retail project
TRANSCRIPT
Declaration
I take the privilege to declare that the Project Study with reference to SPENCER’S, HYPER MARKET, VIJAYAWADA has been carried out by me under the guidance of
Prof. R. MADUSUDHANA RAJU, Ph.D
The Observation Study report is submitted in Partial fulfillment of the requirement for the award of the Degree of Master of Business Administration
This work has not been submitted elsewhere either in part or wholly for degree discipline.
(V. SATEESH KUMAR)
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INDEX
Page no
CHAPTER-I 04-06
Introduction of the study
Need for the Study
Methodology
Objectives
Limitations
CHAPTER-II 08-31
Introduction to retailing
The Functions of a Retailer
Factors influencing the Retail Shopper
The Global retail industry
FDI in retail sector in India
Classification of Retailing
Problems facing Retail sector in India
CHAPTER-III 33-68
RPG Group profile
Spencer’s profile
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CHAPTER-IV 52-68
Retail Marketing Activities
In store Communications
Out Store Communications
Sales Promotional Activities
Retail Store Locations
Branding Options in Spencer’s Hyper
CHAPTER-V 96-111
Questionnaire
Observations or findings in the store
Suggestions
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INTRODUCTION OF THE STUDY
The internship is to know the marketing activities of the
retail chain of stores in addition to get store operations conducted in the store and the
day-to-day transactions done. The store operations include logistics, customer
relationship management, visual merchandising, Cashing, Human Resource management,
Maintenance, Security, IT, Housekeeping and different promotional activities
implemented to increase and maintain the customer relationship.
Need for the Study :
To the Organization:
The study may be useful for the organization to understand their consumer
needs and wants in effective manner. This can be helpful for the organization to
provide maximum consumer satisfaction. This study may help to the organization to
develop and implement improve quality and service, effective communication in the
form of advertising of offerings and effectively overtake competition.
To Me:
This study provides me an opportunity to relate my theoretical knowledge
and thoughts in classrooms to practical environment and to understand and analyze
various practical aspects in marketing functional area of an organization.
Objectives:
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1) To understand the concept of retailing and to know about its importance and
Practices.
2) To enquire into the profile of the organization.
3) To know the various issues relating to Marketing, Operations, VM, and Customer
Relationship Management, Cashing and HR in the organization under study.
4) Done a customer survey on customer satisfaction and The reach of marketing activities
to the customers..
Methodology:
Data is collected in many ways here the data is collected as shown below:
a) Primary Data :
Primary data consist of original information gathered for specific purpose.
The normal procedure is to asking the executives and interview customers individually to
get the required data. In this way primary data is collected from all of the customers
through structured questionnaire.
Survey method has been used for data collection. The survey done by
using personal interviewing technique through administering the structured questionnaire,
which consists of both close and open ended questions.
b) Secondary Data :
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Secondary data consists of information that already exists somewhere, having
been collected for another purpose. Secondary data is collected from Internet and books.
Limitations:
1) Retailing is a vast subject and the time Period that is allotted for the Project Study is
very limited.
2) Only in-store communication, getting an idea on way of communication in order to
make the customers aware of promotions.
3) We are not getting the permission to know about SAP related data from the
organization due to confidential matters.
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CHAPTER-II
Introduction to retailing
The Functions of a Retailer
Factors influencing the Retail Shopper
The Global retail industry
FDI in retail sector in India
Classification of Retailing
Problems facing Retail sector in India
Introduction to retailing:
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Retail is the final stage of any economic activity. By virtue of this fact, retail occupies an
important place in the world economy. In an attempt to understand the scope of the term
retail, various definitions of the term have been examined.
Retailing consists of the sale of goods or merchandise for personal or household
consumption either from a fixed location such as shopping mall or store, or from a fixed
location and related subordinated services.
Retailers are at the end of the supply chain.
Definition:
According to Philip Kotler:
“Retailing includes all the activities involved in selling goods or services to the
final consumers for personal, non-business use. A retailer or retail store is any business
enterprise whose sale volume comes primarily from retailing.
The North American industry classification system (NAICS) specifies that the
retail trade sector comprises establishments primarily engaged in retailing merchandise,
generally without transformation, and rendering services incidental to the sale of
merchandise.
The Functions of a Retailer:
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From the customer point of view, the retailer serves him by providing the
goods that he needs in the required assortment, at the required place and time. From an
economic standpoint, the role of a retailer is to provide real added value or utility to the
customer. This comes from four different perspectives:
1. First is utility regarding the form of a product that is acceptable to the
customer. The retailer does not supply raw materials, but rather offers finished
goods and services in a form that the customers want. The retailer performs
the function of storing the goods, and providing us with an assortment of
products in various categories.
2. He creates time utility by keeping the store open when the consumers prefer to
shop.
3. By being available at a convenient location, he creates place utility.
4. Finally, when the product is sold, ownership utility is created.
All these are real benefits, which retailers offer by getting close to potential
customers. It is necessary; therefore, for retailers to fully understand the motivations that
drive their customers, the retailer serves the consumer by functioning as a marketing
intermediary and creating time, place and ownership utility for the consumer.
The retailer also serves the manufacturer by performing the function of
distributing the goods to the end consumer, and thus forming a channel of information
leading to the consumer. He is the final link in the distribution chain and very vital too.
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For several product categories where brand loyalty is not very strong or for unbranded
products, the retailer’s recommendation is vital.
Factors influencing the Retail Shopper:
I. Range of Merchandise
II. Convenience of Shopping at a particular Outlet
III. Time to Travel
IV. Socio-economic Background and Culture
V. The stage of Family Life Cycle
The Global retail industry: An overview
Retail has played a major role world over in increasing productivity across a wide
range of consumer goods and services. The impact can be best seen in countries like
U.S.A, U.K, Mexico, Thailand and more recently China. Economies of countries like
Singapore, Malaysia, Hong Kong, Srilanka and Dubai are also heavily assisted by the
retail sector.
Retail is the second largest industry in the US both in number of establishment
and number of employees. If also one of the largest worldwide. The retail industry
employs more than 22 million Americans and generates more than $3 trillion in retail sale
annually. Retailing is a US $ 7 trillion sector
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Wal-Mart is the world’s largest retailer. Already the world’s largest employer
over 1 million associates. Wal-Mart displaced oil giant EXXON Mobil as the world’s
largest company when it posted $219 billion in sales for fiscal 2001. Wal-Mart has
become the most successful retail brand in the world due to its ability to leverage sized
market clout, and efficiency to create market dominance. Wal-mart heads Fortune
magazine list of top 500 companies in the world. Forbs Annual list of Billionaires has the
largest number (45/497) from the retail business.
The Global Retail Market:
The emergence of the global market place and the rise of the 24/7 economy has fuelled
the growth of retail across the world. The global retailing industry, as understood under
the Global Industry Classification Standard (GICS), grew by 5.5% in 2004 to touch
$90,498 billion. The compounded annual growth rate for the period 2000-2004 was 3.9%.
The United States of America dominated the world retail market space and accounts for
32.3% of the global retailing group. Europe generates a further 30.8% of the group’s
value Asia Pacific-25.6% and the rest of the world-11.20%. It is interesting to note that
the key 250 retailers in the world alone accounted for $2.6 trillion, which itself is about
one third of the marketplace in retail
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Key players in the world of Retail:
WAL-MART STORES
CARREFOUR
HOME DEPOT
METRO
ROYAL AHOLD
TESCO
KROGER
TARGET
COSTCO WHOLESALE
ALBERTSON’S
AEON
WALGREEN
GROUPE AUCHAN
LOWE’S
SEAR’S ROEBUCK
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FDI in retail sector in India:
The retail sector in India is a big draw for many organized players of the world as
less than 5% of the nearly $400 billion industry is structured the sector predicted to
nearly double in size by 2015. It is estimated to employ about 8% of the total
employment, roughly over 40 million people making it very sensitive issue for any
government that comes into power. The issue of foreign firms and domestic companies
entirely retail has been controversial and politically sensitive on.
There were reports suggesting that the government is planning to allow foreign
companied to foray into multi brand retail. It was suggested that 49% FDI in multi brand
retail could be allowed and the 49% cap an single brand retail could be removed.
Last year then the Commerce minister Kamal nath made it clear that the
government was revamping the FDI policy to open up employment intensive sectors to
FDI but the changes to the Caps in the retail sector were not under consideration. The
position is has not changed since the government was formed and the present Commerce
minister Anand Sharma reiterated the fact that there in built safeguards against FDI
finding it was into multi brand retail and breaching the limits.
Presently the domestic Indian companies are allowed to open neighborhood shops
but the foreign retailers cannot invest in their for minority holding either.
As per the FDI policy 100% FDI is allowed into the wholesale Cash & Carry
Business under automatic route.
What this really means is that a foreign retailer can set up operation in India provided
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It sells only to registered retailers i.e. retailers who have the relevant
paperwork such as Value Added Tax (VAT) number or sales tax number etc.
The foreign companies are not allowed as yet to open up malls and shops in
neighborhoods and cannot sell directly to the public.
The foreign company has to follow the Cash & Carry model which means sale
of goods is only on Cash basis over the counter.
The other mode of entry is the ‘Single Brand Product’ Retailing where FDI up to 51%
in retail trade of ‘Single Brand’ product would be subject to following conditions:
Products to be sold should be of a single brand only
Products should be sold under the same brand internationally
Single brand product-retailing would cover only products which are branded
during manufacturing
In this mode of entry in the Indian retail markets, FDI would be allowed only with
prior approval of the government and 49% of the equity will have to be brought-in be
and Indian partner. The examples are
Wal-Mart entering the market with pact with the Bharti Retail
And Metro also into our market
Tesco and Carrefour are also planning to enter our market.
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In the backdrop of such activity relating to the retail sector a parliamentary standing
committee has recommended a blanket ban on FDI in the retail sector. The committee is
even opposed to big domestic corporate entering the sector saying that it will lead to
unemployment. It has further recommended that restrictions should be put for opening
large format malls for selling other consumer products with particular attention to
grocery, fruits and vegetables vendors who form the majority of the neighborhood mom
and pop stores which are called kirana stores in India.
The committee feels that opening of FDI in retail trade by allowing single brand
foreign firms and whole sale Cash & Carry formal stores into India will result in
unemployment due to slide-down of indigenous retail traders.
The committee headed by Dr. Murali Manohar Joshi, feels that the government
should stop issuing further licenses for Cash and Carry formats either to transformed
retailers or to joint venture with Indian partners, as it is a backdoor entry into retail
trade into the country.
The panel has asked the government to setup a retail regulatory authority to look into
the problems of small traders and to monitor larger players and act as a whistle
blower for anti-competitive behavior and abuse of dominance.
The committee is of the opinion that consumers would be sidelined, as the big retail
giants will adopt a predatory, tempting the consumers which would affect wipe out
competition from local retailers. The retailers would then be in a monopolistic
position and would be able to dictate prices. The panel further opinions that
procurement centers constituted by big corporate for market direct bulk purchases
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would initially pay attractive prices to farmers and cause gradual extinction of mandis
and regulated market yards.
The report further states that the government should ensure that some-in-built policy
must be established to relocate or re employ the people who are disclosed due to
opening of big malls in the vicinity of their shops.
The committee recommendations are in stark contrast to the findings of ICRIER
(Indian Council for Research on International Economic Relations) in a report
submitted to the Commerce & Industry ministry a year ago. The ICRIER report has
said there was no evidence that overall employment would decline if companies came
into organized retail. The committee suggestions are laid before parliament for debate
but are not binding an government.
CLASSIFICATION OF RETAILING
Classification on the Basis of Ownership
On the basis of ownership, a retail store can be an independent retailer, a chain retailer or
a corporate retail chain, a franchise or a consumer co-operative.
Independent retailer:
An independent retailer is one who owns and operates only one retail outlet. Such an
outlet is managed by the owner &proprietor and a few other local hands or family
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members working as assistants in the shop. Many independent stores tend to be passed on
from generation to generation.
In India, a large number of retailers are independent retailers. Stores like the local
baniya/kirana store and the panwala are examples of independent retailers, as are stores
like Benzer, Instyle, Premsons, Amarsons, etc. The ease of entry into the retail market is
one of the biggest advantages available to an independent retailer. Depending on the
location and product mix that he chooses to offer, he can determine the retail strategy.
The independent retailer often has the advantage of having a one to one rapport with most
of his customers. However, on the flip side, the advantages of economies of scale and the
bargaining power with the suppliers is limited.
A chain retailer or a corporate retail chain:
When two or more outlets are under a common ownership, it is called a retail chain.
These stores are characterized by similarity in the merchandise offered to the consumer,
the ambience, advertising and promotions. Examples in India include Wills Sports (ITC),
Louis Phillippe, Van Heusen (Madura Garments), Arrow (Arvind Mills) and department
stores like Globus, Westside and Shopper’s Stop. Food world, Music world, Planet M,
etc., are also examples of chain retailers.
The biggest advantage that a chain retailer has is that of the bargaining power that
he can have with the suppliers. Cost effectiveness is also possible in advertising and
promotions. However, since chains expand across cities and regions, it may not always be
possible to take into account the regional or rural and urban preference. The ability to
give attention to each of the stores becomes fairly restricted.
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Franchising:
A franchise is a contractual agreement between the franchiser and franchisee, which
allows the franchisee to conduct business under an established name as per a particular
business format, in return for a fee or compensation. Franchising can be:
A product or trade mark franchise — where the franchisee sells the
products of the franchiser and/or operates under the franchiser’s
name. Archie’s stores, which have come up across India, are an
example of product franchising.
A business format franchise—Mc Donald’s is perhaps one of the
best examples of business format franchising.
Under both the mentioned methods of franchising, the franchise may be for a single store,
a multiple of stores or for a region or country. While outlets of Van Heusen, Louis
Philippe, Arrow and Benetton are examples of individual franchises in India,
McDonald’s operates at a level of two regional franchises. Pizza Hut, Dominoes and
Subway are also franchises operating in India.
Leased departments:
These are also termed as shop-in-shops. When a section of a department in a retail store
is leased / rented to an outside party, it is termed as a leased department. A leased within
a store is a good method available to the retailer for expanding his product offering to the
customers. In India, many large department stores operate their perfumes and cosmetics
counters in this manner. A new trend emerging in Indian retail is that of larger retail
chains setting up smaller retail outlets or counters in high traffic areas like malls,
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department stores, multiplexes and public places like airports and railway stations. These
stores display only a fraction of merchandise/products sold in those anchor stores. Their
main aim is to be available to the consumer near is place of work or home.
Consumer co-operatives:
A consumer co-operative is a retail institution owned by its member customers. A
consumer co-operative may arise largely because of dissatisfied consumers whose needs
are not fulfilled by the existing retailers. As the members of the co-operatives largely run
these co-operatives, there is a limitation on their growth opportunities. Examples of co-
operatives in India are the Sahakari Bhandar’s and Apna Bazaar shops in Mumbai and
Super Bazaar in Delhi.
Classification on the Basis of the Merchandise Offered
If retailers are to be classified on the basis of the merchandise mix that they offer to their
customers, they may be very broadly be classified into the food oriented and the general
merchandise retailers. Within this classification, we can further classify them on the basis
of the target market that they cater to. Speciality stores, department stores and
convenience stores cater to a very specific target market. They are hence, many a times,
reffered to as product/service retailers. In contrast, the supermarkets, discount stores,
hypermarkets and off price retailers cater to a mass market and are often called traditional
product retailers.
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Convenience stores:
These are relatively small stores located near residential areas--- they are open for long
hours, seven days a week and offer a limited line of convenience products like milk,
bread, soft drinks, cigarettes, coffee, candy bars, sandwiches, pizza hut, ice creams,
candy, gum chip, popcorn, maps, magazines, news paper, toys, hygiene products, cat
food, dog food, and toilet paper, CD, DVD, video game.
Supermarkets:
These are large, low cost, low margin, high volume, self-service operations designed to
meet the needs for food, groceries & other non-food items. This format was at the
forefront of the grocery revolution, and today, it controls more than 30% of the grocery
market in many countries.
Examples of supermarkets in the Indian market scenario are Nilgiri’s, Foodworld,
Subhiksha, Food Bazaar and Vitan.
Hypermarket:
Gigantic retail facility carries an enormous range of products under one roof.
The word hypermarket is derived from the French word hypermarche, which is a
combination of a supermarket and a department store. This retail business format has
evolved since its invention by retailer Carrefour in Sainte Genevieve des Bios near Paris,
in the year 1963. A retail store with a sales area of over 2500 sqm, with at least 35% of
selling space devoted to non-grocery products, is termed as a hypermarket. The stores
occupy an area which ranges from anywhere between 80,000 to 2,20,000 sq.ft and offer a
variety of food and non food products like cloths, jewellery, hardware, sports equipment,
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cycles, motor accessories, books, CD’s, DVD’s videos, TV’s, electrical equipment and
computers and combine supermarket, discount & warehouse retailing principles.
A store that satisfies the following characteristics has been defined by the IGD as a
hypermarket:
A selling area between 5,000 sq.m and 15,000 sq.m
A wide range of products including food and non-food products
Discounted prices
A destination offer
Key retailers who operate in this business model are Carrefour, Wal-Mart (the Wal-Mart
Supercentres). Examples of hypermarkets in India include Gaint, Big Bazaar and Star
India Bazaar.
Specialty stores:
A store specializing in a particular type of merchandise or single product of durable
goods (that is home furniture and household goods, consumer electronics and/or domestic
electrical appliances) or a range of normally complementary durable goods product
categories is termed as a specialty store. Such a business model is characterized by a high
level of service or product information being made available to customers.
These are characterized by a narrow product line with deep assortments in that product
line. Specialty stores usually concentrate on apparel, jewellery, fabric, sporting goods,
furniture, etc. They have clearly defined target market and their success lies in serving
their needs.
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Internationally, most specialty retailers would operate in an area under 8,000 sq.ft.
Examples of international retail chains which are specialty retailers include The Gap,
Ikea, High & Mighty, Big & Tall, etc. In India, specialty stores are one of the fastest
emerging formats. Examples of speciality stores in India include retail chain like praline
fitness station and Gautier furniture.
a) Departmental stores:
A departmental store is a large-scale retail outlet, often multi-leveled, whose merchandise
offer spans a number of different product categories. Traditionally, department stores can
be defined as averaging 7,000sqm., selling at least fashion clothing, accessories,
cosmetics, household goods and often a much broader assortment, from more or less
separate departments on several floors.
Department stores are defined as those establishments depending on food, clothing and
home related items for at least 10% percent but less than 70% respectively, of their sales.
Furthermore, these stores have at least 50 employees and a self-service ratio of less than
50%.
Department stores usually sell products Apparel, Furniture, Electronics, Appliances,
Paint, Toiletries & cosmetics, Photographic equipment, Jewellery, Toys, Sporting goods.
b) Off price retailers:
Here, the merchandise is sold at less than retail prices. Off-price retailers buy
manufacturer’s seconds, overruns and off seasons at a deep discount. The merchandise
may be in odd sizes, unpopular colours or with minor defects. Off price retail stores may
be manufacturer owned or maybe owned by a speciality or departmental store. These
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outlets are usually seen by the parent company as a means of increasing the business. The
factory outlets in case the manufacturer owns them, may stock only company
merchandise. Examples of these include Pantaloon Factory outlets, Levi’s Factory
Outlets, etc. On the other hand, off price retailers owned by speciality or departmental
stores may sell merchandise from the parent company as well as merchandise acquired
from other retailers. This formal largely depends on volume sales to make money.
c) Catalogue showrooms:
Catalogue retailers usually specialize in hard goods such as houseware, jewellery and
consumer electronics. A customer walks into this retail showroom and goes through the
catalogue of the product/s that he would like to purchase. Some stores require the
customer to write out the product code number and hand it over to the clerk, who then
arranges for the product to be brought out from the warehouse for inspection and
purchase. Some of the popular catalogue showroom retailers in the world include Argos,
Service Merchandise and Best products.
Over the years, the landscape of cities, towns and rural areas across the world has
changed. The sizes of retail outlets have changed to become larger and larger and
thereby, earn the title of Big Box retailers. Big-box retail facilities are large, industrial-
style buildings or stores with footprints that generally range from 20,000 square feet
to200, 000 square feet. There are four major subgroups used to categorize Big–box retail
models. They are
d) Discount department stores
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Discount department stores, ranging from 80,000 sq.ft offer a wide variety of
merchandise including automotive parts and services, house wares, home furnishings,
apparel and beauty aids.
e) Category killers
A category killer is a specialty retailer who offers a very large selection in the chosen
product category and economical prices. Category killers are successful because they
focus on one category, they stock deep (e.g. Toy’s R U s has 10,000 toy items in a store
as compared to 3,000 in a department store), they buy and sell cheap and finally, they
dominate the category. Internationally, the size of category killers ranges from 20,000
sq.ft. to 120,000 sq.ft. Toys R Us and staples are good examples of international category
killers. Nalli’s in Chennai can be termed as a category killer in saris, as also the chandana
Bros saree chain in Andhra Pradesh and Toys Kemp in Bangalore. Mumbai has one such
category killer – The Loft, a 15,000 sq.ft. Store catering to footwear alone.
f) Outlet stores:
Outlet stores, ranging from 20,000 sq.ft to 80,000 sq.ft. are typically the discount arms of
major department stores such as Nordstrom Rack and J.C.Penny Outlet.
g) Warehouse clubs:
Warehouse clubs, ranging from 104,000 sq.ft. to 170,000 sq.ft. offer a variety of goods,
in bulk, at wholesale prices. However, warehouse clubs provide a limited number of
product items (5,000 or less). This group includes retailers such as Costco Wholesale,
pace and Sam’s Club.
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Non-store Retailing
The ultimate form of retailing directly to the consumer is non-store retailing. A direct
relationship with the consumer is the basis of any kind of non-store retail venture. It may
be broadly classified into direct selling and direct response marketing. While direct
selling involves direct personal contact, in direct response marketing, the customer
becomes aware of the products/services offered through a non personal medium like
mail, catalogues, phone, television or the internet.
Direct selling: Direct selling involves making a personal contact with the end consumer.
At his home or place of work. Cosmetics, jewellery, food and nutritional products, home
appliances and educational materials are some of the products sold in this manner.
Direct selling may follow the party plan or the multi level network. In the party plan, the
host invites friends and neighbors for a party. The merchandise is displayed and
demonstrated in the party atmosphere and buying and selling takes place.
Direct response marketing
Direct response marketing includes various non-personal forms of communication with
the consumer like:
Catalogue retailing or Mail order;
Telelvision retailing; and
E-tailing.
Other retail models
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Automated vending/kiosks
This is the most impersonal form of retailing. However, it provides convenience to
the customers as they have access to the products round the clock. It is a popular form
of retailing abroad and is used to sell routinely purchased items like soft drinks,
candy, cigarettes and newspapers. While tea and coffee vending machines are a
popular sight at the airports in India, the automated teller machines operated by banks
are perhaps the most successful example of automated vending in India. The tea and
coffee machines are rarely completely automated and unattended as in India; the cost
of labor is still cheap.
Retail kiosks are the largest sector of the self service market. Its international share is
between 40 to 60 percent. Kiosks have their applications in different areas of retail
like within the retail environment as I-kiosks, which aim to provide access to far more
products than the physical store can stock. Applications can also be seen across the
government sector, banking and tourism, where not only is information provided but
other facilities like transit routes and the ability to create personalized itineraries may
also be allowed. Large retailers like McDonald’s are using kiosks to let customers key
in orders at some restaurants.
The Cash & Carry
The term “Cash & Carry” means the customers do their own order picking, pay in
cash and carry the merchandise away. The cash and carry is a wholesale format that
aids small retailers and businessman. The advantages that this format has over the
traditional wholesale operations are:
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It offers a wide assortment of goods, food and non-food items, thus providing
for one stop shopping and allowing the customers to save time.
Given the permanent availability of goods in the store, the customer can
always purchasing goods he needs and is able to store and finance them in the
short term. Thus, despite the principle of cash payment, cash & carry largely
takes over the function of financing and stockholding on behalf of its
customers.
Longer business hours per week as provided, enabled the customer to do his
shopping at a convenient time, seven days a week.This format has been
featured in this section on retail formats as two of the largest groups that
operate under the cash and carry format, viz, Metro AG, Germany and
shoprite of South Africa, have started their operations in India.
Airport Retailing:
The past two decades have witnessed rapid changes in the air travel industry.
Retail is becoming increasingly important for airport operators. Gone is the age
where airports were passenger processors, the time when traveling was just hassle
with passengers moaning and complaining about long waits and dull
surroundings. We are now in a era where airports are focusing on retail to convert
airports into exciting, energized business and retail/entertainment centres—as
well as transportation hubs.
Airports in many cities of the western world, the Far East and Middle East serve
as mini shopping plazas for the traveler, while the trend is yet to catch on in
India. Dramatic changes swept airport retailing when long-term, 20-to-30-year
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concession contracts began expiring. It made airports realize more and more that
with capital investment, good customer service and good pricing, plus a little
imagination, they could generate some attractive revenue.
Problems facing Retail sector in IndiaIndia has 12 million
retail outlets. The retail sector is the second largest source of
employment and the job market is hugely receptive to retailing
expertise as more and more B-schools are now focusing on the
sector and large retailers are setting up retail academies. It is
estimated to create 50,000 jobs a year in the next five years.
MARKET SIZE
The retail market in India is estimated at Rs.5,88,000 crore. Of this the unorganized
market is worth Rs.5, 83,000 crore and the organized market is Rs.5, 000 crore.
OPPORTUNITY:
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Over 8% of India's population is engaged in retailing. According to ASSOCHAM, the
total retail market is expected to grow by 20% annually and is one of the fastest growing
sectors in India.
PROBLEMS:
The organized retail industry in India is faced with stiff competition from the
unorganized sector.
There is a shortage of quality real estate and infrastructure requirements in
our country.
Opposition to Foreign Direct Investment from small traders affects retail
industry.
Very high stamp duties on transfer of property affect the industry.
Shortage of retail space in central and downtown locations also hinders the
growth of retail industry.
Presence of strong Pro-tenancy laws makes it difficult to evict tenants and this is
posing problems.
Land-use conversion is time consuming and becoming complex.
For settling property disputes, it consumes lot of time.
Rigid building laws makes procurement of retail space difficult.
Non residents are not allowed to own property except they are of Indian origin.
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Prohibition of Foreign investment in real estate business.
Customs duties are levied on import of goods in India.
2011 Analysis of Indian Retail Market
The Indian retail market, which is the fifth largest retail destination globally, has been
ranked as the most attractive emerging market for investment in the retail sector by AT
Kearney's eighth annual Global Retail Development Index (GRDI), in 2009. As per a
study conducted by the Indian Council for Research on International Economic Relations
(ICRIER), the retail sector is expected to contribute to 22 per cent of India's GDP by
2011.
With rising consumer demand and greater disposable income, the US$ 400 billion Indian
retail sector is clocking an annual growth rate of 30 per cent. It is projected to grow to
US$ 700 billion by 2010, according to a report by global consultancy Northbridge
Capital. The organised business is expected to be 20 per cent of the total market by then.
In 2008, the share of organised retail was 7.5 per cent or US$ 300 million of the total
retail market.
A McKinsey report, 'The rise of Indian Consumer Market', estimates that the Indian
consumer market is likely to grow four times by 2025. Commercial real estate services
company, CB Richard Ellis' findings state that India's retail market has moved up to the
39th most preferred retail destination in the world in 2009, up from 44 last year.
India continues to be among the most attractive countries for global retailers. Foreign
direct investment (FDI) inflows as on September 2009, in single-brand retail trading,
30
stood at approximately US$ 47.43 million, according to the Department of Industrial
Policy and Promotion (DIPP).
India's overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3
trillion by 2018, at a compound annual growth rate (CAGR) of 10 per cent. As a
democratic country with high growth rates, consumer spending has risen sharply as the
youth population (more than 33 percent of the country is below the age of 15) has seen a
significant increase in its disposable income. Consumer spending rose an impressive 75
per cent in the past four years alone. Also, organised retail, which is pegged at around
US$ 8.14 billion, is expected to grow at a CAGR of 40 per cent to touch US$ 107 billion
by 2013.
The organised retail sector, which currently accounts for around 5 per cent of the Indian
retail market, is all set to witness maximum number of large format malls and branded
retail stores in South India, followed by North, West and the East in the next two years.
Tier II cities like Noida, Amritsar, Kochi and Gurgaon, are emerging as the favoured
destinations for the retail sector with their huge growth potential.
Further, this sector is expected to invest around US$ 503.2 million in retail technology
service solutions in the current financial year. This could go further up to US$ 1.26
billion in the next four to five years, at a CAGR of 40 per cent.
Moreover, many new apparel brands such as Zara, the fashion label owned by Inditex SA
of Spain, UK garment chain Topshop, the Marc Ecko clothing line promoted by the US
entrepreneur of the same name and the Japanese casual wear brand Uniqlo are preparing
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to open outlets in India.
CHAPTER-III
RPG Group profile
Spencer’s profile
32
RPG GROUP PROFILE:
OVERVIEW:
RPG Enterprises, established in 1979, is one of India’s fastest growing business groups
with a turnover touching Rs. 15,000 cr. The group has more than twenty companies
managing diverse business interests in the areas of Power, Tyre, Transmission, IT,
Retail, Entertainment, Carbon Black and Specialty. Wide-ranging businesses, growing
returns and a reputation to reckon, makes working with RPG an enriching experience. Where
entrepreneurial skills are valued, excellence is the by-word, and performance is a pre-requisite.
Management
The RPG Management Board is the backbone of the conglomerate. Its members are
highly qualified professionals, well experienced in their respective fields.
Values
RPG’s business ethics promote higher levels of excellence. The group’s values of
Customer Sovereignty, People Orientation, Innovation & Entrepreneurship, Transparency
33
& Integrity, Passion for Superior Performance, Anticipation, Speed and Flexibility propel
it to perform and excel in all spheres of the business.
Quality
For RPG quality determines success. Continuous process improvements are carried out to
ensure complete satisfaction of customer and market requirements.
Beyond Business
RPG is a socially responsible organization; believing in giving back to the community
what it has gained from it. The group regularly contributes toward the welfare of various
social groups and is involved in promoting social activities in the field of sports and arts.
History:
The history of RPG began in 1820 when Ramdutt Goenka, from a small town in Rajasthan, came to
Calcutta to do business with the British East India Company. The following milestones speak of his
enterprising efforts, and the subsequent growth of the RPG group.
By the 1900s the Goenkas establish themselves in diverse business sectors
like banking, textiles, jute and tea.
Sir Hariram Goenka and Sir Badridas Goenka are conferred knighthood by
the British for outstanding contribution to business and the community.
In 1933, Sir Badridas Goenka becomes the first Indian to be appointed
Chairman of the Imperial Bank of India (now the State Bank of India).
34
He is elected President of the Federation of Indian Chambers of Commerce
and Industry (FICCI) in 1945.
Keshav Prasad Goenka (son of Sir Badridas Goenka) continues the
successful trait of entrepreneurship.
In 1950 Goenka’s acquire two British trading houses - Duncan Brothers and
Octavius Steel.
After successful acquisitions in the areas of tea, automobile, tyre, jute, cotton
textile and electric cables, Keshav Prasad Goenka retires in the 70s. His
business is taken over by his three sons.
One of the sons, Rama Prasad Goenka (better known as RP Goenka), starts
RPG Enterprises in 1979 with Phillips Carbon Black, Asian Cables, Agarpara
Jute and Murphy India.
The 80s see further acquisitions by the RPG group, the first being CEAT
Tyres of India in 1981. The group then went on to acquire KEC (1982); Searle
India, now RPG Life Sciences (1983); Dunlop (1984); HMV (1988); and
finally CESC, Harrisons Malayalam, Spencer & Co. and ICIM in 1989.
RP Goenka’s sons Harsh (Chairman) and Sanjeev (Vice-Chairman) spearhead
the group’s management from 1990.
35
RP Goenka currently oversees the group’s affairs as “Chairman Emeritus”.
Today, RPG has more than twenty companies across eight business sectors,
with a Turnover of Rs. 15,000 cr.
Management Board
The Management Board comprises of highly qualified and experienced professionals from
different business areas.
MILE STONES:
2011
CEAT clocks highest net sales and operational profit @ Rs 2783 and @Rs 230Cr
(YTD Feb’10)
After Antwerp in Belgium, CEAT goes abroad once again and opens office in
Dubai to tap the growing demand in the Middle East.
CEAT wins Employer Brand awards in the following four categories:
1. BEST HR STRATEGY IN LINE WITH BUSINESS
2. TALENT MANAGEMENT
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3. INNOVATIVE RETENTION STRATEGY
4. CONTINUOUS INNOVATION IN HR STRATEGY IN HR AT WORK
IMRB study reveals that CEAT is the most trusted brand in the tyre industry and
the second in exports among the ATMA companies.
The company’s radial project at Hallol and capacity expansion at Nasik, are on
track.
2010
CESC bags thermal power project from Dhariwal Infrastructure. To set up 600
MW thermal power project at Chandrapur in Maharashtra
Gujarat Chief Minister Narendra Modi lays the foundation stone for CEAT’s Rs.
700 crore new radial tyre plant at Hallol.
CEAT wins Reader’s Digest Trusted Brand Awards’09
KEC International and RPG Cables boards approve merger.
Open Media Network launches OPEN, the weekly current affairs and features
magazine.
KEC International wins EEPC India ‘Top Exporter’ Award
RPG Cables Highest EBITDA in industry @ 8%
Zensar’s revenue was up from Rs 782.93 to Rs 908.08 Cr showing a 16% growth
37
y-o-y
Zensar’s net income grew from Rs 64.03 Cr to Rs 86.56 Cr showing a 35%
growth y-o-y
Zensar inaugurates its third Global Delivery Centre in India in Pune in April
Zensar gets into a strategic partnership with Twofour Media, renowned for its
wide range of factual entertainment and lifestyle programming
Zensar is awarded the Emerging Business Applications Award for 2009 at the
Oracle UK Partner Awards
CNBC-TV18’s Exporter of the Year Award for the year 2009 - IT, ITES and
electronics segment for the third consecutive year at the International Trade was
awarded to Zensar
Zensar receives the Certified Advantage Partner Status for Oracle for Middle
East- highest level of partnership status in the region
Zensar is certified by the Indian Department of Scientific and Industrial Research
in recognition of the in-house R&D efforts
CEAT opens a Wheel Management centre for trucks
2009
CESC ties up with Singapore Power to revamp its distribution system
Dr Ganesh Natarajan, Global CEO, Zensar Technologies takes over as
NASSCOM Chairman. NASSCOM is the National Association of Software
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Service Companies in India
Zensar goes Green by launching initiatives to make the Company and the City
Green, and to ensure we build energy efficient solutions for our customers’
business
Dr Ganesh Natarajan announced as Management Board Member, is the President
of the RPG Information Technology Sector and Vice Chairman and MD of Zensar
Technologies
Launched the first ever on-campus Daycare Centre by Zensar in a Pune IT
company
Zensar launches its Innovation Park on 3D Virtual World, SecondLife
The Company celebrates 15 years of partnership with its customer, a large utilities
company in the UK, National Grid
Zensar BPO signs contract with Kotak Mahindra Bank
Zensar's Global HR Head made President of National HRD Network’s Pune
Chapter
RPG group achieves a turnover of 13,500 crore for FY ’08
Spencer’s flagship store of 70,000 sq ft at the South City Mall in Kolkata
Spencer’s first standalone store at Baroda
Announcement of exclusive tie-up with the ₤ 3 billion Woolworth’s PLC of UK
39
for retailing the latter’s internationally acclaimed toy brand, Chad Valley
Announcement of tie-up with Au Bon Pain, the Boston-based fast casual dining
and bakery café chain with more than 200 outlets in the USA, South Korea,
Taiwan and Thailand.
Announcement of exclusive tie-up with Beverly Hills Polo Club, Spencer’s first
international tie-up in fashion
CEAT Srilanka wins 11 Awards at National Quality Competition
CEAT unveils its new logo which is designed to reflect today's CEAT with a
vision to meet the demands of tomorrow’s next generation market.
PCBL has been rated as the second fastest growing Carbon Black Company in the
World (Source: CBO Monitor – Sep 28, 2007).
PCBL has been ranked 11th by the “Economic Times”, among the top 100 wealth
creators in India for 2007.
PCBL has been rated as the second fastest growing Carbon Black Company in the
World (Source: CBO Monitor – Sep 28, 2007).
PCBL has been ranked 11th by the “Economic Times”, among the top 100 wealth
creators in India for 2007.
Received SAP ACE 2007 Award for Customer Excellence, from SAP India for
best in the Chemical Sector Implementation (Midsize Enterprises Category).
Bhoomi Puja carried out in Mundra on 24th January 2008 for a state of art
40
Greenfield Carbon Black plant of capacity 90,000 MT along with a Power plant
of 16 MW.
Carbon Black declared as an independent Business Sector w.e.f. 1st August, 2008.
Durgapur 30 MW Power Plant commissioned on September 29, 2008.
Raychem RPG won The Best Vendor Award: TYCO Germany 2008
Raychem RPG won The Second Best Vendor Award: SEIMENS
Dun & Bradstreet has rated KEC International the number 1 company in terms of
returns on networth in India
2008
Strategic advantage in Japan through JV Zensar Advanced Technologies focused
on mobile gaming and embedded systems
Launch of unique and focused service for First Time Outsourcers (FTO) - vast
market opportunity by Zensar
Zensar among Fortune Top 10 Global Offshore Outsourcing Providers from India
Zensar set up its Poland Centre to lead European Technical Outsourcing
Operations
Zensar launched unique Hosted Oracle ERP Offering for SMBs
Zensar's Insurance Vertical launched with 10 Million USD Business
Zensar Offers Technology Collaboration to 33 Universities in Hubei Province of
41
China
Zensar won 11 Mn USD of Oracle Business
Zensar and SOA Software announce Global Strategic Partnership
RPG group inches closer to the USD 3 billion mark with a turnover of INR
11,500 crore for FY ‘07
Zensar acquires ThoughtDigital, a leading US-based, Oracle consulting firm
RPG in agreement with Fujitsu to acquire controlling stake in Zensar
Quality
RPG Organizational Excellence
RPG Organizational Excellence is an effort toward achieving excellence by enhancing
performances through clarity of purpose, meticulous planning, tenacious execution and
passion to excel.
RPG Organizational Approach
RPG Organizational Approach translates the group’s organizational excellence strategy
through an effective 3-point program:
Six Sigma
TPM
Continuous Improvement
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RPG Organizational Awards
The RPG Organizational Excellence Awards were started to give impetus to the group’s
excellence movement. Initiated in 1999, these awards aim to encourage higher levels of
business excellence among the group companies.
Vision & Values
Vision
SERVICES
1. Power
a. CESC Ltd.
Profile
The pioneer of electricity supply in India, CESC Limited commenced power
generation and distribution in Kolkata in 1899 with India’s first thermal power
station. CESC, one of the few private power utilities, has since grown to a
generating capacity of about 1000 MW across four thermal power plants.
CESC is a vertically integrated power company and its operation encompasses
coal mining, generation and distribution of power. Today, the company serves
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15 million people spread over its licensed area of 567 sq. km in the twin cities
of Kolkata and Howrah in the State of West Bengal, India. Poised for large
growth in demand, CESC is setting up a number of power stations in the
country.
d conservation of energy.
b. Noida Power Company Ltd.
Profile
Noida Power Company Limited distributes power in Greater Noida, near
Delhi in Uttar Pradesh, which has been developed as the industrial hub as well
as an urban settlement. The company, which has a customer base of
approximately 50,000, reaches out to a population of 4.2 lakh spread across
hamlets, villages and a new township spanning an area of 335 sq. km.
The company is a joint venture between the RPG Group and the Greater
Noida Industrial Development Authority, an autonomous body of the U.P.
government, responsible for town planning and infrastructure development.
The venture marks the strategic entry of the Group into privatized distribution
of electricity in North India.
2. TYRES
a) CEAT
44
Profile
CEAT is a leading tyre manufacturer in India, and one of the most
recognized brands in the country. The company also exports a range of
tyres to over 130 countries.
b) CEAT Srilanka
Profile
CEAT -Kelani Associated Holdings (Pvt) Ltd. -A CEAT India Ltd, Associated
Motor Ways PLC & Kelani Tyres PLC joint venture-is the largest tyre
manufacturer in Sri Lanka.
3. TRANSMISSION
a) KEC International Limited
Profile
KEC International Limited is one of the largest Power Transmission
Engineering, Procurement & Construction (EPC) companies in the
world. KEC has made an indelible mark on the world map by constantly
and consistently re-engineering itself to retain its position of leadership in
the areas of quality, technology, capacity and capability.
KEC's strengths lie in the areas of Design, Manufacture, Supply and
Construction of Turnkey Projects of Power Transmission lines of voltages
up to 800 kV and in the execution of Railway Electrification projects,
setting up Sub-stations and power Distribution Networks, Optical Fibre
Cable (OPGW) installations, Turnkey Telecom Infrastructure Services and
45
maintenance of Power Transmission Lines.
To ensure reliable service, KEC is supported by multi-locational
manufacturing facilities, over 60 stringing equipments and a workforce of
about 2500+ employees spread over 20 countries. KEC has successfully
executed contracts from 800 kV to 33 kV in India and abroad. Till date,
KEC has laid down more than 60000 kms of transmission lines of 400 kV
which is 1.5 times the circumference of the earth (40000 kms).
KEC has gone from strength to strength successfully exporting its EPC
services to over 40 countries and widening its client base across the world.
The company has an increasingly strong presence in South Asia, Middle
East, Central Asia and Africa. Recently, it also made a mark in North
America and seeks to serve more opportunities in that region. During its
six decades of existence, KEC has helped transmit power to various
countries that include Argentina, Australia, Brazil, Canada, Egypt,
Ethiopia, Ghana, India, Indonesia, Iran, Iraq, Kenya, Kuwait, Lebanon,
Malaysia, New Zealand, Nepal, Nigeria, Philippines, South Africa, Sri
Lanka, Saudi Arabia, Sudan, Syria, Tajikistan, Thailand, Tunisia, USA,
UAE and Vietnam. Over 60% of the company’s revenue comes from the
international market
KEC today, boasts of the largest production capacity in the world for
tower manufacturing -- close to 200000 MTs. KEC accomplishes this
using three state of the art manufacturing facilities in the strategically
advantageous locations of Jaipur in Rajasthan, Nagpur in Maharshtra &
46
Jabalpur in Madhya Pradesh. Besides, it also has three modern tower
testing services at Mumbai, Jaipur and Jabalpur which are capable of
testing towers up to 1000kV.
The combined KEC has become a diversified infrastructure EPC global
major with a stated mandate of “Building Infrastructure Globally”. Thus,
from being principally a power transmission play, KEC is today operating
through five major business areas:
Power Transmission – International
Power Transmission – South Asia
Distribution, Substation & Design Services
Telecommunications Infrastructure
Railway Infrastructure
b) RPG CABLES Ltd.
Profile
RPG Cables manufactures and markets power cables in India. The
company also exports cables to Sri Lanka, Malaysia, Russia, Zambia,
Nigeria, Afghanistan, Mauritius and other parts of the world. The
Company is certified for ISO 9001.
4. INFORMATION TECHNOLOGY
Zensar Technologies
Profile
47
Zensar is a globally focused software and services company spread across
nineteen countries in the world, servicing over 280 active customers, providing end-to-
end services from IT development to Business Process Outsourcing, from consulting to
implementation. Towards supporting our customers in meeting their business goals, the
Company has built and consolidated a comprehensive portfolio of services in IT and BPO
that offer a sliding range of benefits along the value chain, from cost to value arbitrage
from efficiency gains to lasting business impacts.
actices culled from individual and combined experiences.
5. RETAIL
a. Spencer’s
Profile
Spencer's Retail Limited is one of India's largest and fastest growing multi-format
retailer with 250 stores, including 36 large format stores across 50 cities in India.
Spencer's focuses on verticals like food and grocery, fruit and vegetables,
electrical and electronics, home and office essentials, garments and fashion
accessories, toys, food and personal care, music and books. Established in 1996,
Spencer's has become a popular destination for shoppers in India with
hypermarkets and convenient stores catering to various shopping needs of its
large consumer base.
Operations
48
Spencer's has retail footage of over 1.1 million square feet and over 250 Spencer's
stores in 50 cities. The company operates through the following formats:
The Spencer's Hyper stores are destination stores, of more than 15,000 sq. ft
in size. They offer everything under one roof. The merchandise ranges from
fruits & vegetables, processed foods (Ready to Eat, Ready to Cook, FMCG
products),specialty foods including international, sugar free, organic foods,
etc...groceries, meat, chicken, fish, bakery, chilled and frozen foods, garments,
consumer electronics & electrical products, home care, home décor & home
needs, office stationeries, soft toys. Besides, the stores also comprise book &
music retailing, electronic gadgets and IT accessories. On an average, a
Spencer's hyper stocks 70,000 SKUs across 35,000 items.
The Spencer's stores are neighborhood stores ranging from 1500 less than
15000 sq. ft. These stores stock the necessary range and assortment in fruit
and vegetables, fmcg food and non-food, staples and frozen foods and cater to
the daily and weekly top-up shopping needs of the consumer. Some of these
stores which have floor area of more than 10,000 sq ft sometimes offer home
care products; personal care products, bakery, chilled and frozen food; baby
care, basics in garments and limited range of electronics and electrical.
b. Music World
Profile
49
Music World is India's largest chain of music stores retailing the widest range of
music & home video products (International and Indian).
Operations
Music World operates different store formats to service different consumer
groups.
Products
Music World's product portfolio comprises of audio CDs, DVDs and VCDs, CD-
ROMs, Playstation/ PSP Consoles & software, X Box console & software ,
Nintendo WII console & software, and other music accessories. The company is
an important player in the home video market.Music World has successfully
forayed into high end 'personal audio' gadgets like Apple iPods, Neo Pods,
MP3/MP4 players. The company also offers DVD players, home theatre systems,
speakers and headphones. Music download is also available at select stores. The
company now provides recharge vouchers of all telecom service providers, DTH
service providers & world calling cards.
5. ENTERTAINMENT
Saregama
50
Profile
Saregama India is an integrated entertainment company with the largest music
archive in India. Saregama’s businesses include film production, home video,
television software and digital distribution of audio and video content. The
company represents BBC Worldwide Home video in India. Artiste management,
event management and theatrical film distribution are some of the other business
interests.
7. CARBON BLACK LTD.
PHILIPS CARBON BLACK LTD.
Profile
Phillips Carbon Black Limited (PCBL) is India’s largest and World’s 8th
largest Carbon Black Company with annual turnover exceeding USD 251 Mn. It
is not only the largest exporter of Carbon Black from India but is also one of the
largest exporters in Asia. In domestic market, it commands a market share of
41%.
PCBL also stands for People Challenging and Breaking Limits. The company’s
vision is to become World No. 6 by 2011. It is also sharply focussed on being a
“Learning Organization” and achieving “Quality and Service Leadership”.
RPG Group, recognizing the major turnaround achieved during the FY 07 and the
subsequent growth phase on which PCBL has embarked upon to capture the
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opportunities in Carbon Black business, has made Carbon Black an independent
Business Sector w.e.f. 1st August 2008.
8. RPG LIFE SCIENCES LTD.
Profile
RPG Life Sciences (formerly Searle India) is a wide-ranging pharmaceutical organization
that focuses on current and emerging areas of health care. The company manufactures
and markets a range of bulk drugs, formulations and biotechnology products.
52
OVERVIEW:
Spencer’s Retail Limited is a multi-format retailer providing a wide range of
quality products to discerning young customers - well-traveled citizens of the world,
looking out for authentic flavors and experiences in a fun-filled shopping environment.
Our brand positioning – Taste the World – embodies this approach, delighting shoppers
with the best that the world has to offer in terms of interiors, ambience and merchandise.
Part of the Rs 15,500crore RPG Group, we run about 250 stores (including about
29 large format stores) across 50 cities in India, employing more than 6,000 people. As
one of the earliest entrants in the retail space in India, we have been instrumental in
introducing Indian consumers to the concept of organized retailing, becoming the
country’s first grocery chain back in 1920, and offering the joys of hypermarket shopping
in 2001.
A “food first” retailer we offer both fresh and packaged foods as well as
groceries. We also have a wide selection of electronics and electrical equipment, home
and office essentials, garments and fashion accessories, toys, and personal care.
53
HERITAGE:
Since 1863, Spencer’s has been a part of the Indian retail landscape. At one time,
the Spencer’s Empire stretched from Peshawar to Cochin, from Karachi to Chittagong,
spanning the length and width of undivided India. Originally owned by a British
gentleman – yes, there was a Mr. Spencer (John William Spencer, to be precise) – it
acquired Indian ownership in the 1960s, and became part of the RPG Group in 1989.
In 1995, RPG Enterprises, the flagship company
of the RPG Group, launched Foodworld as a joint
venture with Hong-Kong based Dairy Farm
International. The joint venture, which operated
supermarkets under the name “Foodworld” and
hypermarkets under the name “Giant”, was terminated in 2006. RPG retained 48 of the
93 stores it owned. These were re-furbished and their launch under the brand name,
Spencer’s, kicked off a new phase in both the history of the Spencer’s brand, and the
retailin India.
Since inception Spencer’s has been a consumer-centric brand, constantly
innovating, pioneering formats, evolving over time but always keeping consumer needs
and satisfaction center-stage. Back in 1920, we were the first grocery chain in India. In
1980, we became the first supermarket chain, and in 2001, we introduced India to the
joys of hypermarket shopping.
What has remained unchanged almost 150 years is the trust the Spencer’s brand
evokes. To the consumer, it carries the promise of innovation, quality, and service; the
54
confidence that they will always be able to find a Spencer’s at a convenient location; that
it will have a pleasant ambience; and that it will offer a wide range of products at
affordable prices.
In the Indian milieu, there are only two routes to survival – discounting and
differentiation. Most retailers choose to play the price game. We, however, preferred to
focus instead on establishing ourselves as the preferred shopping destination for
discerning young customers looking for a range of quality products that let them
participate in a global lifestyle.
Our brand positioning – Taste the World – embodies this unique approach,
promising consumers a fun-filled shopping environment with the best that the world has
to offer in terms of interiors, ambience and merchandise.
55
The following characteristics distinguish the Spencer’s brand and create memorable
360° shopping experiences for consumers:
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Product Initiatives
All supermarkets and hypermarkets sell the same things, right? Wrong. While we do stock popular
ranges, we go to a great deal of effort to ensure you a unique range of products.
•Gourmet Centre - Run by an expert Food Scientist cum Cordon Bleu Chef, our food
innovation wing researches world cuisines and develops recipes for a wide range of popular
and trendsetting dishes. These form the basis for developing our own range of products,
which include delicious cookies and sauces, pickles and jams. Ingredients for these dishes
are also retailed through our stores, for those who’d like to prepare the dishes at home.
•Edutainment Booklets – Want to serve wine but not sure how? Want a recipe for preparing
cheese fondue? Curious to know why organic food is supposed to be better for you? Pick up
a booklet and find out. From the story of olive oil to the origins of cocktails, these tell you a
little more about the products on offer and how to use them.
•Meat, Chicken, Fish - our counters for fresh non-vegetarian items truly represent the finest
fresh cuts a shopper can get. Seafood lovers, be sure to take your pick from the live fish-
tanks on display.
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•Wine & Spirits - Wine ignoramuses or aficionados … we cater to both, with a wide range
of wines expertly selected from as many as 181 countries. Spencer’s was, in fact, the first
Indian retailer to offer a selection of Wine & Spirits in its stores, and the first to present an
in-store wine and cheese tasting experience to shoppers.
•Gourmet store - Kolkata’s first Gourmet store is spread over an area of 1500 sq. ft. It is has
more than 4000 products to choose from and offers the finest ingredients of gourmet cuisine
and recipes to guide in the making of lip smacking delicacies from across the world.
The store offers a wide range and assortment of gourmet breads, biscuits, 500 different types
of beverages, chocolates, 100 variants chilled & frozen food items, 200 variants of 300 types
of cheese, cold-cuts, 60 variants in vegetarian and non-vegetarian convenience foods, exotic
and organic fresh fruits and vegetables, 300 types of pastas and noodles, oils and vinegars.
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The products serve as ingredients to cuisines of Thailand, China, Indonesia, America, Chile,
Argentina, Italy, France, Spain, Sri Lanka and UK to name a few.
If you want to taste the world then a visit to Gourmet Centre at Spencer’s, South city hyper
is a must
Store Event Initiatives
In-store event initiatives ensure that a visit to Spencer’s is always a memorable experience.
Feature Displays - Hotspots and focal points around the store carry thematic product
displays to welcome shoppers and give them the opportunity to pause and absorb the ambience
that constitutes a “Taste the World” experience, before continuing their journey of exploration.
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FORMATS
60
• Live Kitchen - Live Counters with Master Chefs preparing gourmet delights are
always popular at buffets … we brought the concept to our stores in the form of the
Spencer’s Chef Corner, a first-of-its-kind in-store experience that involves customers
even as it showcases the ingredients displayed in our Specialty Bays. From Salads to
Sushi, from Pastas to Satays and from Cheese Fondue to Cool mock tails, Spencer’s
Chef Corner gives customers an opportunity to learn more about their favorite world
cuisines.
• Modern Menu – Footsore and still not done with your shopping? Stop by at our food
court and treat yourself to a shake, swirl or savory.
As the pioneer in organized food retailing in India, the modern-day Spencer’s
started operations back in the early 90s, in South India. We run more than 250 stores
across 50 cities in India. Currently, we offer customers two retail store formats:
Convenience stores, called Spencer’s.
Hypermarkets, called Spencer’s hyper
Spencer's are neighborhood stores that cater to the daily and weekly top-up shopping
needs of consumers. Ranging from 1,500 to 15,000 sq. ft. in size, they stock, at
minimum, an assortment of fruits and vegetables, food and non-food Fast Moving
Consumer Goods, staples and frozen foods. The larger of these stores, having a floor area
of more than 10,000 sq ft sometimes offer a selected range of baked, chilled and frozen
foods; personal and home care products; baby care; basic apparels and electronics and
electrical.
Spencer's hyper are megastores, which combine a supermarket with a department
store. At least 15,000 sq. ft in size, they stock, on average, 70,000 items, giving shoppers
fantastic deals across food, fashion, home and entertainment … all under one roof.
Spencer’s hyper are destinations for more than just shopping. Country and theme
festivals, the Spencer’s Chef Corner with master chefs showing you how to prepare
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exotic dishes, Modern Menu – our in-store food court, wine or cheese tasting sessions …
there’s always something extra happening at a Spencer’s hyper
FOOD:
Choices, more choices, and still more choices make Spencer’s a foodie heaven.
Brands – international, national and regional. Farm-fresh fruits and vegetables. Frozen
delights. Packaged goodies. Extensive fish and meat counters. Diet food for the calorie
conscious. Daily groceries as well as exotic ingredients for specialty cuisines. Our own
range of sauces, jams, pickles and cookies to give you more options on products and
price; as well as quick-serve and ready-to-eat “Home Meal Replacements” for those
times you just don’t want to cook.
Best of all, a refreshment area where you can stop for a snack to recharge for …
more shopping!
FASHION:
Choices, both contemporary and classic. Sporty as you like it, or stylish if you
prefer. Office or occasion-specific formals, casuals for lounging or leisure, and
accessories like leather items, junk jewelry and footwear to complete the look. Trendy
designs in comfortable fits and cheerful colors, to help you give expression to your
personal style. Popular labels like Blackberry, Wills Lifestyle, Lee, Levis, Adidas and
Puma. The preppy elegance of Beverly Hills Polo Club. Lilliput and Gini & Jony for the
kids. Ladybird, one of Europe's oldest brands in children's clothing, available exclusively
through us. Our own brands - Island Monks and Mark Nicolas (both for men and
women), Asankhya (women’s ethnic wear) and Lil Devils (kids).
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PERSONAL CARE:
Good grooming is more than a female fetish … it’s a professional and personal
asset for both men and women. We pamper you with our extensive roster of personal care
products. Bath and body, hair and skin, toiletries and cosmetics … we offer all the major
high street brands as well as luxury brands like L’Oreal, Olay, Insignia, Yardley, Camay.
And since we firmly believe it’s never too soon to start looking good, we offer the most
trusted names in baby and child care products, perfect for creating beautiful moments for
parents and babies to share.
HOME:
A home is more than the place where you live. It is a place of comfort and
companionship, with a huge emotional connect. An area where you stamp your
personality. A refuge where you relax, recharge and rejuvenate. And to make it truly your
very own home sweet home, we bring you a cornucopia of offerings.
Do up your home with trendy but affordable furniture design to save space. Kit
out your kitchen with our modular solutions. Splurge on linen for the table or bed. Lay on
luggage for all your travel needs. Embellish your home with décor and artifacts both
functional and fashionable - curios, crockery, cutlery, stemware, and more. Delight the
kids with toys and educational games, school supplies, room furniture and more.
ENTERTAINMENT:
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Full featured home theatres. Televisions, big and small. Powerful audio equipment for
your continued listening pleasure. Still and video cameras. Computer and video games
for all ages. Mobility solutions. Accessories of all kinds. Music and books through Music
World. See. Explore. Try out. Whether you are looking for something the entire family
can enjoy, or a personal gadget, we offer a wide range of home entertainment products
and consumer electronic products to complement your lifestyle and enhance your
treasured moments of leisure.
PRIVATE LABLES:
To give customers a wider range of quality products at prices that don’t pinch, we offer a
host of our own brands across food, fashion, home and entertainment. Go on … compare
and save.
Smart Choice
Fashion Brands
Other Brands
True to our brand promise - Taste the World – we offer customers over 15,000
international products across the categories of food, fashion, home and
entertainment.
Indulge yourself with some beauty or bath goodies. Spend a happy afternoon
choosing a lipstick or fragrance. Put together your own personal kit for a home facial or
spa.Gift a loved one the finest Swiss chocolates and cheeses. Whip up a gourmet Thai,
Japanese, Chinese or Italian meal – the ingredients are available at our Gourmet store,
and our Master Chef will show you how at the Spencer’s Chef Corner. Savour the wines
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presented at an in-store tasting session, and restock your cellar from our extensive range
drawn from as many as 181 countries. Pick up a stylish Beverly Hills Polo Club outfit for
yourself or dress up your little one in Ladybird, one of Europe's oldest brands in
children's clothing. Treat your child to an interactive game, outdoor activity pack, remote
controlled fun car or cuddly soft toy from Chad Valley, one of UK’s leading toy brands.
ALLIANCES:
As India’s largest retail chain, Spencer’s offers a retail trading area of more than
one and half million square feet spread across 275 stores in 50 cities. More than 4.5
million shoppers walk into our stores every month. What this translates into is an
unmatched 360° solution to promote your brand through product launches, value added
services for customers, brand activations, in-store branding and in-store promotional
activities. We even have an in-store television network that stimulates sale by
demonstrating usage through programming like cooking demos and beauty tips. Reach
the captive audience of our premium shoppers with minimum media wastage and
maximum brand visibility.
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We offer the following branding opportunities:
Spencer’s provides you a number of In-store opportunities to showcase your brands.
Choose from display screens, offer leaflets to product displays at the perfect spots.
Get in touch with consumers with our unique Outdoor opportunities. Get special
programs and media that get closest to your audience.
Spencer’s organizes regular events that its customers look forward. You can join hands
with us for Event partnerships that can mean exploring new avenues and touching new
horizons.
If you own or deal in property that satisfies the parameters given below, we’d like to
know you! Please tell us something about yourself to enable us to explore this opportunity
further.
• Market Potential Value (MPV) per capita of more than 3.0
• Catchment area has demographic profile of SEC A+
• Business potential of more than Rs 800 per sq ft and property lease rental of less than
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Rs 40 per sq ft
• Ground floor location with a car parking area or wide road in front
STORE FIXTURES:
Category Fixture
General Merchandise Gondolas of different heights
Powder-coated mild steel racks
Fashion Browsers
Gondolas with shelving or hanging arrangement
Wall fixtures with shelving or hanging arrangement, in stainless
steel or wood in single laminate shade
Electronics & Electricals,
Toys, Home Lifestyle
Gondolas with wooden or glass shelves supported on mild steel
structure
Home Linen Pigeon hole racks and low height gondolas with wooden
shelves
Books Wooden gondolas color-coded as per age groups and type of
book
Music Powder-coated steel racks in black
Fruits & Vegetables Vegetable heapers and racks
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Baked Products Wooden bread racks
Chilled & Frozen
Products
Freezers & Chillers
INFORMATION TECHNOLOGY:
Technology plays an important role in helping us react to the demands of our
customers and suppliers. We are always on the lookout for faster Point of Sale machines;
productive ERP Solutions, hi-tech monitoring CCTVs and the gamut of hardware and
software applications that can help improve operations and enhance the customer
experience.
CELEBRATIONS:
At Spencer’s, we don’t really need a reason to celebrate. Festivals - international,
national and regional – are a natural cause for us to share joyous moments with our
shoppers, as are seasons. Seasons. Opportunities to explore new cultures. Families and
each of the members in them. Be sure to drop by the next Spencer’s celebration in your
city!
WHY SPENCER’S:
Spencer’s Retail, one of India’s largest multi-format retail chain, delights an
astonishing 4.5 million customers a month by delivering on its brand promise - Taste the
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World. Since inception Spencer’s has been a consumer-centric brand, constantly
innovating, pioneering formats, evolving over time but always keeping consumer needs
and satisfaction center-stage. Back in 1920, we were the first grocery chain in India. In
1980, we became the first supermarket chain, and in 2001, we introduced India to the
joys of hypermarket shopping. Today, our network of 250+ stores covers a retail trading
area of 1 million square feet. None of this would have been possible without our people.
CHAPTER -IV
Retail Marketing Activities
In store Communications
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Out Store Communications
Sales Promotional Activities
Retail Store Locations
Branding Options in Spencer’s Hyper
THE MAJOR JOB OF RETAIL MARKETING IS COMMUNICATION.
The entire communication process in retiling are divided into two categories. They are
In store communications
Out store communications.
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INSTORE COMMUNICATIONS
In in store communications the major contributions are
POP (point of purchase) communication.
In store dropdowns
Briefing or announcements
Tag media.
What is a pop?
POP means point of purchase.
What a pop communicates is
The pop gives the communication regarding a particular SKU (stock
keeping unit).
It also communicates the features of that particular SKU.
It gives the information of price (Both MRP&CSP).
It also communicates the offer which is running on that particular SKU.
It gives the information of free offerings, price reductions.
In addition to the above it makes the customer to shop freely without the assistance of
C.S.As or sales promoters.
It educates the customers through intellectual way of shopping.
It motivates the customers to shop more than what they wanted to shop.
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In case of free offerings, BOGO (BUY 1 GET 1), BUY 3 GET 50% off on MRP, it
makes the customers think before they purchase
In this way it affects the buying behavior of customers. (i.e.) it motivates the customers
towards shopping more.
In this way the pop gives the communication of a particular SKU with its features, price
indications, the promotional activities running on that product. In Spencer’s we are
using 7 nomenclatures to club all promos. These are called markers.
THE OBJECTIVE OF THESE MARKERS:
To align look and feel in all designs.
To follow one template in one region.
DOS AND DON’TS TO THE NOMENCLATURE:
DOS:
Need to follow the enclosed templates only.
Need to follow the enclosed nomenclatures only.
All product details and “you save” etc have to be typed in by the
individual entering the promos.
DON’TS:
No new nomenclatures should be added.
No new adaptation of designs to be locally done.
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No new fixtures to be added without VM team & project team’s
approval.
THE MARKERS:
Best buy only @ Spencer’s:
This will be for category/sub category killer SKUs which will be driving foot falls to the
category/sub category.
SAVE THIS MONTH (offers of this month):
This is meant for promo SKUs being advertised for the month long offers.
The promotions we can communicate through these markers are
BUY 1 GET 1/(1+1) offers
Free offerings
Buy 2 get 40% off on MRP etc.
SAVE NOW:
This goes good with the offers of FMCG and staples with price reductions (price offs)
and the %offs on MRP
NEW at Spencer’s: This is meant for the new introductions in Spencer’s. we can also
say that it goes good to promote the exclusive merchandise which are offered in our store.
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Only@spencer’s: To promote exclusive merchandise offered in our store only this
format is applicable.
The formats should be enclosed as per the fixtures and promos.
Data strip jacket: It is in the size of 8x21 cm (A6LANDSCAPE).
This is good for using the promos like monthly offers, weekly offers, price marker
indicators
8x21 cms
PEG HOOK HOLDER LABLES:
The size of this is 39mm (Ht) x60mm (Landscape)
This is useful for price marker indication.
To communicate” save now”. Type of communication.
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The location of this can be across any categories, mainly at E&E, staples &HWPL.
UNIVERSAL CLIP:
This should be useful for indicating new arrivals,’ just in’ in Spencer’s.
FLAG SIGN HOLDERS: This is to use A4portrait/A5Portrait/landscape.
The formats look good with these flag sign holders are Best Buy, Only at Spencer’s; shelf
flags.
F&V PRICE CASTLES:
The measurements of these are 10cms (ht) x 29 cm. It suits well at F&V
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DROPDOWNS:
The dropdowns communicate the offers run in a particular season. Especially regarding
the special offers on festivals, the seasons like (summer, rainy, and winter) to
communicate our private label SKUS, to communicate HYS (Have your say).
HOW THE DROPDOWNS SHOULD BE HANGED?
The dropdowns should be at a level which is readable.
Enough dropdowns should be maintained to catch the eye of the
customers.
The dropdowns shouldn’t cover the markers of category or subcategories.
INSTORE TV SCREENS
Tag media is one of the communication tools through which the monthly offers of that
retail chain especially FMCG offers be communicated .Through TV screens at a height
watchable by the customers the advertisement of the retail chains, promotions of the
entire retail chains be communicated.
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IN STORE ANNOUNCEMENTS
One of the interior communication tools through which the weekly offers, daily offers,
festival offers be communicated.
This is all about interior communication tools of the store. In addition to the above the
communication tools like wobblers, price tags designed to a promo are also come under
the in store communication tools.
OUT STORE COMMUNICATIONS:
Print media, broadcasting through FM radios, through leaflets, flexes at the heavy traffic
roads, these come under out store communications.
LEAFLETS (PRINT MEDIA):
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A leaflet gives the brief explanation of the promotional campaign. Through the leaflets
we can give the information of price offs, free offerings, about the theme offers etc. Here
we can also give the pictorial representation of each merchandise by this the customers
can understand the promotional campaign very easily.
DRAWBACKS: The major drawbacks of this communication program me is less reach
of the message in case of paper insertion why because It passes to the people or
subscribers who reads that news paper. But incase of in store distribution it gives good
results. It also meant for local advertising in the trading area of any particular store.
PAPER ADDS:
This also comes under print media communication. It also reaches maximum number of
customers. Especially during the “MAHA SAVING DAYS” like 15th August, 26th JAN;
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on some festivals like Dussera, Pongal, Deevali, and during some seasonal offers like
winter offers, summer kool offers; rain rush offers the paper add from HO is given.
Through the paper add maximum number of customers around a particular region will
aware of the name of the store and the promotional campaign given by the retail
chain/store. This is costlier than leaflets (print media).
Before buying add space, what we should consider is;-
The number of people who has the habit of reading Newspapers.
The number of Newspapers available in the region.
The Newspaper with the largest circulation in that region.
The Newspaper which is read by our target customers
Cost of add space in that particular Newspaper.
OUTDOOR HOARDINGS:
The outdoor hoardings of size 40x40; 40x20ft create attention in the minds of the
customers regarding the promotional campaign which is running in the retail chain.
Especially besides the heavy traffic roads, near by the places of heavy pedestrian traffic
these hoardings capture the attention of people who passes through that way.
BROADCASTING :
Nowadays due to growth in number of FM channels both in cities and in rural regions it
has created a demand in the field of advertising. Due to maximum number of listeners in
a particular region it has created a lot of demand in the way of communication.
Spencer’s with 93.5SFM cam paining the promotional offers and its theme.
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VEHICLE/AUTO STICKERRING:
This is a process of communication through the moving vehicles like autos, buses.
Through this we can also communicate the promotional program. Through this we can
communicate the name of promo and its theme to the sec B and sec B+ people
.
AUTO BRANDING REGARDING THE EOSS PROMO.
Events:
Events come under both in store and out store communication tools. Here the events
might be of any specific reason oriented like August 15 th, Women’s day, Ugadi events,
Valentines Day, children’s day pongal, Christmas ect. Here the events create a joyful
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mood of shopping to the shoppers and by conducting the competitive programs and
distributing the prizes shoppers enjoy their shopping and they feel enthusiasm to shop on
that particular date by recalling the past events.
Through the events we make the customers feel happy in the journey of their shopping. It
creates a special attention and attraction to the customers.
SALES PROMOTION TOOLS & TECHNIQUES:
All techniques and tools of sales promotion are fairly simple and can be reduced
to twelve in number. Almost all promotions make use of one or more of those tools, alone
or in some carefully developed combination.
Price deals (price cuts, cents-off, denote the same thing)
Bonus packs(price packs)
Coupons
Refunds and rebates
Trade coupons
Exchange offers.
PRICE DEALS:
Price deals are probably the most commonly used promotional techniques. Price
deal for customer’s means in the price of promoted product and the customer saves
money on purchases. Such a deal is designed to stimulate the customers to try a new
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product, to encourage new users. To try an existing product, or to encourage customers to
continue product patronage, increase purchase quantity, and accelerate usage rate.
Price discounts:
A price discount can be used as an offensive as well as defensive tool. More
often discounts are offered to match or beat the competitor’s prices. when used as an
offensive weapon, the objective is to generate additional sales and increase market share
and long run profits.
Price discounts (also called cents –off deals)are communicated to
the consumers through advertising, at the point of purchase by listing the reduced price
on the package or signs near the product or window display, or by the sales people.
The price offs or discounts in specncer’s are communicated through the talkers as like.
Rs.5/- off on MRP
Save Rs.14/- on MRP
25% off on MRP.
Such promotions work very well in gaining the attention of customers,
particularly at the point of purchase (pop) among similar brands,and may also encourage
impulse buying.
Price Pack Deals:
Price pack deals also called value-packs. This may take any of the two
forms, bonus pack and banded pack. In case of bonus pack offer, an additional quantity of
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the same product is offered free when the standard pack size of the product is purchased
at a regular price.
A variation of this offer, and more commonly observed, is when the
marketer develops special packs of the product containing more quantity ,but the price is
proportionately low. For example, the regular price of a standard pack of a product is
Rs.50/- and the quantity contained in the pack is 100 gms. For the purpose of sales
promotions the company offers a special pack containing 150 gms and the price is 62/-
only.
While coming to banded pack offers two or more units of a product are
sold at a reduced price compared to the regular price. Another variation of this technique
is “BUY 1 GET 1 FREE”, or some similar offer (it could be ‘same for less’ or ‘more for
the same’. This also offers consumers the satisfaction of being “smart shoppers”.
COUPONS:
Coupons can be considered as certificates offered by retailers or manufacturers
that entitle the owner to some stated savings or claim the specified thing. Coupons bear a
date of expiry and can not be redeemed after the cut off date. Offer of a coupon is a very
versatile technique and can be used to achieve many different sales promotion objectives.
When coupons are offered by the manufacturer all the costs associated with
advertising and distributing the coupons, redeemed their face values, and paying retailers
a fee for handling ,is borne by the manufacturer. When retailers offer coupons of their
own, they have to bear all the above mentioned costs themselves. Coupons originating
from the manufacturers are redeemed at any retail shop that carries the promoted product.
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The retailers serve as the agents of the manufacturers along with their claims of
reimbursement.
Retailer-originated coupons are redeemable only at their stores. For
example a retailer with a group of chain stores. The retailer originated coupons have only
one objective, to encourage the consumer to shop at a particular store. Their interest is
not tied up with any brand or manufacturer, unless there has been an agreement with the
marketer. of some co-operative venture. In such a case the objective would be to
encourage shopping at a particular store and buy a certain manufacturer brand.
Coupons distribution:
The coupons may be distributed through
Print media(through news paper, magazines)
Direct mail
Product packages
Through retailers
Refunds or rebates:
The terms refund and rebate are used as meaning the same thing/long ago. There
is a subtle difference between these two terms. Refund is payment of money, and a rebate
as a part of the original payment for some service or merchandise. This means a refund is
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payment of total money paid for the purchase, while the rebate represents repayment of
only of part of the money paid for purchase.
Contests and sweep stakes:
These are part of interest promotion because such promotions create not
only interest but also produce excitement and enthusiasm in customers. This seems to be
quite a bit of confusion in understanding these terms. A contest (Event) requires the
participants to perform some task. For example, the participants may be required to write
a slogan, choose a name, or create a design, etc, To decide which entries are first, second
or third etc, an expert or panel of experts examines the entries and judges the winning
ones. The prizes, depending on the announced number of prizes are declared. A contest is
based on testing the skill or ability and may not involve the proof of purchase (this is
called a consideration) to enter the contests.
A sweepstakes is a random drawing and is sometimes called a chance contest.
This too many may not involve the purchase of any product or service.
In addition to the above, exchange offers, melas, free servicing also come under
promotional tools.
RETAIL STORE LOCATIONS
Considerable things for store locations
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Population and Your Customer
If you are choosing a city or state to locate your retail store, research the area thoroughly
before making a final decision. Read local papers and speak to other small businesses in
the area. Obtain location demographics from the local library, chamber of commerce or
the Census Bureau. Any of these sources should have information on the area's
population, income and age. You know who your customers are, so make sure you find a
location where your customers live, work and shop.
Accessibility, Visibility and Traffic: Don't confuse a lot of traffic for a lot
of customers. Retailers want to be located where there are many shoppers but only
if that shopper meets the definition of their target market. Small retail stores may
benefit from the traffic of nearby larger stores.
How many people walk or drive past the location.
Is the area served by public transportation?
Can customers and delivery trucks easily get in and out of the parking lot?
Is there adequate parking?
Depending on the type of business, it would be wise to have somewhere between 5 to 8
parking spaces per 1,000 square feet of retail space.
When considering visibility, look at the location from the customer's view point. Can the
store be seen from the main flow of traffic? Will your sign be easily seen? In many cases,
the better visibility your retail store has, the less advertising needed. A specialty retail
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store located six miles out of town in a free standing building will need more marketing
than a shopping store located in a mall.
Signage, Zoning and Planning: Before signing a lease, be sure you
understand all the rules, policies and procedures related to your retail store
location. Contact the local city hall and zoning commission for information on
regulations regarding signage. Ask about any restrictions that may affect your
retail operation and any future planning that could change traffic, such as highway
construction.
Competition and Neighbors: Other area businesses in your prospective
location can actually help or hurt your retail shop. Determine if the types of
businesses nearby are compatible you're your store. For example, a high-end
fashion boutique may not be successful next door to a discount variety store.
Place it next to a nail or hair salon and it may do much more business.
Location Costs: Besides the base rent, consider all costs involved when
choosing a retail store location.
Who pays for lawn care, building maintenance, utilities and security?
Who pays for the upkeep and repair of the heating/air units?
If the location is remote, how much additional marketing will it take for
customers to find you?
How much is the average utility bill?
Will you need to make any repairs, do any painting or remodeling to have the
location fit your needs?
Will the retailer be responsible for property taxes?
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The location you can afford now and what you can afford in the future should vary. It is
difficult to create sales projects on a new business, but one way to get help in determining
how much rent you can pay is to find out what sales similar retail businesses are making
and how much rent they're paying.
Special Considerations
Your retail shop may require special considerations. Make a list of any unique
characteristic of your business that may need to be addressed.
Will the store require special lighting, fixtures or other hardware installed?
Are restrooms for staff and customers available?
Is there adequate fire and police protection for the area?
Is there sanitation service available?
Does the parking lot and building exterior have adequate lighting?
Does the building have a canopy that provides shelter if raining?
What is the crime rate in the area?
Are there (blue laws) restrictions on Sunday sales?
Don't feel rushed into making a decision on where to put your retail store. Take your
time, research the area and have patience. If you have to change your schedule and push
back the date of the store's opening, than do so. Waiting to find the perfect store location
is better than just settling for the first place that comes along. The wrong location choice
could be devastating to your retail business.
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IMPORTANCE OF STORE LOCATIONS
Locating the retail store in the right place was considered to be adequate for success.
Over the years, with the advent of non-store retailing and the increase in web base retail,
merely choosing the right location is not adequate. However, the retail location is an
important part of the retail strategy, as the location of the store conveys a fair amount of
the image; it also influences the merchandise mix and the interior layout of the store.
While a retailer can change his merchandise mix, adjust prices, improve
communication with consumers and offer better service, once a store comes into
existence it is fairly difficult to change the location, moving from one location to another
may result in the loss of customers and employees, moreover, the new location may not
always have the benefits of the earlier one.
TYPES OF RETAIL LOCATIONS
Typically a store location may be a
1) Freestanding/isolated store,
2) Part of a business district, or
3) Part of a shopping center
1.Isolated store or a freestanding location
A freestanding location is a store located along a major traffic artery, without any
other competitive Retailers around. The biggest advantage of such a location is that there
is no competition around. Due to this, rents are usually low and facilities like ample
parking are available.
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2.Part of a business district
a retail store can also be located as a part of a business district. a business district is the
place of commerce in a city, which developed historically as the centre of trade and
commerce in the city.
It is characterized by peak land rates and intense developments.
3.Part of a shopping centre
a shopping centre has been defined by the international council of shopping centers as,
a group of retail and other commercial establishments that is planned, developed, owned
and managed as a single property. The availability of parking is an important feature of a
shopping centre.
STEPS INVOLVED IN CHOOSING A RETAIL LOCATION
In order to arrive at the decision on where to locate the retail store, a retailer needs to
first decide on the region that he wants to locate the store.
Identifies the market in which to locate the store.
Evaluate the demand and supplies within that market, i.e determine the market
potential.
Identify the most attractive sites.
Select the best site available.
Step1: Market identification
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The first step in arriving at a decision on retail location is to identify the market’s
attractiveness to a retailer.
Step 2: Determining the market potential
In order to determine the market potential, the retailer needs to take into consideration
various elements. The chief among them are
a) Demographic features of the population
Understanding the features of the population is integral to developing a retail
marketing strategy. Data on population, size of the population, gender, educational
back ground, economic back ground, and life styles are considerable things here.
b) The characteristics of the households in the area:
The retailer needs to have a clear idea about the average household income and the
distribution of this income in the area. This is very essentials the level of income
largely determines the kind of retail facilities required.
c) Competition and compatibility
While determining the market potential, it is necessary to check the compatibility of
the retail store with the other retail outlets in an area.
While it is necessary to check the level of compatibility, it is also necessary to do an
analysis of who the competition is in the proposed area.
d) Trade area analysis
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A trade area is the geographic area that generates the majority of the customers for
the store. Knowing the boundaries of the trade area helps the retailer estimate the
number of potential customers that may patronize the store.
Steps3 &4 Identify alternate sites and select the site
After having determined the market potential and taking a decision on the location of the
store, a retailer has to select the site to locate the store.
a) Traffic
This refers to both pedestrian and vehicular traffic. The traffic that store.
However, it is essential that the traffic is suitable to the kind of products to be
retailed in the store for example; the kind of traffic required by a retailer of high
fashion garments is different from the kind of traffic that may be needed for a
hyper market.
b) Accessibility of the market is also a key factor
Accessibility of the market is defined in terms of availability of public transport
and road/local train connections to the market
c) The total number of stores and the type of stores that exist in the area
A market with a large number of stores usually has more people visiting the area than
locations where only one or two stores exist. The type of stores that exist in the area is
also equally important.
BRANDING OPTIONS IN SPENCER’S HYPER
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BASKET BRANDING
2 way branding of basket
PURPOSE: - 1 To make the customers recall of the brand name Spencer’s
2 To increase the brand loyalty of the store.
TROLLEY BRANDING
3-way branding of shopping carts.
PURPOSE:-
1 It also useful for improve the brand name Spencer’s.
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2 It is useful for providing other income to the store by offering
the manufacture brands for their advertising.
RETAIL TELEVISION NET WORK
PURPOSE:- To advertise Spencer’s brands, formats, Private labels, monthly promo
FMCG offers.
CEILING DROPDOWN
PURPOSE: - To communicate promotions on season based, to
communicate the offers on private labels.
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CHAPTER-V
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Questionnaire
Summary
Observations or findings in the store
Suggestions
ANNEXURE
SPENCER’S HYPER MARKET
kakinada
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NAME REG. NO
ADDRESS CELL. NO
QUESTIONNAIRE
1. How do you feel the offers given by Spencer’s?
1) Satisfactory
2) Happy
3) Not bad
4) No comment
2. Do you feel that Spencer’s is better than other formats in Kakinada ?
1) NO
2) May be
3) Yes
4) No comment
3. How do you feel the prices offered by Spencer’s? When compared to others?
1) High
2) Better
3) Reasonable
4) No comment
4 why do you choose to visit this store?
1) Good ambiance
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2) Product availability
3) Good customer service
4) All the above
5 Do you feel the communication given through pop is comfortable?
1) Yes 2) No
6 Are you satisfied with the customer service?
1) Yes
2) No
3) Not bad
4) Satisfactory
7. Is the location is comfortable to come?
1) Yes
2) No
8. Do you think that Spencer’s has provided all quality products?
1) Yes
2) No
3) Not bad
4) Satisfactory
9. Do you know about hara bhara offer on F&V on every Wednesday?
1) No communication
2) No
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3) Yes
4) No answer
10. How the sales men responses after you enter the store?
1) Good
2) Not available many times
3) Good response after asking sales people
1. How do you feel the offers given by Spencer’s?
Response No. of respondents N=160
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S.NO
1 Satisfactory 32
2 Happy 64
3 Not bad 48
4 No comment 16
INTERPRETATION: From the above analysis we can conclude that 40% of the customers feel happy with the offers given by Spencer’s; 20% of the customers feel that they are satisfactory with the offers. In the same way 30% of the customers feel that the offers are not bad. .
2. Do you feel that Spencer’s is better than other formats in Vijayawada?
S.NO Response No. of respondents N=160
1 No 32
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2 May be 64
3 Yes 48
4 No comment 16
INTERPRETATION: From the above analysis we can conclude that 20% of the customers did not agree Spencer’s format is better when compared to other formats. 40% of the customers feel that Spencer’s may be better than other formats. In the same way 30% of the customers say yes to the format. And from 10% no comment was given.
3. How do you feel the prices offered by Spencer’s? When compared to others?
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S.NO Response No of respondents N= 160
1 High 77
2 Better 45
3 Reasonable 19
4 No comment 19
INTERPRETATION: From the above analysis we can conclude that 48% of the respondents feel that the prices are very high;12% feel reasonable ; 28%feel that better;12%of customers did not comment.
4 why do you choose to visit this store?
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S. no ResponseNumber of respondents N=160
1 Good ambiance 19
2 product availability 35
3Good customer Service 28
4 All above 78
INTERPRETATION: From the above analysis we can conclude that 12% of the customers are coming to Spencer’s for the sake of good ambiance.22% for the sake of product availability. And 18% of the customers satisfied with the customer service. And finally 48% liked all options.
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5 Do you feel the communication given through pop is comfortable?
S. no Response Number of responding N=160
1 Yes 128
2 No 32
INTERPRETATION: From the above analysis 80% of the customers feel happy with the communication given through POP is clear.20%of the customers feel that the communication is not clear.
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6 Are you satisfied with the customer service?
S. no Response Number of respondents N=160
1 Yes 90
2 No 19
3 Not bad 36
4 Improved 15
INTERPRETATION: From the above analysis 56% of customers feel happy with the service.12% of customers feel unhappy.22% customers feel some what satisfied. And 10% of the customers feel that services should be improved.
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7. Is the location is comfortable to come?
S .no Responsenumber of responding N=160
1 Yes 160
2 No 0
INTERPRETATION: From the above analysis we can come to a conclusion that customers feel happy with the store location.
8. Do you think that Spencer’s has provided all quality products?
S.NO Response No of respondents N=160
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1 Yes 96
2 NO 13
3 Not bad 19
4 Satisfactory 32
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INTERPRETATION: From the above analysis we can conclude that 60%o the customers feel happy with the quality of offerings.20%feel satisfactory.8% didn’t agree with quality.12% feel that not bad.
9 .Do you know about hara bhara offer on F&V on every Wednesday?
S. no Response number of responding N=160
1 No communication 33
2 No 44
3 Yes 71
4 No answer 12
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INTERPRETATION: From the above conclusion 21% feel that there is no proper communication they got.28%said that they don’t know.43% said that they knew. From 8% no comment.
10. How the sales men responses after you enter the store?
S. no ResponseNumber of responding
N=160
1 Good 96
2 Not available many times 25
3Good response after asking the
products 39
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INTERPRETATION: From the above we can come to a conclusion that 60% of customers feel happy with the response from the sales people.16% feel that they are not available.24% feel that they got good response after they asked.
SUMMARY/CONCLUSION
From the above analysis we can conclude the following.
Customers feel happy with the offers given by spencer’s.
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Spencer’s customers feel that the format is better than other formats in Kakinada. Some customers felt that some formats are better than spencer’s in kakinada.
Spencer’s customers feel that the prices of some items like staples are high. From this we can conclude that Kakinada customers are price sensitive.
Due to the reasons like good ambiance, good customer service, good assortment the customers are selecting the store to visit.
Maximum no of customers feel happy with the communication given through POP is comfortable.
Although customers feel happy with the customer service, some customers giving suggestions to improve the present services.
From the above analysis we can conclude that customers feel happy with the present location.
Customers in Kakinada satisfied with the quality offered by spencer’s.
Although the communication about Hara bhara offer is sufficient, it should be increased so as get maximum response from customers.
Customers feel happy with the c.s.a s response in the floor.
OBSERVATIONS IN THE SPENCER’S HYPER MARKET AT
KAKINADA
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Spencer’s hyper market is located near by the Srinivasa theatre .
The hyper market has a trading area of 19,254 sq. ft.
The store is located beside the Pitapuram Road .So it is a convenient to the
customers who comes from distant places through four wheelers.
Near the store there is a junction which allows the customers to reach from four
corners of the junction.
The store has adequate parking facility (For nearly 25 four wheelers at a time
under the ground floor of the store.
The store is surrounded by the no of employee colonies like LIC, Dairy, Gazetted,
which is a boon the location.
The availability of wide assortment under one roof of store is attracting the
maximum number of customers and creating a great shopping experience to them.
The ambiance of the store is very good in attracting and creating a great shopping
experience to customers.
The assortment(categories)in the store are
1.Fashion(garments),2.staples,3.FMCG,4.HWPFL(Home,work,play,lenin,furnitur
e),4.F&V(Fruits and vegetables) and E&E(Electricals and electronics).
In addition to wide assortment wide range in each product category is another
attraction in Spencer’s hyper market.
In addition to the offerings of Spencer’s the offerings of the sis (store in stores) is
a attracting the customers and making them habituated to a particular sis.
The quality of the products like staples, F&V and food section in FMCG is
making the customers loyal to the store.
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On the brand name of Spencer’s smart choice and Right value with small price
variations Spencer’s satisfies the needs of the each segment of people.
Availability of private label brands in Spencer’s which are competing the
manufacturer brands are also satisfying the customers who are price sensitive and
quality preferred.
The marketing activities (In store &out store communications) making the
customers to shop at Spencer’s. In this way the marketing activities succeeded in
raising the number of walk-ins of store.
The In-store communications like POP, In-store drop downs, In - store leaflet
distribution, In - store announcements making the customers impulse buying. In
this way the marketing team is succeeded in giving proper communication.
The out store communications like paper insertions, paper adds, outdoor
hoardings, auto branding, through broadcasting, FM radios, reaching the
customers and it affects the customers towards shopping.
By offering trolley branding, pillar branding, wall branding, sis(store in
stores/concessionaries) the marketing department provides other income to the
store.
Through the aisle promotions for new products also the store is providing the
other income to the store.
The Harra Bharra offer for fresh fruits and vegetables on every Wednesday
providing fruits and vegetables at lower prices to the customers.
During the promotional campaign the dropdowns, wobblers, flexile banners
creating brand loyalty to the store.
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The customer service in Spencer’s in the exchange of merchandise, free home
delivery, HYS (Have your say) causing the customer delight.
Suggestions:
The customers of Spencer’s feel unhappy with the updated items like cool drinks,
some food items in the store which are offering through promotions. So, before
offering those items care should be taken.
Customers at store especially on weekends feel unhappy at the check-out point.
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Some customers feel unhappy with the updated packets in staples. So, before
stocking the merchandise the packs should be verified.
Some customers feel unhappy with the way of bagging done by the bagging
people of the store.
Customers feel unhappy with the terms and of any promotion campaign.
Sometimes it makes the angry of the people.
Sometimes the offers communicated through leaflets making customers unhappy
because the offers in the leaflets are not coming in the cast till.
Some customers feel unhappy because of the location of the store. So the
communication should be given in a proper way to avoid confusion in customers.
The unavailability of C.S.As and C.S.S s making the customers unhappy.
The communication through signage is not properly going in the minds of the
customers. So the marketing team should take care of giving the proper signage.
Customer service in the store to implemented to get maximum satisfaction levels
from the customers.
BIBLOGRAPHY
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RETAIL MARKETING BY LEVI & WEITZ.
MARKETING MANAGEMENT BY PHILIP KOTLER & KELVIN LANE KILLER
SALES PROMOTION & ADVERTISING BY S.H KHAZMI.
Websites
www.rpggroup.com
www.spencer’sreatail.com
www.imagesretail.com
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