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Project Report

on

Operations Management
Submitted By
Name: Amit Anil Kulkarni
Reg No.: 201513005
Submitted To SCDL
In partial fulfillment of the requirements for the award of degree of

Post Graduate Diploma in


Business Administration

Operations Management Page 1


NO OBJECTION CERTIFICATE

This is to certify that “Amit Anil Kulkarni” is permitted to use relevant data/information
of this organization for his/her project as a partial fulfillment of the Post Graduate
Diploma in Business Administration (Specialization – Operations Management)
Programme. We wish him/her all the success.

Signature of the competent authority

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DECLARATION

This is to declare that I “Amit Anil Kulkarni” have carried out this project work myself in
part fulfillment of the Post Graduate Diploma in Business Administration (Specialization
– Operations Management) Program of SCDL.

The work is original, has not been copied from anywhere else and has not been submitted
to any other University/Institute for an award of any degree/diploma.

Date: Name: Amit Anil Kulkarni

Signature: Reg No: 201513005

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CERTIFICATE OF SUPERVISOR

Certified that the work incorporated in this Project Report on Operations Management
submitted by Amit Anil Kulkarni is his/her original work and completed under my
supervision.

Material obtained from other sources has been duly acknowledged in the Project Report.

Date: Signature of Guide

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CONTENTS
S.NO CHAPTERS PAGE NOS
1 Introduction 7
1.1 Need for the Study 9
1.2 Objective of the Study 9
1.3 Methodology of the Study 10
1.4 Limitations of the Study 10
2 Industry & Company Profile 11
2.1 Introduction to Retailing 12
2.2 Retail Formats 18
2.3 Company Profile 32
3 Operations at Store 44
4 Functional Aspects 51
4.1 Supply Chain Management 52
4.2 Sales Promotion 55
4.3 Advertising 63
4 Data Analysis & Interpretations 67
5 Findings 81
6 Suggestions 83
8 Bibliography 85

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ABSTRACT

There are certain aspects that are vital to be observed in any retail store such as front-end
operations, back-end operations, store layout, customer relation management, visual
merchandising, inventory management, promotional activities….etc .This study explains
all these aspects in particular and emphasizes for an effective way to the retailers to
improve their ability to achieve the targeted goals and enhance the profitability of the
organization.

The project is aimed at the operations (business development) of a store engaged in retail
business and studies its management, growth expansion program and other points.
Business development is two types first is the income generation and by increasing the
business of store. The marketing and business development team is responsible for
business development of store and in turn of the organization. They should be creative and
proactive to attain the task given .They must know how to take competitive advantage over
the competitors. The business development plays an important role in retailing as the
organized retailer operates at very thin margins. So any additional income to the store is
advantage to the organization.

Based on the information presented before on the aspects relating to concepts, objectives,
purposes and /or importance .It is understood that the concept of “business development”
is one of the important areas in retailing. Further it is also understand that based on the
profile of the organization presented in chapter-2, the organizations is one of the leading
and important retail organizations at present.

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Introduction

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CHAPTER- 1
INTRODUCTION

Retail comes from the French word retailer which refers to “cutting off, clip and divide “in
terms of tailoring (1365). It was first recorded as a noun with the meaning of a “sale in
small quantities’” in 1433. Its literal meaning was large quantities from the manufacturers
or importers, either directly or through wholesaler, and then sells individual items or small
quantities to the general public or end-user customer, usually in a shop, also called a store.
Retailer is at the end of the supply chain. Marketers see retailing as a part of their overall
distribution strategy.

Retailing business is quite familiar in foreign countries and famous department stores like
burdens and Macy’s, discount stores like the Gap, Zale’s jewelers and toys ‘R’ us, are all
renewed companies having several chain branches in different countries countries and
doing business internationally.

In India through retailing business through chain shops is emerging as a new business,
several retail stores like Reliance, BigBazar, Megamart…etc have already enter in retail
business and achieved phenomenal business growth. Due to India‘s healthy domestic
economical growth several multi-national companies are eying to enter the fray. As india is
a potential market for retail business because of population. The same has already been
proved in communications and auto sector. further, service providers like dentists, hotels
and hair salons and on-line stores, likeAmazon.com,Bazee.com, E-Bay also come under
retailers. Many business, like Home depot, though they do business in both wholesale and
retail business because they sell to consumers directly .Other business, like The Limited
are both manufactures and retailers . Regardless of other functions these business perform,
they are retail.

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NEED FOR THE STUDY

 Retailing is evolving into a global, high-tech business. There are many organizations
such as Wal-mart, Carrefour, Food Lion, reliance, Metro……etc are pioneers in this
retail sectored.
 Retailers are using sophisticated communication and information system to manage
their business.
 The growing power of the large retail has increased their ability to demand trade.
 Increase in competition in retail had become obvious in this industry to maintain
effective in store operations strategies.
 Customers often aren’t aware of the sophisticated business decisions retail managers
make and the technologies they use to provide goods and services.

OBJECTIVE OF THE STUDY


The objective of the project study to know
 To benchmark the various operations (business development) in retail store.
 To know how well the company policies and procedures are put into practice.
 To know what generally customer looks for from a service organization.
 To identify the problems and suggest the required measures to improve the
performance of the company.

METHODOLOGY OF THE STUDY


The methodology of this project runs as stated below. The data was collected from
1. Primary sources
2. Secondary sources

PRIMARY SOURCES:
 Observation method
 Interview method

The primary information is collected by using a structured questionnaire and also


interviews were held with some of the respondents and staff of the organizations.

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SECONDARY SOURCES:
Secondary data was collected through annual reports of the organizations. The
information’s so collected is tabulated systematically and analyzed meaningfully by using
various statically techniques wherever necessary. This helped a lot in making appropriate
suggestions and drawing meaningful conclusions.

LIMITATION OF THE STUDY

 Respondent’s busy schedule /routines did not give them enough time to respond
properly.
 Fear of top management may have prohibited the employee to give their true opinion.
 Financial data could not be accessed due to company’s confidential clause.

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Industry & Company Profile

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CHAPTER- 2

India’s retail market which is seen as THE GOLDMINE by global players has grabbed
attention of the most developed nations. This is no wonder to the one who knows that the
total Indian retail market is US $350bn. (16, 00,000 crore INR approx.) of which organized
retailing is only around 3 percent i.e. US $8bn (36,000 crore INR approx).“Retailing
includes all activities involved in selling goods or services directly to final consumers for
personal, non-business use. A retailer or retail store is any business enterprise whose sales
volume comes primarily from retailing.” Retail is India's largest industry, accounting for
over 10 per cent of the country's GDP and around eight per cent of the employment.

Retail industry in India is at the crossroads. It has emerged as one of the most dynamic and
fast paced industries with several players entering the market. The presence of 15million
kirana stores brings into light the very fact that the Indian retail industry is highly
fragmented/ unorganized. Retailing in India is gradually inching its way toward becoming
the next boom industry, org shopping has altered in terms of format and consumer buying
behavior, ushering in a revolution in shopping in India. Modern retail has entered India as
seen in sprawling shopping centers, multi-storied malls and huge complexes offer
shopping, entertainment and food all under one roof.

The future of Indian retailing may even witness the concept of 24 hour retailing. Even
though this concept has been in existence in few retail segments like pharmaceuticals and
fuel, it still remains to be a challenge for other segments like food and groceries, apparel
etc to adopt this trend. Although the organized retailing in India is coming up in a big way,
it cannot simply ignore the competition from the conventional stores because of various
factors like reach, extending credit facility and other intangible factors like the human
touch which are provided only by the conventional stores.
Global Scenario:

Retail stores constitute 20% of US GDP & are the 3 rd largest employer segment in USA.
China on the other hand has attracted several global retailers in recent times. Retail sector
employs 7% of the population in China. Major retailers like Wal-Mart & Carrefour have

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already entered the Chinese market. In the year 2003, Wal-Mart & Carrefour had sales of
US $ 70.4 Crore & US $ 160 Crore respectively.

The global retail industry has traveled a long way from a small beginning to an industry
where the world wide retail sales is valued at $ 7 x 10 5 Crore. The top 200 retailers alone
accounts for 30 % of the worldwide demand. Retail turnover in the EU is approximately
Euros 2,00,000 Crore and the sector average growth is showing an upward pattern. The
Asian economies (excluding Japan) are expected to grow at 6% consistently till 2005-06.

On the global Retail stage, little has remained same over the last decade. One of the few
similarities with today is that Wal-Mart was ranked the top retailer in the world then & it
still holds that distinction. Other than Wal-Mart's dominance, there's a little about today's
environment that looks like the mid-1990s. The global economy has changed, consumer
demand has shifted & retailers' operating systems today are infused with far more
technology than was the case six years ago.

Scenario of Retailing in India


Retailing is the most active and attractive sector of last decade. While the retailing
industry itself has been present since ages in our country, it is only the recent past that it
has witnessed so much dynamism. The emergence of retailing in India has more to do
with the increased p of modern supply and distributions solution.

Indian retailing today is at an interesting crossroads. The retail sales are at the highest point
in history and new technologies are improving retail productivity. Though there are many
opportunities to start a new retail business, retailers are facing numerous challenges.
Purchasing power of buyers, especially post-liberalization, increase in product variety, and
increase in economies of scale, with the aid of modern supply and distributions solution.

The Facts
Retailing in more developed countries is big business and better organized that what it is in
India. Report published by McKinsey & Co. in partnership with Confederation of Indian
Industry (CII) states that the global retail business is worth a staggering retailing to

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unorganized in US is around 80 to 20, in Europe it is 70 to 30, while in Asia it comes to
around 20 to 80.

In India the scenario is quiet unique, organized retailing accounts for a mere 5% of the
total retail sector. Although there are around 5 million retail stores in India, 90% of these
have a floor space area of 500 sq.ft. or less. The emergence of organized retailing in IUS $
7 trillion. The ratio of organized The emergence of organized retailing in India is a recent
phenomenon and is concentrated in the top 20 urban towns and cities.

Traditionally retailing in India can be traced to


 The emergence of the neighborhood ‘Kirana’ stores catering to the convenience of
the consumers
 Era of government support for rural retail: Indigenous franchise model of store
chains run by Khadi & Village Industries Commission
 1980s experienced slow change as India began to open up economy.
 Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and
Grasim first saw the emergence of retail chains
 Later Titan successfully created an organized retailing concept and established a
series of showrooms for its premium watches
 The latter half of the 1990s saw a fresh wave of entrants with a shift from
Manufactures to Pure Retailers.
 For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and
Music World in music; Crossword and Fountainhead in books.
 Post 1995 onwards saw an emergence of shopping centers,
 mainly in urban areas, with facilities like car parking
 targeted to provide a complete destination experience for all segments of society
 Emergence of hyper and super markets trying to provide customer with 3 V’s -
Value, Variety and Volume
 Expanding target consumer segment: The Sachet revolution - example of reaching
to the bottom of the pyramid.

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Indian retailing key challenges:

1) LOCATION:
"Right Place, Right choice" Location is the most important ingredient for any business that
relies on customers, and is typically the
prime consideration in a customer’s store choice. Locations decisions are harder to change
because retailers have to either make sustainable investments to buy and develop real
estate or commit to long term lease with developers. When formulating decision about
where to locate, the retailer must refer to the strategic plan:
 Investigate alternative trading areas
 .Determine the type of desirable store location
 Evaluate alternative specific store sites

2) MERCHANDISE:
The primary goal of the most retailers is to sell the right kind of merchandise and nothing
is more central to the strategic thrust of the retailing firm. Merchandising consists of
activities involved in acquiring particular goods and services and making them available at
a place, time and quantity that enable the retailer to reach its goals. Merchandising is
perhaps, the most important function for any retail organization, as it decides what finally
goes on shelf of the store.

3)PRICING:
Pricing is a crucial strategic variable due to its direct relationship with a firm's goal and its
interaction with other retailing elements. The importance of pricing decisions is growing
because today's customers are looking for good value when they buy merchandise and
services. Price is the easiest and quickest variable to change.

4) TARGET AUDIENCE:
"Consumer the prime mover""Consumer Pull", however, seems to be the most important
driving factor behind the sustenance of the industry. The purchasing power of the
customers has increased to a great extent, with the influencing the retail industry to a great
extent, a variety of other factors also seem to fuel the retailing boom.

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5) SCALE OF OPERATIONS:
Scale of operations includes all the supply chain activities, which are carried out in the
business. It is one of the challenges that the Indian retailers are facing. The cost of business
operations is very high in India.

PRESENT INDIAN SCENARIO:


 Unorganized market: Rs. 583,000 crores
 Organized market: Rs.5, 000 crores
 5X growth in organized retailing between 2000-2005
 Over 4,000 new modern Outlets in the last 3 years
 Over 5,000,000 sq. ft. of mall space under development
 The top 3 modern retailers control over 750,000 sq. ft. of retail space
 Over 400,000 shoppers walk through their doors every week
 Growth in organized retailing on par with expectations and projections of the last 5
Years: on course to touch Rs. 35,000 crores (US$ 7 Billion) or more by 2005-06

Major players:
Detailing reasons why Indian organized retail is at the brink of revolution, the IMAGES-
KSA report says that the last few years have seen rapid transformation in many areas and
the setting of scalable and profitable retail models across categories. Indian consumers are
rapidly evolving and accepting modern formats overwhelmingly. Retail Space is no more a
constraint for growth.

India is on the radar of Global Retailers and suppliers / brands worldwide are willing to
partner with retailers here. Further, large Indian corporate groups like Tata, Reliance,
Raheja, ITC, Bombay Dyeing, Murugappa & Piramal Groups ………etc and also foreign
investors and private equity players are firming up plans to identify investment
opportunities in the Indian retail sector. The quantum of investments is likely to skyrocket
as the inherent attractiveness of the segment lures more and more investors to earn large
profits. Investments into the sector are estimated at INR 2000 - 2500 Crore in the next 2-3
years, and over INR 20,000 Crore by end of 2010.

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Few of India's top retailers are:

1. Big Bazaar-Pantaloons: Big Bazaar, a division of Pantaloon Retail (India) Ltd is


already India's biggest retailer.
2. Food World: Food World in India is an alliance between the RPG group in India with
Dairy Farm International of the Jar dine Matheson Group.
3. Trinethra: It is a supermarket chain that has predominant presence in the southern state
of Andhra Pradesh. Their turnover was Rs 78.8 Crore for the year 2002-03.
4. Apna Bazaar: It is a Rs 140-crore consumer co-operative society with a customer base
of over 12 lakh, plans to cater to an upwardly mobile urban population.
5. Margin Free: It is a Kerala based discount store, which is uniformly spread across 240
Margin Free franchisees in Kerala, Tamil Nadu and Karnataka. Wholesale trading is
another area, which has potential for rapid growth. German giant Metro AG and South
African Shoprite Holdings have already made headway in this segment by setting up
stores selling merchandise on a wholesale basis in Bangalore and Mumbai respectively.
These new-format cash-and-carry stores attract large volumes from a sizeable number
of retailers who do not have to maintain relationships with multiple suppliers for all
their needs

INDIAN RETAIL IS MOVING INTO SECOND GEAR:


1) FIRST GEAR: (Create awareness)
 New retailers driving awareness
 High degree of fragmentation
 Real estate groups starting retail chains
 Consumer expecting 'value for money' as core value
2) SECOND GEAR: (Meet customer expectations)
 Consumer-driven
 Emergence of pure retailers
3) THIRD GEAR: (Back end management)
 management
 Vendor partnership
 Category Stock turns
 Channel synchronization

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 Consumer acquisitio
 Customer relation's management
4) FOURTH GEAR: (Consolidation)
 Aggressive rollout
 Organized retail acquitting significant share
 Organized retail acquitting significant share
 Beginning of cross-border movement
 Mergers and acquisitions
Merchandise: food grocery to clothing to spots goods to books to stationery.
Space occupied: 50000 Sq .ft. and above.
SKUs: 20000-30000.
Example: Pantaloon retail’s Big Bazaar, RPG’s Spencers (Giant).

RETAIL FORMATS:
Hypermarket: It is the largest format in Indian retail so far is a one stop shop for the
modern Indian shopper
 Merchandise: food grocery to clothing to spots goods to books to stationery.
 Space occupied: 50000 Sq .ft. and above.
 SKUs: 20000-30000.
Example: Pantaloon retail’s Big Bazaar, RPG’s Spencers (Giant).

Supermarket: A subdued version of a hypermarket.


 Merchandise: Almost similar to that of a hypermarket but in relatively smaller
proposition.
 Space occupied: 5000 Sq. ft. or more.
 SKUs: Around 10000.
Example: Nilgiris, Apna Bazaar, Trinethra.

Convenience store: A subdued version of a supermarket.


 Merchandise: Groceries are predominantly sold.
 Space occupied: Around 500 Sq. ft. to 3000 Sq. ft.
Example: stores located at the corners of the streets, Reliance Retail’s Fresh and Select.

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Department store: A retail establishment which specializes in selling a wide range of
products without a single prominent merchandise line and is usually a part of a retail chain.
 Merchandise: Apparel, household accessories, cosmetics, gifts etc.
 pace occupied: Around 10000 Sq. ft. – 30000 Sq. ft.
Example: Landmark Group’s Lifestyle, Trent India Ltd.’s Westside.

Discount store: Standard merchandise sold at lower prices with lower margins and higher
volumes
 Merchandise: A variety of perishable/ non perishable goods.
Example: Viswapriya Group’s Subiksha, Piramal’s TruMart.

Specialty store: It consists of a narrow product line with deep assortment.


 Merchandise: Depends on the stores
Example: Bata store deals only with footwear, RPG’s Music World, Crossword.

MBO’s: Multi Brand outlets, also known as Category Killers. These usually do well in
busy market places and Metros Merchandise: Offers several brads across a single product
category.

Kirana stores: The smallest retail formats which are the highest in number (15 million
approx.) in India.
 Merchandise: Offers several brads across a single product category.
The smallest retail formats: Which are the highest in number (15 million approx.) in India.
 Merchandise: Mostly food and groceries

Recent Trends: Retailing in India is witnessing a huge revamping exercise as can be seen
in the graph
 India is rated the fifth most attractive emerging retail market: a potential goldmine.
 Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade)
makes up 3 percent or US$ 6.4 billion
 As per a report by KPMG the annual growth of department stores is estimated at
24%

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 Ranked second in a Global Retail Development Index of 30 developing countries
drawn up by contd. AT Kearney.
Traditionally three factors have plagued the retail industry:

Unorganized: Vast majority of the twelve million stores are small "father and son" outlets

Fragmented: Mostly small individually owned businesses, average size of outlet equals 50
s.q. ft. Though India has the highest number of retail outlets per capita in the world, the
retail space per capita at 2 s.q. ft per person is amongst the lowest.

Rural bias: Nearly two thirds of the stores are located in rural areas. Rural retail industry
has typically two forms: "Haats" and “Melas". Haats are the weekly markets : serve groups
of 10-50 villages and sell day-to-day necessities. Melas are larger in size and more
sophisticated in terms of the goods sold (like TVs)

Recent changes:
 Experimentation with formats:
Retailing in India is still evolving and the sector is witnessing a series of experiments
across the country with new formats being tested out.
Ex. Quasi-mall, sub-urban discount stores,Cash and carry etc.

 Store design:
Biggest challenge for organised retailing to create a “customer-pull” environment that
increases the amount of impulse shopping. Research shows that the chances of senses
dictating sales are upto 10-15%. Retail chains like MusicWorld, Baristas, Piramyd and
Globus are laying major emphasis & investing heavily in store design.

 Emergence of discount stores:


They are expected to spearhead the organised retailing revolution. Stores trying to emulate
the model of Wal-Mart.
 Unorganized retailing is getting organized:
To meet the challenges of organized retailing such as large cineplexes, and malls, which
are backed by the corporate house such as 'Ansals' and 'PVR‘ the unorganized sector is

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getting organized. 25 stores in Delhi under the banner of Provision mart are joining hands
to combine monthly buying. Bombay Bazaar and Efoodmart formed which are
aggregations of Karana’s.

Recent Trends contd.


 Multiple drivers leading to a consumption boom:
 Favorable demographics
 Growth in income
 Increasing population of women
 Raising aspirations : Value added goods sales
 Food and apparel retailing key drivers of growth
 Organized retailing in India has been largely an urban phenomenon with affluent
classes and growing number of double-income households.
 More successful in cities in the south and west of India. Reasons range from
differences in consumer buying behavior to cost of real estate and taxation laws.
 Rural markets emerging as a huge opportunity for retailers reflected in the share of
the rural market across most categories of consumption
 ITC is experimenting with retailing through its e-Choupal and Choupal Sagar –
rural hypermarkets.
 HLL is using its Project Shakti initiative – leveraging women self-help groups – to
explore the rural market.
 Mahamaza is leveraging technology and network marketing concepts to act as an
aggregator and serve the rural markets.
 IT is a tool that has been used by retailers ranging from Amazon.com to eBay to
radically change buying behavior across the globe.
 e-tailing’ slowly making its presence felt.
 Companies using their own web portal or tie-sups with horizontal players like
Rediff.com and Indiatimes.com to offer products on the web.
Trends in Present Retail Market:
New Product Categories:
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 traditional food and grocery segment has seen the emergence of

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supermarkets/grocery chains (Food World, Nilgiris, Apna Bazaar), convenience stores
(ConveniO, HP Speedmart) and fast-food chains (McDonalds, Dominos).

It is the non-food segment, however that foray has been made into a variety of new sectors.
These include lifestyle/fashion segments (Shoppers' Stop, Globus, LifeStyle, Westside),
apparel/accessories (Pantaloon, Levis, Reebok), books/music/gifts (Archies, MusicWorld,
Crosswords, Landmark), appliances and consumer durables (Viveks, Jainsons, Vasant &
Co.), drugs and pharmacy (Health and Glow, Apollo).

Increasing competition in the retail market:


New entrants such as Reliance, Bharti Enterprises and the AV Birla group will compete
against well-established retailers, such as Pantaloon Retail, Shoppers’ stop, Trent,
Spencer’s and Lifestyle stores. Foreign retailers are keenly evaluating the Indian market
and identifying partners to forge an alliance with in areas currently permitted by
regulations. With an estimated initial investment of USD 750 million, Reliance is planning
to launch a nationwide chain of hypermarts, supermarkets, discount stores, department
stores, conven stores. These 5,500 stores will be located in 800 cities and towns in India.

 Increase in Private Labels:


With the emergence of organized retail and modern retail formats, private labels have been
gaining significance. They enhance the profitability levels of product categories, increase
retailers’ negotiation powers and create consumer loyalty. More retailers are introducing
their own brands in all categories including Food & Groceries, apparel, accessories,
footwear. These own brands also do not have to manage intermediaries since retailers
maintain oversight of the supply chain. The label penetration is in a huge rise. Private
Label penetration has been on a rise. It is mainly growing among FMCG products in most
supermarkets with groceries accounting for 45.9%

 Expanding to Tier II and III cities:


Indian retailers are planning to extend operations into Tier II and Tier III cities as
heightened IT offshoring activity in these locations have increased consumers’ disposable
income. The population in these cities is

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typically well educated and willing to purchase goods and services. Some major retailers,
like Globus, Reliance Retail and Pantaloon, have already begun building a retail presence
in Tier III cities before many retailers have finalized their Tier II retail operations.

 Foray into Retail Agri-Business:


India’s most prestigious business houses and global retailers are planning to enter retail
agri-business. Market entrants plan to invest in the entire value chain, moving goods “from
the farm to the fridge at home.” Viewed as India’s next “Sunrise Sector,” retailers are
employing contract farming as a means of boosting their ventures. Contract farming
enables farmers to a.ccess land, manpower and farming skill without having to purchase
land. Of the total Cultivable land of 400 million acres in India, contract farming represents
7 million acres thus indicating a tremendous opportunity. For pure corporate contracts
between farmers and companies, only 2,00,000 acres are used.

 Experimenting with formats:


Selecting the right retail format is essential in modern retailing. The difference between
urban and rural customers is one of the reasons why multiple formats are required in India.
Local conditions and insights into buying-behaviour shape the format choice. No single
format will be suitable or an all India strategy and selecting the relevant format is the key
success factor.

Technology in Retail:
Over the years as the consumer demand increased and the retailers geared up to meet this
increase, technology evolved rapidly to support this growth. The hardware and software
tools that have now become almost essential for retailing can be into 2 broad categories.

Customer Interfacing Systems:


 Bar Coding and Scanners
Point of sale 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. Tunnel Scanning is a new concept
where the consumer pushes the full shopping cart through an electronic gate to the point of
sale In a matter of seconds, the items in the cart are hit with laser beams and scanned. All
that the consumer has to do is to pay for the goods.

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 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. Rather than manually process a cheque, the retailer voids it and hands it
back to the consumer along with a receipt, having digitally captured and stored the image
of the cheque, which makes the process very fast..

 Internet
Internet is also rapidly evolving as a customer interface, removing the need of a consumer
physically visiting the store.

Operation Support Systems:


 ERP System
Various 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 the retailer in maintaining his stocks,
getting his supplies on time, preventing stock-outs and thus reducing his costs, while
servicing the customer better.

 CRM Systems
The rise of loyalty programs, mail order and the Internet has provided retailers with real
access to consumer data. Data wareho This, along with the various available CRM
(Customer Relationship Management) Systems, allows the retailers to study the purchase
behavior of consumers in detail and grow the value of individual consumers to their
businesses.

 FUTURE TREND:
SCOPE OF 24hr RETAILING:
The concept of 24hr. retailing in India has been present only in very limited formats like
the pharmaceuticals (Apollo) and fuel retail outlets (H.P, Reliance etc.) and the other retail
formats used to operate only till the early hours of the night. But because of the changing

Operations Management Page 24


lifestyles and the buying habits of the consumers the retailers have been extending their
operating hours till late nights.

Most of the Indian retail formats though capable of operating their formats round the clock
do not choose to do so because of the non feasibility of the idea at present taking in
conjunction the customers’ readiness. For instance if any of the hyper market or
supermarket is functioning during the night the retailer has to bear the extra costs of
electricity, labor and maintenance if the number of footfalls are less very low during the
late nights which otherwise would be profitable to him. Anyways, the shopping time of the
consu India most of the retailing is all about food and groceries. It might not be a rational
prediction that all the consumers will step into the retail outlet at midnights to buy food
and groceries.

This problem can be overcome by implementing the idea in places which have a floating
population even during the nights like railway stations and bus stations. However with the
upcoming culture of malls and the changing lifestyles of the people one can design a small
part of the store or a mall for a new 24/7 retail format which consists of the essential
products like medicines, fruits and vegetables, groceries and some other FMCG products
and test market it. Once if the sales start showing some consistent positive figures and if
the crowd increases then the store can come in a bigger way to reach out to their
customers.

The other option for trying the concept of 24hr retailing is that the retailer can have a
mobile s to happen. outlet which can place itself in the areas which have substantial night
traffic for the sale And once the people are to the 24hr shopping then the retail plans can be
altered accordingly.

Rural Vs Urban Retail Trends:


The urban retail market has been embracing various new formats and the malls turned out
to be the trend setters by promising the concept of shoppertainment. The trends in the rural
market also have been changing from the old Haats and Melas to the rural malls like
‘Chaupal Sagar’ launched by ITC, DCM Shriram Groups one-stop shopping destination
called ‘Hariyali Bazaar’, Godrej groups agri store ‘Adhar’ etc.

Operations Management Page 25


India's largely rural population has also caught the eye of retailers looking for new areas of
growth.

Chaupal Sagar :
ITC launched the country's first rural mall ‘ Chaupal Sagar' offering a diverse product
range from FMCG to electronics appliance to automobiles, attempting to provide farmers a
one-stop destination for all of their needs.

Hariyali Bazaar :
There has been yet another initiative by the DCM Sriram Group called the Hariyali Bazaar'
that has initially started off by providing farm related inputs and services but plans to
introduce the complete shopping basket in due course. Other corporate bodies include
Escorts, and Tata Chemicals (with Tata Kisan Sansar) setting up agri-stores to provide
products/services targeted at the farmer in order to tap the vast rural market.

Adhar:
Commenting on the Rural Retailing chapter in INDIA RETAIL REPORT 2005, Mr. Adi B.
Godrej, Chairman, The Godrej Group (India's one of the leading corporate majors) said
that his group had also launched the concept of agri-stores named 'Adhaar', which served
as one-stop shops for farmers selling agricultural products such as fertilisers providing
farmers knowledge on how to effectively utilise these products. "There are 8 stores already
operating in Maharashtra and Gujarat and further expansion is very much on the cards. He
added.

The group plans to take its recently launched retail concept – Nature's Basket - to newer
cities steadily. Godrej Group's Agro and Food division, Godrej Agrovet Ltd. (GAVL)
operates the format, selling a variety of vegetables, fruits and herbs - both local and exotic
thereby introducing the concept of 'farm-to-plate' to urbanites. Godrej plans to open four
more Nature's Basket stores in Mumbai before taking them national. Setting up cost of a
store is about INR 5-10 million and per stores sales are expected in the range of INR 30-
Rs 50 million a year.

Operations Management Page 26


Interestingly, the world's largest corporation, Wal-mart, also had its roots in rural America.
Unlike many other retailers who started from urban centres and then trickled down to rural
areas, Wal-mart had started from rural areas and then came closer to cities over a period of
time. Many more such concepts are likely to be tested in the future as marketers and
retailer The IMAGES KSA Report avers that these concepts are likely to go a long way in
bringing a huge untapped population within the purview of organized retailing, thereby,
increasing the size of the total markets begin to acknowledge that the rural consumer is
more than a ‘poor cousin' of the urban counterpart.

Urban Trends:
The urban retailing has been experimenting with many formats like the supermarkets,
hypermarkets, specialty stores, multi branded outlets etc. and of latest it seems to be
embracing the trend of mall culture. It is a rich man's world too, with multi-screen
cinemas, restaurants, games and branded shops - well out of the reach of many of the
country's one billion people. But India's middle-classes, widely travelled and with deep
pockets, are flocking to malls.

SWOT ANALYSIS:
A SWOT analysis of the Indian organized retail industry is presented below:

Strength:
 Retailing is a "Technology-intensive" industry. It is technology that will help the
organized retailers to score over the unorganized retailers. Successful organized
retailers today work closely with their vendors to predict consumer demand,
shorten lead times, reduce inventory holding and ultimately save cost. Example:
Wal-Mart pioneered the concept of building competitive advantage through
distribution & information systems in the retailing industry. They introduced two
innovative logistics techniques – cross-docking and EDI (electronic data
interchange)
 On an average a super market stocks up to 5000 SKU's against a few hundred
stocked with an average unorganized retailer. This will provide variety in products
(required breadth & depth for consumers)

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 As a consequence of high volumes, procurement will be direct from the
Manufacturer. Hence, merchandise can be offered at lower costs.

Weakness:
 Less Conversion level:
Despite high footfalls, the conversion ratio has been very low in the retail outlets in a mall
as compared to the standalone counter parts. It is seen that actual conversions of footfall
into sales for a mall outlet is approximately 20-25%. On the other hand, a high street store
of retail chain has an average conversion of about 50-60%. As a result, a stand-alone store
has a ROI (return on investment) of 25-30%; in contrast the retail majors are experiencing
a ROI of 8-10%
 Customer Loyalty
Retail chains are yet to settle down with the proper merchandise mix for the mall outlets.
Since the stand-alone outlets were established long time back, so they have stabilized in
terms of footfalls & merchandise mix and thus have a higher customer loyalty base.

Opportunity:
 The Indian middle class is already 30 Crore & is projected to grow to over 60 Crore
by 2010 making India one of the largest consumer markets of the world.
The IMAGES-KSA projections indicate that by 2015, India will have over 55 Crore people
under the age of 20 - reflecting the enormous opportunities possible in the kids and teens
retailing segment
 Organized retail is only 3% of the total retailing market in India. It is estimated to
grow at the rate of 25-30% p.a. and reach INR 1,00,000 Crore by 2010.
 Rural Retailing:
India's huge rural population has caught the eye of the retailers looking for new areas of
growth. ITC launched India's first rural mall "Chaupal Saga" offering a diverse range of
products from FMCG to electronic goods to automobiles, attempting to provide farmers a
one-stop destination for all their needs." Hariyali Bazar" is started by DCM Sriram group
which provides farm related inputs & services. The Godrej group has launched the concept
of 'agri-stores' named "Adhaar" which offers agricultural products such as fertilizers &
animal feed along with the required knowledge for effective use of the same to the farmers.

Operations Management Page 28


Pepsi on the other hand is experimenting with the farmers of Punjab for growing the right
quality of tomato for its tomato purees & pastes.

Threats:
 If the unorganized retailers are put together, they are parallel to a large supermarket
with no or little overheads, high degree of flexibility in merchandise, display,
prices and turnover.
 Shopping culture has not developed in India as yet. Even now malls are just a place
to hang around with family and friends and largely confined to window-shopping.
 Cultural Variation leads to variation in merchandise in India at different
geographical locations.

Challenges in Retail:
The following are the key areas that may pose a threat to those retail companies that ignore
the impacts of giving less importance to manage their demand and supply: -
 Forecasting and Inventory Management for JIT replenishments of products.
 Peak Season Demand Handling.
 Order Management in case of retailers with multiple outlets.
 Warehouse Management in case of multiple outlets.

India vs. World


Indian retail is fragmented with over 12 million outlets operating in the country. This is in
comparison to 0.9 million outlets in USA, catering to more than 13 times of the total retail
market size as compared to India
 India has the highest number of outlets per capita in the world - widely spread retail
network but with the lowest per capita retail space (@ 2 sq. ft. per person)
 Annual turnover of Wal-Mart (Sales in 2001 were $219 billion) is higher than the
size of Indian retail industry. Almost 100 times more than the turnover of HLL
(India's largest FMCG company).
 Wal-Mart - over 4,800 stores (over 47 million square meters) where as none of
India's large format store (Shoppers' Stop, Westside, Lifestyle) can compare.

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 The sales per hour of $22 million are incomparable to any retailer in the world.
Number of employees in Wal-Mart are about 1.3 million where as the entire Indian
retail industry employs about three million people.
 One-day sales record at Wal-Mart (11/23/01) $1.25 billion - roughly two third of
HLL's annual turnover.
 Developed economies like the U.S. employ between 10 and 11 percent of their
workforce in retailing (against 7 percent employed in India today).
 60% of retailers in India feel that the multiple format approach will be successful
here whereas in US 34 of the fastest-growing 50 retailers have just one format
 Inventory turns ratio: measures efficiency of operations. The U.S. retail sector has
an average inventory turns ratio of about 18. Many Indian retailers KPMG
surveyed have inventory turns levels between 4 and 10.
 Global best-practice retailers can achieve more than 95 percent availability of all
SKUs on the retail shelves (translating into a stock-out level of less than 5 %).The
stock-out levels among Indian retailers surveyed ranged from 5 to 15 percent.

Future direction: Positives


AT Kearney has estimated India’s total retail market at US$ 202.6 billion which is
expected to grow at a compounded 30 per cent over the next five years.
 With the organised retail segment growing at the rate of 25-30 per cent per annum,
revenues from the sector are expected to triple from the current US$ 7.7 billion to
US$ 24 billion by 2010.
 The share of modern retail is likely to grow from its current 2 per cent to 15-20
percent over the next decade
 Over next two years India will see several Indian retail businesses attaining a
critical mass as growth in the industry picks up momentum driven by two key
factors:
 Availability of quality real estate and mall management practices
 Consumer preference for shopping in new environments
 Wal-Mart : huge plans for India. Moving a senior official from its headquarters in
Bentonville, Arkansas, to head its market research and business development
functions pertaining to its retail plans in India.

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 New York-based high-end fashion retailer Saks Fifth Avenue has tied up with realty
major DLF Properties to set up shop in a mall in New Delhi.
 Tommy Hilfiger, retailer of apparels, expects to open one store each in Delhi,
Ahmedabad, Lucknow and Bangalore in the next four months.

Future direction: Concerns


68 million square feet of mall space is expected to be available by end of 2007, which
might lead to over-capacity of malls
 Lack of differentiation among the malls that are coming up. One option may be to
look at specialization.
 Poor inventory turns and stock availability measures - retailers clearly need to
augment their operations.
 Operations of retailers and suppliers are not integrated. Efficient replenishment
practices practiced in the Indian auto and auto-component industry can be
leveraged to implement efficient supply chain management techniques.
 Supplier maturity, in terms of adherence to delivery schedules and delivering the
quantity ordered, is an issue
 Sales tax laws - lead to retailers having state-level procurement and storage leads to
Indian retailers having higher inventories. VAT has helped alleviate this a bit.
 Increased adoption of IT and shrinkage management will be a critical area.

Operations Management Page 31


COMPANY PROFILE: RPG ENTERPRISES
An RPG enterprise is 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. We at Spencer’s are truly proud
to be a part of the RPG family

RPG Enterprises is run by a Management Board headed by Mr. R. P. Goenka, Chairman


Emeritus, Mr. Harsh Goenka, Chairman and Mr. Sanjiv Goenka, Vice-Chairman. The
Management Board comprises of highly qualified and experienced professionals in their
respective fields.

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

QUALITY:
For RPG quality determines success. Continuous process improvements are carried out to
ensure complete satisfaction of customer and market requirements.

RPG ORGANIZATIONAL EXCELLENCE:


RPG Organizational Excellence is an effort toward achieving excellence by enhancing
performances through clarity of purpose, meticulous planning, tenacious execution and
passion to excel.

RPG ORGANIZATIONAL APPROACH :


RPG Organizational Approach translates the group’s organizational excellence strategy
through an effective 3-point program:

Operations Management Page 32


 Six Sigma
 TPM
 Continuous Improvement

RPG ORGANIZATIONAL AWARDS:


The RPG Organizational Excellence Awards were started to give impetus to the group’s
excellence movement. Initiated in 1999, these awards aim to encourage higher levels of
business excellence among the group companies.

RPG ORGANIZATIONAL EXCELLENCE MODEL :


RPG has always been among the forerunners in the area of quality improvement. The
group set up the RPG Organizational Excellence Center in 1998 (then know as the
Corporate Quality Center), to enhance quality standards within all RPG group companies.
To match world standards of excellence the center inducted the Organizational Excellence
Model, drawn from the EFQM framework of excellence and in alignment with the CII –
EXIM Business Excellence Model.

The model works in three distinct phases...


Introspection:
Establishing quality systems, processes and human responses across the group companies
Externalizing: proactively studying customers, markets and societal issues
Benchmarking: applying a relevant global excellence model

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RPG ORGANIZATIONAL EXCELLENCE APPROACH:

Web site: http://www.rpggroup.com/quality1.html


RPG has been encouraging continuous improvement initiatives in all the group companies,
through an effective 3-point program: Six Sigma, TPM, and Continuous Improvement.

The quality drive has been promoted through QC, CFT, and 5S systems. Many of the group
companies have successfully applied the quality improvement program, implementing
policy deployment through the Business Balanced Score Card (BBSC).

The group companies have initiated the excellence drive by implementing TQM strategies
like 5S of housekeeping, and structured problem solving – CFT, Kaizen etc. These
initiatives help in embedding awareness of quality in all organizational processes; leading
to employee involvement, a culture of continuous improvement and definite changes in
QCD.

PG ORGANIZATIONAL EXCELLENCE AWARDS


The RPG Organizational Excellence Awards were introduced in 1999, to encourage higher
levels of business excellence among the group’s companies. These awards motivate the
companies to instill quality control measures in all their processes. The awards also
generate a healthy competitive environment, encouraging the companies to excel.

The RPG quality awards are given to group companies (in the manufacturing or the service
categories) that exhibit outstanding levels of organizational excellence. Each company is
assessed on predetermined criteria for RPG’s quality and organizational excellence awards,

Operations Management Page 34


every year. The ‘Best TQM Team’ and ‘Best TQM Facilitator’ awards are given to
encourage and appreciate improvement efforts at team and individual levels.

The introduction of the awards has been effective in creating a better working
environment by:
 Providing direction and creating a uniform excellence culture throughout the group
 Recognizing contributions made by individual units
 Motivating the management and employees to work toward continuous
improvement
 Improving company performance, based on the sound approach of strategy,
Policies and processes, and its organization-wide deployment.

MANUFACTURING CATEGORY

Year Winner Certificate of Merit

2000 Raychem RPG RPG Cables, Mysore

2001 RPG Cables, Mysore Cetex Petrochemicals, RPG Life Sciences

2002 Cetex Petrochemicals RPG Cables, Thane

2003 CEAT Limited KEC International, Butibori

2004 CEAT Limited Raychem RPG

2005 Raychem RPG CEAT Limited

2006 CEAT Limited Raychem RPG

2007 Raychem RPG CEAT Limited

Operations Management Page 35


SERVICE CATEGORY

Year Winner Certificate of Merit


2000 Spencer’s Travel Zensar Technologies
2001 RPG Cellular Services Zensar Technologies
2002 RPG Cellular Services Zensar Technologies
2003 CEAT Limited Spencer’s Travel
2004 CEAT Limited Spencer’s Travel
2005 Music World Entertainment
CESC Limited
Ltd
2006 CESC Limited N/A
2007 CESC Limited KEC, Projects, Abu Dhabi

Website: http://www.rpggroup.com/quality2.html
Vision:
Leadership in profitability and revenue growth in our chosen businesses. Being a
customer-centric organization and Being the most exciting workplace.

Values:
RPG’s business ethics promote higher levels of excellence. The group’s values of
Customer Sovereignty, People Orientation, Innovation & Entrepreneurship, Transparency
& Integrity, Passion for Superior Performance, Anticipation, Speed and Flexibility propel it
to perform and excel in all spheres of the business.

Core values:
The Core Values of RPG Enterprises were soon defined as its business drivers and are still
faithfully followed and cherished.
Respond - React to a business opportunity. Harness the finest resources.
Perform - Inspire people to come together and work as one team.
Grow - Ensure the best possible outcome… success.

Operations Management Page 36


Quality :
Quality is a process in which RPG Enterprises firmly believes as it aims at continuous
improvements to meet the current and anticipated requirements of customers and markets.
With an ever-changing environment, RPG Enterprises is an exciting place to work, where
excellence, performance and entrepreneurship are valued.

COMPANY PROFILE
Spencer’s Retail is the largest supermarket chain in India. At Spencer’s we have for you an
extensive range of products and durables, designed to satisfy all your shopping needs. We
are proud today of our 400 stores across 65 cities covering a retail trading area of 2 million
square feet and an astonishing 3.5 million customers a month. However, all these figures
and statistics would mean nothing if we couldn’t 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 Spencer’s. And this trust has been the outcome of a consistent high-
quality service.

For every want, for every need:


We at Spencer’s 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 décor 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 Spencer’s.

THE VARIOUS FORMATS IN SPENCER’S RETAIL


Spencer’s Express
Spencer’s express is your store next door for your 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 provide you with
home delivery. Our Express stores stock dairy, fruit and vegetable, bread and bread
products, cut vegetables/ ready to cook, fruit juices, fresh batter, fresh coffee/tea, fresh
masalas, fresh pickles, fresh Ghee, fresh fish and meat.

Operations Management Page 37


Spencer’s Fresh
Spencer’s Fresh stores provide you with an enjoyable and convenient shopping
environment in your very own neighborhood. These 2000 sq. ft. air-conditioned stores are
well stocked with fresh food of the 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, Spencer’s Fresh is far better than the regular sabzi mandis
or local vegetable markets, which is why our consumers return to our stores again and
again. And at Spencer’s Fresh not only do you get fresh, clean and tasty farm produce but
also the lowest possible prices in the locality, yes even lower than your sabziwala!

Spencer’s Daily
The Spencer’s Daily store is your friendly neighborhood store, which caters to your entire
daily shopping needs - from regular groceries to fresh food and also weekly top-up
shopping. About 4000-7000 sq ft in size and with a bright and friendly atmosphere,
Spencer’s Daily saves you the hassle of bargaining with the local Kirana shop owners
(because we offer the lowest possible prices).

Spencer’s Superstore
The Spencer’s Super is the place to go for your monthly shopping. About 8000-15,000 sq.
ft. in size the Spencer’s Super not only caters to your 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. In effect we have everything to make sure
your household runs smoothly all month long.

Spencer’s Hyper
The Spencer’s Hypermarkets are huge destination stores, more than 25,000 sq. ft. in
trading area. Shoppers come here looking for fantastic deals across all categories. Our
Hypermarkets ensure a comfortable, clean, bright and functional ambience to shop along
with the convenience of finding everything under one roof at the best value for money.

OPERATIONS IN INDIA
Spencer’s has retail footage of over 1.3 million square feet and over 250 Spencer’s stores
in 50 cities.

Operations Management Page 38


The company operates through the following formats:
Spencer’s Hypermarkets: a fast growing retail network of hypermarkets with large format
stores in Mumbai, Gurgaon, Ghaziabad, Lucknow, Calicut, Hyderabad, Vizag, Vijayawada,
Aurangabad Durgapur and Kolkata.
Spencer’s Super: one of the largest supermarket chains in the food and grocery segment in
India.
Spencer’s Daily: small format stores conveniently located with a range of products to meet
your daily household needs.

Spencer’s fresh: all food items, juices, and bread products are available.
Spencer’s Express: your food and grocery store next door.

SPENCER’S PROFILE
RPG: Retail Launches "Spencer's Hypermarket" In Visakhapatnam on September 17 2004:
Great Wholesale Club Ltd., the company which operates the GIANT Hypermarkets
launched their first 'Spencer's Hypermarket" today at Vizag. The store was inaugurated by
Vice-Admiral O.P. Bansal, PVSM, AVSM, and VSM. Flag Officer, Commanding-in-Chief,
Eastern Naval Command and Mrs. Renu Bansal.

The store is spread over 60,000 sq. ft and provides ample parking more than 60 cars and
two wheelers in the premises. The store would have 25,000 plus products across staples,
ready foods, instant foods, beverages, health & beauty products, dairy & frozen foods,
garments, electrical goods, general merchandise and other household products. The store
would also have a Bakery, Music World, Café and several other concessionaires offering a
wide variety of products. The store would be open from 9.30 a.m. to 10.00 p.m., 7 days of
the week. The store has several customer facilities which the first in Vizag like 19 cash
tills, special billing for physically challenged people, etc.

There will be special promotions and offers exclusively at Spencer's, 365 days in a year, in
addition to the products being sold below MRP. Spencer's offers a unique no hassles
"Replacement Guarantee" as also a "Price Guarantee" to their customers. This is one of the
several unique features that the store offers to their customers.

Operations Management Page 39


In addition to this Spencer's would have a whole host of exciting offers and activities every
weekday. "Hara Bhara Wednesday" is an exclusive concept. Where customers get fresh
fruits and vegetables at the lowest prices, only at Spencer's and Aksheya Annapurna
showcased on Friday.

Mr. Raghu Pillai, President & Chief Executive, Retail Sector, RPG Enterprises, speaking
about the launch said "This is truly exciting that the "Grand Old Lady" comes back in style
into the Indian retail environment. I am proud to present Spencer's Hypermarket to the
Vizagites". Mr. Kruben Moodliar, CEO added that 'Spencer's promises Mega Value. Maha
Khushi' and that customer in Vizag can now look forward to some great, international
shopping at Indian prices.

RPG Retail has been a pioneer in the organized retail segment and operates several large
successful chains of stores. The various brands operated by RPG Retail include Food
world, Health & Glow, Music World. The hypermarket business was started in 2001. The
store at Vizag will be in association with Phoenix Logistics Pvt. Ltd.

The lowest price, in a format that is air-conditioned, cleans, comfortable, well stocked and
laid-out. The spacious layout allows for wide aisles within the store for moving around and
ample space outside for parking and loading.

The Hypermarket is a large format store that aims at retail consolidation by being a single
point contact between the brand owners and customers. This is one of the fastest growing
formats in Asia. A number of international chains are investing in these stores.
Hypermarkets have a very wide range of product categories, of which the core and
essential range is in groceries, food, home needs, fresh food, garments and consumer
durables. All these are sold at low prices, which is possible because of the economies of
large-scale operations. The Hypermarket format offers several advantages to all the parties
involved in the process.

Operations Management Page 40


SPENCER'S PRDUCTS
Spencer's retail offers the complete gamut of products & durables ranging from bread to
bed covers; from toothpaste to television.

Our product profile includes the following:


1. Fresh fruits and vegetables
2. Groceries & staples
3. Home care products
4. Personal care products
5. Garments & fashions accessories
6. Jewelry
7. Bakery, Chilled and frozen food
8. Utensils & crockery for your kitchen
9. Stationary for your office and home
10. White goods
11. Baby care
12. Music and lots more…

Spencer's Retail provides maximum value for price in its stores. It has been our constant
endeavor to provide the best shopping experience to our customers. We have regular
promotions and special offers running, 52 weeks of the year, that enable our customers to
buy smartly. These offers are available across all our outlets, across the entire range of
products.

WHY SPENCER’S?

 Spencer’s has currently 250 stores geographically spread across the country with a
retail trading area of more than half a million square feet.
 The largest Super Market Chain of India.
 We have a captive audience of around 2.6 million who walk in every month in all the
stores across the chain.
 Consumers view brands advertised on in-store media networks 40% more positively.
(Source: Nielsen Media)

Operations Management Page 41


 Consumers are 34% more predisposed to buy products advertised on in-store media
network. (Source: India retail report 2005)
 In-store advertising has 57% Brand Recall as compared to 24% for TV Ads. (Source:
Nielsen Media)
 Consumers watch in-store media advertising on an average of 7 minutes per visit.
 Variety of branding options (Hyper, Daily / Supers) for the clients and a controlled
environment for in-store promotions. We deliver the lowest OTC cost and ensure
minimum media wastage.

VISION & CORE VALUES


What is it that defines RPG Enterprises’ success and carries it on through generations?

The set of values and the visionary focus of its leaders, which forms the distinct identity of
RPG Enterprises, is what constitute its business drivers.
Its’ Vision and Core Values are:

We shall be a leading Indian Group with a focus on market capitalization through:


 Leadership in profitability and revenue growth in our chosen businesses.
 Being a customer-centric organization and
 Being the most exciting workplace.

 Customer Sovereignty
 People Orientation
 Innovation & Entrepreneurship
 Transparency & Integrity
 Passion for Superior Performance
 Anticipation, Speed & Flexibility

Operations Management Page 42


MILESTONES OF RPG GROUP
The following are the Milestones of 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 Goenka’s acquire two British trading houses - Duncan Brothers and
Octavius Steel.
 After successful acquisitions in the areas of tea, automobile, tyre, jute, cotton
textile and electric cables, Keshav Prasad Goenka retires in the 70s. His business is
taken over by his three sons.
 One of the sons, Rama Prasad Goenka (better known as RP Goenka), starts RPG
Enterprises in 1979 with Phillips Carbon Black, Asian Cables, Agarpara Jute and
Murphy India.
 The 80s see further acquisitions by the RPG group, the first being CEAT Tyres of
India in 1981. The group then went on to acquire KEC (1982); Searle India, now RPG
Life Sciences (1983); Dunlop (1984); HMV (1988); and finally CESC, Harrisons
Malayalam, Spencer & Co. and ICIM in 1989.

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Operations at Store

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STORE OPERATIONS
 Stores shutter will be opened at 7:30 am
 Security opens the tampered seal and locks in the presence Supervisor.
 The first activity to happen will be the house keeping followed by staff scheduling.
 The stock outs are established and the replenishments happen as the day progresses,
though it is suggested that replenishments of the stock should always happens the
customer is not there.
 The head of the store inspects all the departments of the store which is otherwise
called as “Floor Walk”.
 The Supervisor would ensure that all cashiers have enough and correct float cash,
whether the stationery required by them is in place or not.
 The store manager in turn would brief their team on the achievements of the
previous day and the set targets for the day. During this discussion, any incidents
worth mention.
 All the CSA’s working in the schedule between 7:30 am to 2:30pm should be
present at stores by 7:00 am.
 Time when the shutter is opened is registered by the security in Closing and
Opening book and the entry time of the staff is also registered in Staff register.

DUTIES OF STORE MANAGER:


Staff attendance: daily store manager will take the attendance of every employee in store

Staff briefing store manager will discuss previous day’s targets and achieved to days
targets and special promos, awareness among the team members.

Handling CSD activities: The work is that the store manager has to take responsibility of
CSD activities like exchanges, refunds, customer complaints & suggestions.

Check list execution: store manager checks the list which includes stock arrival from
warehouse .CSA’S attendance and their work.

Store manager will check everything that are included to housekeeping like cleaning of
floor, baskets, trolleys etc,.

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Store manager will check the stock that are coming from vendors like fresh choice and
send goods which are damaged.

Store manager keeps some amount in every cash counter which is useful for change as
opening balance. The cashier signs when store manager gives amount and again he will
sign shift end.

Operation management:
The first Spencer’s hypermarket is located in the heart of Hyderabad, in Musheerabad, at a
site spread over 1,20,000sq.ft area. ‘Spencer’s’ stock s over 20,000 products across a
50,000-sq.ft.singlelevel shopping space, and employs around 160 people

The store has a convenient food court and concessionaries who sell a wide range of
products like pearls jewelry, ethnic wear, liquor, fresh chicken, music and personal care
product

The second Spencer’s Hypermarket is located at malad in Mumbai, with an area of


50,000sq.ft. And stocks over 25000 products .it also has a bakery, music world Express
outlet and a gift store.

Spencer’s hypermarket also offers memberships to B28 customers that have advantages of
convenient shopping combined rewards for bulk purchases.

Inventory In Spencer’s
General Stock Receiving:
Inwards process means stock receiving from vendors and manufacturing department and
receiving damage stock from stores. In this process they are doing three functions.
1. GRN process receipt note
2. Stock transfer in process
3. Damage transfer in process.

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GRN process:
This process will start when the stock come to ware house from vendor as per PO
(purchase order). The vendor will come to with invoice and purchase order . my using both
supervisor will check cost price of the product, EAN code of the product and quality After
checking the stock will send to warehouse for storing and the document will go to EDP
section to enter into system . In that EDP section they will modify the cost prices . MRP
and quantity if necessary and finely calculate the total amount including VAT tax .If any
product is damage the product return to vendor at same time and the amount of damage
stock will be deducted from total amount .After GRN complete the stock will go put away
means storage in racks.

Stock transfer in process:


This process will starts when the stock receive from RPC (main warehouse) or any other
warehouse’s. This stock is mainly staples like rice, Atta’s, dals and species ets .In the
process the merchandiser will give order to RPC as per requirement .sometimes the stock
will come from another warehouse when the stock will come from RPC they will send
stock transfer out report with vehicles, then the inwards supervisor will check the PO and
to report and then check the total quantity of the stock .After that the document will go to
EDP section .In that section they will enter the stock details (EAN codes and quantity)
after that stock will go to put away.

Damage transfer in process:


This is another process means receiving damage and expire stock from stores and inside
the warehouse .This process is two types (1)Store damage TI process means the damage
stock of the store of the store will keep at the store and that will check by checker at end of
the every month that is called PRN process. After PRN the stock will come to ware house .
In the ware house the inwards supervisor will check PRN document and receive the
stock .Warehouse damage TI process means, if any stock damages or expires the stock will
come to the damage location. It is done every day and the warehouse in charge will send
TO report to damage supervisor.

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F&V Stock Receiving:
In the process they are sourcing of vegetables from direct formers and local market
(wholesaler) and the fruits are sourcing from Hyderabad and other states .The F&V
merchandiser will give order to vendors before two days and the buyer will go to local
market in early morning of the day to purchase and bring to warehouse by auto by morning
6 am and the vendor will bring the stock before 6 am. After receiving stock to warehouse
the quality and quantity will check after that the stock will go grading it is done through
mandatory.

Outwards process:
Out wards process means stock dispatching from warehouse to stores and damage stock
dispatching from warehouse to vendors or manufacturing department in this process the
main functions are
(1) General stock dispatching process
(2) F&V dispatching process
(3) Damage stock dispatching process

General stock dispatching process:


General stock dispatching process means the stock sending to stores as per requirement of
the store (indent).

Indent process
It will start in this process every day before closing the store manager send the day-end file
means requirement of stock for next day(the day-end file is create by compare both store
MBQ and store QOH).This day –end file will come to it department and the IT manager
will give prepare indent. This process is done through automatically system process .The
indent will come in division wise to each store that is called pick list.

Picking & checking process:


Picking process means by using pick list the picker will pick the stock from each division
for each store as per QOH of the warehouse and after picking the stock keep in store bays
for checking .After picking pick list go to EDP for modification and they will prepare

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check list by using this check list the checker will the stock at store bays after check list go
to EDP to prepare stock transfer out report.

Stock transfer out report:


After completing picking and checking process the EDP supervisor will prepare to
report .After this process the stock will go for packing and then loaded in vehicle for
dispatching. The QC(quantity checker )will go to store with the TO documents to deliver
the stock in store.

F&V dispatching process:


In this process the indent will come through manual before two days from store. By this
indent the F&V manager will give the purchase order to vendors and bring the stock from
local market. After Quality checking and grading the stock will allocate to each store as per
indent of the store. After allocation this stock will keep at store bays. After that the F&V
supervisor will prepare stock transfer out report and then lode in auto .This stock will go to
store before 10 am in the morning .In this process also the QC(quantity checker )will go to
store with the TO documents to deliver them to stock in store.

Damage stock dispatching process :


In this process the store damage and warehouse damage will keep in damage section for
sending to vendor or RPC for replenishment .The damage stock will checked section
supervisor after receiving stock from store and warehouse .After checking the manager
will send the stock to return if it is sending to RPC then the stock transfer out report will
prepare otherwise it will go to second sale or burning purpose.

STAFFING
INTRODUCTION
The organizational structure of a retail store will vary by the size and type of the business
most task involved with operating a retail business will be the same .However small or a
independent retail store may combine many sectors together under one division, while
larger stores create various division for each particular function along with many layers of
management .As Spencer’s is an organized store, it consists of various act ivies .Under

Operations Management Page 49


them, staffing is one of the major part of the operations .Staffing generally consists of
scheduling the employees store meetings, exit interviews, motivating staffing.
My observation including all these activities.

RECRUITIMENT PROCESS
Generally the customers facilitators are recruited by tapping the known sources .They then
look into the bio data and the experience the person has. Mostly the company prefer to
recruit experienced people .This helps the store to reduce to training cost. The payment of
the CSA’s is Rs 4000 and the payment of supervisor s is Rs 6000 and Rs15000 to
manager .Based on the experience they have the salary changes spender’s over, there are
some credits and incentives given to employees who sell Spencer’s in a month .This helps
the management to in build a competitive spirit the rest.

SCHEDULING THE EMPLOYEES


The basic hierarchy or the structure of the staff is that, the store consists of customer
facilitators who are controlled by the supervisors .Above them, there store manager and all
of them are controlled by the cluster manager .The CSA’s are first regarding the way they
sell the product by explaining them the texture,fabric and price of the product so that they
try to induce a thought into the customers mind to buy the product. The CSA’s generally
work in two shifts, first shift from morning 07:30 am to 4:00 and second shift from 1:00
pm to 10:30 pm with a one hour recess time for lunch and fifteen minutes recess for tea
.The recess time is scheduled differently for a group of CSA’s a

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Functional Aspects

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SUPPLY CHAIN MANAGEMENT

INTRODUCTION
The supply chain is the process of creating products for customers .Supply change span
from raw materials, to manufacturing, distribution, transportation, warehousing and
product sales. As you can imagine, when the number of resources, operations, and
functions increase, managing this supply chain can become very complex. An entire supply
chain could exist within a single company supply chains operating within enterprise! Or
supply chain can span multiple enterprises before it reaches a customer .While other
dreams like demand chain and value chain are used today, they usually mean the same
thing managing a portfolio of assets and relationships to transform raw material into
finished goods for customers in the most efficient manner.

A supply chain is dynamic and involves the constant flow of information, product and
funds between different stages .Realistic supply chains have multiple end products with
shared components, facilities and capacities. The flow of material is not always along an
arbores cent network, various modes of transportation may be considered, and the bill of
materials for the end items may be both deep and large.

SUPPLY CHAIN MANAGEMENT PROBLEMS


Supply chain management must address the following problems:
 Distribution Network configuration number, location and network missions of
suppliers, production facilities, distribution centers, warehouses cross-docks and
customers.
 Distribution strategy : Including question of operating control (centralized
decentralizes or shared ): delivery scheme (e.g,, direct shipment, pool point
shipping .cross docking DSD (direct store delivery),closed loop shipping):mode of
transportation (e.g,, motor carrier, including truckload
 Information: Integration of and process through the supply chain to share valuable
information, including demand signals, forecasts, inventory and transportation etc.
 Inventory management: quantity and location of inventory including raw material,
work-in-process and finished goods,

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 Cash-flow : Arranging the payment terms and the methodologies for exchanging
funds across entities within the supply chain.

Supply chain execution is managing and coordinating the movement of materials,


information and funds across the supply chain .the flow is dis directional.

OBJECTIVE OF A SUPPLY CHAIN IN SPENCER’S


The objectives of the project are to create a horticultural model for spencer’s retail are :
 Increases consumer’s value for money
 Reduce cost in the supply chain
 Improve response to customer needs
 Facilities new product innovation
 Increases competitiveness and along term sustainability through out the
production distribution and marketing ’chain’
 Improve the market share of the fresh fruit and vegetables in the retail
sector.
The objective of every supply chain should be to maximize the overall value generated. for
the most commercial supply chains. value will be strongly correlated with supply chain
profitability (also known as a supply chain surplus). The difference between the revenue
generated by from the customers and the overall cost across the supply chain.

Supply chain management is typically use viewed to lie between fully vertically integrated
firms,where the entire material flow owned by a single firm and those where each channel
member operators independently, such a team is spencer’s competitive when each player
knows how to be positioned for hand-off.

SUPPLY CHAIN PROCESS IN SPENCER’S


The supply chain process plays a vital role in every organization .but this process may
different from one organization to another organization.

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The process of supply chain in spencer’s:
The supply chain process in spencer’s retail ltd in Andhra Pradesh is going on in
systematic process
 Manufacturer
 Warehouse
 Stores(spencer’s)
 Customers

SUPPLY CHAIN IN SPENCER’S


The supply chain process in spencer’s is quite a simple one even though have large number
of stores .when merchandisers from different locations go for buying, after selection their
required product they courier them to central point, Hyderabad, since they have chosen
central point as Hyderabad because geographically very much accessible to their
merchandise centers in transport means.so the main warehouse is placed at Hyderabad,
from there according to the requirement of the individual stores at different areas they
courier the products as they adopted this process since Hyderabad very much near to
Visakhapatnam and at any time they can get the goods depending on their requirement to
Visakhapatnam warehouse. here at Visakhapatnam they have separate ware house in
Gajuwakha where the inventory is stocked.

In Visakhapatnam the warehouse is located Gajuwakha where all products are send to all
stores depending on different categories of products, different supply chain process will
use by Spencer’s owned manufacturer and directly from farmers, and for branded products
dispatches from that branded company manufacturer’s.

The same process is adapted by all the stores of spencer’s .thus all about their supply chain
process at spencer’s.

PROCESSES IN WAREHOUSE OR DC
 RECEIVING
 DISTRIBUTION
 DISPATCH

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 EDP
 DAMAGE SECTION
 STOCK CHECK
 SECURITY
SECURITY
Security is implemented to maintain the discipline and to prevent the losses and customers
service and fine fighting discipline cover. They take the responsibility to open and close
the store.
 Uniform
 Time in time out
 Grouning
Prevention losses: finding out where the losses are possible by tighten the security control
the losses

CUSTOMER SERVICE:
Customer services with cheering faces wishing the customers and provide the service
properly to them like basket, trolley and parking etc.,

FIRE FIGHTING:
Whenever there is some information about some fire accident immediately rushing to that
area and try extinguishing the fire. From this tie should will aware about the fire
equipments and this operation.

First Aid: security should provide the first aid to any one like customers, staff when ever it
is needed. Security is of contract based. the head is the Spencer’s employees and reaming
all are contract people.

SALES PROMOTION:
Sales promotion is a key ingredient in marketing campaigns.

SALES PROMOTION means a collection of incentive tools mostly short term, designed to
stimulated quicker or greater purchase of particular product or services by consumers or
the trade.

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 Sales promotion offers a reason to buy
 Sales promotion offers an incentive to buy.
 Sales promotion also includes tools for consumer promotion like samples, coupons,
cash refund offers, prices off, premiums, prizes, free trails, warranties, point of
purchase display and demonstrations etc.,
 Sales promotion are used by organization, including manufactures, distributors,
retailers, trade associations and non profit organizations.
 In ancient times the advertising to sales promotion ratio was about 60:40 but today
the consumer packaged goods companies sales promotion accounts for 65:75
 Sales promotion expenditures have been increased as a percentage of budget
expenditure annually for the last two decades.

Several factors contribute to the rapid growth of sales promotion, particularly in


consumer markets they are :

Internal factors include:


1. Promotion is now more accepted by management as effective sales tool.
2. product managers are qualified to use sales promotion tools
3. product managers are under greater pressure to increase current sales

External factors include:


1. The number of brands has increase
2. Competitors use promotions frequency
3. Many brands are seen as similar
4. Consumers are more prices oriented
5. The trade has demanded more deals from manufacturers.
6. Advertising efficiency has declined because of rising costs, media coverage and
legal restraints.

Sellers use incentive type promotions to attract new prospects, to rewards loyal customers
and to increase the repurchase rates of occasional users. Sales promotions often attract the
brand switchers.

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Marketing managers first estimate what they need to spend in trade promotion and then
they need to spend in consumer promotion. Whatever is left they will budget for
advertising.

In advertising take a back seat to sales promotion because advertising typically acts to
build brands loyalty. Sales promotion with its incessant prices off, coupons, deals,
premiums and blaring quality may devalue the product offering in the buyer’s minds.

HUMAN RESOURCES MANAGEMENT:


The Human Resouces manager will see the all the responsibilities of the store while the
customer are satisfied while they are shopping or not.The HR manager will train the
C.S.A.’s of all the categories.He will decided how much of man power is sufficient for the
each category.The HR Manager recruits the people and allocates how much salary they
will have to pay them. The HR will give the leaves to each category and he will allocate
the working hours to the people who are working in the store.He will allocate the worker
for the 1st and 2nd shifts of the stores.

The HR manager will give the incentives to the category wise .The HR will keep the
records of the every category and they should be given a list of sales day by day to the each
category.He will take the attendance of the workers of each category.In case of any
shortage is held he will take the alternate decision and want to allocate another person to
that category.

The HR manager will work hard for the development of the organization for that purpose
he will trained up the member of each category by giving the demo classes to all people.
The HR manager will motivates the workers in the organization and gives some of the
benefits to workers in the organization like safety and security, health, bonus any
compensation etc will be taken under the HR.

BILLING:
Billing is major part of the store without this the store will not move forward. In this
billing department the people will be take the all the responsibilities while they are in duty
about the money. They should very careful while they are doing their job. Every day they

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will to shift takes place. The people of both shifts will be attend at the end of the day and
they should pay the collected amount to the managers. In case any items are returned by
the customer the manager will give the permission to cancel that bill and want to give the
new bill. The people who are billing they should know the offers and discount of the
product which are in stores, and otherwise they will face so many problems with the
customers and so many times they may loose their value stores.

The mode of payment will be done on 4 type.


a. Cash
b. Credit
c. Coupons (sodexo,paper cuttings)
d. Gift vouchers

CATEGORIES:
Retail marketing industry is growing at rapid space in India. Government policies are also
helping the industries to have a strong foot hold part of the product mix of the retail
industry is FMCG that is bifurcated to food and Non-Food. Food division broadly divided
as biscuit, beverages and noodles where as non food segment is parted into skin, hair and
body segment. So display of goods of this segment is based on price range. The leading
player among the existing one is HLL with around 450 products followed by Henkel, RBI
and P&G there are around 48 bays in the spencer followed 5 selves in the displays

The total trading area 25000sqft in which the following break up may be observed as
Home,Work and Play - 2800 SKU
FMCG - 3623 SKU
F&V - 1400SKU
Fashion - 5650SKU
Hi-Tech - 1450 SKU
Staples - 2440 SKU
Bakery and food - 800SKU

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FRESH(F&V):
In the modern retail F&V (fruits and vegetables) is the important category which diffr from
common retailers the same concept is adopted by the bigger companies like Reliance.F &
V carriers some of the sub-categories like vegetables, hard vegetables,leafy vegetables,
imported fruits (litchi,Australian grapes)exciting vegetables, fruits,bakery items.To attract
the common retailer F & V section is the right section to differ from other competitors.If a
lady consumer satisfies with a stuff of F & V she will turn as a loyal customer to the
organization.

In Spencer’s F & V section consists of Onions,potatoes,Tomotoes,Cabbage,Brinjal etc.,


and leafy vegetables like : Coriander, curry leaf,palak etc.,and fruits are : Apple,
Banana,Grapes,Mango,Orange etc.,

STAPLES:
It is a category completed based on the quality .Staples are a day to day essential category
for A.P people and it is the destination category. Company will put their own brands and
sell it like Dal Rice, Masala etc. Four P’s in this category is to be followed they are:
1. Price
2. Product Knowledge
3. Planogram
4. Promotions

There are sub-categories in staples category:


1. cereals : it consists of raw rice,wheat etc,.
2. Pulses: it consists of toor dal,urrad dal, major and minor dals, channa dal,
Green piece.
3. Floured: RAva-idly, Bombay,maida,atta etc,.
4. Masala and spieces :dry fruits and spices
5. Oil: sun flower, palm. ground nut, rice rich, ghee, vanaspathi etc,.
6. Salt: salt
7. Sweeteners: sugar, jag earn etc.

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FMCG: (Fast moving consumer goods)
FMCG is the basis category which gives top line(sales) FMCG is the 60% business driving
category, if a customer picks up a general basket value rs 300//- line value of FMCG will
be 60%

There are 2 sub categories in it


 Food
 Non food
Food consist of tea, mineral water, aerated drink,fruit juice,savories,potato chips
Apadam,sauces,vermicelli,instead noodles,pickles,corn flakes,health drink, milk Powder,
cream Biscuits, plain Biscuits, wafers, paper Tissues, Chocolates, Toffees. Mint, Sweet
etc,

Non-food category consists of powders/ Detergents, washing Bars, Floor Cleaner, Toilet
Cleaner, pooja ltems, Sanitary ltems, Mosquitoes/ Reptiles, Air fresher, Agarbathi Tooth
Brush, Tooth paste, Mouth Wash, Baby Toiletries, Creams, Soaps, Lotions, Diapers,
shaving creams,razor Blades, OTC products (over the counter) Hair oil color, Bath
Accessories etc,.

H.W.P(Home Work And Play)


It is one of the major categories. It contributes 13% of store With high margins (bottom
line is strong ) customer service should maintain in this category to get average sales,
Average margin contribution is around 25% it is a seasonal category in this season the
contribution of Kitchen Hold ltims Will be high

In Home Kitchen Ware, Table Ware, Home needs, Home décor, Gifts and Novelties,
Cleaning aids, Bathroom aids, Serving ladles, tainless Steel, plates, Bake and Serve,
Cookery, Serving Dishes, Glass Ware, Lend and Fashion like bed sheets, towels, pillow
covers, kerchiefs. Door croutons etc,.

In play Soft toys, Sports, Education and Entertainment. Board Games and puzzles infant
Toys. Play characters etc.

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FURNITURE:
Furniture is one of the important cateagories in the stores. NoW-a days most of the people
are preferred for their luxuries life in the society.sothat people are preferred for the nuclear
families.Due to the increase in the nucoear families there is an increase purchasing
quantity. So that the people are wanted to live in there own house, So that there is an
increase in the furniture.

In this there are 6 subcategories for various standards.


a) Bed Room
b) Livingroom
c) Kitchen room
d) Cgukdren room
e) Iffuce room
f) Outdoor room

a. BED ROOM:

In this category the furniture will have different types of are there Which are to be
decorated in the bed room, to get good out look of the bed room, Due to the increase in the
nucoeat famioies there most be a importance came to the furniture,

Some of the item in furniture which are decorated are bed, mattress, dressing table, chairs,
book stand ward robes unit,

b. living Room Furniture:


it is also known as Hall furniture, in every house the hall must be decorated in a
attractive manner for that purpose they want to place the furniture items. So that many
furniture companies are designed the living room furniture with various designs and
models which are in attractive manner, These are some of the items which are decorated in
the hall to good outlook is sofa set tables. Chairs, T.V unit
Center table, book shelfs, magazine stands etc, corner tables, etc are come under this
category.

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C. kitchen room furniture
Kitchen furniture is also important every home while the people are eating or while doing
the work in the kitchen they should be feel comfort, So that some of the furniture items
should be arranged compulsorily, So that some of the items arranged in the kitchen are
dinning table, chairs. Kitchen stands. Kitchen shelf, s/ kitchen trolley,s. kitchen cupboards,
etc,.

d.Children Room Furniture:


In every family the parents are take care about their children.s. studies so that the parents
are giving a separate room for their studies and for the playing purpose. The parents want
to create a good atmosphere and facilities for their studies. Sleeping and playing purposes
etc,. So that parents are arrange the furniture in a simple manner to their children.

Some of the furniture items which are arranged in the childrens. Room are bed mattress,
chair study table. Book shelfs. Ward robes, computer table, computer chairs, etc,.

e.office room furniture;


Presently all the companies are want to create an ambiance among their customers so that
they want to decorate their offices with attractive among manner. Due to these
availabilities the people in the offices are doing their work in a respectable
way. Some of the furniture items which are arranged in the office room are Tables, Chairs,
book shelves,, agazome sstamd. Telephone stand, computer chair etc, are come under
category,

f. Out door Furniture:


Outdoor furniture is the one of the category in the furniture. People are like to sit in the out
door in the evening for the health air and also for the freshness. Some of the furniture items
which are arranged in the outdoor are shoe rack, iron tables, jula, sofas, etc., are come
under this category.

GARMENTS:
It is the only category which gives more margin than any other category the margin with be
28 to 30%. That total sale contribution will be 9 to 10%

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GARMENTS are of different kinds like MENS WEAR, LADIES, KIDS and FASHION
etc.,
MENS WEAR: Shirts, Jeans, T-Shirts, jackets, Kurtha, Pijama etc.,
LADIES : Dress materials, Salwar Suits, Tops, Skirts, Sarees, Nighties
KIDS: Frocks, Tops, 3/4items, Shirts, Jeans etc.,
FASHION : Foot ware, Junk Jewellery, Cosmetic, Brand Watches, Belts and all inner
wears

ADVERTISING
Advertising is a form of communication that typically attempts to persuade potential
customers to purchase or to purchase or to consume Spencer’s of a particular brand of
product or service. While now central to the contemporary global economy and the
reproduction of global production networks, it is only quite recently that advertising has
been Spencer’s than a marginal influence on patterns of sales and production. The
formation of modern advertising was intimately bound up with the emergence of new
forms of monopoly capitalism around the end of the 19 th and beginning of the 20th century
as one element in corporate strategies to create, organize and where possible control
markets, especially for mass produced consumer goods. Mass production necessitated
mass consumption, and this in turn required a certain homogenization of consumer tastes
for final products. At its limit, this involved seeking to create world cultural convergence to
homogenize consumer tastes and engineer a convergence of lifestyle, culture and behaviors
among consumer segments across the world.”

Many advertisements are designed to generate increased consumption of those products


and services through the creation and reinvention of the brand image . For these purpose,
advertisements sometimes embed their persuasive message with factual information. Every
major medium is used to deliver these messages, including television, radio, cinema,
magazines, news papers, video games. The internet, carrier bags and billboards.
Advertising is often placed by and organization. Organizations that frequently spend large
sums of money on advertising that sells what is not, strictly speacking, a product or service
include c and military recruiters. Non – profit organizations are not typical advertising
clients, and may rely on free modes of persuasion, such as public service announcements.

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Advertising in Spencer’s:
As per our observation, Spencer’s majorly concentrates for advertising about their store, by
print media, local television advertisements and FM.

Print media: Spencer’s concentration mostly on print media rather than electronic medias
like TV’S internet their perception is that print media creates a better impact and
impression on customer minds. Spencer’s mostly concentrate on print media to advertise
bout the discounts and offers of large number of sku’s and to keep remembrance in mind of
the customer for that they mostly concentrate on leaf lets and news papers.

Hoardings playing major role in advertising the brand of Spencer’s adithya Birla group to
all types of customer like upper class and middle class customers Spencer’s concentrate
upon advertisement on hording at every part of the city.

Electronic media: in electronic media, FM playing a major role in advertising. Since in


Vijayawada listeners for radios are quite in good number. But by only these means on cant
get good publicity. After launching of Spencer’s private labels they are using FM media
Spencer’s

VISUAL MECHANDISING:
Visual merchandising can be termed as a orderly, systematic, logical and intelligent way of
putting stock on floor. It has several aspects and involves sku planning, store windows and
floor displays, signs, design, fixtures and hardware, props and mannequins. As retailing
becomes increasingly complex creating the right atmosphere in the store and presenting
merchandising in the right manner becomes more and more important.

To produce good visual merchandising, it is vital to understand the product and the
customer. Good visual merchandising means selling space is neat, easy-to-see, follow and
shop. It means merchandising arranged in a manner that enable the customer to buy
quickly, efficiently and comfortably.

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IMPORTANCE OF VISUAL RCHANDISING
STORE DESGIN:
The store design and layout tells a customer what the store is all about, Lit is very strong
tool in the hands of retailer for communicating and creating the image of the store in the
mid of the customer, it is the creation of the image that is starting point all marketing
efforts. The importance store design needs to be understood from the perspective of retailer
as well as from the perspective of consumer.

The design and lay out of the store are a means of communicating the image of the retail
store. The primary consideration the retailer tales in to account while choosing the look for
his store and the merchandising that he is going to sell, creating store image is like giving a
personality to the store it is what the store is all about,

INTERIOR STORE DESIGN:


The interior store design is a function of the aesthetics within the store, the merchandising
sold within the space use for the same and the overall lay out, now concerned each of these
areas, the first factor that needs to be take in to account is the amount of space allocated
within the store. For the merchandising, this often termed as space planning,

SPACE PLANING
It helps a retailer determine the amount of space available for selling and for storage, it
also helps determine the following,
The location of various departments
The location of various products waith in the department
The specific location for impulse products, destination areas, seasonal
Products, products with specific merchandising needs, adjacent departments etc.,
The relation of space to profitability

LIGHTING
Lighting is a key factor of retail design .The lighting screen to adopt has to be decided
upon keeping in mind the kind of products being sold in the store and the target audience.
Effective lighting is key to the sale of merchandising and it helps create a favorable first
impression.

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PLANOGRAM
Planogram is a tool used by the retailer that helps determine the location of merchandising
with in a department .It is a diagram that visually communicates how merchandise and
props physically fit onto a store fixture or window to allow for the proper visibility and
price point options.

METHODS OF DISPLAY
Retailers while displaying their products may adopt various methods.

COLOUR DOMINANCE
This is simplest and most direct method of presenting merchandising .In such a display
merchandise is primarily displayed by color .Within the color display the products may be
displayed by size and style.

COORDINATE PRESENTATION
Many times it is effective to present merchandising are coordinate manner .Presentation by
coordination may be done for garments and can also can be done for the home-fashions,
bed and bath lines and even kitchen requisites.

PRESENTATION BY PRICE
In such a display, the inexpensive, bargain or merchandising is displayed first. The volume
of the product and the saving is dominant.

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Chapter 5: Data Analysis & Interpretations

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DATA ANALYSIS & INTERPRETATIONS

1) How do you know about Spencer’s?

a) TV/FM b) Pamphlet c) Newspaper d) Others

TV/FM; 20%; 20.00%

Others; 53%; 53.00% Pamphlet; 12%; 12.00% TV/FM


Pamphlet
Newspaper; 15%; 15.00% Newspaper
Others

Interpretation:
The above graph shows out of 100 respondents 20% of the people know through T.V/FM,
12% of the people know through pamphlet, 15% of the people know through newspaper
and remaining 53% of the people know through others.

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2) What made you make to prefer Spencer’s?

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What do you like about Spencer’s store? Rate your experience in following questions

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5) Product Quality
a) Delighted b) Happy c) Somewhat satisfied d) Dissatisfied

Dissatisfied; 5%; 5.00%


Delighted; 13%; 13.00%
Some What satisfied; 15%;
15.00% Delighted
Happy
Some What satisfied
Happy; 67%; 67.00% Dissatisfied

Interpretation:
The above graph shows out of 100 respondents 13% of the people delighted with product
quality,67% of the people happy, 15% of the people somewhat satisfied and 5% of the
peoples are dissatisfied.

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6) Product Variety
a) Delighted b) Happy c) Somewhat satisfied d) Dissatisfied

Dissatisfied; 11%; 11.00%

Somewhat Satisfied; 24%; Delighted; 26%; 26.00%


24.00% Delighted
Happy
Somewhat Satisfied
Happy; 39%; 39.00% Dissatisfied

Interpretation:
The above graph shows out of 100 respondents 26% of the people delighted with product
variety 39% of the people happy, 24% of the people somewhat satisfied and 11% of the
peoples are dissatisfied.

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7) Product Availability
a) Delighted b) Happy c) Somewhat satisfied d) Dissatisfied

Dissatisfied; 13%; 13.00%


Somewhat Satisfied; 15%;
15.00% Delighted ; 29%; 29.00%
Delighted
Happy
Somewhat Satisfied
Dissatisfied
Happy; 43%; 43.00%

Interpretation:
The above graph shows out of 100 respondents 29% of the people delighted with product
availability 43% of the people happy, 15% of the people somewhat satisfied and 13% of
the peoples are dissatisfied.

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8) what do you rate Spencer’s on product pricing.
a) Delighted b) Happy c) Somewhat satisfied d) Dissatisfied

Dissatisfied; 11%; 11.00%


Somewhat Satisfied; 22%; Delighted; 15%; 15.00% Delighted
22.00%
Happy
Somewhat Satisfied
Happy; 52%; 52.00%
Dissatisfied

Interpretation:
The above graph shows out of 100 respondents 15% of the people delighted with product
pricing 52% of the people happy, 22% of the people somewhat satisfied and 11% of the
peoples are dissatisfied.

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9) Store Ambience
a) Delighted b) Happy c) Somewhat satisfied d) Dissatisfied

Dissatisfied; 15%; 15.00% Delightde; 17%; 17.00%


Delightde
Somewhat Satisfied; 28%;
28.00% Happy
Happy; 40%; 40.00% Somewhat Satisfied
Dissatisfied

Interpretation:
The above graph shows out of 100 respondents 17% of the people delighted with store
ambience 40% of the people happy, 28% of the people somewhat satisfied and 15% of the
peoples are dissatisfied.

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10) Convenient Location
a) Delighted b) Happy c) Somewhat satisfied d) Dissatisfied

Dissatisfied; 6%; 5.45%


Somewhat Satisfied; 10%; Delighted; 28%; 25.45%
9.09%
Delighted
Happy
Somewhat Satisfied
Happy; 66%; 60.00% Dissatisfied

Interpretation:
The above graph shows out of 100 respondents 28% of the people delighted with
convenient location 66% of the people happy, 10% of the people somewhat satisfied and
6% of the peoples are dissatisfied.

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11) Fast & Accurate Billing
a) Delighted b) Happy c) Somewhat satisfied d) Dissatisfied

Sales

Dissatisfied; 10%; 9.09%


Somewhat Satisfied; 19%; Delighted; 24%; 21.82% Delighted
17.27% Happy
Somewhat Satisfied
Dissatisfied

Happy; 57%; 51.82%

Interpretation:
The above graph shows out of 100 respondents 24% of the people delighted with fast &
accurate billing 57% of the people happy, 19% of the people somewhat satisfied and 10%
of the peoples are dissatisfied.

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12) Customer Service
a) Delighted b) Happy c) Somewhat satisfied d) Dissatisfied

Sales

Dissatisfied; 6%; 5.45%


Somewhat Satisfied; 12%; Delighted; 23%; 20.91% Delighted
10.91% Happy
Somewhat Satisfied
Dissatisfied

Happy; 69%; 62.73%

Interpretation:
The above graph shows out of 100 respondents 23% of the people delighted with customer
service 69% of the people happy, 12% of the people somewhat satisfied and 6% of the
peoples are dissatisfied.

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13) Do you refer Spencer’s brand to your friend?
a) Yes b) No

No; 16; 16.00%

Yes
No

Yes; 84; 84.00%

Interpretation:
The above graph shows out of 100 respondents 84% of the people are ready to recommend
to others 16% of the people are not ready to recommend to others.

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Findings

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FINDINGS

 Discount offers are not very visible in Newspapers/T.V.


 Billing counters were found inadequate/ slow billing.
 All the offers are not being updated by the \IT administrator at the right time.
 In the store customer service associates do not have proper knowledge in private labels.
 Pops are not updated in the f&v (fruits& vegetables) and staples section.
 Parking space is very less, mostly in weekends.
 fresh stock in ( F&V )fruits & vegetables is not available.

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Suggestions

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SUGGESTIONS

 Discount offers to customers should be made more effective by presenting


advertisements in newspapers.
 Billing counters which are being kept closed to be opened during rush hours
 Salesmen should improve their body language by being submissive and cordial in
receiving customers.
 Special manpower to help customers to guide products to be allotted.
 They need proper training and knowledge about products. Then they can explain about
the private labels.
 It should be mandatory to update the pops in all section in store.

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Bibliography

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BIBLIOGRAPHY

 Phillip Kotler Marketing Management

 Swapna Pradhan Retail Management

 Levy Weitz Retail Management

Websites:
 Imagesretailing.com
 Retail blitz
 Google
 Spencersretail.com

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