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Retailing consists of the business activities involved in selling goods and services to consumers for their personal, family, or household use. It includes every sales of goods and services to the final consumer. The retail sector is expected to grow 40% to $427 billion by 2011. By 2017, organized retail will be 15-20% of the total retail market. Total retail market $ 800-billion by 2017. Impact on rural incomes and urban prices will be real and positive. Organized retailing in India will need painstaking, often frustrating, effort to chisel out India ready business models, retail formats and delivery models. Products, Properties, People and Profitability are going to be huge challenges. The real estate prices and shortage of talented staff, the run-up expenses for growth are going to shoot up sharply. Significant delay in completion of shopping malls by developers and unreasonably high property prices is adversely affecting the growth of the sector. The situation is expected to improve in 2009, when a large, and probably an oversupply of retail space is expected to come on-stream. By the year 2010, it is expected that there will be around 500 shopping malls, adding over 250 million square feet of retail space. Its' just the first phase of retail playing out in India currently, where lot of players are merely 'land-grabbing'. In second phase the focus will be on creating differentiation. And in a couple of years, half of the new entrants of today will simply die. Understanding, interpreting and catering to Indian consumer behavior, taking into account the social diversity in the country will be crucial to the success of new players. New formats in specialty retail, wholesale retail and luxury retail are expected to emerge. The next few years will provide the answers to the most crucial questions on the sustainability of modern retailing in India. Whether the Indian consumer market can sustain such large growth in modern retail, whether more and more people will join the consuming class and what the real market size in small cities will be, become clearer. No one can stop the growth of modern retail and the consequent impetus to consumption and development in India. No one can stop an idea whose time has come - Victor Hugo.
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 advanced 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 unorganized 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.
Who is the customer? What do consumers buy? When do consumers buy? How do consumers buy? From where do consumers buy? Why do consumers buy?
A buyer makes a purchase of a particular product or a particular brand and this can be termed product buying motives and the reason behind the purchase from a particular seller is patronage motives When a person gets his pay packet, and if he is educated, sits down along with his wife and prepares a family budget, by appropriating the amount to different needs. It may happen that after a trip to the market, they might have purchased some items, which are not in the budget, and thus there arises a deviation from the budgeted items and expenditure. All the behavior of human beings during the purchase may be termed as buyer behavior.
1. Need/Want/Desire is recognized In the first step the consumer has determined that for some reason he/she is not satisfied (i.e., consumers perceived actual condition) and wants to improve his/her situation (i.e., consumers perceived desired condition). For instance, internal triggers, such as hunger or thirst, may tell the consumer that food or drink is needed. External factors can also trigger consumers needs. Marketers are particularly good at this through advertising; in-store displays and even the intentional use of scent (e.g., perfume counters). 2. Search for Information Assuming consumers are motivated to satisfy his or her need, they will next undertake a search for information on possible solutions. The sources used to acquire this information may be as simple as remembering information from past experience (i.e., memory) or the consumer may expend considerable effort to locate information from outside sources (e.g., Internet search, talk with others, etc.). How much effort the consumer directs toward searching depends on such factors as: the importance of satisfying the need, familiarity with available solutions, and the amount of time available to search. 3. Evaluate Options Consumers search efforts may result in a set of options from which a choice can be made. It should be noted that there may be two levels to this stage. At level one the consumer may create a set of possible solutions to their needs (i.e., product types) while at level two the consumer may be evaluating particular products (i.e., brands) within each solution. For example, a consumer who needs to replace a television has multiple solutions to choose from such as plasma, LCD and CRT television. 4. Purchase In many cases the solution chosen by the consumer is the same as the product whose evaluation is the highest. However, this may change when it is actually time to make the purchase. The intended purchase may be altered at the time of purchase for many reasons such as: the product is out-of-stock, a competitor offers an incentive at the point-of-purchase (e.g., store salesperson mentions a competitors offer), the customer lacks the necessary funds (e.g., credit card not working), or members of the consumers reference group take a negative view of the purchase (e.g., friend is critical of purchase).
5. After-Purchase Evaluation Once the consumer has made the purchase they are faced with an evaluation of the decision. If the product performs below the consumers expectation then he/she will re-evaluate satisfaction with the decision, which at its extreme may result in the consumer returning the product while in less extreme situations the consumer will retain the purchased item but may take a negative view of the product. Such evaluations are more likely to occur in cases of expensive or highly important purchases. To help ease the concerns consumers have with their purchase evaluation, marketers need to be receptive and even encourage consumer contact. Customer service centers and follow-up market research are useful tools in helping to address purchasers concerns. 6. Why Consumers Buy Customers make purchases in order to satisfy needs. Some of these needs are basic and must be filled by everyone on the planet (e.g., food, shelter) while others are not required for basic survival and vary depending on the person. It probably makes more sense to classify needs that are not a necessity as wants or desires. In fact, in many countries where the standard of living is very high, a large portion of the populations income is spent on wants and desires rather than on basic needs. For example, in planning for a family vacation the mother may make the hotel reservations but others in the family may have input on the hotel choice. Similarly, a father may purchase snacks at the grocery store but his young child may be the one who selected it from the store shelf. So understanding consumer purchase behavior involves not only understanding how decisions are made but also understanding the dynamics that influence purchases.
Convenience shoppers for instance, are people who consume relatively less amount of time while shopping. Also they look out for the width and depth of the range they purchase and conduct their annual shopping at one shot. Value Shoppers always hunt for value for money; Prefer quality reassurance and benchmark offerings among other related attributes. Image Shoppers are fashion- conscious and look out for the latest trends and labels.
On the other hand , Experience Shoppers are attentive and prefer personalized services look out for the right ambience, prefer giving personal advice on clothing at the time of purchase , and prefer not to buy at one sold.
INDUSTRY ANALYSIS
INDUSTRY CLASSIFICATION THE INDIAN CONSUMER DURABLES INDUSTRY CAN BE SEGMENTED INTO THREE KEY GROUPS. CONSUMER DURABLES WHITE GOODS Refrigerators Washing machines Air conditioners Speakers equipment and KITCHEN APPLIANCES/BROWN GOODS Mixers Grinders Microwave oven audio Irons Electric fans Cooking range Chimneys Segment Definition In general consumer electronics refers to a variety of electronic equipment used by private customers. This industry can be divided into many segments: 1. Traditional Consumer Electronics: audio and video equipment 2. Computing Devices: Computers, Calculators, Laptops 3. White Goods: Household /Domestic Appliances such as washing machines, irons, vacuum cleaners, grinders, etc 4. Personal Care: Hair Dryers, shavers, electric toothbrushes. In addition to this, the emergence of telecommunication has lead to the convergence of mobile technology into the consumer electronics industry and hence this paper will only deal with traditional consumer electronics, mobile phones and computing devices which can be termed as Brown Goods as per industry definitions. Henceforth in this paper consumer electronics will refer to Brown Goods. CONSUMER ELECTRONICS Mobile phones Televisions MP3 players DVD players VCD players
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33%
Others
27%
In 2008, the market size was estimated to be $22 billion and growing. With the growing population in India, exceeding 1 billion, the consumer electronic Industry is all geared up for fast growth in the coming years.The predicted figure for the consumer electronic market by 2013 is around $46 billion, growing at a compound annual growth rate (CAGR) of 16%. This astounding growth is due to many factors, the major ones including Rising disposable incomes coupled with increasing consumer exposure Increase in manufacturing in the local grounds Credit/Financing schemes which make purchase easy Growing competition , leading to better deals Increased reach due to better distribution networks
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Taking a look at the individual segments in the consumer electronics segment, we can broadly classify them as: COMPUTERS According to Business Monitor India Report, the computers (laptops, desktops and accessories) market took up a share of 33% of the consumer electronics wallet in 2008. It also states that with the prices of PCs coming down by nearly half, the sales went up from $5.8bn in 2008 to $6.0bn in 2009. Its very interesting to note that the current PC penetration is only 2% and this leads to excellent growth opportunities with a predicted CAGR of 13% for the period 2009 to 2013. AUDIO, VIDEO AND GAMING DEVICES The audio, video and gaming devices take up close to one third of the wallet share in the consumer electronics segment. This segment is set to grow at 22% CAGR from 2009 reaching US $15 in 2013. The main product in this group is Television, with new technology such as Plasma TVs entering the market and cricket being the main attraction for most Indians, the Indian Premier League, Common Wealth Games 2010 are all helping in boosting the drive for upgrades. MOBILE HANDSETS The largest chunk of the consumer electronic market goes to the mobile handsets and accessories with 37% of Indian spending in 2008. With the telecommunication boom and lower call rates, the handset market is poised to grow at 19% compounded annually and reach a staggering figure of about 380 million units by 2013. The mobile penetration in the rural market is 15% and is the most as compared to other categories. In the future, most vendors will definitely target the 3 tier cities and rural customers.
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CHALLENGES
Price Wars
With the increase in price wars due to the entry of new players in the market and increase in manufacturing capacity by some original manufacturers, the profitability and margins of the companies are adversely affected. Hence companies need to increase focus on product / store differentiation to address various segmental specific needs. Lack of Distribution Networks and Logistics Management
Getting stock into a store in India is a massive challenge given the poor city roads and complex intra city transportation regulations, high cost of moving goods between starts, inefficient storage (e.g. small store backrooms owing to expensive real estate). It is of utmost importance to design an efficient network. Transportation, including railway systems, highways has to meet global standards. Airport capacities, power supply, warehouse facilities and timely distribution are other areas which need to be enhanced. The distribution network is also highly fragmented and is very poor in semi-urban and rural areas. Presence of Gray Market in Consumer Electronics
Presence of gray market in consumer electronics products, especially in DVD player, music players is definitely eating into the sales of the retailers. Counterfeit products are present across a wide range of products. Increasing Awareness of the Indian Consumers
With the increase in access to Internet information, and availability of wide range of choices, consumers have become quite smart. They want the product that is easy-to-handle, good in quality and low in price. Most importantly, consumers want some guarantee for the product that they are buying. The role of electronic companies doesn't end on the sale of the product, but continues till the end of guarantee period. Trained manpower shortage in India
There is lack of talent in consumer electronics retailing. Retailers need to spend heavily on training its sales force to match the expectations of the Indian consumers both in terms of technical knowledge and soft skills.
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Value-for-money pricing lead consumers to upgrade from corded to cord-less phones, from conventional CRT to flat-screen or plasma/LCD TVs, from 15- to 17-inch computer monitors, from 1- to 3-megapixel cameras, from monochrome to colour phones, etc. Huge boom in mobile phone purchases with high penetration even in rural markets (launch of value for money, no frills, reliance phones gave an impetus to rural penetration)
With internet penetration also increasing along with growing number of service providers, the sales of modems, routers and accessories has gone up.
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Mobile Phones Speciality Retailers The main players in the mobile phone retailer market are The MobileStore, UniverCell, Cellucom, etc. The MobileStore currently has more than 1050 outlets and plans to have a network of 2500 stores by 2010 across 650 cities, covering virtually every major town in every state across India. Chennai-based mobile retail chain, UniverCell, currently has 300 company-owned stores across the four southern states including 70 in Andhra Pradesh, and is trying to touch 400 stores by March 2010 through the franchisee mode. Cellucom which hosts mobile and laptops, first outlet was opened in January 2007 at Gurgaon. Currently there are 120 stores across 15 cities including top four metros. These outlets cover the entire value chain in formats like stand-alone stores in Malls, as well as Shop-in-Shop within Shopper's Stop, Lifestyle and other large-format chain stores Laptop Speciality Stores It is very interesting to note that there are very few multiband laptop specialty retail chains in India. Most laptop showrooms are local players or dealers for the big brands like Lenovo, HP, Acer, etc.
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CROMA
Background: The birth of Croma came forth in late 2006 through a desire to seal a long business alliance with two collaborators - the chairman of Tata Group and the chairman of Woolworths Tata group wanting to strengthen their bond. The Tata group had a strong existing relationship with Woolworths Limited of Australia (the largest retail chain in Australia and New Zealand) as TCS was a key provider of IT services to Woolworths.
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A detailed market study and concrete research after studying the Indian consumer established that electronics retailing was a great opportunity segment as there was no significant national player in this segment. This sector had a vast unfulfilled potential. The two parent companies set about structuring the details of the partnership. It was decided that Woolworths would be the wholesale partner for the business where as Infiniti retail limited would handle the retailing side of the business. To give shape to this dream and make it a reality a ten-member team was formed under the leadership of Ajit Joshi to carry out this venture from an idea to reality. Ajit came in with a lot of experience in the service industry with successful stints in the hospitality space as well as in retail arena under his belt. With a clear vision of building a best in class retail chain that would excel in all aspects of consumer engagement, the team quickly got down to the task of setting this company into motion. Croma today boasts of currently 32 stores spread across 8 cities and growing. It has created formidable brand value and all within only two and half years of existence. While a number of retailers are struggling for survival and others are on the verge of either closure or merger or being sold off because of economic meltdown, Croma today has set industry benchmarks in terms of footfalls, sales per square feet, average bill value and conversions. Consumer proposition based on a strong consumer insight Croma realized early on that it had to enter the market with a differentiated offering and format from the current players to meet the latent needs of the consumers in order to be really successful in this market. An analysis of the market showed the market was then populated with price focused local players and that there was limited endeavor to understand and meet all the needs of the consumer. There was no one player which offered a one stop shop for technology and consumer products, with offerings across brands, price points, product range to suit the varying needs of customers as well as serving diverse customers from different strata of society. The existing formats did not offer trial rooms for testing highly sophisticated gadgets with product display and trained staff to assist and provide support and actual demonstration of the use of the product. The team at Croma went about creating a unique experience in electronics retailing; and this requirement necessitated a unique approach, both on the customer-visible front and on the inside working of the organization. Uniqueness in Format and Products: The New Retail Experience Croma stands out from the milieu as a truly costumer focused brand for the nearly 1.3 lac consumers who visit a Croma store every week. Cromas commitment is that costumers will
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get the latest products, widest range of products and sound advice if they go to Croma for their electronics need. Croma store format was design to satisfy the need of the customers. The croma concept in the Croma store is provide wide display of items, allow the touch and feel experience for customers and ensure that trained staff are always there to help customers to make their right choice. Since the product range offers varies from sub Rs 100 price point to Rs 4 lac price point with products ranging from simple ones to highly complex electronic products, customer service is key. Croma was also the first to develop a strong line-up of Croma branded products in its stores. Uniqueness in Service: We Help You Buy Philosophy Technology products shopping is an involved process given the wide variety of brands, products, features and jargon that were there in this process. What adds to the complexity is the fact that not all consumers are technically inclined. Therefore, Croma came in with a strong intent to help consumers in this buying process. This is aptly expressed in the brands tagline- We help you buy. This philosophy is closely aligned to the way employees are recruited, inducted, trained, assessed and rewarded making Croma the highest average selling price retailer for most highend brands. While other retailers are able to sell in the lower and middle range, Cromas philosophy of we help you buy attracts and creates the comfort for buyers to choose high end product ranges. Managing & Rewarding Talent Cromas agility in recruitment: The recruitment process that Croma follows for new stores has saved the company lacs in spending on advertisement and recruitment consultants. This process also allows just-intime recruitment and ensures that the company does not overstaff. Before any store opens (around 2 months before the opening date), the preparation work starts in the new stores. This is the time where Croma advertises simultaneously to future customers and potential candidates the openings of the new store. A walk-in interview occurs 45 days before the scheduled time of opening and the store gets more than 80% of the personnel required from this simple and economic source of candidates. Career Management through Assessment Centres: Assessment centres are organized twice a year. This is key to ensure that growth is provided to star employees and top performers, who have potential to grow to the next level. This ensures meritocracy and also keeps associates performance focused.
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Creating the right incentive getting the desired behavior: Cromas performance-oriented culture and responsible approach are the foundations of its success. The company encourages its young and vibrant workforce to focus on achievement through collaboration and innovation. The execution of this vision comes from a simple and yet effective compensation structure for the store teams. On monthly basis, divisions are given targets based on units sold. That incentivises and reinforces the value of we help you buy, as employees are not incentivized to sell any particular brand or in any particular price range but they are incentivised based on units sold. The target set is a team target and the achievement of this target will mean payment of incentives for the complete team; similarly failing to achieve this monthly target means that nobody from that team gets incentive. This model seems to work very well as the ratio of stores achieving their targets is between 60 to 80 % in any given month. This rewarding mechanism also highlights the low performers very quickly as teams will want very single individual to contribute equally to maintain internal equity. The targets are set monthly, performance is also reviewed monthly and payouts for the month are done in the next month salary. The recency effects on this incentive model is very strong, both for performers and the motivated teams as the new target is only 30 days ahead. Engaging every employee to productivity: Communication is a key area for Croma. All employees understand their job description, what is expected from them (following a Balance Score Card System for goal setting) and the linkage between performance and reward happens. The relationship with the management and the teams is very strong and direct creating the right environment for engagement and performance. With the theme Our People are our Power, Croma aims to inspire a high degree of employee engagement which enables its team to achieve new levels of efficiency and production. Cromas organizational productivity is measured not in terms of employee satisfaction but by employee engagement. New stores induction: PUCCA or product understanding and RSS - Retail Selling Skills are key modules that help improve customer service in associates. Before a new store opens, a specialized team travels to the new location to coach the new team. This knowledge transfer happens before the store opens and also on the job for the first few days of operations of that new store. Additionally, structured training at the time of recruitment ensures that only knowledgeable and trained people are driving the company - both in the support office and crucially, on the shop floor where employees engage with the consumer. Croma also has a planned refresher training periodically to ensure that everyone is abreast with the latest in both soft and hard skills. Croma consistently looks at strengthening the behavioural aspects in our associates through structured inputs provided at regular interval.
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Challenges and Opportunities Ahead: The target of Croma is to expand to 100 stores by 2011. It has a challenge of remaining differentiated and offering the consumers more benefits of shopping there versus any other retailer. The current economic slowdown has provided an opportunity for consolidation and creation of efficiencies. Croma has not reduced the number of openings planned this year due to the economic situation, and the month on month sales have continue to increase regardless of the economic situation. With many awards for a young brand (most admired retailer of the year award in 2008 at the Images Retail Forum and many partners and vendors awards), the focus for Croma this year is to look at creating internal efficiencies, introducing and consolidation new merchandise categories and look for replicating the unique store format in different locations. Creating internal efficiencies: his last year, Croma has embarked on a strict benchmarking exercise to take their internal cost to a minimum while maintaining the quality of service and delivery. This exercise has translated differently in different areas of the business. Store Managers are requested to look at all the cost under their control and create efficiencies in maintenance, running, inventory and logistics of the store. In the corporate offices, the cost control has translated in tighter budgets especially for travel. Finally, Croma is looking at investing in technology and systems to maximize productivity in logistics and inventory management. Maintaining company philosophy across outlets and locations: As its workforce expands, it has the challenge of ensuring that the company philosophy is deeply ingrained in its larger employee set and that every person in its fold is focused on helping consumers buy. This will involve significant inputs in the training process and the organization is gearing up to meet this challenge. With increased geographical presence, the companys workforce will also become more heterogeneous in its composition and it will be challenge to assimilate all these cultural streams into the company culture. Focused expansion: To exploit economies of scale, Croma is planning to grow focusing on existing cities instead of new cities. This year Croma is also growing the Zip-Store concept. Two years ago, one the first Zip-Store was opened in the Mumbai airport, the investment in a high cost rental was seen as an opportunity for brand building and awareness. But, Croma soon realized that travelers were also buying high priced cameras, blackberries, phones and even laptops. The Zip-Store in Delhi was opened this June and has already attracted many flyers waiting in the New Delhi airport lounge.
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Living up to our promise, We help you buy, at Croma, we now also help you buy for your loved ones. Croma proudly introduces a smart gifting option - the Croma Gift Card. Gift a Croma Gift Card to your friends, relatives or employees and give them the freedom to choose from a range of latest electronics. SOME SIMPLE STEPS TO GIFT YOUR DEAR ONES THE FREEDOM TO BUY WHAT THEY WANT: Buy a Croma Gift Card from any of the Croma stores in Mumbai. Load an amount of your choice on it. Gift the loaded card to your friends, relatives, colleagues, employees etc. Gift them the freedom to choose their own gift. With this loaded card the holder can shop from any Croma store in Mumbai, up to the amount that is loaded on the card within the validity period of 1 year. If he wishes to buy merchandise that is worth more than the value loaded on the card, he can pay the difference by cash or debit/credit card. If the holder shops for merchandise that is less than the value loaded on the gift card, the balance amount remains on the card and can be redeemed in parts in subsequent swipes.
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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.
Opportunity: CROMA had a large opportunity ahead because of the increasing retail business. The sector is growing tremendously at a fast rate.
Threats: THREATS were the players in the market which had already invested huge in retailing and were having a good market share already. Threats were also the local dealers and distributors which were blooming because of personal factors like loyalty etc.
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CROMA STRATEGY
Applying the Retailing concept in Relation to Croma 1. Customer Orientation croma determine the attribute and needs of its customers. 2. Coordinated Effort croma integrates all plan and activities to maximize efficiency. All the employees make their best service to customer. 3. Value Driven croma offer good value to customers whether it to be discounter or up sale this means having the price appropriate for the level of product and customer service 4. Goal Orientation - croma set goals and then uses a strategy to attain them. croma set goal to achieve the one hundred crore target in 2008. To relate the marketing concept to retailing, with an emphasis on the total retail Experience customer service, and relationship retailing. The marketing concept (known as retailing concept when applied to retail situations) should be understood and used by all the retailers. The total retail experience includes all the elements in retail offering that encourage consumers during their contact with retailer. Many elements such as number of sale people, displays price. The brands carried, and inventory in hand are controllable by a retailer, others like the adequacy of on-street parking, the speed of on line shopping and sale taxes are not. If some part of the total retail experience is unsatisfactory, consumers may not buy a given good or service. The total retail experience of Croma is very good. There is goods systematic display of goods. Synapses indicate price of the goods. Smart sales people, they always maintain eye contact with customer. There are good branded items are available in Croma store.
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Objectives are the retailer's long term and short term goal. A firm may pursue one or more of their objectives Sales (growth, Stability and market share) Profit (level, return on investment, and efficiency) Satisfaction of public (Stockholders, consumers and others) and image pinioning (customer and industry perception) Next consumer characteristics and needs are determined and a retailer elects a target market.A firm can sell to a broad spectrum of consumers (Mass Marketing) Zero in an one consumer group (concentrated Marketing) or aim at two or more distinct groups of consumers (differentiated marketing) with repeated retailing approaches for each.
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A broad strategy in then formed. It involve controllable variables (aspects of business a firm can directly affect) Uncontrollable variable (factors of a firm cannot control and to which it must adapt) Controllable Variables 1. Store Location 2. Managing business 3. Product management And pricing. 4. Communicating with the Customer. Uncontrollable Variables 1. Consumers 2. Competition 3. Technology 4. Economic Condition 5. Seasonality
Managing Business
The Retail Management Creating a unique experience in electronics retailing; and this requirement necessitated a unique approach, both on the customer-visible front and on the inside working of the organization. Comas philosophy of we help you buy attracts and creates the comfort for buyers to choose high end product ranges. Product management and pricing Product management Croma store format was design to satisfy the need of the customers. The central concept in the Croma store is provide wide display of items, allow the touch and feel experience for customers and ensure that trained staff are always there to help customers to make their right choice. Technology products shopping is an involved process given the wide variety of brands, products, features and jargon.
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PRODUCT VISUALITY Product visualty /display is the art of displaying product in a manner that is appealing to the eyes of the customer. Visual merchandising is acted as a silent communicator to the customer. The main function of product display is to aware about what merchandise is available in store. Product display includes window displays, signage, interior displays, and promotions And any other special sales promotions taking place. PRODUCT VISUALITY ALSO HELPS TO CUSTOMERS AS 1) Educating the customers about the product/service in an effective and creative way. 2) Establishing a creative medium to present product in 3D environment, thereby enabling long lasting impact and recall value. 3) Setting the company apart in an exclusive position. 4) Establishing linkage between trend, product design and marketing by keeping the product in prime focus. 5) Combining the creative, technical and operational aspects of a product and the business. 6) Drawing the attention of the customer to enable him to take purchase decision within shortest possible time, and thus augmenting the selling process.
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PRICE Croma is the highest average selling price retailer for most high-end brands. THEY USE FOLLOWING PRICING STRATEGY: 1) VALUE FOR YOUR MONEY: Best products with most reasonable pricing, Lowest down payments and easy EMIs. Best discounts and offers. Warranties and guarantees to your most likings.
2) BUNDLING: Bundling serves to the purpose, both of consumer as well as the retailer. Consumer gets value for their money as they find a value product absolutely free, with a product they were buying. Retailer can easily bundle those products which are of least demand and hence, compensate the profit by extra selling of those products which are in demand. 3) REFERENCE PRICING: It uses customers frame of reference that is established through previous experience of purchasing the product or high level of information search. 4) PSYCHOLOGICAL PRICING. 5) FESTIVE PROMOTIONAL PRICING 6) TIME PRICING
PROMOTION STRATEGY BELOW THE LINE PROMOTION Coupon, discount, more of the product at normal price, gift with purchase, competition, and prizes, money back offer, exchange offer, special occasion.
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ABOVE THE LINE PROMOTION Giving advertise in newspaper, TV. Internet (own website which give online shopping service), Partnership with Bigfilx, Big FM 92.7.
SOCIAL MEDIA ACTIVATION CONTESTS AND CAMPAIGNS Design and execute monthly contests/campaigns around the brand identity of CROMA to create more passion and gain exposure, building more fans and followers. Push small contests to ignite participation and increase spreading of the word. SUN SET SERVICES In this, we visit our customers place and rectify the problem or any trouble that they are facing because of our product. We assure them that if they call us before 12 in the afternoon, we will be there rectifying the problem before actually the sun set i.e., before 6 in evening. Our customers trouble is our pain and hence, we aim at solving issues before the source of energy sets.
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E-COMMERCE Create a customer support website. We will create a customer support website where people can submit their queries, ideas, advices, and get the knowledge of the products sitting back from their home. SAMPLE www.cromasupport.com There will be a toll free number providing support to customers queries and feedbacks. Our executives will be supporting and available on weekends also. Providing 12*7 supports to our customers.
Supported by some trip as a face of the month, promoting the gaming zone at croma. These contests will take part online with the help of social networking websites like Facebook, Orkut, and Twitter etc. SPONSOR EVENTS AND GAMES Croma will sponsor events and games in the future. Croma is eying some contract with a sports channel as a new investment.
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UNCONTROLLABLE VARIABLES
Consumers - Basically central target upper medium& high class people According to this Central learns about its target market and from a strategy consistent with consumer trends and desire. Selecting a target market is within a retailer's control but the firm cannot sell goods or Services that are beyond the price range of its customers not wanted, or not displayed or Advertised In proper manner. Competition - Competition in retail sector increasing in India. Retail industry even organized Retail is fragmented industry in India. Every region has local competitors E ZONE, NEXT, RELIANCE DIGITAL; VIJAY SALES are close rivals make a good presence in Maharashtra. Government has gave the approval F.D.I. in retail sector so it will increase competition n Retail rector wall Mart J.C Penny, Mark & Spencer could inter in Indian Market.
Market share
5% 13% 37% 18% Ezone NEXT Croma Reliance digital 27% others
CROMA is covering 18% in terms of market share in retail sector of consumer durable and electronic segment. The biggest competitor in this E-ZONE is capturing 37% of the market. NEXT goes with 27% in the market and is been 2nd biggest challenge to be look forward by CROMA. RELIANCE DIGITAL capturing 13% in retailing of electronics segment. OTHERS are contributing 5 % to the retail sector. Technology - In today's world of retailing technology is advance rapidly. Computer system is Available for inventory control and check out. Operation. Bar coding has revolutionized Product handling and inventory control.
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Economic Conditions - Economic condition of India is better than one decade before. Per capita income as increase by 5.2% in this fiscal year. G.D.P. also increase people have more Disposal income. Unemployment Interest rate, inflation tax levels and the annual gross Domestic product (GDP) are Just some economic factors with which a retailer copes and which it cannot change In outlining the controllable to consider and adapt to forecast about international, national state and local economics.
WHY CROMA????
Widest range of products Choose from 6000 products across eight categories We help you buy Sound and knowledgeable advice from well-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.
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The Prime Ministers Office commissioned the politically sensitive survey in March 2007 at the behest of the ruling United Progressive Alliances Chairperson Sonia Gandhi. If and when the Manmohan Singh government chooses to publicly disclose the findings of the survey, it could set the stage for a showdown over the governments retail policy. The issue is a sensitive one and several parts of the country have been roiled by protests over the entry of organized retail. Some states have placed curbs on the entry or expansion of organized retail chains. India is home to hundreds of thousands of small shops and there has been growing concern that the governments policies have allowed big retail unrestricted entry into the business at the cost of small store owners and their employees. Indias $300 billion (by sales) retail market is also attracting top global retailers such as WalMart Stores Inc., which has a joint venture with Bharti for wholesale, or cash-and-carry stores, where India allows foreign investment, and Frances Carrefour SA Plc. that are looking for partners. and UKs Tesco
We also studied the impact of the entry of big retail on farmers, consumers, manufacturers, and intermediaries. It also studied practices in other fast-growing emerging market economies. In its presentation to the government in March, consumers would benefit from lower prices, more choice, and better quality at organized retail stores.
Small store owners were resorting to several measures to fight competition from organized retail stores. These include improving and enhancing stocking, lower prices, better displays, home-delivery services, and computerization.
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MAULI ELECTRONICS
Proprietor: - Sudhir T. Bharadkar. Head office: Kurar village,Malad (east). Branch location: Gokuldham market, film city road, Goregaon (east). Established in July1989.
We have asked several questions to Mr. Deepak Rathod (branch head) As follows: 1. What kind of consumer durables customer purchase the most? Ans: TV, DVD Player washing machine, fridge. 2. How do you retain your customers? Ans: On relationship basis, credit period and discounts. 3. Which do you think is toughest competitor? Ans: Sony mony, vijay sales, Ezone,Next,Sumaria, croma 4. What influence your customer decision? Ans: Brand name, Discounts, free gifts, luxurious ambience 5. Why do you think croma has been a successful brand? Ans: Range of products, Range of price and Promotional activities and special offers.
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6. What is the impact of croma and other hyper consumer durable retailers on your business? Ans: There is no such bad or critical impact on business because as market is classified as higher income group, middle income group and lower income group so they are targeting their potential customer as middle and lower income group by offering cheaper prices. But there is decrease in sales due to losing our core and customers from higher income. 7. What strategies you would implement to retain your customers and market share? Ans: Maintaining relationship, seasonal offers, and free gifts. And other strategic planning will be specialized dealership, as presently they are dealing in multi branded consumer durables but now they are planning to change it to single branded dealership which will help them to sustain their market position and to gain monopoly in local market. And they have diversified their two out of six branches into single brand dealership with Videocon. Where they will be promoting and selling only Videocon companys products.
Product mix: their major clients are Videocon, Onida, LG and Samsung.
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STRATEGIES
PRICING STRATEGY Discounted pricing: They provide discount on M.R.P and scratch coupons. Advertising and promotional strategy: Advertisements in paper and local cable channels.
Threats: Threats are the players in the market which had already invested huge in retailing and were having a good market share already. Threats were also the local dealers and distributors which were blooming because of personal factors like loyalty, wider range of products.
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1. Study about the STRATEGY run by the hyper electronic retailers and local retailers. 2. Study the customer approach towards the mall. 3. Study about the impact of the hyper electronic retailers on local electronic retailers. 4. Comparative analysis of all retailers in this section to differentiate with other competitors.
SECONDARY OBJECTIVE
1. Understand the customer behavior inside the mall. 2. Customers expectation from hyper electronic retailers as well as local retailers. 3. Gather all the information about all the competitors. 4. Details about the loyalty scheme in consumer durable retail sector.
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CONCLUSION
Impact of hyper consumer durables retailers on local players is not that effective yet, because small /local retailers have adopted various strategies to maintain their market share and their presence in local market but we cant predict the future because, hyper retailers as CROMA,NEXT,EZONE,VIJAY SALES and other MNC who are looking to invest in Indian market. As Indian consumer remains one of the most upbeat globally. it is widely believed that the Indian market will fuel the growth of multinational companies in the coming years. While most leading companies are cutting costs in the US and Europe, they see India as a strategic market, which can fuel their growth.
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1) How important is the brand? ________________________________________________ 2) On what basis do you select a brand? a) b) c) d) e) f) Price Brand name Reliability Performance Advertisement After sales service
3) From where do you buy electronic goods? ____________ hyper market(Retailers) ____________Small electronic shop ____________Some other way 4) What are the first 5 brands/shops of consumer durable that comes in our mind? _________________________________________________________________ 5) Which is your preferred brand/shop? If any why? __________________________________ 6) Do you go in for re-purchase? a) Yes b) No 7) What influences you the most to buy products from this brands? ________________________________________ 8) Why do you look for a different brand? a) b) c) d) Variety Technology Price Service
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why________________________________ 10) What influences your purchase decision? a) b) c) d) e) f) Price Brand name Reliability Performance Advertisement After sales service
11) Based on price range what impression do you carry of croma? a) Economical b) Costly 12) Which store you find the price best? a) Vijay sales b) Ezone c) Next d) Sumaria e) Sony mony f) croma
13) Which store you find that there is a good range of brands available? 14) Which store has a good product range available? 15) Which store has got good promotional offers? 16) Which store provides the best service? 17) Which store has a good store layout? 18) Which store has organized good events? 19) Which store has good ambience?
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BIBLIOGRAPHY
WEB SITES 1) www.cromaretail.com 2) www.cromaretail.com/special-offers/special-offers.html 3) www.retailbiz.com 4) www.indiaretailing.com 5) www.slideshare.com BOOKS Marketing research Rajendra Nargundkar.
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