Sarita Project

8/8/2019 Sarita Project

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G. L.BAJAJ INSTITUTE OF MANAGEMENT AND RASEARCH

INTRODUCTION

Overview of RPG Group

RPG Enterprises, established in 1979, is one of Indias fastest growing business groups with a

turnover touching USD $3 billion. The group has more than twenty companies managing diverse

business interests in the areas ofPower, Transmission, Technology, Retail and

Entertainment.

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

RPGs business ethics promote higher levels of excellence. The groups values of Customer

Sovereignty, People Orientation, Innovation & Entrepreneurship, Transparency & Integrity, and

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.


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OBJECTIVES OF THE STUDY

This project is based on the comparative study of consumer behavior towards Brand awareness

of Spencers and its comparative analysis with Big Bazaar & other retail organizations in

Lucknow city. Objectives of the study are:

To study about the Brand awareness of Spencers.

To analyze the organized retailers profitability drivers on the basis of Garments,

Gifts, Cards & Music Department.

SCOPEOFTHESTUDY

As learning is a human activity and is as natural, as breathing. Despite of the fact that learning is

all pervasive in our lives, psychologists do not agree on how learning takes place. How

individuals learn is a matter of interest to marketers. They want to teach retailers in their roles as

their roles as consumers. They want retailers to learn about their products, product attributes,

potential consumers benefit, how to use, maintain or even dispose of the product and new ways

of behaving that will satisfy not only the consumers needs, but the marketers objectives.

The scope of my study restricts itself to the Brand awareness of Spencers and its comparative

analysis with Big Bazaar & other retail organizations in Lucknow city. The scope of my study is

also restricts itself to Lucknow city only. The scope of my study restricts itself to analyze the

organized retailers profitability drivers on the basis of Garments, Gifts, Cards & Music

Department where as in the recent trend it's seen that the key players in retail industry are more

emphasizing on the Garments, Personal grooming, Home furnishings, Life style and footwear

Department in their Stores.


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LITERATURE REVIEW

Spencer's retail is the largest supermarket chain in India. They offer a complete range of

products & durables, from bread to bed cover; from toothpaste to even television sets. Today

Spencer's has 100 stores spread across 25 cities with a retail trading area of more than half a

million square feet, and we're growing rapidly. Spencer's is the shopping choice for millions

across the country, 2.8 million to be exact, who frequent our stores every month.

Today Spencer's offers its customers a customized and convenient shopping experience in 5

different formats. Each format, namely the Spencer's Express, Spencer's Fresh, Spencer's Daily,

Spencer's Super and Spencer's Hyper is differently sized and caters to the various needs of ourconsumers. We at Spencer's offer a pleasant and delightful shopping experience by ensuring

convenient store locations, trusted quality, great value for money and a wide array of products.

And these qualities characterize all of our 100 stores, across the country.

The scope of my study restricts itself to the Brand awareness of Spencers and its comparative

analysis with Big Bazaar & other retail organizations in Lucknow city. The scope of my study is

also restricts itself to Lucknow city only. The scope of my study restricts itself to analyze the

organized retailers profitability drivers on the basis of Garments, Gifts, Cards & Music

Department where as in the recent trend it's seen that the key players in retail industry are more

emphasizing on the Garments, Personal grooming, Home furnishings, Life style and footwear

Department in their Stores.


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COMPANY PROFILE

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). 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 Goenkas 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


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Management Board

The Management Board comprises of highly qualified and experienced professionals from

different business areas.


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About RPG

RPG Enterprisesis not only one of the biggest, but also one of the most respected names in the

industry. A US$ 3.4 billion business conglomerate, RPG is one of the powerhouses that drive

Indian Industry. With more than 20 companies, it spans 7 business sectors, Retail, Technology,

Entertainment, Power, Transmission, Tyres and Specialties- all under the RPG banner. Even with

such a diverse portfolio, the fact that RPG Enterprises has had nothing but only unrivalled

success in all these sectors, speak very highly of the efficiency and vision with which the

company is run. Over the years RPG Enterprises has built a huge reservoir of trust and goodwill

among the people of India. People at Spencers are truly proud to be a part of the RPG .

Their Heritage

Spencers quality is a time-tested phrase, which has been ingrained in the minds of the Indian

consumer for over 100 years now. And it still continues to evoke a warm aura of trust and

goodness. In 1863, since we first opened our gates to the Indian consumer, we have like all

successful businesses, re-invented ourselves with the times. But our endeavor, by which we still

stand firm, has always been to provide a pleasant and delightful shopping experience for you, our

valued customer. As RPG, when we took over Spencers, we pioneered the retail revolution in

India, by introducing the concept of specialty stores like Food World, Health and Glow and

Music World. And this pioneering spirit still burns strong. We feel proud to share the fact that in

2000, we introduced the Indian consumer to the first ever Hypermarket.


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RPG Values

Customer Sovereignty

People Orientation

Innovation and Entrepreneurship

Transparency and Integrity

Anticipation, Speed and Flexibility

Passion for Superior Performance

Customer Challenges

Enable rapid business expansion

Improve performance

Add room for growth

Ensure IT systems' availability

Solution

Spencer's Retail based its production environment on Sun SPARC Enterprise servers that run

SAP ERP software. The infrastructure includes Sun storage solutions and a remote disasterrecovery site with Sun SPARC Enterprise and Sun Fire servers. When implementation is

complete, more than 350 stores will connect to the new system.


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Business Results

Improved performance

Increased scalability

Ensured IT systems' availability

Reduced space and power requirements


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Technology in Retail: The ERP Initiative at Spencer's Retail Ltd.

Over the years, during the turn of twentieth century as the consumer demand increased and the

retailers geared up to meet this increase world over, technology evolved rapidly to support this

growth. The hardware and software tools that have now become almost essential for retailing can

be classified into 3 broad categories:

Customer Interfacing Systems

y Bar Coding and Scanners

Point of Sale (POS) systems use scanners and bar coding to identify an item, use pre-

stored data to calculate the cost and generate the total bill for a client.

y Payment

Payment through credit cards has become quite widespread and this enables a fast and

easy payment process. Electronic cheque conversion, a recent development in this area,

processes a cheque electronically by transmitting transaction information to the retailer

and consumer's bank.

y Internet

Internet is also rapidly evolving as a customer interface, removing the need of a customer

physically visiting the store.

Operation Support Systems

y ERP System

Various Enterprise Resource Planning (ERP) vendors have developed retail-specific

systems which help in integrating all the functions from warehousing to distribution,

front and back office store systems and merchandising. An integrated supply chain helps


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the retailer in maintaining his stocks, getting his supplies on time, preventing stock-outs

and thus reducing his costs, while servicing the customer better.

y CRM Systems

The rise of loyalty programs, mail order and the Internet has provided retailers with real

access to consumer data. Data warehousing and mining technologies offers retailers the

tools they need to make sense of their consumer data and apply it to business.

y Advanced Planning and Scheduling Systems

APS systems can provide improved control across the supply chain, all the way from raw

material suppliers, right through to the retail shelf. They enable consolidation of activitiessuch as long term budgeting, monthly forecasting, weekly factory scheduling and daily

distribution scheduling into one overall planning process using a single set of data.

Strategic Decision Support Systems

y Store Site Location

Demographics and buying patterns of residents of an area can be used to compare various

possible sites for opening new stores. Today, software packages are helping retailers not

only in their locational decisions but in decisions regarding store sizing and floor-spaces

as well.

y Visual Merchandising

The decision on how to place and stack items in a store is no more taken on the gut feel

of the store manager. A larger number of visual merchandising tools are available to him

to evaluate the impact of his stacking options.

To manage this kind of growth, it was necessary to move out of legacy systems, as they

didn't provide the scalability that was needed. Plus, some of its stores are currently

working on as many as four different legacy systems, managing which was very difficult.


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It needed a solution to manage everything under one umbrella. So it engaged a team of

experts to evaluate various solutions in the market. Spencer's found that SAP came

closest to fulfilling its needs. Project Shakti has been operating for the last two years out

of Chennai and it has already gone live in seven States Andhra Pradesh (Vizag since 17

November 2006), Haryana (Gurgaon, since March 08, 2007), Maharashtra, Gujarat, West

Bengal, Jharkhand, and Karnataka (Bangalore, since 1 July 2008). Spencer's Retail has

rolled out its SAP solution to approximately 207 stores and expects to complete

deployment to more than 350 stores by October 2008. While 53% stores run on SAP,

28% stores run on Oracle and 18% stores run on FoxPro.They are using the latest

MySAP ERP IS Retail ECC 6.0 for their operations in Books & Beyond, and are

gradually migrating the rest to SAP.

At RPG, the businesses are divided into three entities (Spencer's, Music World and Books &

Beyond). Spencer's business is basically procurement of articles from respective distribution

centres (DC) and selling to customers. The DCs in turn would be procuring articles based on the

site's need from different vendors. The business processes covered under this are purchase, sales,

inventory controlling along with financial accounting. The challenges faced during the

implementation are managing the different pricing procedures which change very rapidly,

managing the promotions; automation of the POS information, high volume of information to be

processed, GMROI (Gross Margin Return on Investment) etc.

They have followed SAP Methodology during the course of this implementation. The Project

leader from SAP India gathered the necessary KPI's, Dimensions and reports from the functional

consultants. Based on these inputs he prepared a Data Model and the Blue Print. Taking this Blue

print as input the team at RPG was responsible in preparing the technical specs and also

realize/develop the objects.

With ERP, high-availability is a challenge as the network over which the data travels from, say, a

datacenter to the store is not within its control and belongs to an external agency. Spencer's ERP

datacenter is based out of Kolkata along with the business warehousing servers. For data

processing, they have 'staging servers'. These are intermediary servers to store data temporarily

before moving it to the SAP Production server. Eventually, all stores and warehouses across all


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locations will be integrated with its datacenter and shall be working on a real-time basis, except

for the PoS billing system. At the end of each working day, the data is sent to the parent

datacenter for processing and analytics.

While some basic infrastructure is in place already, they are gradually implementing business

intelligence into their system in due course.

An important pillar of retail business is ERP, which has three elements People, Process and

Technology. The People part is most difficult to manage as it needs to recruit, train and motivate

people constantly, generate awareness and do change management. This makes the task more

challenging, as it needs to manage deployments in such a dynamic environment keeping pace

with the company's exponential growth plans.


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Operations

Spencer's has retail footage of over 1 million square feet and over 275 Spencer's stores in 50

cities. The company operates through the following formats:

y 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 dcor & 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.

y 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.


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Vision

To build Spencers as the most professionally managed retail business in the country through:

Excellence in all operating process;

Nurturing and facilitating a learning and growth culture;

Building a unique retail experience for the customers.

Mission

Strives to exceed the aspirations of its customers for a healthy and fulfilling lifestyle by

providing:

The most innovative customer goods and delectable taste experience.

The ultimate shopping experience.

Unbeatable value.

The next place away from home or office to relax and indulge themselves.

Major Investment plan

1. It will be going in for a public issue within the next 12 months to raise capital for

expansion.2. The company will be investing Rs.10 billion over the next three years using both

internal sources and an IPO.

3. The company has already reserved 1 million sq ft of space all over the country

and will be creating close to 10,000 jobs in its different formats.

4. Spencers Retail currently employs 4,500 people and has 6 million sq ft of space.


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Spencers milestone

1863- John William Spencer and Charles Durant open the first ever Spencer store in

Chennai.

1920 Spencers becomes the first grocery store in India.

1980 Spencers becomes the first supermarket chain under Food World in India.

1989 RPG Enterprises buys a majority stake in Spencers.

1995 Spencers enters into a Technology Assistance Agreement with Dairy Farm

International Holdings Ltd. ,Hong Kong, to set up the Food world chain of supermarkets

in India.

1996 First Food world store inaugurated in R A Puram, Chennai, by M. S. Subbulakshmi,

renowned Karnatic musician.

2001 First hypermarket inaugurated in Musheerabad, Hyderabad, by Krishna Yadav,

Labor Minister of Andhra Pradesh.

100th Foodworld store inaugurated in Pondicherry.

2006 Joint venture with Dairy Farm International Holdings terminated

First new store under the Spencers brand name inaugurated in West Mambalam,

Chennai 2008. 75,000 sq ft flagship store inaugurated at South City Mall, Kolkata

+First standalone store inaugurated at Vadodara

Exclusive tie-up with 3 billion Woolworths plc, UK, for retailing their internationally

acclaimed toy brand,Chad Valley, and their Ladybird brand of kidswear; the latter is

Woolworths first international tie-up in the childrens apparel segment.

Tie-up with Au Bon Pain, the Boston-based fast casual dining and bakery caf chain

having more than 200 outlets in America, South Korea, Taiwan and Thailand.

Alliance with Beverly Hills Polo Club its first international tie-up in fashion.

2009 Launch of first Shop-in-shop Gourmet store in Kolkata.

Launch of first standalone Fish-n-meat store in Kolkata.

Launch of first hyper of the state of Tamil Nadu in Tiruchira


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Formats of Spencers outlets

Spencers has retail footage over 2 million square feet and over 400 Spencers stores in 65cities.

The Company operates through the following formats:

1. Spencers Hypermarkets: A fast growing retail network of hypermarkets with largeformat stores in Mumbai, Gurgaon, Ghaziabad, Lucknow, Calicut, Hyderabad, Vizag,Vijaywada, Aurangabad, Durgapur and Kolkata.

2. Spencers super: One of the largest supermarket chains in the food and grocerysegment in India.

3. Spencers Daily: Small format stores conveniently located with a range of products tomeet daily household needs.

4. Spencers express: Food and grocery store next door.


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Spencers Daily

Fresh Fruit Stall Market stall Manton Market

The Spencers Daily store is a friendly neighborhood store, which caters to the entire

daily shopping needs- from regular groceries to fresh food and also weekly top-up

shopping.

It is about 4000-7000 sq ft in size and with a bright and friendly atmosphere; Spencers

Daily saves the hassle of bargaining with the local kirana shop owners (because it offers

the lowest possible prices).


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Spencers Express

Spencers Express is a store next door for the fresh needs at arms length.

These stores are around 1000 sq ft in size. They are open from 7 am to 9 pm and also

provides with home delivery.

The Express stores stock dairy, fruit and vegetables, bread and bread products, cut

vegetables/ready to cook, fruit juice, fresh batter, fresh coffee/tea, fresh masalas, fresh

pickles, fresh Ghee, fresh Fish and meat.


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Spencers Fresh

Spencers fresh stores provide with an enjoyable and convenient shopping

environment in very own neighborhood. These 2000 sq ft. air conditioned

stores are well stocked with Fresh food of very best quality, such as fresh

farm produce, vegetables, fruit, milk, eggs, breads and much more. With

an impressive range and a clean, bright and hygienic ambience, Spencers

Fresh is far better the regular sabzi mandis or local vegetables markets and

at Spencers.

Fresh consumers not only do get fresh, clean and tasty farm produce but

also the lowest possible prices in the locality, yes even lower than

sabziwala!


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Spencers Super

The Spencers Super is the place to go for the monthly shopping.

About 8000-15000 sq ft. in size, the Spencers Super not only caters to the daily

needs but also stocks home care products; personal care products, Bakery, Chilled

and frozen food; Baby care besides groceries & staples, Fresh fruits and

vegetables.


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Spencers Hyper

The Spencers Hypermarkets are huge destination stores, more than 25,000 sq

ft. in trading area. Shoppers come here looking for fantastic deals across all

categories.

Hypermarkets ensure a comfortable, clean, bright and functional ambience to

shop along with the convenience of finding everything under one roof at thebest value for money.


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SNAPSHOT

Different Formats of Spencers

Format Stocks Minimum TradingArea (sq. ft.)

Spencers Express dairy, fruit and vegetables, bread and bread

products, fruit juice, fresh batter, fresh

coffee/tea, masalas, pickles, Ghee, Fish and

meat.

1000

Spencers Fresh vegetables, fruit, milk, eggs, breads 2000

Spencers daily regular groceries 4000-7000

Spencers Super home care products; personal care

products, Bakery, Chilled and frozen food;

Baby care products

8000-15000

Spencers Hyper Miscellaneous More than 25000


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RETAIL INDUSTRY

RETAIL DEFINITION:- The word retail is derived from the French word retailer meaning

to cut piece off or tom break bulk.it includes all the activates directly related to the sales of

goods and services to the ultimate consumer for personal or non personal business use . in simple

terms, it implies a first-hand transaction with the consumer.

INTRODUCTION:-

Retailing today is not only about selling at the shop, but also about surveying the market,

offering choice and experience to consumers, competitive prices and retaining consumers

as well

Retailing is the final step in the distribution of merchandise - the last link in the Supply Chain -

connecting the bulk producers of commodities to the final consumers. Retailing covers diverse

products such as foot apparels, consumer goods, financial services and leisure.

A retailer, typically, is someone who does not effect any significant change in the product except

breaking the bulk. He/ She are also the final stock point who makes products or services

available to the consumer whenever require. Hence, the value proposition a retailer offers to a

consumer is easy availabilities of the desired product in the desired sizes at the desired times.

In the developed countries, the retail industry has developed into a full-fledged industry where

more than three-fourths of the total retail trade is done by the organized sector. Huge retail

chains like Wal-Mart, Carr four Group, Sears, K-Mart, McDonalds, etc. have now replaced the

individual small stores. Large retail formats, with high quality ambiance and courteous, and well-

trained sales staff are regular features of these retailers.


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TYPE OF RETAIL

* Organized Retail- 3%

* Unorganized Retail- 97%

Organized vs. unorganized Retail

Organized Unorganized

Owner usually not the operator Owner usually the operator

Supply chain management No SCM dependent on distributors & suppliers

Automation Virtually no automation

Presence of store brand Absence of store brand

Wider assortment &range of products Lesser range & assortment of products

Large scale operations Small scale operations


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Growth of organized retailing in IndiaRetailing- one of the largest sectors in the global economy is going through a transition phase

not only in India but the world over. For a long time, the corner grocery store was the only

choice available to the consumer, especially in the urban areas. This is slowly giving way to

international formats of retailing.

The Indian Retail market, rated as the second most attractive destination among emerging

markets globally, is in the midst of a gigantic transformation, thanks to a plethora of changes

within the segment and outside, with mounting international and domestic pressure to open up

the economy, with Indian corporate houses and investors taking active interest in retailing, and

with the Government realizing the importance of modernizing the sector, Organized Retail could

well become a major driver of the economy in the years ahead.

The sector can greatly induce consumer spending in the domestic market.


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Various reasons are responsible for the growth of Indian retail:

1. Increased per capita income of the Indian consumery Increase in disposable income of middle class households.

y 20.9% growth in real disposable income in 99-03.

2. Growing high and middle income population at a pace of over

10% per annum over last decade.

3. Affordability growth:

y Falling interest rates

y Easier consumer credits

y Greater variety and quality at all price points.

4.

Improvement in infrastructure are enlarging consumer marketsand accelerating the convergence of consumer tastes.

Liberalization of market for consumer goods, this has helped the

MNC brand to make in roads into Indian markets by offering

wide range of choices to Indian consumers.

5. Changing mindset of Indian consumer

y Increasing tendency to spend

y Post Liberalization youth population is nearly 100 million


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6. Greater levels of education.

7. Shift in the consumer demand for higher brand

8. Internet is making consumers more accessible

Reach of satellite TV channels, which are helping in creating

awareness about global products for local markets.

9. Reduction of custom duties of CE, personal care Dairy

Product.

10.The urban customer:

y Getting exposed to international lifestyle


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INTRODUCTION OF SPENCERS RETAIL

Spencers Retail is the largest supermarket chain in India. At Spencers we have for you an

extensive range of products and durables, designed to satisfy all your shopping needs. We are

proud today of our 350 stores across 50 cities covering a retail trading area of 1.3 million square

feet and an astonishing 3.5 million customers a month. However, all these figures and statistics

would mean nothing if we couldnt put a smile on your face. It has been and will always be our

constant effort. No wonder, after more than 100 years, people continue to trust the name

Spencers. And this trust has been the outcome of a consistent high-quality service.

For every want, for every need

We at Spencers are glad that we are able to provide all that you need, and all that you wish you

had. From an endless choice of foods and exotic fruits & vegetables to household needs, home

dcor and consumer durables. Whether you are designing your home or plan to have a party, we

have your basket ready with us. So come and discover the joy of shopping at Spence


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SWOT Analysis

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of

planning and helps marketers to focus on key issues. SWOT Stands for strengths, weaknesses,

opportunities, and threats. Strengths & weaknesses are internal factors. opportunities, and threats

are external factors.

Strengths

y Spencers have good brand awareness among the consumers.

y Spencers in FMCG sector.

y Spencers retail specialist marketing expertise.

Weaknesses

y The consumers are not much satisfied of the offers introduced by Spencers.

y Big Bazaar has better product range than Spencers.

y Big Bazaar has better promotional schemes than Spencers.

Opportunities

y To become better in the business of garments.

y To be accepted by the consumers in comparison to other retail stores.

y To develop better marketing strategy than retail outlets.

Threats

y Big Bazaar & Vishal Mega Mart are huge threats to Spencers.

y Big Bazaar have greater acceptance among the consumers in comparison to Spencers.


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Comptative awarness of some other brand

Big Bazaar

Big Bazaar is not just another hypermarket. It caters to every need of your family. Where Big

Bazaar scores over other stores is its value for money proposition for the Indian customers.

At Big Bazaar, you will definitely get the best products at the best prices - thats what we

guarantee. With the ever increasing array of private labels, it has opened the doors into the world

of fashion and general merchandise including home furnishings, utensils, crockery, cutlery,

sports goods and much more at prices that will surprise you. And this is just the beginning. Big

Bazaar plans to add much more to complete your shopping experience.

The Big Bazaar is the discount store which offers a wide range of products under one roof. The

products include apparels and non-apparels such as utensils, sports goods and footwear. The

Food Bazaar provides a range of food and grocery products ranging from fresh fruits and

vegetables, staples, FMCG products and ready-to-cook products. The Central offers a chain of

stores including books and music stores, global brands in fashion, sports and lifestyle

accessories, grocery store and restaurants. The Group's other formats include, Depot, Shoe

Factory, Brand Factory, Blue Sky, Fashion Station, aLL, Top 10, mBazaar and Star and Sitara. It

also operates an online portal, futurebazaar.com.


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What started as a humble one store enterprise in 1986 in Kolkata (erstwhile, Calcutta) is today

a conglomerate encompassing 180 showrooms in 100 cities / 24 states. Indias first hyper-

market has also been opened for the Indian consumer by Vishal. Situated in the national capital

Delhi this store boasts of the singe largest collection of goods and commodities sold under one

roof in India.

The group had a turnover of Rs. 1463.12 million for fiscal 2005, under the dynamic leadership of

Mr.Ram Chandra Agarwal . The group had a turnover of Rs 2884.43 million for fiscal 2006 and

Rs. 6026.53 million for fiscal 2007.

The groups prime focus is on retailing. The Vishal stores offer affordable family fashion at

prices to suit every pocket.

The groups philosophy is integration and towards this end has initiated backward integration in

the field of high fashion by setting up a state of the art manufacturing facility to support its retail

endeavors.

Vishal is one of fastest growing retailing groups in India. Its outlets cater to almost all price

ranges. The showrooms have over 70,000 products range which fulfills all your household needs,and can be catered to under one roof. It is covering about 29, 90, 146 sq. ft. in 24 states across

India. Each store gives you international quality goods and prices hard to match..


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Subhiksha was an Indian retail chain with 1600 outlets selling groceries, fruits, vegetables,

medicines and mobile phones. It was started and is managed by R Subramaniam, an IIM

Ahmedabad alumnus. Subhiksha plans to open 1000 outlets by December 2008.[1]

He also plans

to invest Rs.500 crore to increase the number of outlets to 2000 across the country by 2009.its

turn over was 2305 crore in financial year 2008.

The name Subhiksha means prosperity in Sanskrit. It opened its first store in Thiruvanmiyur in

Chennai in March, 1997 with an investment of about Rs. 5 lakhs. The retail chain has seen a

considerable growth by offering goods at cheaper rates and there by increasing its customer base.

It is also dubbed as India's largest retail chain.vision to deliver consistently better value to Indian

consumers, has guided Subhiksha to deliver savings to all consumers on each and every item that

they need in their daily lives, 365 days a year, without any compromise on quality of goods

purchased.

Subhiksha now has the pan Indian presence with stores across Delhi, UP, Punjab, Haryana,

Gujarat, Maharashtra, AP, Karnataka and TN. It has recently commenced operation in Kerala

also. Today, it is a multi-location, professionally managed and vibrant organization. Subhiksha

now has even opened Specialized Mobile shops called Subhiksha Mobile where mobiles are sold

at a discounted price.

As of January 2009, Subhiksha has been facing severe financial crises pertaining to liquidity.

This has led to the shutting down of a large number of stores.


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Research Methodology

This chapter describes the methodology of the study. This project is based on information

collected from primary sources. After the detailed study, an attempt has been made to presentBrand awareness of Spencers and its comparative analysis with Big Bazaar & other retail

organizations towards the people. The data had been used to cover various aspects like price of

various commodities available at Spencers and Big bazaar. In collecting requisite data and

information regarding the topic selected, I went to the outlets of Spencers, Big Bazaar & Vishal

Mega Mart of Lucknow city and collected the data.

Survey design:

The study is a cross sectional study because the data were collected at a single point of time. Forthe purpose of present study a related sample of population was selected on the basis of

convenience.

Sample Size and Design:

A sample of 100 peoples & 3 stores was taken on the basis of convenience. The actual customers

were contacted on the basis of random sampling.

Research Period:

Research work is only carried for3 weeks.Research Instrument:

This work is carried out through face to face survey &self-administered questionnaires. The

questions included were open ended, dichotomous and offered multiple choices.


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Survey on Spencers retail

What is the thought of people about Spencers retail?

1. Have you heard of Spencers?

Yes 93

No 7

2. Have you visited Lucknow city Spencers earlier?

Yes 90

No 10

Yes

No

Yes

No


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3. Visited Lucknow Spencers once, twice or more?

Once 12

Twice 19

More than Twice 69

4.

Peoples not visited to local retail stores?

Local shops 10.0

Big Bazaar 20.0

Any other stores 70.0

Once

Twice

More than Twice


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5. Spencers products range available to customers?

Spencers 3%

Big Bazaar 5%

Vishal Mega Mart 15%

Others 77%

Column1

Local shops

Big Bazaar

Any other stores

Spencers

Big bazaar

Vishal Mega

Mart

Others


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6. Spencers in FMCG?

Spencers 67%

Big Bazaar 25%

Vishal Mega Mart 8%

7. Spencers in garments?

Yes 8

No 92

Spencers

ig

azaar

Vishal Mega

Mart

Yes

No


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8. Spencers in F & V?

Yes 22

No 78

Yes

No


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Data Analysis and Interpretation

ANALYSIS OF THE STUDY ON SPENCER RETAIL

Types of Customer:

Spencer is a major player in the Indian organized retail industry. They have a good customer

base in the high class level income group. Mainly they are focusing on the Men-Women-Kids

Apparel, gifts and also in the home furnishing products. They have huge music, cards or cookery

departments.

TYPES OF TARGET CUTOMER

HIGH GRADE INCOME LEVEL 75%

MEDIUM GRADE INCOME LEVEL 20%AVEREGE GRADE INCOME LEVEL 5%

From the above the analysis its revealed that though a very few numbers of low grade income

level customers are visiting the garment section but in the gifts section we have found that the

products are unreachable for the average level income groups.

0%

20%

40%

60%

80%

HIGHGRADE

INCOME

LEVEL

MEDIUM

GRADE

INCOME

LEVEL

AVEREGE

GRADE

INCOME

LEVEL


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Flow of customer in different departments:

Here we have analyzed the flow of customers per day basis. For this reason we have studied

customer flows on an average of high customer flow days.

In Spencer we have found that the average customer flow lies between 650-700 on average high

customer flow day.

The main products categories in Spencer basically the Music and home furnishing products

related to gifts items. We have found that in the case of garments department customer flow is

350 per day bases and in the case of gifts departments its 600 to 700 per day basis. Its noted that

the gifts department consists of exclusive products.

Value of Stock in the different department:

The garment section is divided into Men, women and kids section as well as lifestyle accessories

and shoe wears. They have all the major brands like Blackberry, Louis Phillips, Lee Coopers,

Van Hausen, Parx, Lee for in the men category, Melanga, Code, Ginger in the women category

and for the kids section they have brands like Bossini, Benetton, Orchestra, Juniors, Teeny Tiny,

Artex etc.

Inter-Department Customer Flow

DEPARTMENT NUMBER OF CUSTOMER

GARMENTS DEPARTMENT 350

GIFTS DEPARTMENT 700

MUSIC DEPARTMENT 900

VALUE OF THE STOCK

DEPARTMENT (Rs)





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The garments section includes:

1. Watch section for the brands like Fast track, Zodiac, Hugo-boss, Nautica, Marie Claire,

Casio, Guess, GC, Kenneth Cole, Aspen, Skagen, Levis, Adidas etc.

2.

Sunglass section for the brands like Ferrari, Mojo, Mont blanc, Scott, Guess etc.

3. Fashion accessories for the brands like Tribal Zone, Sarah, Fire Fly, Adrika, Earrings,

Necklace, Bracelet, Anklet, Bangles, Hair Clips, Bra Straps, Scrunges, Mens Jewelry,

Kids Fashion.

All these product range are exclusively for the High grade income level customers.

The gifts section is consisting of high class home furnishings and personal grooming products.

They are introducing it by the name of Home Centre. Its a one-stop destination for furniture,

home ware and home furnishings that enterprises elegance, luxury and individuality. Home

Centre houses a wide range of contemporary and classic furniture, linen as well as other home

accessories, thus providing customers a high range product.

Revenue generated by the different department:

REVENUE PER

DEPARTMENTIn 2007-08 (Rs)




TOTAL 12500000

The average revenue earned per customer basis is more Rs.15000. Comparison of revenue

generated by the each department is taken into consideration on an average of high customer

flow days.

From the above analysis its found that the average customers in the all departments are basically

high grade income level customers.


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Garment Department:

Overview:

In Garment department the products are mainly the major international readymade brands and

price ranges lies between Rs.800 to Rs.2000 averagely which is meant for a few Indians

customers.

Findings:

The products exclusively for a certain income level customers. Maximum products are

unreachable for the medium and average income level customers.

Suggestions:

They are focusing a very few Indian customers and the most of the Indian consumers cant afford

this price range. So if they want to increase their market share in the Indian retail Industry they

should introduce such product range also which can be affordable for the medium level income

groups and the main customer in the retail industry lies within it.

Gifts Department

Overview:

Gifts department is consisting of various product categories from home furnishing products to

personal grooming products.

Findings:

In the Spencer we have found a wider range of glass made and metal products which are

exclusive and also the quality isnt up to the price levels. Whatever, the stock is sufficient to

satisfy its customers but the price range is found very high as a gift product in this department.


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Suggestions:

Again the Indian retail industry is targeting the medium level income group people as its

increasing day by day but the products in the Spencer store is meant only for the high class

consumers which is very low in population in India. Also an important point is noted that thoughthe volume is sufficient but the variety in product categories as a gift isnt sufficient.

Music Department

Overview:

Music section consist of Music CD;s, Game CD & DVDs and also Movie DVDs.

Findings:

Spencer has introduced very low range cd & dvds like Moserbear music and movie cd-dvds

and price range lies in between Rs 30 to 100. Basically they are gaining a competitive business at

the age of piracy products in this industry. Also they have a very good collection in games cd-

dvd categories at a low price range of Rs 100 to 200 whereas if anyone go to the open market the

average price range is Rs 300 to 400 for the copyright product.

Suggestions:

Spencer is earning more revenue by its music section. In the music its found that the collection

of cds and educational cds low than the music games cds. They are emphasizing on the low

price mp3 and game cds where as there is also a demand for educational and movies cd-dvds.


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Analysis of the study on Big Bazaar

In the Indian Retail Scenario Big Bazaar has a great success to create a revolution. Basically they

have differentiated their customers on the basis of customers rather than their income level. Later

on we will analyze these aspects. Here we are analyzing which income level of customers are

generally tended to purchase the products in Big Bazaar department wise:

Percentage of customers flows department wise

Type of customer Garment

section

Gifts Section Music

section

Cards

section

High grade income level 10% 15% 50% 7%

Medium grade income level 50% 55% 40% 53%

High grade income level 40% 30% 10% 40%

From the above details it is found that the garment section they are targeting the middle and

average level of customers. They are not promoting any major brands and they have their own

brand towards the major brands in garments industry. Flow of high level of customers I music

section is better than the other department. Generally upper middle and medium class and also a

good percentage of average income level customers visits their old departments.

0%

20%

40%

60%

80%

100%

High grade income level

Medium grade income

level



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Flow of customers in different departments:

Here we have analyzed the flow of customers per day basis. For this reason studied customer

flows on an average of high customer flow days.

Inter-Department Customer Flow

Department Number of customer

Garments Department 1600

Gifts Department 600

Cards Department 250Music Department 800

With the study of customer flow in Big Bazaar on an average of high customer flow day we

came to know that its basically lies between 2000-2500 customers per day. Here we talking the

customers who are generating revenues for these departments.

From the above figures its executed that flow of customers in garment department is relatively

higher than the other departments. One significant difference is noted than the others retail is that

they have placed their music department at the front of cash counters and introduced low range

of music cds and game dvds for the all category customers which increased customers the flow

in the music department.

Value of stock in the different departments:

We have chosen 4 departments from Spencers store and estimated the valuation of average

stock with the assumption details provided by the branch operation stuffs.


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Value of the stock

The garment section is divided into men, women and kids section. They have also a discount

section only for the garments. In this section they are selling the old or rejected stocks of major

brands at 40-50 % discount rate. The value of stock in garment is being overflowed at the time ofwinter season and tends to double the value of stock. Normally they are maintain a stock value of

16.3 to 17 crore value of stock bus it increase at the time of winter to more than 40 crore.

Revenue generated by the different departments:

To find out the profitability drivers we have compared the revenue generated by different

departments on the basis of 2004-2005 to 2008-2009.For this study we have considered average

revenue of a high customer flow day by the income level customers.

Revenue per

department

2004-2005 2007-2008

Garment department 90000 300000

Gifts department 42000 180000

Cards department 2000 1800

Music department 19000 40000

Total 153000 521800

Department (Rs)



Cards Department 150000

Music Department 580000


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From the above study its revealed that at the time of inception of the organized retail in India in

the year of 2004-2005, only the high grade and upper medium grade income level customers

were tends to go the retails. So the maximum portion of revenues generates from these two

groups only in the year of 2004-2005.

The change in revenue of garment department and in the gifts department from the year 2004-

2005 to 2007-2008 is significant because Big Bazaar is shifted products towards the own

manufactured brands and they became successful to establish their own brands in the garmentretail industry.

A measurable changes found in the cards department is the revenues as well as the stock is

decreasing day by day because of changing customer preferences towards information

technology enabled services like SMS, MMS & E-mails.

Facts and findings

From the above analysis its found that the average customers in the all departments are the all

income level people in Big Bazaar. Meanwhile their main customer base is upper, middle and

average level income customers.

0

100000200000

300000

400000

500000

600000

2004-2005

2008-2009


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Garment Department

Overview:

In Garment department the products are mainly their own brands an price range lies between Rs99 to Rs 800 averagely which is very reasonable for the middle class, average and also low level

income group peoples. The stock in this section is fair to satisfy its customer needs and attracts

window shoppers to become a potential customer.

Findings:

The main facts that we have found in the garment section is that Big Bazaar mainly focusing on

the low range products with their own brands. All the times they are giving special discounts onall the garments products. They have adopted tricks like Buy 2 get 3, Buy 3 get 5 which looks

like as if you buy 2 will get more 3 but the actual fact is that if you buy 2 products will get 1 free

as total you will get 3. Its a very strategic and attractive offer specially adopted by Big Bazaar.

They have also a section they are selling the branded high class garments at a high discount rate

of 50 to 60 percent.

Suggestions:

After discussing all the profit factors it can be suggest that as they have a good high income level

customer level flow in the others departments like in the furniture and grocery department they

can introduce a wider range of branded products in the garment section as this income is

conscious about the brand that they are using.


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Gifts Department

Overview:

Gift department is consisting of various product categories from home furnishing productspersonal using products. According to Big Bazaar now a days no one can define which section

should be referred as a gifts section. Customer preference is changing day by day with the

increased product categories.

Findings:

In Big Bazaar we have found that they are also referring home furnishing products, personal care

and low range electronic products as gift products and basically it depends on the customers needand choice. The whole gift section is able to satisfy the all level of income groups as they have a

large collection of product categories but with a limited stock of same products. A noted strategy

is taken in gifts department is that they are selling a large varieties of products with a limited

stock which helps them to implement a good stock turn over ratio and generating good revenue

from this department.

Suggestions:

Big Bazaar can focus on stocks of gifts though the stock varieties is remarkable but within the

same category the stock is not appreciable.

Music Department

Overview:

Music section consist of Music CD;s, Game CD & DVDs and also Movie DVDs.

Findings:

Big Bazaar has introduced very low range cd & dvds like Moserbear music and movie cd-

dvds and price range lies in between Rs 30 to 100. Basically they are gaining a competitive

business at the age of piracy products in this industry. Also they have a very good collection in


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games cd-dvd categories at a low price range of Rs 100 to 200 whereas if anyone go to the open

market the average price range is Rs 300 to 400 for the copyright product.

Suggestions:

In the music its found that the collection of cds and educational cds low than the music games

cds. They are emphasizing on the low price mp3 and game cds where as there is also a demand

for educational and movies cd-dvds.


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Analysis of the study on Vishal Mega Mart

Types of customer:

There are three types of consumer in the Indian retail market. Vishal mega mart is a firm believerof that the middle class and upper middle class are the potential customer in their product

categories.

Here we are analyzing which income level of customers are generally tend to purchase the

products department wise:

Percentage of types of customer department wise

Type of customer Garment

section

Gifts

section

Music

section

Cards

section

High grade income level 10 40 60 0

Medium grade income level 60 50 30 50

Average grade income level 30 10 10 50

Type of customer

0

20

40

60

80

100

Average grade income

level

Medium grade income

level



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From the above details its found that the customer flows in the garment section is relatively high

rather the other sections. The focus customer group is basically medium level income group of

customers.

Flow of customers in different departments:

Here we have analyzed the flow of customer per day basis. For this reason we have studied

customer flows on an average of high customer flow days.

Inter- Department customer flow

Department Number of customer





From the above figures its executed that flow of customer in garment departments is relatively

higher than the others departments. To determine the above study we have considered who arespending their money on purchase of products of above said departments. Its revealed at the time

of study that they have 10 cash counters and they are making bills of more than 280 bills per day

per counter on the above said days.

Value of stock in different department:

We have chosen departments from Vishal Mega Mart and establish the valuation of averagestock with the assumption details provided by the branch operation stuffs.


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Value of the stock

Department (Rs)





Value of the stock in the Garment Departments:

The garment section is divided into men, women and kids section. The value of the stock in the

garment department is relatively much higher than the others departments is relatively much

higher than the other departments. The value of stock in winter season jumps to 18 to 20 crore

and its 3 times higher than others season as normally they are maintaining a stock of 6 crore in

the others time.

The value of the stock of the other department are relatively lower than garment department.

The stock maintained in the gifts section, basically maintained for the high and medium level

income customers.

In the cards department the stock increases at the time of Christmas an New Year eve as its

seasonal business according to the Vishal Mega Mart.

Garments

Department

Gifts Department

Cards Department

MusicDepartment


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Music department is consisting of Music, movie and game cd & dvds. Its found that the stock of

game cd & dvds is higher than the others.

Revenue generated by different departments:

To find out the profitability drivers we have composed the revenue generated by different

department on the basis of 2004-2005 to 2008-2009.

For this study we have considered average revenue of a high customer flow day by the all

income level customers.

Department 2004-2005 2007-2008

Garments 50000 180000

Gifts 5000 10000

Cards 2000 1800

Music 1800 5000

Total 58800 196800

0

50000

100000

150000

200000

2004-2005


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From the above study its revealed that at the time of inception of the organized retail in India in

the year of 2005-2005, only the high grade and upper medium grade income level customers

wear tends to go to the retails only.

In the case of garments, gifts and music departments as the stock is increased, the revenue is also

increased with the market demand study of the year of 2004-05 to 2007-2008 and also its seen

that product category in the gifts and music department is relatively changing with the increasing

demand of new innovated products.

A measurable changes found in the cards department is that the revenues as well as the stock is

decreasing day by day because of changing customer preferences towards information

technology enabled services like SMS, MMS & E-mails.

FACTS AND FINDINGS

From the above analysis its found that the average customers in the all departments are the

middle grade income level customers as Vishal is mainly focusing in this segment of customers.


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Garments Department

Overview:

Product lines and the quality of the products in the Garment Section are basically for the medium

and average grade income level people and price range in this section is averagely lies between

Rs.250 to 600.

Findings :

In the garment section we have found that products categories are not focusing the high grade

income level customers as the brand consciousness not presents in the floors. The high grade

income level people are very conscious about the brand that they are using. Basically they are

very conscious about the brand rather than the quality which isnt present in this department.

Suggestions:

Vishal is strategically targeting the middle class customer but there is also a rash of high grade

income level customers in their stores. They should focus on this aspect that they can turn mob

into potential customer by introducing a various range of high class products in the garment

department.

Gifts Department

Overview:

Product lines and the quality of the products in the Gifts Section are basically for the high and

medium grade income level people and price range in this section is averagely lies between

Rs.500 to 800.

Findings:

In the gifts we have found that stock of gifts items is very low and also products categories are

not focusing to low grade income level customers and the gifts department is referred to high

class products.


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Suggestions:

They should focus on this aspect by introducing more stocks and also a lower price range

products in the gifts section that they can also generate revenue from lower grade income

customers.

Music Department

Overview:

Music section consist of music cds, game cd & dvds and also movie dvds. Product lines and

the quality of products in the music section are basically for the high and medium grade income

level people and price range in this section is averagely lies between Rs.150 to 500.

Findings:

In the music section we have found that they are mainly focusing on the game cds and dvds and

also the price range is also high. Again the collection of game cd and dvds is considerable but in

the case of Indian music cds the stock level is not also upto the customers satisfactory level.

Suggestions:

Vishal should concentrate on that the music industry is passing through a high competitive

market with piracy world so the range should be such as the customer feel free to buy original

cds. Another point is that there should be a balance between the stock of their product lines in

the music department.


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COMPARITIVE ANALYSIS OF THE STORES

On the basis of customer flows:

We have considered the average of the high customer flow days.

Flow of Customer per Day

Store Name No. of Customer

Vishal Mega Mart 1600

Spencer Retail 1200

Big Bazaar 2300

Vishal Mega Mart: From the study its revealed that the average customer flow is medium

grade income level customers and average grade income level customers.

Spencer Retail: The customer flows in this store is basically refers to the high and upper

medium income level customers.

Big Bazaar: They are focusing on the all income level customers but it depends on the

departments wise also.

On the basis of stock value:

Comparison of stock value

Store Name Garments

dept

Gifts Dept Cards Dept Music Dept

Vishal Mega

Mart

65000000 250000 77500 175000

Spencer Retail 760000 5500000 175000 8060000

Big Bazaar 163000000 75000000 150000 575000


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Garments Department:

The value of stock depends on the season. At the time of winter season it increases upto 2 to 3

times than the other seasons as the price of winter garments is relatively higher than springs-

summer collection.

Vishal Mega Mart: The product in the garment section isnt exclusive and meant for the

medium to average grade income level customers. Also they arent focusing on major brands in

the garment industry. All the products are unbranded and semi branded and dont attracts the

high grade level income groups. However brand consciousness not present but the stock volume

is able to met customer satisfaction.

Spencer Retail: Product ranges are very high and meant for the high class consumers. In

Spencer there is very low stock turnover ratio.

Big Bazaar: They have their own brands in the garments department with a reasonable price for

the upper medium, medium and average class income groups. Though brand conscious people

will think at the time purchasing but customer are satisfied with the stock and as well as quality

related to price. They have high stock turnover ratio.

Gift Department:

Vishal Mega Mart: They are not focusing on the gifts stock for the result customer flow and

revenue from this section is very low and no point is gaining for the customer satisfactory level.

Spencer: A wider range of products is found in gifts section for the all income level people.

Though the variety in the product categories is high but the volume of stock in the same product

is low. However customers are happy with the large number of collection of gifts items.

Big Bazaar: A very large investment in the gifts section is found at the time of study. They are

basically emphasizing on introduction of personal grooming products and home furnishing

products in the gifts section. This department is solely for the upper class consumers and

customers satisfactory level is remarkable.


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Cards Department:

Vishal Mega Mart: Stock in the department is taken care as relatively low and its considered as

a seasonal business.

Big Bazaar: Stock in this department is taken care as relatively low and its considered as a

seasonal business.

Spencer: It is having highest value in gift department.

Music Department:

Vishal Mega Mart: Music department is consisting of music, movies amd games cd-dvds. the

stock of game cd-dvds is higher than the others and price range is relatively not for the medium

and average income groups though they are focusing on this income group only and a result they

failed to satisfy their customer needs.

Big Bazaar: Their music department is also consisting of music, movies and games cd-dvds

and they have maintained a good balance between the stock level in all the categories. And also a

remarkable change is noted that they selling very low range products within this copyright

product categories. They customer satisfaction level is high with the fulfillment of their needs.

Spencer: Spencer is earning more revenue in this department than Big Bazaar & Vishal Mega

Mart in music because it is of RPG group.


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Findings

Spencers have good brand awareness among the consumers.

Big Bazaar has better product range than Spencers.

Big Bazaar have greater acceptance among the consumers in comparison to

Spencers.

FMCG products have major acceptance of all offerings of Spencers among

consumers.

The consumers are not much satisfied of the offers introduced by Spencers.

Big Bazaar has better promotional schemes than Spencers.


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SUGGESTIONS AND RECOMMENDATIONS

In order to improve its business, Spencers should introduce more

competitive promotional schemes such as those in Big Bazaar.

The product range of Spencers should be improved in order to match that

existing in Big Bazaar.

For promotional offers, company should go for free gifts rather than going

for other ways.


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Bibliography:

USE WEBSITE

www.Spencersretail.com

www.rpggroup.com

SEARCH ENGINE

www.google.com

www.search.com

www.yahoo.com

www.alvista.com

.

Documents

Sarita Project