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Term paper of Retail strategy & Formats

Submittedto Lovely Professional University

Opening a sports Retail Outlet

Just Play (Power In Hands)

Submitted by:

Name of Student: Ishan Sood

Registration No.: 3020060015

Roll No.: R1601A23

Supervisor:

Name of the Faculty Advisor:

Mr. Rajan Girdhar

Designation: Lecturer

DEPARTMENT OF MANAGEMENTLOVELY PROFESSIONAL UNIVERSITY

PHAGWARA

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Sports Goods IndustryBackground

The sports goods industry of India has its roots in Sialkot, Pakistan. When India was

partitioned in 1947, many of Sialkot's skilled Hindu craftsmen migrated across the

border into Punjab, settling in Jalandhar, where the Indian sports goods industry is

now based. The Indian sports goods industry has expanded to include the areas of

Meerut, (Uttar Pradesh) and Gurgaon, (Haryana). Most of India's sports goods are

exported to the United Kingdom, The United States of America, Germany, France

and Australia. The industry is mainly concentrated in Jalandhar and Meerut.

The sports goods industry in India has witnessed a phenomenal growth over the

past five decades and now occupies a place of prominence in the Indian economy

in view of its massive potential for employment, growth and export. There has

been an increasing emphasis on its planned development, aimed at optimal

utilization of resources for maximizing the returns, particularly from exports.

The Indian sports goods industry manufactures 318 items. However, major items

that are exported are inflatable balls, hockey sticks and balls, cricket bats and

balls, boxing equipment, fishing equipment, indoor games like carrom and chess

boards and different kinds of protective equipment. The Indian sports goods

industry is a highly labour intensive industry which provides employment to the

weaker sections of society and also employs a large number of women.

Sports goods industry of Jalandhar

Jalandhar acquired importance during the Mughal period. Twelve Muslim bastis (clusters of

houses) came into existence including Basti Danishmanda, Basti Guzan and Basti Nau, which

are now dominant centers of the sports goods industry. Basti Nau has one of the biggest sports

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goods markets as well.

Jalandhar ranks second in India in the rate of urbanization and have the highest density of

population at 598 persons per square km, as per the 1991 census. The reason for this is growing

industrialization. Industrial production of sports goods began on a small scale during the lateforties. Over the years, the sports goods industry has grown at an impressive rate and of late

Indian sports goods are also exported to different countries. Rough estimates suggest that today

Jalandhar has more than one hundred major industries and about 20,000 small-scale industries

with a most conservative estimate of an annual turnover of approximately Rs 450 crores.

In Jalandhar, about 60 per cent of the sports goods that are manufactured comprise of different

kinds of inflatable balls. Besides inflatable balls, the other sports goods that are largely

manufactured are badminton racquets and shuttle cocks, cricket bats and balls, different kinds

of gloves and protective equipment.

In Jalandhar, three kinds of establishments are usually found:

i. Big establishments: These are generally geared to exports besides catering to the

domestic market.

ii. Small establishments: These usually manufacture sports goods for the domestic market.

Both the big establishments as well as the small establishments are registered either

under the Factories Act, 1948, or under the Shops and Establishment Act of the state of

Punjab.

iii. The unregistered units: These are found particularly in the urban pockets of Jalandhar.

These units are mostly small home-based units which are usually run by the family

members, but at times with the help of a couple of hired employees. These units do not

have a direct access to market. It has been seen that many a times when the big

establishments - especially exporters - are not able to cope with large orders from their

foreign clients, distribute a share of the production to these small unregistered, home-

based units.

Industrial production of sports goods began on a small scale during the late forties. Overthe years, thesports goods industry has grown at an impressive rate and of late, Indian

sports goods are also exported to different countries. Rough estimates suggest that today

Jalandhar has more than one hundred industries and about 20,000 small-scale industries

with a most conservative estimate of turnover of approximately Rs 450 crores.

Main Sporting Goods

http://www.sporting-goods-industry.com/manufacturing-region-india/jalandhar-spoting-goods-manufacturing.htmlhttp://www.sporting-goods-industry.com/manufacturing-region-india/jalandhar-spoting-goods-manufacturing.htmlhttp://www.sporting-goods-industry.com/manufacturing-region-india/jalandhar-spoting-goods-manufacturing.html

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Inflatable Balls

Badminton racquets

Shuttle Cocks

Cricket Bats

Cricket Balls

Gloves Protective Gear/ equipment.

Open a sports Store

By this I will open new business that gives me the freedom to make my own decisions and

express my creative spirit throughout my experience.I will decide on the store's concept, design,

and ambiance creating an inviting atmosphere where my customers can enjoy

a memorable shopping experience. I choose a store that carries a line of popular products, or a

shop that sells all the leading brands.

Company profile

Name of retail store: Just play

Tag line: Power in your hands

Web site: www.justplay.com

Ground work that I think is important before starting my business

Deciding what kind of store format.

Search the available brands in market.

Choosing a name and signage for my store.

Make budget for the store.

Allocation of budget for each department.

Information about the different legal structures for businesses and the advantages and

disadvantages of each.

How much space (square footage) I need for my store.

Choosing a location for my store, including information about permits and leases or rent.

http://www.sporting-goods-industry.com/manufacturing-region-india/jalandhar-spoting-goods-manufacturing.htmlhttp://www.justplay.com/http://www.sporting-goods-industry.com/manufacturing-region-india/jalandhar-spoting-goods-manufacturing.htmlhttp://www.justplay.com/

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Creating the interior design of my store with tips on how to display items to show

availability.

Information on the types of licenses and insurance I will need to insure my products.

Display fixtures, merchandise to be offered. E.g. Bats, Balls, badminton rackets etc.

Location

My store is based in Basti Nau market. This is the sports market in Jalandhar & the biggest

market in Asia. I will take a shop of 20*50 sq feet of shop on rent bases. The theme of store is

totally sports oriented & different athletes are showed on walls.

Process I will follow at my store:

1. First choose a company / business name and register it with your local registrar office. The

name of my company is Just Play.

2. Apply for TIN number.

3. Apply for Business (Current) Account with your local bank

4. Find out the contacts of the distributors in my area

5. Setup Reseller / Dealer account with the distributor

6. Buy the products from your distributor and sell in your store

7. Take the profit

Problems I may face in Managing my Store

How to develop effective systems for my operations.

How to set right prices.

Modes of accepting payments from customers.

Theft prevention techniques. Ways to attract customers through advertising and low cost publicity

Increasing sales with effective customer relations, including how to get repeat business

How to handle difficult customers

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Format That I will choose for my store

Category killers: Small specialty stores have expanded to offer a range of categories. They have

widened their vision in terms of the number of categories. They are called category killers as

they specialize in their fields.

My ownership plan and to why I have chosen that only

Sole Proprietorship as a Business Structure

sole proprietorship is a business which has only one owner. It is a "sole" proprietor in the sense

that the owner has no partners. A sole proprietorship essentially means a person does business in

his own name and there is only one owner. A sole proprietorship is not a corporation, it does not

pay corporate taxes, but rather the person who organized the business pays personal income

taxes on the profits, making accounting much simpler.

Reasons to why I will chose this ownership format

1. A sole proprietorship has an authority to hire any number of employees because the law

makes no distinction between you, the sole proprietor, and the business. Sole

proprietorship has also an authority to hire independent contractors of their own choice.

2. Corporations are considered as separate entities consisting of many partners or owners.

As a result the corporation owners will pay tax on their individual income and the

corporation will pay tax on any profits made by the company. As a sole proprietor, you

will not pay double tax on your business income because the law makes no difference

between you, the sole proprietor, and your sole proprietorship and the business income is

treated as your personal income.

3. The second tax advantage of sole proprietorships is that you can deduct your business

losses to the extent of your total income that you may have from all sources, including

interest, dividends, and profits.

4. No sharing of profits.

5. Quick decision making.

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6. As my business is small in this phase so I can manage it easily so I dont need anyone

with me to manage it properly.

Competitors

Some major players in this sector are:

I. Organized Showrooms

II. Local players

III. Belco

IV. Free will(nivia)

V. Soccer

VI. Spartan

VII. Beat all sports

VIII. Ranson sports

IX. Leisure exports

X. Sports hub

These are the leading manufacturing houses in all over in India & having a large production

house in Jalandhar.

Opportunities for Sports sector in India

1) Demand Side - Demand for sports goods is very high in INDIA. The Indian consumer is

extremely value conscious.

2) Real estate availability and cost - Rentals account for 7-7.5% of the total costs for

organized retail in India against global benchmarks of less than 3%. Real estate

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availability and costs will continue to remain a challenge in the retail industry with

factors like adequate parking, ambience and proximity being the key drivers of footfalls.

3) Manpower availability - As organized retail expands, there is expected to be a dearth of

skilled manpower. The lack of institutions and courses for different aspects of retail

management will have an impact on the overall supply of quality manpower

Target market

My target market will be all the sports persons. I will focus on the age group 15-35. We cant

neglect youngster because most of my customers belongs to this age group.

Marketing Mix of my store:

Product

Product refers to the goods and services offered to my customers. Apart from the physical

product itself, there are elements associated with product that customers may be attracted to,

such as the way it is packaged. Other product attributes include quality, features, options,

services, warranties, and brand name. Products appearance, function, and support make up what

the customer is actually buying. Successful managers pay close attention to the needs their

product bundles address for customers.

I will offer

Basket balls

Soccer balls

Tennis

Bat

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Balls

Badminton

Tennis rackets

Hockey sticks Hand balls

Leather balls

Footballs

Volley balls

Baseball bats

PricePrice refers to how much to charge for products. Determining products price can be tricky and

even frightening. The different pricing methods which are commonly used are cost plus,

skimming, penetration pricing, discrimination pricing etc.

But I will use the penetration pricing as it will help me to make market for my product. Prices are

fixed. Penetration prices give us platform to build our market & goodwill. This also helps us to

capture more market share. This can be our competitive advantage.

Place

My store is based in Basti Nau market because this is the sports market in Jalandhar and there is

more scope in that area. All the sports shops & showrooms are situated in that area. By choosing

this market there I get a pool of customers because customers are aware about this market &

comes automatically for shopping of their sports goods.

I will also go for e-taling. I will make a website of my store with name justplay.com. By going

for this I can capture more customers. Because now a days before going for shopping customer

search for data on internet. While going for this topic I found very less data available on internet.

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Only very few stores have their presence on internet so this will not target the customers of

Jalandhar but also target potential customer outside Jalandhar.

Now a days making a website is not a costly task. Even a small retailer can go for virtual store.

This will also help in repeat purchase.

PromotionPromotion refers to the advertising and selling part of marketing. It is how I let people know

what Ive got for sale. The purpose of promotion is to get people to understand what my product

is, what they can use it for, and why they should want it. I want the customers who are looking

for a product to know that your product satisfies their needs. To be effective, my promotional

efforts should contain a clear message targeted to a specific audience reached via an appropriate

channel. My target audience will be the people who use or influence the purchase of your

product. I should focus on market research efforts on identifying these individuals. My message

must be consistent with my overall marketing image to get my target audiences attention, and

elicit the response you desire, whether it is to purchase my product or to form an opinion. The

channel I will select for my message will likely involve use of a few key marketing channels.

Promotion may involve advertising, public relations, personal selling, and sales promotions. A

key channel is advertising.

Advertising methods that I will use to promote my product includes the

following:

Radio: Radio advertisements are relatively inexpensive ways to inform potential local

customers about your business. Mid-to-late week is generally the best time to run your radio ad.

As we all know that radio is very effective tool to promote the product basically in Jalandhar.

Print: Direct mail and printed materials, including newspapers, consumer and trade magazines,

flyers, allow me to explain what, when, where, and why people should buy from me.

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Electronic: Company Web sites provide useful information to attract consumers and clients.

Advertisements allow broad promotion of products. Direct e-mail contact is possible if data is

collected detailed customer information.

Word of Mouth: Word of mouth depends on satisfied customers (or dissatisfied customers)

telling their acquaintances about the effectiveness of your products.

Note: While deciding the promotion mix for my store I will include all these sources so that I

can reach to a maximum number of customers.

I will also try to target schools & colleges. A promotion campaign is organized to promote theretail store. A contract is made for interested customers (school & colleges) & a discount of 10-

20% is given. Schools & colleges have great potential & regularly need sports goods. While

doing promotional campaign a special discount of 10% is given to school & college students.

All these efforts are done only for promotion of retail store. Because if once we are wellrecognized for low prices than we will definitely get repeat purchase. Low prices can be our

competitive advantage over competitors.

Web Site for sale of goods:I will make a web site of my store and make the shopping option

available over there as well. There it will be easy for me to provide ample information of each

and every good I have. I will charge some extra money in the form of delivery charges otherwise

the price of my goods will be same as they are in my store. By this the reach of my store will

increase to more customers as who are staying at distant places and cannot come to my store

easily.

Hiring the right human resource for my store

In hiring my employees I will be highly serious as they are a driving force for the sales for any

store.I will hire the below mentioned employees:

Designation Work profile Salary(annual bases)

One store manger To mange store 1,50,000

One sales executive For field work (will visit in school,

colleges, institutes, sports club)

1,20,000

Two assistant Who will directly handle the

customer

90,000

One housekeeping boy 24000

One security guard 30,000

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My employees should have following skills

He should know how to behave with their customers and talk to them.

He should be able to understand need of customer.

He should be fast learner & self starter.

He should have good communication & influencing power.

He should be well dressed while they are in store.

For this I may take help of some small recruitment agencies in town.

Based on customers feedback I will give rewards to sales man of the

month. This will motivate all employees to entertain customers in best

possible extent.

Competitive advantages

1. Low price

2. Skilled sales force

3. Location

4. Electronic channel

Budget for opening my store

The total budget is of 17 lakhs. 10 lakhs is fixed capital & 5 lakh is working capital.

Allocation of budget

Product merchandise 5.5 lacs

store design & ambience 2 lacs

Promotional campaign(for 1 year) 1 lacs

Sales force & training 4.25 lacs

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Rent (yaerly bases) 1 lacs

Cash in hand (working capital) 2.75 lacs

Electronic channel(yearly basis) .50lacs

Initial product merchandise will be of total 10 lakhs. In which 5.5 lakhs on cash &

4.5 lakh on credit. Every manufacturer give me a credit of 15-30 days.

Note: .50 lacs include formation of website & promotion on yahoo.

Business model

I will prefer brick & mortar and electronic channel both. This mix of business model gives a

competitive edge over competitors. If we have both type of presence in market this will

definitely help me to capture more & more target customers & capture more market share.

References

http://www.sporting-goods-industry.com/manufacturing-region-india/jalandhar-spoting-goods-

manufacturing.html

http://jalandhar.nic.in/html/sports_goods_industry.htm

http://www.sporting-goods-industry.com/manufacturing-region-india/jalandhar-spoting-goods-manufacturing.htmlhttp://www.sporting-goods-industry.com/manufacturing-region-india/jalandhar-spoting-goods-manufacturing.htmlhttp://jalandhar.nic.in/html/sports_goods_industry.htmhttp://www.sporting-goods-industry.com/manufacturing-region-india/jalandhar-spoting-goods-manufacturing.htmlhttp://www.sporting-goods-industry.com/manufacturing-region-india/jalandhar-spoting-goods-manufacturing.htmlhttp://jalandhar.nic.in/html/sports_goods_industry.htm