestion Conclusion Suggection
63 64 65
Chapter 6. Bibliography
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Chapter:-1. INTRODUCTION
Introduction of Indian Retail Industries: In the background of high consumerism and income of the urban consumers, in recent year there are a number of companies have expressed their interest towards retail sector outlets. As a result 7
numbers of shopping malls have started their operations in metro and urban areas. Pantaloon, big bazaar, Vishal Mega Mart, Reliance Fresh are the best known examples of retail sector outlets in India. Retailing is the interface between the producer and the individual consumer buying for personal consumption. This excludes direct interface between the manufacturer and institutional buyers such as the government and other bulk customers. A retailer is one who stocks the producer’s goods and is involved in the act of selling it to the individual consumer, at a margin of profit. As such, retailing is the last link that connects the individual consumer with the manufacturing and distribution chain. Some of the key features of retailing include: • • • • • •
Selling directly to customers with out having any intermediaries Selling in smaller units / quantities, breaking the bulk Present in neighborhood or in the location which is quite convenient to the customers. Very high in numbers Recognized by their service levels Fitting any size and or location
It is assumed that due to the entry of a number of retail outlets in the urban and semi urban areas, the mindset of the existing customers have undergone drastic changes. Besides it is also reported that the traditional retailing such an age old Grocery shops have directly faced competition with the organized retailing sector. In some parts of the country, it is reported that the traditional retails are resisting the entry of organized shopping malls. For instance the traditional retails of Bhubaneswar with the active support of the consumers at large didn’t allow reliance Fresh to start outlet initially. RECENT TRENDS • • • • •
Retailing in India is witnessing a huge revamping exercise as can be seen in the graph India is rated the fifth most attractive emerging retail market: a potential goldmine. Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade) makes up 3 percent or US$ 6.4 billion As per a report by KPMG the annual growth of department stores is estimated at 24% Ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT Kearney.
Retailing in India: the present scenario The present value of the Indian retail market is estimated by the India Retail Report to be around Rs. 12,00,000 crore($270 billion) and the annual growth rate is 5.7 percent. Retail 8
market for food and grocery with a worth of Rs. 7, 43,900 crore is the largest of the different types of retail industries present in India. Furthermore around 15 million retail outlets help India win the crown of having the highest retail outlet density in the world. The contribution of retail sector to GDP has been manifested below: Country Retail Sector's share in GDP (in %) India 10 USA 10 China 8 Brazil 6 As can be clearly seen, retailing in India is superior to those of its contenders. Retail sector is a sunrise industry in India and the prospect for growth is simply huge. There are many factors that have stimulated the rise of the shopping centers and multiplex-malls in a jiffy. Some of them can be listed as follows:
Rise in the purchasing power of IndiansThe rise in the per capita income in the last few years has been magnificent. This has led to the generation of insatiable wants of the upper and middle class. The demand of new as well as
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second hand durables has risen throughout the country thus providing the incentive for taking up retailing. Favorable to farmers- retailing has helped in removing the middlemen and has thus enhanced the remuneration to farmers. This is a new revolution in the agricultural sector in India and will go a long way in amending the condition of agriculture, a major concern among policy makers. Use of credit- a typical Indian is most conversant with using credit cards than carrying money. These have led to a shift of the consumer base towards supermarkets and make the payments in the form of credit. Comfortable Atmosphere- a visit to a retail store appears to be more soothing for the generation-Y. People and kids prefer to shop in an air conditioned a tech savvy manner. The retail industry is the second largest employer in India. It currently employs about 7 percent of the total labor force in India. Finance Minister P. Chidambaram's recent statement “salaries ought not to be legislated” is a welcome move as most of the organized retail is in private hands. However only about 4.6% of the total retail trade is in organized sector. It generates about Rs.55, 000 crore ($12.4 billion). The major and minor players desperately need to work hard in this direction so that next time the figures look more decent. The government must also make an attempt to ameliorate the situation as political instability and infrastructure namely power and roads are the major roadblocks in the path of smooth functioning of the market.
Components of Retail Sector The major components of the retail sector are: 10
Food and Grocery, Fast Moving Consumer Goods (FMCGs), Consumer Durables, Apparel, Footwear and leather, Watches, Jewellery, and Health and Beauty The anatomy of the retail market has shown that the clothing and textiles constitutes 39 per cent of the organised retail pie, followed by food and grocery, which accounts for 11 percent of the total retail market.
However, according to the survey conducted by KPMG for Federation of Indian Chamber of Commerce and Industry (FICCI), among these, the food and grocery is expected to witness the fastest growth followed by clothing as the second-fastest growing segment.
Objectives of the study
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To understand the different marketing strategies being followed by Vishal Mega Mart.
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To learn their marketing mix.
Marketing help to define the business for the customer's interests, not your own. It is the process of learning what customers want or need and determining how to satisfy those wants or needs. It is also used to confirm whether the customer reacted to a marketing program as expected. The benefits of market research include: Learning who your customers are and what they want. Learning how to reach your customers and how frequently you should try to communicate with them. Learning which advertising appeals are most effective and which ones get no response. Learning the relative success of different marketing strategies, thus improving return on investment. Learning how not to repeat your mistakes.
LIMITATION OF THE STUDY 12
Although it would have been nice to conduct a perfect research study, but this study is conducted under certain limitations, which were faced while doing this research. So it is highly recommended to consider these limitations while going through the project study. These limitations are as follows 1. LIMITATION OF DATA The statistical data regarding the city was not available to us on secondary source of data and to generate such data on the primary source was a task, which cannot be achieved in such a short time. 2.
LIMITATION OF TIME The limitation of time was another constraint in the study as the study had to be conducted in few months therefore many aspects have been left unexplored. Research period is not just much enough to know fully about the strategies & consumers perception 3. INHIBITIONS OF THE RESPONDENTS The respondents did not reply the question with precision as they were busy with their own work or they were not interested in taking part in such a research. Employees sometimes feel hesitated while telling about their view about their marketing strategies. 4. RESEARCH HAS BEEN CONDUCTED IN A LIMITED AREA The research has been conducted for the Vishal mega mart(Shastri Nagar Garh Road,Meerut) but not all their retail outlet have been covered therefore it has been mentioned that the research has been conducted in a limited area. 5. THE SAMPLE SIZE IS SMALL The sample size taken for this thesis is small; it may not actually represent the
whole
population. The data collected were totally depending on the respondent’s views, perception, behavior, psychology related to particular scheme which could base in nature
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These limitations were very common and yet we came across these with a positive note and the subsequent chapters in this report shall explain the rationality behind the structural compilation.
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Scope of study This project gave me great exposure to the customer’s perception to the marketing strategies adopted by the Vishal mega mart because it includes the service offered by them. The study also identifies the attitudes and preference of the consumers. The study also focused on Media through which the product reaches the consumers This project helped me in knowing the market practically.
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RESEARCH METHODOLOGY Definition of Research The word research is derived from the Latin word meaning to know. It is a systematic and a replicable process, which identifies and defines problems, within specified boundaries. It employs well-designed method to collect the data and analyses the results. It disseminates the findings to contribute to generalize able knowledge. The characteristics of research presented below will be examined in greater details later are: Systematic problem solving which identifies variables and tests relationships between them, Collecting, organizing and evaluating data. Logical, so procedures can be duplicated or understood by others Empirical, so decisions are based on data collected Reductive, so it investigates a small sample which can be generalized to a larger population Replicable, so others may test the findings by repeating it. Discovering new facts or verify and test old facts. Developing new scientific tools, concepts and theories, this would facilitate to take decision. For the proper analysis of data simple statistical techniques such as percentage were use. It helps in making more generalization from the data available. The data which was collected from a sample of population was assumed to be representing entire population was interest. Demographic factors like age, income and educational background was used for the classification purpose.
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2.1 Research Design: It was important to collect detailed information on various aspects for effective analysis. Research design can be of three forms: •
Descriptive Research: It is conducted to ascertain certain magnitudes and to provide an accurate snapshot of some aspect of the market environment. For example: Determining the size of the market, market share, availability of distributors, sales analysis, studies of consumer attitude etc.
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Exploratory Research: This is used when one is seeking insight into the general nature of a problem, the possible decision alternatives, and relevant variables that need to be considered. Little prior knowledge is required. Research methods are highly flexible, unstructured and qualitative. For example: What new product should be developed, what should be the positioning of our product, etc.
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Causal Research: Causal studies are designed to determine whether one or more variables cause or determine the value of other variables. It is an evidence of relationships of variables. For example: Whether decrease in price will lead to an increase in the sales of a product, or whether the presence of a sales person will help in increasing the sales in a retail outlet, etc.
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These three types can be viewed as cumulative. The research design adopted for project research is Causal Research.
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Once the researcher has decided the ‘Research Design’, the next job is of data collection. For data to be useful, our observation needs to be organized so that we can get some patterns and come to logical conclusions.
Depending upon the sources utilized, whether the data has come from actual observations or from records that are kept for normal purposes, statistical data can be classified into two categories: 2.2 Primary Data 2.3 Secondary Data 17
2.2 Primary Data: It is one, which is collected by the investigator himself for the purpose of specific inquiry or study. Such data is original in character and is generated by surveys conducted by individuals or research institutions. It can be obtained by: °
Communication
°
Observation
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Questionnaire
2.3 Secondary Data: When an investigator uses the data, which has already been collected by others such data is called secondary data. This data is primary for the agency that collects it and becomes secondary data for someone else who uses this data for his own purpose. It can be obtained by: °
Company’s web
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Journals
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Reports
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Newspapers
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Government Publications
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Publication of professional and research organization.
The research methodology involves the following major steps namely2.3.1 Defining data source 2.3.2 Research approach
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2.3.1 Defining data source: In the project, both primary and secondary data were used for the research process. Secondary data are data that were collected for another purpose and already exist somewhere. In this project the secondary data are collected from internet, newspapers and text materials. This constitutes the chief material on the basis of which research work is carried out. Primary data are data freshly gathered for specific purpose or specific project purpose. It is obtained by study specifically designed to fulfill the data of the problem in hand. Primary data are original in character. Primary data was collected in two ways: - Observation research and surveys. 2.3.2 Research Approach: In the project primary data was collected through observation research, surveys and secondary data from internet, books and text materials. In observation research, fresh data was collected by observing the relevant parameter of research. Basically secondary data was used for evaluating the performance of stock market. 2.4 Sample Design: For carrying out any research or study on any subject it is very difficult to cover even 10% of the total population. Therefore the sample size has to be decided for a meaningful conclusion. For designing the sample size, it was thought proper to cover a very small percentage of population in various age groups. The method used for sample technique was non probability convenience sampling method. This method is used because it is known previously as to whether a particular person will be asked to fill the questionnaire. Convenient sampling is used because only those people will be asked to fill the questionnaires that were easily accessible and available to the researcher. Considering the constraints, it was decided to conduct the study based on sample size of 200 people in specific age groups. Scientific method is not adopted in this study because of financial constraints and also because of lack of time; also the basic aim of doing the research is academic, hence most convenient way is selected 2.4.1 Sample Size: 19
I conducted approximately 200 samples during my research. 2.4.2 Sampling Method: I used random sampling method for my research. Where, I have selected the persons randomly for research work. 2.5 Method of data collection: The next step is together the requisite data. There are two types of data collection method – primary data and secondary data 2.5.1 Instrument for data collection: I have used the questionnaire method in sample survey. If one wishes to find what people think or know, the logical procedure is to ask them. This has lead marketing researchers to use the questionnaire technique for collecting data more than any other method. In this method questionnaire were distributed to the respondents and they were asked to answer the questions in the questionnaire. The questionnaires were structured non-disguised questionnaire because the questions, which the questionnaire contained, were arranged in a specific order besides every question asked was logical for the study; no question can be termed as irrelevant. The questionnaire, were non-disguised because the questionnaire were constructed so that the objective is clear to the respondent. The respondents were aware of the objective. They knew why they asked to fill the questionnaire. 2.7 Data-analysis techniques: The study conducted is a conclusive descriptive statistical study; the researcher comes to the decision which is precise and rational. The study is conclusive because after doing the study the researcher comes to a conclusion regarding the position of the brand in the minds of respondents of different firms groups. The study is statistical because throughout the study all the similar samples are selected and group together. All the similar responses are taken together as one and their percentages are calculated. 20
Thus, this, conclusive descriptive statistical study is the best study for this purpose as it provides the necessary information which is utilize to arrive at a concrete decision.
COMPANY PROFILE “Future is thinking beyond horizon” & in order to keep its pace with the modern retail, Vishal Retail Limited is spreading its wings. Instead of resting on its laurels the Group are busy identifying new avenues of growth by venturing in other formats like cash & carry, convenios as well as specialty stores and inspiring local retailers to grow along with the big names. The group has tied up with HPCL to open corner stores at their petrol pumps and in addition to the above Vishal has come up with an institute to train manpower for the service industry. As of December 1, 2010, it operates 172 retail stores, including two stores which are operated by their franchisees. These 172 stores are spread over about 24,00,000square feet and are located in 24 states across India. In its efforts to strengthen thier supply chain, it has set up seven regional distributions centres and an apparel manufacturing plant. Today Vishal Retail Limited, Flagship Company of Vishal Group, engaged in Hyper Market stores with an average area of 25,000 to 30,000 sq. ft. According to Mr. Ram Chandra Agarwal, CMD, Vishal Retail Limited, the group owes its origin to a small 50 sq ft shop in Kolkata's Lal Bazaar that started selling readymade garments. In tune with the pulse of the market, he envisioned a mega store that would sell garments at prices none other could match. . The first big store opened in Calcutta's Esplanade area in 1997, under the banner of Vishal Garments. He was involved in all the aspects of the business: right from sourcing the garments to interacting with customers. And this led to his greatest finding “The Vishal Group.” After identifying the immense market in fashion garment for the masses, He moved to Delhi in 2001 and opened his first store in Delhi’s Rajouri Garden by the name of Vishal Mega Mart (The jewel in Vishal Group’s crown) and then there was no looking back for Mr. Ram Chandra Agarwal. At present, in addition to garments, Vishal Mega Mart stores retail the entire range of household products, FMCG and electronic goods. Vishal's prices are roughly 15 to 20 per cent less than other mass market garment labels. Mr. Ram Chandra Agarwal, CMD, Vishal Retail Limited believes that the shopping habits of Indians are changing due to their growing disposable income, higher aspirations, relative increase in the younger population, and the change in attitudes towards shopping. The emphasis has changed from price consideration to design, quality and trendy. Age is also a major factor that affects the spending decisions of an individual. Consumer spending is an important factor that affects the economic growth and development in a country. As a trend, consumer is more educated. He has access to all reforms taking place through various arrays of communication. He is becoming a “value shopper” everyday. 21
Keeping this in mind, the group is now looking for franchisees to join hands with Vishal and grow under common banner. This partnership will help small retailers to survive the onslaught of organized retail as it will enhance their competitiveness. Small stores can avail of the benefits on account of the economies of scale, a key advantage for big retailers. As per the plans, Vishal Retail will completely take over the supply chain of its franchisees and provide them with technology, new practices, visual merchandising skill and special promotional schemes, besides its brand and customer base. Some of the Franchisee exclusive business categories are:
Mens Fashion Ladies and Kids Footwear Toys and Games Home – General Convenience (FMCG) CDIT Watches Mobile
It follows the concept of value retail in India. In other words, their business approach is to sell quality goods at reasonable prices by either manufacturing themself or directly procuring from manufacturers (primarily from small and medium size vendors and manufacturers). It endeavour to facilitate one-stop-shop convenience for their customers and to cater to the needs of the entire family. It believes this concept has helped them grow to thier current size within a short time frame of their years. Mr. Ram Chandra Agarwal has been ranked as the 28th most pitiful person in the Indian retail industry. In order to reduce costs and take advantage of economies of scale it has embarked on backward integration of their products. Thier apparel manufacturing plant is located at Gurgaon, Haryana. For ensuring efficiency in supply chain, it has set up seven regional distribution centres located around Kolkata, Thane (Maharashtra), Jaipur (Rajasthan), Ghaziabad (Uttar Pradesh), Ludhiana (Punjab), Gurgaon (Haryana) and Delhi. Further, it has focussed on developing a cost and time efficient distribution and logistics network, which currently comprises seven distribution centers and a fleet of trucks for transportation. “Retailing is an engine for taking merchandise to the end-users. There is a lot of opportunity in this sector for us since demand of the potential consumers are not being met under the existing facilities. Therein lies the road to success.” says Mr. R C Agarwal
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Board of Directors:
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Mr. Ram Chandra Agarwal, Chairman & Managing Director He holds a bachelor’s degree in commerce from St. Xavier’s College,Kolkata. Mr. Agarwal has more than 20 years of experience in the retail industry and has been with VRPL since their inception in 1997.
Mrs. Uma Agarwal, Executive Director She holds a bachelor’s degree in arts. Mrs. Agarwal has more than 7 years of experience in the retail industry. She has been associated with accounts department of VRPL. Mr. Surendra Kumar Agarwal, Executive Director . . He holds a bachelor’s degree in commerce. Mr. Agarwal has more than 17 years of experience in the retail industry. He has been associated with store development and management at various locations of VRPL.
Mr. Bharat Jain, Independent Director He holds bachelor’s degree in commerce. Mr. Jain is engaged in the business of leather garments and accessories and has more than 23 years of work experience. Mr. Jain joined VRPL Board on May 8, 2006. Mr. Rakesh Aggarwal, Independent Director He holds a master’s degree in commerce. Mr. Aggarwal is currently engaged in roto-moulding industry has more than 20 years of work experience. Mr. Aggarwal joined VRPL Board on October 31, 2006.
OUR PROMOTERS AND GROUP COMPANIES Our Promoters The following individuals are the Promoters of our Company: a). Mr. Ram Chandra Agarwal; b). Mrs. Uma Agarwal; and c). Mr. Surendra Kumar Agarwal.
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The following companies are the Promoters of our Company: a). Unicon Marketing Private Limited; b). Ricon Commodities Private Limited; and c). Vishal Water World Private Limited. In addition, the following HUFs are the Promoters of our Company: a). Mr. Ram Chandra Agarwal (HUF)VISION STATEMANT: We share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development Name of Shareholders & Number ofof Shares %families, of shareholding Because of increasing number nuclear working women, greater work pressure and greaterMarketing commuting time, Limited convenience has 49.53 become a priority for Indian customers. They want 1. Unicon Private 315,000 2. Ricon Commodities Limited ever thing under onePrivate roof for easy300,000 access 47.17 and multiplicity of choice. The growth and 3. Mr. Ram Chandra Agarwal 12,010 1.89 development of organized 4. Mrs. Uma Agarwal 9,010retailing 1.42 is driven by two main factors – lower prices and benefits the Total 636,020 100.00 customer can’t resist. India is rapidly involving into a competitive market place with potential target consumers in the niche middle class segments. The market trend indicates tremendous growth opportunities.
MISSION STATEMENT: We shall deliver Everything, everywhere, everytime for every Indian Consumer in the most profitable manner. VRPL’s BUSINESS:VRPL started as a retailer of ready-made apparels in Kolkata in 2001. In 2003, VRPL acquired the manufacturing facilities from Vishal Fashions Private Limited and M/s Vishal Apparels. Subsequently, with evolution of retail industry in India and change in consumer aspirations, VRPL diversified their portfolio of offerings to include other retail goods. Currently, VRPL sell ready-made apparels and a wide range of household merchandise and other consumer goods such as footwear, toys, watches, toiletries, grocery items, sports items, crockery, home furnishing, beverages, drinks, gift and novelties. VRPL follow the concept of value retail in India. In other words, VRPL’s business approach is to sell quality goods at reasonable prices by either manufacturing themselves or directly procuring from manufacturers (primarily from small and medium size vendors and manufacturers). VRPL endeavor to facilitate one-stop-shop convenience for their customers and to cater to the needs of the entire family. VRPL believe this concept has helped them grow to their current size within a 25
short time frame of 10 years. In order to reduce costs and take advantage of economies of scale VRPL have embarked on backward integration of their products. VRPL’s apparel manufacturing plant is located at Gurgaon, Haryana. For ensuring efficiency in supply chain, VRPL have set up seven regional distribution centers located around Kolkata (West Bengal), Thane (Maharashtra), Jaipur (Rajasthan), Ghaziabad (Uttar Pradesh), Ludhiana (Punjab), Gurgaon (Haryana) and Delhi. Further, VRPL have focused on developing a cost and time efficient distribution and logistics network, which currently comprises seven distribution centers and a fleet of trucks for transportation. VRPL Business Processes:VRPL’s business process can be summarized as below: Establishment of Stores: Selection of location In selecting location for a new store, VRPL start by identifying the city/town. VRPL target primarily cities/towns which may be classified as Tier II or Tier III cities. In this regard, an analysis of the demography, literacy levels, nature of occupation and income levels. Within a city/town, VRPL target locations with good infrastructural facilities such as easy accessibility, provision for water, electricity, parking, security and other basic amenities. VRPL prefer to locate their stores in areas where real estate is available at reasonable prices. The efforts of VRPL’s retail business are targeted towards families having total income which can be classified under the “lower middle” and “middle” income groups. Accordingly, VRPL plan their strategy to search for areas within cities where such customers are domiciled in large numbers and make efforts to locate themselves within the reach of such customers. VRPL believe that adoption of standard formats for their stores has led to their brand establishment and identification among their customers and will increase their base of loyal customers. In pursuance of this, they have adopted standard parameters for store planning and establishment. For ensuring standardized formats of their stores, VRPL consider various factors, such as internal and external décor and colour schemes, allocation of store space, stock mix and pricing and accounting methods. 26
Insurance VRPL maintain comprehensive insurance coverage with Tata AIG, Bajaj Allianz, Royal Sundaram and IFFCO-TOKIO for their existing stores, distribution centers, manufacturing facilities and trucks. VRPL insurance policies include comprehensive coverage for electronic equipment, fire and special perils and burglary. Further, VRPL has filed a claim of Rs. 22.50 million on account of fire in their store at Meerut as on July 7, 2006. In this regard, they have received Rs. 7.50 million as an interim payment. Factories VRPL’s existing manufacturing facilities are located at Plot No. 224, Phase 1 Udyog Vihar, Gurgaon, for which they have leasehold interest until May 4, 2009. In addition, VRPL have recently acquired freehold interest in relation to a land admeasuring 7.24 acres in Dehradun, Uttaranchal, where they are exploring the possibilities for establishment of another manufacturing facility. Other Properties VRPL have recently acquired freehold interest in relation to a land admeasuring 82,830 square feet in Hubli, Dharwad. Merchandise Planning VRPL’s merchandise planning is based on the concept of category management rather than traditional brand management practices.
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Apparels and Non Apparels Under category management for, say, apparels, VRPL create and cater to products across length and breadth of a category at different price points, fabrics, designs, shapes, seasons, colors and sizes. VRPL formulate annual merchandising plan for each division of merchandise taking into consideration factors such as past sales data, regional customer tastes and preferences, number of stores (established and proposed), likely fashion and trends, in-house production resources, vendor management and price. Each division is further divided into major categories (for instance, men’s apparel as a division is further divided into three major categories, namely, upper, lowers and sports and ethnic wear). These major categories are in turn segregated into various subcategories. For example, men’s upper as a major category would be further divided into several sub-categories such as formal shirts, casual shirts, party wear etc. Each sub-category consists of pre-defined SKUs, which are classified on the basis of price point, brand, style, pattern and size. VRPL draw annual sales projections for different SKUs and, accordingly, ascertain their sourcing requirements. Based on such information and lead time estimates for supplies, purchase orders with delivery schedules are issued. The inventory position for each SKU is reviewed fortnightly taking into account the actual sales and variations from the budgeted plans. Regular visits to the stores are made by the category merchandising team to identify the slow-movingSKUs and explore the options to expeditiously dispose of them. For certain non apparel categories, their merchandise planning and scheduling also depends on introduction of new products and schemes by the vendors. For instance, if a branded home appliance manufacturer replaces a product with a new version, then their planning for the product would need to be reviewed based on the acceptability of the new version. In-house Manufacturing VRPL benefit from backward integration and in-house manufacturing of part of the apparel products sold in their stores. Through their manufacturing capabilities, VRPL is able to attain relative independence from intermediaries with a competitive advantage in terms of value and cost. VRPL use their manufacturing strengths to focus on enhancing product knowledge and their experiences from manufacturing enable them to negotiate better terms from the vendors and job 28
workers. VRPL currently have an apparels manufacturing plant at Gurgaon, Haryana. The manufacturing plant is well-equipped with fully automatic machines for fusing, buttoning, embroidery and welt pocket-making operations. The factory has a capacity to manufacture 5,000 pieces per day. The plant was commissioned in 2004 and achieved a capacity utilization of 80%. It has 450 machines and is operated by 500 workers. Further, VRPL are exploring the possibilities for establishment of another manufacturing facility, for the purposes of which they have acquired certain portions of land admeasuring 7.24 acres in Dehradun, Uttaranchal. In addition to in-house manufacturing, they have outsourced some parts of the manufacturing to “job workers” who work in their factory premises. VRPL undertake quality control measures by way of random sampling to ensure the pre-determined quality standards are met. To verify that the quantity of supplies is as per the order, they undertake count-check for every receipt of the goods. VRPL’s manufacturing team works closely with their design team to understand trends, develop products, value engineer and finally create season wise collection that cater to regional tastes. Purchasing Purchasing or vendor management assumes critical importance in retail business where one has to deal with multiple products. VRPL have in place a vendor management system, under which they identify vendors all over the country and overseas and seek to develop alliances and arrangements with them. They regularly interact with the vendors and share information such that the vendors remain familiar with their goals and targets. It has been their strategy to procure goods from small and medium sized vendors and manufacturers, which they believe has led to reduction in the cost of goods they sell and increase in their profitability. Upon ascertaining the procurements needs based on each SKU, VRPL explore the various options for sourcing the products. They continuously strive to procure goods from the place of origin to reduce the costs and control the quality. For identifying the vendors, VRPL assess the various possible options on factors such as capacity, credibility in the market, quality awareness and experience. After identifying the vendors for the goods, VRPL place purchase orders based on their SKUwise plan, estimated lead time of each vendor and quantity to be procured from each vendor. 29
VRPL follow a policy of ‘payment on delivery’ to negotiate better prices with the vendors and in certain cases they also release payments in advance. To ensure quality of supplies, VRPL check quality by way of random sampling at the time of receipt of the goods. To verify that the quantity of supplies is as ordered, they undertake count-check for every receipt of the goods. For FMCG products, VRPL procure from large as well as small and medium size manufacturers. For procurement from the large manufacturers or their distributors, they endeavor to enter into formal arrangements for supply of products to all VRPL stores, such that they are able to derive fixed margins from sales of such products, irrespective of the locations. Under these agreements, they benefit from special discretionary discounts and offers directly from the manufacturers or their distributors.
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VISHAL Apparels Brand
Vishal Mega Mart is one of India’s fastest growing retail chains.. The chain currently has 172 company stores in 24 states / 110 cities in India. The Vishal brand is known for great modern style for men, women and children. Vishal offers high level fashion styling. Since 1986, our name has been synonymous with quality, value and fashion integrity. We offer an unparalleled collection of clothes for the entire family. Each garment is hand selected for quality and contemporary styling. Vishal manufactures majority of its own garments and out sources some under its direct quality supervision. This enables us to offer the lowest possible and most reasonable prices. Our goal is to provide a range of fashion wear to suit every pocket. Our product mix represents the most current fashion trends in tops, bottoms, formals and accessories for men, women and kids. Our courteous staff will ensure that consumers get a perfect fit.
Popular Brands are: Zeppelin : Kitaan Studio : Blues & Khakis : Paranoia :
Mens Shirts & Trousers Mens Shirts & Trousers Mens Trousers Mens Shirts & T-Shirts
Fizzy Babe : Jasmine : Zero Degree : Soil :
Chlorine :
Mens Shirts
Massa Bay :
Fume :
Mens Shirts, UnderGarments.
Ladies & Kids Girls Ladies & Kids Girls Kids Boys Mens Shirts Mens Trousers Bermudas
&
T-Shirts,
Apparel Manufacture The basic raw materials required for the manufacturing process of apparels includes fabrics and accessories. VRPL merchandising teams source fabrics from local manufacturers in India depending upon their production plan. VRPL also source fabrics from the place of origin. VRPL source various other components and accessories from vendors in various parts of the country and also import them from China. 31
Inventory Management, Distribution Network and Logistics VRPL’s distribution network and logistics encompasses all activities to ensure that goods are dispatched in right quantities and at right time to reach stores with sufficient time in hand to promptly cater to customer demands and optimization of inventory position. They have built a system to monitor the inventory position on a real-time basis at each store, under which a stock requisition or delivery order is generated when pre-determined stock or reorder levels are reached. The re-order levels for stores are determined based on factors such as display levels, lead time for replenishment and average daily sales. VRPL review these re-order levels on continuous basis to factor in variances in demand based on seasons, trends and promotional schemes. VRPL have seven distribution centers over approximately 385,033 square feet. These distribution centers are located around Kolkata (West Bengal), Thane (Maharashtra), Jaipur (Rajasthan), Ghaziabad (Uttar Pradesh), Ludhiana (Punjab), Gurgaon (Haryana) and Mahipalpur (New Delhi). VRPL have clearly demarcated the stores which will be serviced by each distribution centre. The reorder levels for distribution centers are ascertained on the basis of factors like average daily sales of all the stores services, lead time for replenishment and buffer stock, which caters to both the existing and proposed stores to be fed. As for the stores, they regularly review these re-order levels. VRPL’s distribution centers and stores are connected through company-wide virtual network connection through broadband which helps to efficiently manage their network of stores and distribution centers throughout the country. They primarily utilise their own vehicles to transport the inventory to their stores from the distribution centers. In addition, VRPL use the services of logistic solution providers including low cost transport service providers in order to deliver products on time to VRPL stores and optimize transportation costs. Distribution centers operations have been streamlined through the standardisation of racking system, layouts and implementation of automatic replenishment system. Under arrangements with some of their merchandise manufacturers, they receive payment on account of display of their products.
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Product Categories
- HOME FURNISHING Drawing Room Door Mat Carpet Curtains Kitchen Apron Kitchen Napkin
Bedroom Bed Sheet Pillows Pillow Cover Bathroom Bath Mats Towel Gift Sets
FOOTWEAR BOYS Shoes Sandals LADIES Shoes Slippers
GIRLS Slippers Sandals MENS Shoes Slippers
MENS Upper Shirt Casual Shirt Formal Ethnic & Sports Night Suits T-Shirts Dupatta Sherwani
Lower Jeans(MP) Cotton Trouser(MPC) Winter Wear Suit(WMC) Blazer(WMB) Windcheater(WMW) Jacket
LADIES ACCESSORIES Upper Kurta Skirt Top Ethnic Nighty Lancha Sharara Salwar Suit
Lower Pants Jeans Capri Winter Wear Jackets Stawl Blazer Track Suit 33
INFANTS Garments Hot Pant Frock Baba Suit
Accessories Bed Sheet Under Garments Socks
WOMEN Sarees Fancy(SRF) Synthetics Banarsi Jewellery Necklace Ring
Personal Items Cap(LCA) Socks(Las) Cosmetics LIp Gloss Nail Polish
KIDS BOYS Lower Jeans Bermudas Dungries Upper Shirt Formal T-Shirt
Sets Night Suit Baba Suit
Winter Wear Suit Blazer Jacket
Ethnic Kurta- Pyjama Sherwani
KIDS GIRLS Lower Hot Pant Skirt Dungries Upper Tops(GWT) Frock(GFK)
Sets Night Suit Capri Set
Winter Wear Hipster Set Blazer Jacket
Ethnic Sharara Lancha
HOUSEHOLD Dinner Set Home Aids Floor Wiper Sanitary Brush General Plastic Goods Coffee Mug Bucket Glass Ware Cup
Jug Pressure Cooker Cooker Pressure Pan Electrical App. Chopper Microwave Oven Thermo Ware Tiffin
Cake Server Non Stick Handi Dosa Tawa Bone China Soup Set Dessert Set Porcelain Cup & Saucer 34
L$emon Set
Container
LIFESTYLE Time Zone Ladies Wrist Watch Mens Wrist Watch Mens Accessories
Opticals Gifts & Novelties Ladies Sun Glass Flower Vase Mens Sun Glass Key Chain Electric & ElectronicsPerfume/Deo
Belts Wallets
Items Battery(ABT) Calculator(EEC)
Spray Deo
TOYS & GAMES Soft Toys
Dolls
Cycles & Scooters
Musical Toys Non-Musical Board Games Wooden Blocks Puzzles
Barbie Doll Other Dolls Infant Toys Teether Swing
Cycles Scooters Video Games T.V. Video Game Hand Video Game
FOOD MART FOOD & BEVERAGES Snacks Drinks
M A R K E T I N G A N A LY S I S S U M M A RY
Marketing help to define the business for the customer's interests, not your own. It is the process of learning what customers want or need and determining how to satisfy those wants or needs. It is also used to confirm whether the customer reacted to a marketing program as expected. The 35
benefits of market research include: Learning who your customers are and what they want. Learning how to reach your customers and how frequently you should try to communicate with them. Learning which advertising appeals are most effective and which ones get no response. Learning the relative success of different marketing strategies, thus improving return on investment. Learning how not to repeat your mistakes. Vishal Mega Mart has been the pioneer of retail revolution. Its first fight was against local ‘Kirana’ stores. The task was to change the mindset of consumer to bring about changes in their shopping patterns. It wanted people to do bulk shopping for their monthly ration instead of going to the shop each week.
MARKETING STRATEGY OF VISHAL MEGA MART Product Vishal Mega Mart offers a wide range of products which starts from apparels to food items, footwear to home furnishing, crockery to sport items, child care products to toys, watches, drinks etc. There are many in house brands promoted by Vishal Mega Mart. In pursuance of their 36
business plan to diversify their portfolio of offerings, FMCG products play a key role. FMCG products are usually meant to fulfill the daily needs of consumers and therefore, VRPL believe retailing of FMCG products will bring customers to their stores on a frequent basis and this may in-turn lead to consumption of their apparels. VRPL have a number of private labels for apparels such as Zepplin, Paranoia, Chlorine, Kitaan Studio, Famenne, Fleurier Women and Roseau. . Vishal Mega-mart sold over 300,000 pairs of jeans, 50,000 DVD-players and 25,000 microwave-ovens. In all, the fashion, electronics and travel segments made up about 70% of sales. Last year, these categories made up only about 60%.
Price Vishal Mega Mart promises its consumers the lowest available price. The concept of psychological discounting (Rs. 99, Rs. 49, etc.) is used as promotional tool. Vishal Mega Mart also caters on Special Event Pricing (Close to Diwali, Christmas, New Year etc.). Selling combopacks and offering discount to customers. The combo-packs add value to customer. Through Bundling, they also reduced the price of the products. In addition to VRPL’s strategy to continue 37
procurement of goods from small and medium size vendors and manufacturers which leads to cost efficiencies, VRPL intend to procure FMCG and apparels from low-cost production centers located outside India. Towards this objective, VRPL’s propose to increase their procurement of finished and semi-finished goods from China and thereby realize economies of scale and pass on the benefits so accrued to their customers. The efforts of VRPL’s retail business are targeted towards families having total income which can be classified under the “lower middle” and “middle” income groups. VRPL follow uniform pricing policy across their stores in respect of private labels and non-branded products sold by them. This enhances brand loyalty, encourages customer confidence and results in operational convenience. In relation to the other products, the prices may vary between stores on account of state-specific taxation and vendor policies.
Place Vishal Mega-mart stores are located in 129 cities with 172 outlets. VMM has presence in almost all the major Indian cities. They are aggressive on their expansion plans. Vishal Retail targets cities with urban population of 1 million people or above or can be classified as Tier-2 and Tier-3 cities. In Tier-1 cities, the company opens retail outlets on the outskirts, rather than the prime area. Its target market includes people with middle income and lower income levels. This enables the company to overcome competition to some extent due to its first mover advantage (as competitors have relatively less space in tier-2 and tier-3 cities) and helps to lower rental cost. As at 3Q FY08, 78% of the company’s 82 stores are in Tier-2 and Tier-3 cities.The company plans to maintain the ratio of Tier-2 and Tier-3 to Tier-1 cities at 80:20. Promotion Advertising has played a crucial role in building of the brand. Vishal Mega Mart advertisements are mainly seen in print media i.e. newspapers, Television with Tina Parekh as there in advertisement, and sometime road-side bill-boards. VRPL’s category management system is used to plan promotional schemes. They launch promotional schemes weekly. Apart from general sales promotion, the category manager 38
formulates promotional plans for ‘slow movers’. In addition, to promote sales, they focus on layout of the stores and positioning, presentation and display of merchandise, in order to appeal to the customer. In addition, VRPL have introduced, in association with SBI Cards & Payment Services Private Limited, a co-branded credit card. VRPL’s propose to continuously undertake such initiatives to increase the satisfaction of their customers. Vishal Mega-mart started many new and innovative cross-sell and up-sell strategies in Indian retail market. The various promotion techniques used at VMM include: -5 Din Ki Maha Bachat -2 din Ki Maha Loot -Dhan-teras Dhamaal -Great Savings -Vishal Mega Mart Gift Voucher Rs. 1000. -25% Off On All Items – Every Month -Discount Offers At Various Festive occasions -Grand Winter Sale – 50% & 60% discount for 2 days -Paise Bachao Aandolan – 9 Din Ki Maha Loot -Vishal Reward Plus: Consumers can make purchases at any store and accumulate points at a central level. These points are redeemable at any of our stores. -Cross category promotions are now catching up where discounts are being offered on grocery purchases, redeemable against purchase of apparel and household products
People Vishal Retail has been established by Mr. Ram Chandra Agarwal, a first generation entrepreneur. He has been instrumental in expanding the business from an apparel store in Kolkata to 82 value retail stores with pan- India presence. The management team has a pool of talented professionals with right mix of working experience. Professionals are one of the key assets for any organization. The salient features of staff of VMM are: -Monthly, weekly & daily sales targets are communicated to the staff & efforts are made to consistently achieve the set targets. -Employees are motivated to think out-of-the-box. Retail sector is in growth stage, so staff is empowered to take innovative steps. -Multiple counters for payment, staff at store to keep baggage and security guards at every gate, makes for a customer-friendly atmosphere. -VMM motivates & retains store staff & maintains a positive work environment. 39
-Well-dressed staff improves the overall appearance of store. -Strong Recruitment Cell, 2,509 employees joined in 2009. -8500 employee Strength. Due to intense competition, the requirement of skilled manpower is increasing. At the same time, the availability of skilled manpower is declining and attrition rates are increasing throughout the industry. We foresee an increase in the employee cost going forward (Figure 7) due to company’s efforts to attract and retain the employees. Although employee cost is increasing; still the company’s motive is to retain the valuable employees in the company
Process VMM adopted the business model as shown in (Figure-9) to run their activities smoothly. This process includes four steps as follows: Manufacturing Capacity; Strong Logistics; Products; Retailing The goods' dispatch and purchasing area has certain salient features which include: -Multiple counters with trolleys to carry the items purchased. -Proper display / posters of the place like (Kids Wear, Grocery, and Stationary etc.). -Home delivery counters to be started soon. -Three Layer Security Checks. -No. of Parallel Billing Counter -Retail Exchange Software Solution – PRIL -Integrated With SAP & ERP Physical Evidence It deals with the final deliverable or the display of written facts. This includes the current system and available facilities. -Infrastructure – Stand Alone Commercial Building -Clean, Air-conditioned outlet -Equipment – computer, BCR, Desk etc State of Art Management Organization Structure
40
Year---- Milestone
41
2001-- Incorporated as Vishal Retail Private Limited acquired the proprietorship firm Vishal Garments & the Vishal Garments opened first store outside Kolkata. 2002-- Opened first Store in Delhi 2003 --Acquired Vishal Apparels, a manufacturing unit. Set up a manufacturing unit in Gurgaon. 2004--Started thier largest store of at Mathura Road, New Delhi having an area of 80,000 square feet nominated for the Images Retail Awards’ 2004 2006--Thier Company was converted into a public limited company 103 implementation of production and retail module of SAP Broadband connectivity with each and every location Increased thier presence to an aggregate of 17 States. 2007-- Increase in number of stores to 50 spread across in 18 States
42
Data Collection And Analysis
SWOT ANALYSIS
43
Strength: 44
− High Brand Equity in evolving retails markets − State-of-art infrastructure of Big Bazaar outlets − POP to increase the purchase − One stop shop for variety of products, increasing customer time and available choices Weakness: − Unable to meet store opening target so far − Falling revenue per square feet Opportunity: − Organized retail is just 4.15%of total pie of Indian retail market − Evolving Customer preferences in recent years. Threat: − Competitors, global big players planning to foray into market − Government policies are not well-defined in India − Unorganized retail market of India
1. How do you know about Vishal MegaMart? 45
T.V.
Hoardings
Newspaper
Friends
Net
T.V 70
Hoardings 40
10% 25%
Newspaper 50
10%
Friends 20
Net 20
T,V Hordings Newspaper Friends Net
35% 20%
2. How often you visit to Vishal MegaMart? Within a week Within a month
Within 2 week Above 1 month 46
Within a week 70
Within 2 week 40
27. 17.5%
Within a month 35
Above 1 month 55
Within a week Within 2 week Within a month Above 1 month
35% 20%
3. What excites you most for shopping at Vishal Mega Mart? Discount
Buy one get one free
Cash back
Free gift
Discount 76
Buy one get one free 62
Cash back 38
Free gift 24 47
Discount
12% 19%
38%
Buy one get one free Cashback Free gift
31%
4. What do you usually buy from Vishal Mega Mart? FMCG products
Child care & Toys
Apparels
Electronic goods
All products
48
FMCG products 45
Child toys 20
care
& Appareals 60
Electronic goods 20
All product 55
35 30 25 20
IN %
15 10 5 0 FMCG products
Child care Appareals Electronic All product & toys goods
5. Are you satisfied with the quality of the products offered by Vishal Mega Mart? Yes
No
It’s ok
49
Yes 114
No 48
It’s ok 38
60 50 40 30
Data In %
20 10 0
Yes
No
Itsok
6. How is your shopping experience at Vishal Mega Mart? Very Satisfactory
Satisfactory
Average
Unsatisfactory
Poor 50
Very satisfactory 40
Satisfactory
Average
Unsatisfactory
Poor
50
72
22
16
60 50 40 30
Datain%
20 10 0 Very Satisfactory
Satisfactory
Average
Unsatisfactory
Poor
7. Do you want to changes in Vishal Mega-Mart? Yes
No
51
Yes 96
No 104
52%
48%
Yes NO
9. What changes you want? Better services Better products
Better packaging Home delivery
52
Better service 45
Better packaging 25
Better products 60
Home delivery 70
35 30 25 20 15
Datain%
10 5 0
Better Better Better service packaging product
Home delivery
10. According to you which promotional activity is effective? Road show
Campaign
Sampling
Premiums
Any other
53
Road show 40
Campaign 76
Sampling 30
Premiums 24
Any other 30
40 35 30 25 20 Data in %
15 10 5 0
Road show
Campaign Sampling PremiumsAny other
11. What you think about sales promotion strategy of company?
Best
Good
54
Average
Not good
\ Best 46
Good 56
Average 78
Not good 20
40 35 30 25 20
Data in %
15 10 5 0
Best
Good
Average
Not good
12. Does sales promotion strategies beneficial for sales? Yes
No 55
Yes 146
No 54
27%
73%
Yes No
13. At what percent sales promotion strategy is useful for increasing sales 56
Up to 10%
20-30%
30-40%
More than 40%
Up to 10%
20-30%
30-40%
75
58
40
More than 40% 27
57
Findings
Findings
1. The choice of a store location has a profound effect on the entire business life of a retail 58
operation. A bad choice may all but guarantee failure, a good choice, and success. 2. Choosing a retail location is, at best, a risky undertaking. Considering the consequences of choosing a location that proves to be unsuitable, it pays to get as much assistance as possible. According to a survey more than 60% of the customer prefers to shop in a retail store which is easily accessible to them. 3. Advertising plays a very important role in achieving growth for any retail company. This is evident from the fact that Advertising by Retail Industry registered a rise of 12 percent during January - May 2007 over January - May 2006. 4. The right location, trained manpower, software assistance, product with a distinct differentiation, a strong value proposition, efficient supply chain management - these are the factors that influence the success of a retail outlet. With competition in this segment increasing, differentiation and a strong value proposition assume significance. Retail chains are realizing that they cannot be another ‘me-too’ store. The differentiation today among the 5-6 retail chains has come through private labels, which in some cases account for as much as 70 per cent of the total merchandise in the outlet. 5. Variety offered by any retail store is of very much important to attract all type of customers in the stores. A large variety of products caters to each segment of customers. 6. Shopping experience within a store also has a great impact on selecting a product from a particular retail store. Overall ambience includes infrastructure facilities provided by the store such as air conditioners, lighting etc. 7. Pricing is in fact a dramatic controller of at least 3 key strategic elements to any company's success: Company’s image, the product and services company sells and consumer behavior. The Importance of Pricing their Products' will give them an insight into developing appropriate costing methods and the impact of getting it wrong in today's competitive creative market. This topic should be of interest to anyone who is unsure if they are getting it right. Remember the difference between over or under-pricing their work can mean a very short future for any business. Approximately 60% customers think that Price is the most important factor while they go for shopping in a retail stores 8. Quality in everyday life and business, engineering and manufacturing has a pragmatic interpretation as the non-inferiority, superiority or usefulness of something. This is the most common interpretation of the term. The quality of a product or service refers to the 59
perception of the degree to which the product or service meets the customer's expectations. Quality has no specific meaning unless related to a specific function and/or object. Quality is a perceptual, conditional and somewhat subjective attribute. And in addition to that, more than 90% of customers place quality as the most important factor than anything else in the list to shop in a retail store. 9. More than 70% of customers place variety as an important factor to shop in a particular retail store. 10. Brands name bears an important role while shopping of any type of goods. So building a brand for a retail store is important as 80% of customer still prefer to buy branded clothes in the retail store instead of local or unbranded clothes.
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Conclusion & Suggestions
Conclusion Given the developments and prospects, the Indian retail sector is in its nascent stage of evolution. While there are obstacles, there are clear opportunities in modern retailing in India. There are 61
many lessons that India can take from other countries, which have moved along the path of retail evolution. The retail sector has proved to be of immense significant from macro-economic point of view. The sector’s capability to give strong growth momentum by creating multiplier effects on other sectors is not in dispute. It is now necessary to cautiously expand and develop the sector, as the government, at present, has done by permitting partial FDI in the sector. Given the scope, the retail sector is certainly expected to fetch the long-term economic benefits for the country. The convenience and personalized service offered by the unorganized sector holds its future in good stead for the future. Organized retail of late has seen a tremendous boom and is attracting more people to the malls. What is to be seen is how organized retail can duplicate the same level of personalized customer service levels offered by the unorganized sector to have a higher conversion ratio. The target audience for both the organized and unorganized retail formats remains relatively the same. When shopping in malls, people value the experience related to the trip the most and return most frequently for the same. Besides, while enjoying the experience they seem to buy high ticket and items of conspicuous consumption most frequently. Gaining and maintaining consumer preference is a battle that is never really won. Continued and consistent branding initiatives that reinforce the consumer’s purchase decision will, over time, land the product in consumer preference sets. Attaining and sustaining preference is an important step on the road to gaining brand loyalty
Suggestions 1. Include more trained sales person to help customers in the store while shopping. 2. Improve quality of the products especially clothes. 3. Play good songs or soothing music in the store rather than cheap filmy songs. 62
4. Customer care service can be introduced 5. More branded products can be displayed in the store as people still prefer branded clothes than offered by local vendors. 6. Constant reminder of discounts through pamphlets, speakers inside the store for inducing consumers for impulse buying. 7. Add more cosmetic products as its having a huge market of consumers attached to it. 8. Display of product should be improved so that the product is easily visible to the consumers. 9. Proper advertisement in press and outdoor to make Vishal Mega Mart should be visible in the eyes of consumers. 10. Should have parking spaces in front of every store. 11. Hire more salesgirls as in ladies section its very difficult for both the consumers and salesman to interact with each other. 12. Regular training to sales person to improve there overall performance. 13. Customization of clothing should be given an important consideration. 14. Proper packaging and provide contrast labelling in displays of product. 15. Should apply electronic supply chain management for better inventory management. 16. Proper power back up as air conditioners are not working to their full capacity at many stores. 17. Proper placements of Gondola in the stores as space between them are very less. 18. Proper display in the gondola and top most rack of the gondola should be used for storing of inventory rather than display of product. 19. Should provide more festival schemes and at proper time. 20. Should use psychological pricing-more discounts by increasing the price 21. Proper display of cutlery items 22. Clothes should be in sync with fashion.
Bibliography Books referred:
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Retailing Management Pradhan, Swapna Retail Management – A Strategic Approach Berman, Barry & Evans, Joel R. The Art Of Retailing
Websites: www.google.com www.wikipedia.com www.vishalmegamart.com
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