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1.1 Background
The lifestyle, preference and demands of consumers are changing rapidly. Superstore culture
is playing a vital role in the ever changing purchasing pattern of consumers. With the current
shopping practice, superstore has become a necessity as it offers a unique shopping
experience. Superstores have successfully made a breakthrough in the urban lifestyle with the
idea of all essential elements under one roof. As the customers are increasingly becoming
more aware of the conveniences and their own lifestyles, they are in many cases preferring to
go to a Chain Superstore for their everyday shopping rather than to small department stores

ACI Logistics Ltd., a concern of ACI group was established in 2008 with a vision to change
the lifestyle of Bangladeshi consumers in the form of retail chain branded as Shwapno.
Shwapno opened its first outlet in Postogola Dhaka in 28 October 2008. At present, it is
operating 46 outlets in 3 districts: Dhaka (41 outlets), Sylhet (4 outlets) & Chittagong (1
outlet) making it currently the largest retail chain in the country with over 35% markets share
of the growing 1500 crore taka retail industry. The number of employees including those at
the Head Office, Distribution Center and Outlets is now more than 1300.

Superstores have attempted the massive expansion drive to attract the consumers in terms of
status and convenience. A rise in a good number of organized retailing superstores, offer the
consumers hygienic items at a competitive price. The expansion of superstores will diversify
the choices of consumers and boost their spending pattern. Superstores in Bangladesh include
Agora, Meenabazar, Prince Bazaar, Nandan and Shwapno. More than 600 retail outlets are
expected to be set up in the next five years in an attempt to attract more consumers. The
expansion of outlets will boost consumers confidence and help to create a market for
manufacturers. In the early days of business around 500 consumers would visit a super store
outlet daily.

Retail industry in Bangladesh still has huge scope since only 2% of the entire population is
served by the retail industry (Jain, 2009). Major competitors of Shwapno are Agora, Meena
Bazaar etc. who have had long established presence in the Bangladeshi market, though

neither has been able to achieve the broad reach and brand equity that Shwapno has been able
to. However, the Shwapno management considers the wet markets as their prime competitors
for the grocery division and all grocery sales strategies are formulated by primarily taking
into account the possible wet market reactions.

Because the retail industry in Bangladesh is still a developing sector its business management
process is also evolving rapidly. This study will look into the techniques and strategies
developed and implemented by Shwapno for grocery category management. An in-depth
study of business processes and innovative strategies used by retail chains specially for
grocery items has not been done in Bangladesh previously. The increasing importance of the
retail industry to the Bangladeshi economy and its growing penetration into many aspects of
peoples lives demands a thorough study on this subject matter.

1.2 Objectives
The broad and specific objectives of the study are as follows:

1.2.1 Broad Objectives
To understand the overall management process of the grocery division at Shwapno

1.2.2 Specific Objectives
To realize the challenges at different steps of the management of grocery division
To determine the accuracy of various sales forecasting methods used for the grocery
division at Shwapno
To learn about planning the supply chain of grocery items
To study the previous sales strategies for the grocery division used by Shwapno
To recommend sales strategies to improve the performance of the grocery division
To assess the customers perception about Shwapno as a service organization

1.3 Methodology
This study will be both descriptive and analytical. In every retail firm, business analytics play
an important role. This report will reflect this with its high emphasis on mathematical
rationales and data. Primary data will be obtained from interviews with workers and
managerial staff at the head office, the distribution center and the outlets situated in Dhaka

city. Information related to the grocery management practices and sales strategies used by the
retail chain both in the present and in the past will be ascertained by conducting non formal
interviews with relevant top management personnels at the firm. Information on customers
perception about Shwapno, will come through a survey conducted at a popular social
networking site among the customers of Shwapno. Other insights will be gained from
interviews with the customers of Shwapno and observations of the firms surroundings.
Primary data related to sales, footfall, basket size and gross profit will be obtained from
Shwapnos Information System. Secondary data will be obtained from journals, books and
the internet.

1.4 Scope
The scope of this study is limited to the operations of ACI Logistics Ltd. (Shwapno). The
study will be limited to grocery sales at the retail outlets situated in Dhaka city. This study
will be broad and comprehensive in nature. Limiting the study to Dhaka city will enable a
thorough study of Shwapnos retail operations, while at the same time saving funds by
reducing travel and living costs.

1.5 Limitations
As the organization is a listed company at the Dhaka Stock Exchange, it may not
disclose price sensitive classified information
The employment status of an individual might prevent the person to ascertain
important information
Information provided by the interviewed individuals might not be accurate


THE COMPANY_______________________________________________________

2.1 ACI Limited
ACI is one of the largest Bangladeshi conglomerates. It established as the subsidiary of
Imperial Chemical Industries (ICI) in 1968 (ACI, 2014). It has been incorporated as ICI
Bangladesh Manufacturers Limited on January 24, 1973. ICI Bangladesh Manufacturers
Limited was a subsidiary of world renowned multinational ICI Plc and was a listed public
limited company under Dhaka Stock Exchange. In 1992 ICI Plc divested its shareholding
through a management buyout and the company name was changed from ICI Bangladesh
Manufacturers Limited to Advanced Chemical Industries (ACI) Limited on 5 May 1992. ACI
has diversified into four major strategic business divisions which include Health Care,
Consumer Brands, Agribusinesses and Retail Chain.

2.1.1 Mission
ACIs mission is to enrich the quality of life of people through responsible application of
knowledge, skills and technology. ACI is committed to the pursuit of excellence through
world-class products, innovative processes and empowered employees to provide the highest
level of satisfaction to its customers.

2.1.2 Vision
To realize the mission ACI will:
Endeavor to attain a position of leadership in each category of its businesses.
Attain a high level of productivity in all its operations through effective and efficient
use of resources, adoption of appropriate technology and alignment with our core
Develop its employees by encouraging empowerment and rewarding innovation.
Promote an environment for learning and personal growth of its employees.
Provide products and services of high and consistent quality, ensuring value for
money to its customers.
Encourage and assist in the qualitative improvement of the services of its suppliers
and distributors.
Establish harmonious relationship with the community and promote greater
environmental responsibility within its sphere of influence.

2.1.3 Values
Customer Focus
Continuous Improvement
cost leadership

2.1.4 Strategic Business Units
The conglomerate operates 3 major strategic business units alongside 10 sister concerns and
other 3 joint ventures. The SBUs have been briefly discussed in the following sections. Pharmaceuticals
ACI carries the legacy of ICI- world renowned British Multinational in providing the people
of Bangladesh with quality medicines and healthcare products. Its state-of-the art
pharmaceutical plant represents Bangladesh's quest for a truly world class manufacturing
facility. ACI's rich heritage leads to innovative and higher value added formulations.

The comprehensive product range of ACI pharmaceuticals include products from all major
therapeutic classes and in various dosage forms like tablet, capsule, dry powder, liquid,
cream, gel, ointment, ophthalmic and injectable. ACI Pharma also has state of the art plant on
Novel Drug Delivery System (NDDS). It produces world class Modified Release drug and
medicine to cater the requirement of pharmaceutical manufacturer of domestic and
international market. It exports high quality pharmaceuticals to a good number of countries of
Asia, Africa & South America. Consumer Brands & Commodity Products
The Consumer Brands Division boasts in having an unequivocal presence in consumers' heart
with the market leading brands like ACI Aerosol, ACI Mosquito Coil, Savlon. These are the
persistent performers in keeping the household clean and free from germs and harmful


The necessity of pure food in the minds of Bangladeshi consumers especially in the
commodity food business has pushed ACI to fill up the market gap by producing commodity
products such as Salt, Flour and Spices. Now the customers of Bangladesh are ensured with
100% pure Salt, Spices products and Wheat products under the brand name of "ACI Pure".

ACI also represents the world renowned product range of Colgate, Nivea, Tetley, Godrej &
Dabur in Bangladesh through distribution and forming joint ventures. Agribusinesses
ACI Agribusiness is the largest integrator in Bangladesh in Agriculture, Livestock and
Fisheries and deals with Crop Protection, Seed, Fertilizer, Agrimachineries, and Animal
Health products. These businesses have glorified presence in Bangladesh:
Crop Care & Public Health
Animal Health

CC & PH supplies crop protection chemicals, Seed supplies Hybrid Rice, vegetable and
Maize seeds, Fertilizer Supplies Micronutrient and Foiler fertilizer, Agrimachineries supplies
Tractors, Power Tiller and Harvester and Animal Health supplies high quality Nutritional,
Veterinary and Poultry medicines and vaccines.

ACI Agribusiness is having strong partnership with national and international R & D
companies, universities and research institutions. Before introducing any product, it is
elaborately tested in the laboratory and farmers field. ACI provides solution to the farmers
through a large team of scientists & skilled professionals.

2.1.5 Sister Concerns
ACI Formulations Ltd.
ACI Agrgochemicals
Apex Leathercrafts Limited
ACI Salt Limited
ACI Pure Flour Limited

ACI Foods Limited
Premiaflex Plastics Limited
Creative Communication Limited
ACI Motors Limited
ACI Logistics Limited

2.1.6 Joint ventures
ACI Godrej Agrovet Private Limited
Tetley ACI (Bangladesh) Limited
Asian Consumer Care (Pvt) Limited

2.1.7 Management Committee
Dr. Arif Dowla Managing Director
Dr. F H Ansarey Executive Director, Agribusinesses
Mr. Syed Alamgir Executive Director, Consumer Brands
Mr. M. Mohibuz Zaman Chief Operating Officer, Pharmaceuticals
Mr. Pradip Kar Chowdhury Executive Director, Finance and Planning
Mr. Sabbir Hasan Nasir Executive Director, Logistics
Mr. Priyatosh Datta Director, Quality Assurance, Pharma
Mr. Abdus Sadeque Director, Marketing & Sales, Pharma
Ms. Sheema Abed Rahman Director, Corporate Affairs
Mr. Md. Monir Hossain Khan Financial Controller
Mr. Imam Ahmed Istiak Director, Operations, Pharma

2.1.8 Board of Directors
Mr. M. Anis Ud Dowla Chairman
Dr. Arif Ud Dowla Managing Director
Mr. Waliur Rahman Bhuiyan OBE Director
Mr. Golam Mainuddin Director
Mr. Md. Fayekuzzaman Director
Mrs. Najma Dowla Director
Mr. Abdul-Muyeed Chowdhury Director
Mr. Juned Ahmed Choudhury Director


2.1.9 Auditors
Hoda Vasi Chowdhury & Co, Chartered Accountants

2.1.10 Legal Advisor
Barrister Rafique-ul Huq, Huq and Company

2.1.11 Financial Consultant
Mr. M Sekander Ali

2.1.12 Financials (Year Ending December 2012)
Authorized Capital Taka 500 Million
Paid Up Capital Taka 238 Million
Sales Taka 21,976 Million
Number of Employees 8,080 (Eight Thousand Eighty)

2.2 ACI Logistics Limited
ACI Logistics Limited was formed in 2008 with a vision to setup nationwide retail outlets,
named Shwapno, to utilize ACIs strong presence in Bangladesh through implementation
of world-class supply chain mechanism.

2.2.1 Present Management
Executive Director Sabbir Hasan Nasir
Chief of Operations Abu Naser
Head of Business Development Sohel Tanvir Khan
Head of Supply Chain Planning Saiful Alam
Head of Retail Sales Md. Shamsuddoha Shemul
Head of Procurement Md. Parvez Chowdhury
Head of Distribution Md. Mohibur Rahman Chowdhury
Head of Dealer Operations Md. Kamal Hossain
Head of Administration Mohd. Mostafizur Rahman
Team Leader, Business Strategy Md. Mahadi Faisal
Manager, Accounts Abdullah Al Mamun
National Sales Manager Debobrata Saha


2.2.3 Business Channels
ACI Logistics currently operates its business through 4 channels: retail, corporate sales,
dealer and franchise. The retail channel branded as Shwapno, is the strongest and most
focused business arm of ACI Logistics. Retail Outlets
Shwapno retail outlets are built on rented places. This on one side takes lesser amount to have
an outlet then purchasing the place as well as causes lesser difficulties in outlet shifting.
However, it also makes it very difficult to select ideal locations to build outlets. Corporate Sales
This is one of the business channels of ACI logistics, responsible for selling products in bulk
amount to corporate customers at a reduced rate. Dealer Operations
In case of dealer operations, investors are encouraged to invest large sums of money in
purchasing products from Shwapno. ACI logistics helps with training, branding and
communications of stores owned by dealers. Dealers in return get to keep the proceeds and
profits from the sales of products purchased from the firm. This situation represents a trade-
off that benefits both the dealers and Shwapno. Shwapno has several dealerships spread
across 16 districts of Bangladesh. Franchises
This is the least developed business channel by ACI Logistics. The reasons being are the
return from such operations is below par and requires extensive involvement. Investors have
the choice to invest a certain sum to purchase franchise rights from ACI Logistics under the
brand name Shwapno. ACI Logistics will invest money in products, outlet decorations,
communications and employee training. In return the customer will receive a certain
percentage from the sale of products at the store. Currently there are only two franchises in
Bangladesh with another located at London.

2.2.4 Organogram
The organogram of Shwapno at both the Head Office and the Outlet has been discussed
separately in the later sections.
10 Head Office
Shwapno has a very conventional organizational structure. Under each department heads,
there are managers who in turn have assistant managers, executives and officers under their
command. Figure 2.1 shows Head Office Organogram at Shwapno. However, although the
position Outlet Operation Manager do not operate at the Head Office, the figure also
includes to illustrate the linkage between the Head Office and the Outlet organogram.

Figure 2.1: Head Office Organogram at Shwapno

The Executive Director is the head of the strategic business unit. The Executive Director
reports directly to the Managing Director, the Chairman and the Board of Directors at ACI.
Under the Executive Director is the Chief of Operations who is responsible for the sales
operations of the company. The CO is responsible for the proper control and management of
retail and dealer sales operations of Shwapno. The CO is also directly looking after the Non
Food Divergence division (NFD).

Head of Retail Sales is the person responsible for attaining the overall retail sales and revenue
target for the company. He also looks after the expansion of outlets. He is aided in his role
by the National Sales Manager (NSM). On the other hand, the Head of Dealer Operations is
responsible for the sales from and expansion of dealer operations. Regional Sales Managers,
Head of
Head of Business
Chief of
Head of Retail
National Sales
Regional Sales
Outlet Operation
Area Sales
Outlet Operation
Oultet Operation
Head of Dealer
Head of Supply
Chain Plannig
Team Leader,
Business Strategy

Area Sales Managers and Cluster Operations Managers report to the NSM directly. Each of
these managers is in charge of a number of outlets in the zones of their responsibility. Even
though these managers have different designations, they all have the same responsibilities.
Their job is to devise strategies to improve sales and footfall (FF) at their assigned outlets.
They also act as supervisors to control outlet operations and give upper management insights
into what is happening in the field.

Head of Business Development is responsible for engaging customers by effectively
communicating and meeting the needs of the consumers of Shwapno. The person is also
responsible for corporate sales and franchises. Lastly, the head of the department looks after
the performance of the Company Goods.

The Head of Supply Chain Planning is responsible for maintaining the supply chain of every
product through each of the three business channels, which essentially is the most important
arm of the firm. This department also handles the planning needs of the company by
forecasting demand, taking into account previous years sales and seasonal variations. The
Head of this department also directly looks after the Commodities category & the Restaurant.

The procurement team is responsible for purchasing products according to the demand laid
down by the planning, category management or operations team. The head of this department
also directly looks after the Protein & Perishables category. The Head of Distribution leads
the distribution team responsible for managing the proper delivery and retrieval of products
from the outlets.

The Human Resources department and Finance department of Shwapno are part deputized
from the main ACI firm. ACI does not have separate Finance and Human Resources
department for each of their strategic business units. Shwapno receives HR and Finance staffs
directly from ACI Group. Individuals in these departments have different pay scales,
structures and hierarchy than their ACI logistics counterparts. Outlet
The organization at outlet level was until recently very Ad-hoc. Only recently has there been
any work done to rectify the matter and adopt a proper organizational structure at the outlet

Figure 2.2: Outlet Organogram at Shwapno

The Outlet Operation Manager (OOM) is responsible for overall performance of the outlet
assigned to him/her. An Outlet Operation Manager is assigned to a single outlet. The person
reports directly to the RSM, ASM or the COM assigned to the particular outlet. The
Inventory and Cash Management Officer (ICMO) is responsible stock and cash management
of the outlet. Assistant Outlet Operation Manager (AOOM) acts as in-charge in absence of
the Outlet Manager, usually at other shifts of operation or if there is no Outlet Operation
Manager assigned to the outlet. The Outlet Operation Manager and the Assistant Outlet
Operation Manager as well as the ICMO are assisted by the Floor Supervisor at the front
store and the Back Store Manager at the back store.

The POS operators issue invoices and records the sales in the system. They directly report to
the ICMO but also follow instructions from the outlet in-charge. Sales Executives (SE) and
Assistants (SA) are assigned to serve the customers directly for each category of products at
the outlet. One SE or SA may be assigned to one or several product categories. They are
guided by the Floor Supervisor as well as the outlet in-charge (OOM/AOOM).

Outlet Operation Manager
Inventory & Cash Management Officer
POS Operator
Assistant Outlet Operation Manager
Floor Supervisor
Sales Executive Sales Assistant
Back Store Manager
Back Store Assistant

SHWAPNO THE RETAIL CHAIN________________________________

3.1 Retail Industry of Bangladesh
Retail trade is one of the traditional businesses of Bangladesh. Its expansion is keeping pace
with population growth and changes in consumption patterns, which are consistent with the
growth of the economy. This expansion has not been structurally organized, because, until
recently, retailing had never been perceived as an industry, but rather as an individual or
family business entity with a very limited scope of organized expansion. Little to no market
information is available on the retail sector, but secondary sources indicate that the size of the
food retail sector in Bangladesh could be US$12-14 billion, and the number of retail grocery
shops could be around 1 million. Retail is one of the biggest sources of employment (12
percent), and it contributed 13 percent (wholesale and retail trading) to Bangladeshs GDP.

Organized retail is booming and creating huge opportunity for enterprises. Retailers though
sell other companies products work out their own marketing strategies fixing their own target
market towards providing customer satisfaction separately. Retail stores irrespective of
product line and relative prices emerge in all shape and sizes, such as Specialty stores,
Department stores, Supermarkets, Superstore, Convenience stores, Discount stores and off-
price stores.

In Bangladesh, the farmers are paid very poorly for the same harvests that are sold at
extremely high prices in the towns and cities. A big margin is taken away by the middlemen
and cartels who add little value. Understanding this value chain gap ACI initiated two new
businesses namely ACI Agribusiness and ACI Logistics, which by removing the middlemen
ensured reasonable prices for both farmers and consumers. ACI logistics launched Shwapno
in 2008 a chain store which offered the retail experience at competitive pricing.

3.2 Shwapno
Shwapno has a very strong retail presence. It has thrice as many outlets as Meenabazar which
is its strongest competitor in terms of outlets and almost 4 times more than Agora its closest
competitor in terms of sales volume. It has a total of 41 outlets spread across the most
populous neighborhoods of Dhaka Division, 1 in Chittagong and 4 in Sylhet. The store
layouts are strategically designed so that high margin items are places at high traffic areas.

Slow moving products are placed near store drivers like beef and fish. Introductory products
are placed near checkout counters and at entry points generate interest.

3.3 Market Positioning
Shwapno started with the same philosophy as Walmart, the retail giant of the west. It aimed
to provide a wide assortment of good-quality merchandise at the lowest possible prices with a
pleasant shopping experience.

3.3.1 Brand Name and Logo Development
Though ACI has a recognized brand name for its consumer and pharmaceutical products its
name has not been tagged with the stores as it is not a very suitable name for a chain store.
Almost all other chain super shops has a one word name that is easy to remember and the
name themselves suggest that they are a shop (Agora, Meena Bazar) or refers to pleasant
experience (Nandan). Shwapno falls in to the latter group as the word literally means dreams
in Bengali (linguistic consideration) and is suggestive of the dream of the Bangladeshi
Consumer that fair prices can be given with a pleasant shopping experience is realized at
Shwapno. The logo shows a man reaching for the stars which further reinforces that at
Shwapno dreams do come true.

3.3.2 Place
Shwapno, at the peak of its expansion in 2009 had 59 outlets across 16 districts of the country
and a huge supply chain management problem. It incurred severe losses and was forced to
reduce its outlets to 42 by 2011. Since then Shwapno has redesigned and streamlined its
business processes in accordance to market research findings and have emerged as price
leader in the retail industry. It currently operates 46 outlets across 5 districts (38 in Dhaka, 2
in Gazipur, 1 in Narayanganj, 1 in Chittagong and 4 in Sylhet).

The Shwapno outlets are designed in a very simple manner. They have bright signage and
simple toned down exteriors so that consumers are not intimidated to enter the store. The
interiors are also simple but appear colorful because of promotional streamers and banners
placed strategically to add color and capture attention which allows a comfortable shopping
experience for its customers.. All outlets control aroma by using the same air freshener.


3.3.3 Product
Shwapnos product portfolio consists of over 25000 stock keeping units (SKU). Currently
these products are separated into four business divisions: Grocery, Company Goods, Non-
food-divergence (NFD) and Restaurant. NFD was introduced to raise the gross profit of the
business model and so far it has achieved marvelous results. All the products offered by
Shwapno are divided in to 24 master categories as presented in Table 3.1.

Table 3.1: Master Category-wise sales contribution to total retail sales
Business Divisions Master Categories Sales Contribution (%)
Protein 22.6
Commodities 16.4
Perishables 5.5
Company Goods
Packaged Foods 12.8
Personal Care 9.4
Dairy 5.8
Beverage & Tobacco 5.6
Kitchen Additives 3.3
Home Care 3.2
Baby Food 1.8
Baby Care 1.5
Stationeries 0.1
Home Made < 0.05
Medicine < 0.05
Life Style 6.4
Electronics & Appliances 1.8
Home Accessories 1.6
Gift & Toys 0.9
Home Appliances 0.5
Accent & Decors 0.2
Infotainment 0.2
Furniture 0.2
Vehicles Currently not in operation
Restaurant Restaurant 0.3

3.3.4 Price
Shwapno is the current price leader in the retail industry and offers the lowest prices
compared to other retailer superstores and in some product categories it competes with the
Local Wet Markets by offering lower prices.

3.3.5 Promotion
Shwapno uses banners, leaflets, posters, signage at storefronts and advertisements in the print
media to reach out to its customers. SMS alerts are also given to regular customers to ensure
that they are aware of current offers and discounts. They have new promotional offers every
weekend targeted towards its store driver protein products like beef and fish, commodity
products like rice and edible oil and various CG and NFD products. With offers that vary
every week these are effective ways to make sure they gain the maximum attention with in
the shortest possible time.

3.3.6 People and Process
ACI Logistics, the company which runs Shwapno employs around 1500 people around the
country who manage the outlets, the inventory, the warehouse and the supply chain and help
run this massive operation. The sales staffs receive continuous training to improve customer
service. It uses sophisticated information systems, ERP software, SAP and EPS (A house
software developed by ACIs MIS department) to control inventory and manage the supply

3.3.7 Target Market
Shwapno is a classic example of mass marketing that failed to attract the masses. Even
though as a price leader and the strength of almost 3 times the numbers of outlets compared
to its nearest competitors it had its basics right, the problem essentially was the fact that the
masses in Bangladesh belong to the lower income groups and would not come to retails super
stores. Even though Shwapno still strives to bring the masses in to its stores its main
customers essentially are the lower middle, middle-middle and upper middle income groups
which constitute about 28% of the population. The income of this group ranges from BDT
25000-40000, BDT 41000- 60000 and BDT 61000-100000 respectively. The customers are
men aged between 30 to 40 years and women between 26 to 50 years of age. Working men
and women as well as housewives come to the stores and no specific gender or occupational
patterns could be found.

3.4 Competitors
Other than Shwapno, there are currently a significant number of competitors in the retail
superstore sector such as Agora, Meena Bazaar, Prince Bazar, Nandonik, Unimart, Mustafa
Mart, Mehedi Mart, Lavender, Dhali, Trust Family Needs etc. to name a few. However, in
case of Groceries, Shwapno considers the local wet markets to be its primary competitor.
Brief descriptions of Shwapnos major competitors have been provided below.

3.4.1 Agora
Rahimafrooz Superstores Ltd. (RSL) launched Agora, the first ever retail chain in Bangladesh
in 2001 (Rahimafrooze, 2014). It aims to consistently provide a remarkably satisfying and
valuable shopping experience through a business that improves the quality of life for
customers and team members. While Agora mainly focuses on food items - ranging from a
wide variety of fish, meat, vegetables, fruits, bakery, dairy, and grocery - it also carries a vast
array of other grocery, personal care, and various other consumer goods and household
utensils. Agora currently operates 13 outlets, all of them located at Dhaka.

3.4.2 Meena Bazaar
Meena Bazaar, one of the largest retail supermarket chains in Bangladesh, started its journey
in 2002. It is a subsidiary of Gemcon Food & Agricultural Products Ltd, producing organic
products, dairy items, prepared food & herbal products (Meena Bazaar, 2014). Meena Bazar
is known as one of the trustworthy food suppliers of the nation; hence it is committed to
deliver its best of the very best by expanding its sphere all over Bangladesh. Meena Bazaar
currently operates a total of 18 outlets (16 at Dhaka, 1 at Chittagong and 1 at Khulna).

3.4.3 Prince Bazar
Prince Bazar holds the highest growth rate in super shop business in Bangladesh. Its motto is
to provide the quality products in lowest price and perfect customer service. Prince Bazar had
been established on 2005 and currently operates 3 outlets at Dhaka (Prince Bazar, 2014).

3.4.4 Wet Markets
Shwapnos greatest threats and competitors in the market are local wet markets. Shwapno
does not consider conventional retail market chains to pose a significant challenge to its goal
of dominance in the industry. Only 2% of the entire population of Bangladesh shop at retail
stores. Most people prefer to shop at wet markets, where prices are reasonable, products are

fresh and bargaining is allowed. Significant percentage of Bangladeshis still believe that wet
markets offer products that are superior to what is available at retail chains. Convincing
people to move away for wet markets is one of the primary strategies of Shwapno.

3.5 Customer Perception
A short SERVQUAL analysis carried out by the author on a social networking website for
education purpose only reveals the perception customers have in reality about Shwapno.
Based on 4 factors: Tangibility, Reliability, Responsiveness and Assurance SERVQUAL
findings suggests that consumers still think of Shwapno as a retail chain of moderate quality.

The factors and their sub-factors are:
1) Tangibility: up-to-date facility, pleasant ambience and professional service personnel
2) Reliability: freshness and trendy, addressing customer needs, maintenance quality
3) Responsiveness: Prompt support, proper feedback handling
4) Assurance: Comfortable behavior, courteous manner and knowledgeable service

On a scale of 1 to 5 (where 1 depicts poor quality and 5 denote high quality of service) the 4
factors have their mean value close to the neutral point 3. In fact, except for the Assurance
factor, most responses of other three factors went below even 3 at 95% confidence level of
analysis. In order to really claim that it has a good service, even the lower value should be
equal to or more than 3.

Reliability Statistics of the factors Reliability Statistics of the sub-factors
Cronbach's Alpha N of items Cronbach's Alpha N of items
.751 4 .857 11
(scale 1-5)
Std. Deviation 95% Confidence Interval of the
Difference (with test value 3=neutral)
Lower value Upper value
Tangibility 3.067 .794 -.1583 .2931
Reliability 3.047 .852 -.1948 .2892
Responsiveness 3.090 .831 -.1462 .3262
Assurance 3.367 .845 .1267 .6069

Also, looking at the Cronbachs alpha of the factors which is a satisfying .751 for the average
score of the four factors and .857 for the sub-factors under these factors, it appears that the
SERVQUAL findings are entirely reliable. Also, the histogram of the four factors clearly
shows the distribution and spread of customer perception regarding the service offered at
Shwapno. While most of the frequencies lie on the moderate quality zone, only Assurance
factor is skewed from the mid-level and spread more towards the high-quality zone. So,
Shwapno has surely done one thing right by providing training to its workforce on how to
serve customer.

Figure 3.1: SERVQUAL factor histograms


GROCERY DIVISION________________________________________________

4.1 Commodities
Commodities include Edible Oils (Soyabean, Rice Bran, Sunflower, Mustard etc.), Rice
(Regular and Aromatic), Lentils, Sugar, Salt, Wheat, Flour, Semolina, and Dry Vegetables
such as Potato, Onion, Garlic, Ginger etc. The category contributes to about 16% of the total
sales of Shwapno and about 10% of the total Gross Profit (GP). Driving force of this category
is Rice which contributes to about 40% of the total category sales, followed by Edible Oils
with approximately 25% contribution. However, Dry Vegetables are the most critical items of
this category due to its complicated quality and availability issues. Figure 4.1 shows typical
sub-category-wise sales contribution to the total master category sales value. Figure 4.2 and
4.3 illustrates the growth of master category sales and GP in 2014 over 2013 respectively.

Figure 4.1: Sub-category-wise sales contribution to total Commodities sales

Figure 4.2: Sales growth in Commodities 2014 over 2013

10% Rice
Edible Oil
Sugar & Salt
Wheat, Flour & Semolina
Dry Vegetables
-45% -46%
Jan Feb Mar Apr May Jun

Figure 4.3: GP growth in Commodities 2014 over 2013
4.2 Proteins
Proteins include Meat (Beef, Chicken, Mutton, Duck, Pigeon etc.), Fish, Shrimp and Eggs. At
several outlets there are also Live Fish and Live Chicken. The category contributes to about
23% of the total sales of Shwapno and about 36% of the total GP. Driving force of this
category is Beef which contributes to about 35% of the total category sales, followed by Fish
and Chicken with approximately 25% and 15% contribution respectively. Fish are the most
critical items of this category due to its complicated quality, preservation and availability
issues. Figure 4.4 shows typical sub-category-wise sales contribution to the total master
category sales value. Figure 4.5 and 4.6 illustrates the month-to-month growth of master
category sales and GP in 2014 Jan-June over 2013 Jan-June respectively.

Figure 4.4: Sub-category-wise sales contribution to total Proteins sales

-9% -7%
Jan Feb Mar Apr May Jun
Beef Mutton Chicken Egg Fish Others

Figure 4.5: Sales growth in Proteins 2014 over 2013

Figure 4.6: GP growth in Proteins 2014 over 2013

4.3 Perishables
Perishables include Vegetables and Fruits. The category contributes to about 6% of the total
sales of Shwapno and about 8% of the total GP. It is a complicated master category due to its
critical preservation and rapid price fluctuation issues. Figure 4.7 shows typical sub-category-
wise sales contribution to the total master category sales value. Figure 4.8 and 4.9 illustrates
the month-to-month growth of master category sales and GP in 2014 Jan-June over 2013 Jan-
June respectively.

Jan Feb Mar Apr May Jun
Jan Feb Mar Apr May Jun

Figure 4.7: Sub-category-wise sales contribution to total Perishables sales

Figure 4.8: Sales growth in Perishables 2014 over 2013

Figure 4.9: GP growth in Perishables 2014 over 2013
Jan Feb Mar Apr May Jun
57.70% 57.05%
Jan Feb Mar Apr May Jun

CATEGORY MANAGEMENT_______________________________________

5.1 Sales Forecasting
Forecasting sales is the first step of category management at any superstore. Forecasting
should be carried out for a definite period ranging from days to years using any method
suitable for the particular business model. The estimation can be for the entire organization,
any particular category or even a single SKU.

5.1.1 Forecasting Period
The grocery sale is usually forecasted for every week as the sales pattern varies from week to
week for a particular month (specially that of rice, lentils, sugar, salt, edible oil, meat and
fish). Generally, in case of commodities, the first week of a month observes a comparatively
heavy sale which gradually decreases in the next two weeks and again picks up in the last
week. However, sales of dry vegetables do not usually follow this pattern and are almost
uniform throughout the month unlike the other commodity items. On the other hand, the
protein sale rises in the first two weeks of a month, then falls significantly in the third week
and reaches its peak in the last week, whereas, sale of perishables remains almost constant
throughout the month except in the last week when it increases significantly. Figure 5.1
shows the typical week-wise sales contribution to total sales of each of the master categories.

Figure 5.1: Week-wise sales contribution to total sales of different master categories
1 2 3 4


Commodities Protein Perishables

Such sales trend is basically related to the period people usually get their salaries which is
considered to be between 27
of a month to 7
of the next month, the shelf-life of the
products, consumption rate of the consumers etc. Again, in special cases the sales may be
forecasted for even one to three days such as day before the Pohela Boishakh or days
before the Shab-e-Barat or the Eid. Holidays, specially at the beginning of a month, also
get special attention regarding sales forecasting (Example: May Day on 1

5.1.2 Sales Analysis
Sales figures are analyzed from various perspectives such as category-wise, sub-category-
wise, SKU-wise, outlet-wise etc. It helps to compare the performance of a particular category
at different time frames or to other categories within the same time frame. This is further
analyzed to sub-category-wise and then SKU-wise to find out the particular category segment
making the difference. Again, the outlet-wise sales analysis helps to determine which outlet
requires a close investigation to find out the change in its performance and subsequent
solutions or learning to increase the sales. Sales analysis is also carried out to evaluate the
performance of a promotional activity. Moreover, any special events must also be considered
during the analysis of past sales performances such as the then organizational status, policies
and practices, socio-economic conditions or any other rare incident.

5.1.3 Forecasting Methods
There are various types of methods used at Shwapno for Grocery sales forecasting, such as:
the simple 1-week or 2-weeks moving average of SKU-wise sales (which is often not
updated) or the last year similar period sales multiplied by growth in sales/changes in number
of outlets/growth in footfall. Because, the superstore retail industry is still very dynamic and
still developing and also because there are rapid changes in the number of outlets of Shwapno
as well as that of the competitors, accuracy of such forecasting method is quite low.

Thus, recently, some other methods have been formulated and tested. One of which firstly,
forecasts the average basket size for a particular master category during a certain week of a
month based on the trend in month-to-month weekly basket size variation calculated using
seasonal forecasting of 36 periods and then multiplying it to an estimated number of footfall
determined by the growth in footfall in the last period compared to the last years same
period. This method however only estimates the total master category sales value during a

certain period and doesnt forecast the sales quantity of individual articles within a certain
period of time, which is extremely important for proper supply chain planning.

Another forecasting method has been also formulated which estimates the sales quantity of
each individual SKUs simply by multiplying year-to-year growth in sales quantity to the sales
quantity of the same period last year. Multiplying the possible MRP of the item forecasts the
sales value of that particular item. Summation of the sales value of all the SKUs of a master
category provides the possible total sales value of that master category within the time period
under consideration. However, it has been found that none of the methods is significantly
accurate. Thus, there is still a search of a reliable forecasting method. The equations and
associated forecasting errors have been presented in the Table 5.1.

Table 5.1: Accuracy Assessment of different Forecasting Methods
Method 1
Purpose Estimating only the master category sales value
Equation Category Total Sales Value = Category FF in the previous similar
period*Forecasted BS determined by seasonal forecasting method
Where, Category FF = Category Footfall (no. of invoices of the category)
Total Sales Value of May 2014, 1
week =
Category FF in April 2014, 1
week*Forecasted BS for May 2013, 1
CV% Commodities 10.5%, Protein 15.3%, Perishables 34.2%
Remarks No master category in grocery division with CV% less than 10%.
Low level of accuracy in case of perishables.
Below moderate accuracy in case of perishables & commodities.
Method 2
Purpose Estimating the Sales Quantity (SQ) of a particular SKU
Equation SQ in a time period =
(SQ in this year last month similar time period/SQ in last year last month
similar time period)* SQ in last year same month similar time period
SQ in May 2014, 1
week =
(SQ in April 2014, 1
week/SQ in April 2013, 1
week)*(SQ in May 2013, 1

CV% Miniket Rice (P) 26%, Soyabean Oil 5ltr 26%, Beef Standard 47%
Remarks Low level of accuracy

5.2 Supply Chain Planning
As discussed earlier in the earlier section, it is difficult to find a reliable sales forecasting
method for retail grocery business. Still, in attempt to forecast sales of stock keeping units
(SKU) for any given period, the planning or the category department tabulates previous
years similar period sales and then they come up with an estimate taking into account
seasonal variations and other factors such as expansion of outlets, recent trends in FF & sales.
However, the preferred approach is to forecast aggressively so that there is no opportunity
loss. But as most of the grocery items are highly perishable one cannot be too aggressive in
forecasting. So, the total sale of a particular item is forecasted with a moderately aggressive
approach. The next step is to work out the supply chain planning. At this point, the planning
team and the category managers estimate outlet-wise SKU quantity requirement generally
using the following method:

Outlet requirement = Round up to the nearest integer [{Forecasted sales of the SKU at the
particular outlet Current stock of the SKU at the outlet + Minimum shelf stock required +
Minimum back store stock required (usually a stock of 1 day)}/Minimum delivery quantity]

Forecasted sales of a particular SKU at the particular Outlet = (Average outlet contribution to
the sale of the particular SKU*Forecasted total sale of the SKU) + Expected additional sales
of the SKU at the particular outlet

Estimation of outlet-wise SKU quantity requirement leads to the determination of the total
purchase requirement of the SKU as follows:

Total purchase requirement = Round up to the nearest integer [{(Outlet requirement)
Current stock of the SKU at the DC + Safety stock required at the DC (usually a stock of 1
day)}/Minimum purchase quantity]

Here, DC = Distribution Center

Each of the master categories has certain space allocated at the distribution center. Category
managers and the planning team always try to manage their stock within the allocated space
and attempts to schedule the arrival time of individual products and the quantity of items per

consignment in such a way that the distribution center suffers less from managing high level
of stocks at any point of time. The general methodology is to schedule the arrival of a
consignment only when the closing stock of the particular SKU at the DC on any day is
estimated to be lower than a certain quantity, which is usually equal to:

Estimated total sales of the SKU next day + Safety stock required at the DC

The procurement team then issues purchase order (PO) according to the plan, ensure delivery
of the products to the DC, which upon approval from the quality assurance team is distributed
to the outlets. These activities are discussed further in the later sections.

5.3 Procurement
The grocery items are purchased from different sources. Usually, all the items are purchased
on credit terms where the credit days may range from 7 days to 45 days. Major types of rice
are purchased directly from rice processing mills. The other less selling types of rice, where
Shwapno is yet to achieve the economies of scale, are purchased from the local wholesale
markets. Lentils are purchased both from the local wholesale markets and directly from lentil
processing mills. Branded commodity products such as different types of edible oils, flour,
wheat, semolina, sugar, salt etc. are purchased directly from the manufacturers. Proteins are
purchased from local wholesale markets and well-established trusted suppliers who purchase
the items directly from different farms. The perishables are mostly purchased from local
wholesale markets as well as directly from different farms specially the fruits in the peak
seasons such as Mangoes directly from farms at Rajshahi in its peak season. Foreign fruits are
imported through suppliers. Dry vegetables are usually purchased from local wholesale

The challenges for the procurement team is to purchase items through strong negotiation to
lower the cost of the product without compromising on its acceptable quality, arrange the safe
and timely delivery of the products from the point of purchase to the DC or any other
destination (directly to the outlet or to any other processing team) as instructed by the
category team. They also play vital role in supplier relationship management by developing
new suppliers and facilitating existing suppliers for the betterment of the organization.


5.4 Quality Control
The Quality Assurance (QA) team for the grocery items is comprised of agriculturists. The
team is dedicated to check and control the quality of the purchased items. They approve the
procurement team to purchase any particular item after checking the quality of its sample,
and then again they check the purchased items upon arrival at the DC before
approving/disapproving the DC officials to receive the items. Certain quality standards are
defined for each of the grocery items which are strictly followed during quality checking.

5.5 Distribution
Shwapno operates two distribution centers at Dhaka, one located at Tejgaon just beside the
head office, and the other being located at Savar. The Tejgaon DC is treated as the central DC
whereas; the Savar distribution center is mainly used for the processing of proteins. The
distribution team work day and night to manage and preserve the stocks at the DC, ensure the
proper timely distribution of the items to the outlets according to their demand. The
distribution team currently operates 16 motor vans in 8 routes for product distribution
purposes to the Dhaka zone outlets (outlets at Dhaka, Narayanganj and Gazipur). Generally,
grocery items are delivered twice a day to each of the outlets, one usually at the early
mornings and the other being at the afternoon. Each of the vans delivery grocery items to 5
outlets per trip. However, in order to lessen product handling; most of the perishables
specially the vegetables are delivered to the outlets directly from the point of purchase using
separate transports such as cycle vans. Distribution to the outlets at Chittagong and Sylhet is
managed by the local management.

Whenever, a consignment arrives at the DC, the officials receive only the amount of products
approved by the QA team and issue Goods Receipt Note (GRN) against the Purchase Order
(PO) issued earlier by the procurement team. Without, prior issued PO, no product is
received. After GRN, the distribution team then delivers the products to the outlets at
scheduled times according to the demand issued by the outlets itself or the category
management team. Such issued demand is termed as Stock Transfer Order or STO. Before a
van starts with the items to be delivered, it signs a Delivery Note to confirm the amount of
each product on transport. Upon delivery, the outlets issue GRN to acknowledge the products
delivered from the DC. The process is illustrated in Figure 5.2.


Figure 5.2: Demand to Delivery Process at Shwapno

5.6 Payment Method
All the suppliers are registered at ACI Logistics as vendors with unique vendor codes. Every
category has its own account where the respective sales amount is transferred on every
working day after deducting the GP. Thus, the category receives the cost of goods sold which
makes up the fund required to pay the suppliers within the credit day range. However, in case
of emergency fund requirement the category management team may apply for additional fund
from the central account of the organization. All the payments are made as recommended by
the category management team through A/C payee cheques from the pay counter at the head
office on every working day at a scheduled period.

5.7 Product Pricing and Promotion Planning
Pricing of the grocery items are monitored daily based on results of frequent surveys on price
and comparative quality of the items available at the major local wet markets and popular
superstores. The purchase costs of the items are also taken into account while setting the
prices. Pricing at all the Dhaka zone outlets (outlets at Dhaka, Gazipur &Narayanganj) are
controlled centrally from the head office. However, in Sylhet and Chittagong the pricing is
set by the local management.

Every weekend (Thursdays to Saturdays) exclusive promotions are offered on grocery items
mainly focusing on the essential ingredients such as rice, sugar, edible oil, beef, chicken etc.
The promotions are communicated through press ads, SMS and internal outlet
Purchase & Delivery

5.8 Private Label Branding
Shwapno focuses on private label branding with significant importance in order to establish
and strengthen its own brand. It has already launched several private labeled commodity
brands such as:
Shwapno Sugar 1kg
Shwapno Deshi Moshur Dal 1kg
Shwapno Chinigura Rice 1kg
Shwapno Miniket Rice 5kg
Shwapno Miniket Rice 20kg
Shwapno Miniket Rice 50kg
Shwapno Nazirshail Rice 5kg
Shwapno Nazirshail Rice 20kg
Shwapno Nazirshail Rice 50kg

Shwapno also plans to launch several other commodity items under the private label brand. It
also plans to re-launch the existing brands in new packs as well as introducing other weight

5.9 Customer Feedback Collection
The market research team of Shwapno conducts daily customer satisfaction survey on each of
the categories and other services provided at the retail outlets. Customer satisfaction points
are then provided for each of the categories based on the survey and distributed to the top
management, the operations team and all the category management team in order to make
them aware of the problems faced by the consumers at respective area which helps in
initiating corrective measures by the associated managements.


SALES STRATEGIES_________________________________________________

6.1 Strategies for Grocery Sales
To increase the sales of groceries which contribute to about 45% of the total sales of
Shwapno, several strategies have been applied by the management at different points of time.
The strategies consist of innovation, creativity, price cut, specialization etc. Some of the
strategies have been briefly presented below.

6.1.1 Beef at unbelievable price
In 2012, Shwapno offered Beef (Premium) at Tk. 235 per Kg only. This was an unbelievable
price compared to Beefs regular price of Tk. 280 per Kg at that time. The sales of beef
increased dramatically as well as the sales of other items at Shwapno outlets.

6.1.2 Formalin Free Campaign
Shwapno 1
started the formalin free campaign in 2012 to gain the customers faith in a
situation of high concern and fear of formalin in food items. Shwapno quickly gained a
substantial amount of new customers due to the campaign. However, Shwapno failed
maintain the hype and gradually lost the newly developed perception of the customers. Figure
6.1 shows a couple of communications used by Shwapno for the Formalin Free campaign.

Figure 6.1: Communications used by Shwapno for the Formalin Free campaign


6.1.3 Live Fish & Chicken
In an attempt to increase the sales of groceries, Shwapno, in 2012, introduced live fish &
chickens in the stores. The initiative became a revolution in the superstore concept in
Bangladesh and was later imitated by other competitors. Shwapno went for massive
communication to promote this initiative as presented by Figure 6.2.

Figure 6.3 represents the sales trend of the live vs. non-live chicken as a fraction of total
chicken sales. It is found that at one point of time (Nov-Dec, 2012) the sales of live chicken
was almost equal to the sales of non-live chicken. However, Shwapno couldnt manage to
continue the initiative to an expected level due to various constraints such as adjustments in
supply chain, redesigning the outlets architecture and operations etc.

Figure 6.2: Communications used by Shwapno to promote Live Fish and Chicken

Figure 6.3: Sales contribution of Live and Non-Live Chicken to total sales of Chicken
Live Chicken Non-Live Chicken


7.1 Conclusion
Through its systematic management and innovative marketing strategies in the grocery
division, Shwapno has been able to achieve a dominant position in the market place. Some of
the strategies were developed as a result of market dynamics, some to create a buzz in the
market. On the other hand, although the business process is very much efficient, it is still
evolving and requires more effort to achieve managerial excellence.

A large portion of consumers is yet to be served. In June 2013, Shwapno operated 38 outlets
whereas it has now increased to 46 outlets. It has been found that the sales of groceries have
not increased as much as it should have been due to this heavy expansion of outlets. Thus, the
management must rethink their marketing strategies for the grocery division which still has a
great opportunity to increase its sales, footfall and the loyal customer base of Shwapno.

7.2 Recommendations
In order to improve the performance of the grocery division at Shwapno, the pricing,
branding, communication, quality control, display engineering and visual merchandising
should be given special priority. Several marketing techniques may be considered for
application, such as:
Intelligent pricing adjusting price at an optimum value to maximize the gross profit.
Innovative quality control & display engineering to keep the products fresh and the
outlets clean and comfortable in terms of temperature, humidity, noise & odor.
Bazaar Look creating a natural wet market or bazaar environment as much as
possible but eliminating the negative features of it.
Special offers discounts on certain amount of purchase within a certain period of
time, bundle offers etc.
Reviving the Formalin Free campaign.
Online sales and advertisements
Backward linkage in the supply chain it would help to lower the cost of the products
which would allow offering lower prices as well as increasing the GP.
Home delivery delivering items to a single home can be too costly but fulfilling
order to a number of homes located at the same area might become profitable.


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