Amber Kumar Deepak Jeswal Ketan Balani Kirti Tiwari Pooja Saxena Mridu Mohanty

(WMP08002) (WMP08010) (WMP 08020) (WMP 08021) (WMP 08028) (WMP 08073) [1]

Muebles Case
A Study from Managing Retailing
Group 2
1.Environment for the Home Building Industry in India
in 2001
[2]
Unorganized

Highly Fragmented

Undercapitalized

No one stop shops-inconvenience to consumer-time consuming

No differentiation in products

Price undercutting was common

Quality of product varied without any fixed prices

Ambience of market was unfriendly to women

Limited choices of assortments

1.Environment for the Home Building Industry in India
in 2001
[3]

Shopping experience was traumatic

Inadequate after sales service

Poor distribution, retailing, materials procurement and retail practices.

Construction Sector : total Rs.2000 billion per yr

Materials: 67%

1996 2001 Growth
Value: Rs. 970,250
million
Rs. 3,721,450
million
(Up 283%)
Usage of
cement
400 million
tonne
700 million
tonne
(up75%)
2. Review of store concept employed by Muebles
in terms of customer value.

[4]

Completely customer centric

All the Home & Building Merchandise under one roof.

Merchandise with improved design content, aesthetics and functionality.

Goods of assured quality at reliable price.

Information sharing with customer and customer service for
facilitating decision making.

A pleasant shopping experience unique in this product category.

No invisibles
2. Value Added Services

[5]

Comprehensive design assistance by a panel of professionals and
design consultants.

Apartment packages

Installation and Service support

Info mediation through website

Home loan consultancy and loans

CAD/CAM Assist to choose better designs

2. Value Added Services

[6]





Certification programmes for electricians, masons, plumbers and
carpenters.

Educational programme on do-it-yourself techniques and procedures.

Customer loyalty programmes

Other services such as cafe, ATM, kids play zone, etc.


3. Please identify the different customer
segments and their needs
[7]
Mr Muebles of yesteryears: Needs

Homebuilders (Mostly Invisibles): Build a new home from scratch;
Demolish existing houses for new ones;
Added new floors to existing house

Renovators (Mostly Visible): Constructing additional rooms
Changing Fittings, floorings, electrical fittings
Constructing additional rooms; Basic Furniture; Bathrooms; Kitchen

Apartment owners (Both Visible and Invisible): Additional facilities
Improved existing facilities Good Floor, Quality electric wiring
Furnishings, Basic Furniture; Bathrooms; Kitchen
Additional Rooms
Professional: High Quality ; Cost effectiveness

This segment perceived Muebles as expensive and exclusive.
They were not aware of Muebles value proposition.
They were not frequent visitors of the store.
3. Please identify the different customer
segments and their needs
[8]
Todays Mr Muebles

Young well educated professionals

Decent earning; maintained status in society

Owning big cars, Credit cards, consumer durables

Influenced by spouse and peer group

Needs: Looking out for convenience, quality and availability of their needed items.

Had higher expectation as compared to yesteryears Mr Muebles.

They were frequent visitors of the store and the repeat customers.

Had positive attitude towards renovation and improvement.

4. Should Meubles change the way it views the
target market and hence change its
positioning?
[9]











Consumer today looks for convenience, quality and availability

Advice of spouse or friends matters


New positioning:
One stop shop for all home needs

Complete solution provider in the area of home renovation and furnishing

No more a Exclusive and Expensive store


5. Should it redefine its market scope and reach and decide the way
forward in terms of expansion in Ahmedabad and other cities?

[10]











Change in format:
Major thrust on
Kitchen and accessories
Bathroom and accessories
Electricals and fittings
Family friendly environment
Segregation of categories to provide a better experience
Focus on aesthetics for better shopping experience
Better trained, solution oriented sales staff

Location
Near main business center
Focus on Professional, businessmen and corporates
High streets
Primarily open stores in Ahmedabad and gradually focus on other cities
5. Should it redefine its market scope and reach
and decide the way forward in terms of expansion
in Ahmedabad and other cities?

[11]











Merchandise
Varied stock to cater to diversified need of customers
Thrust on imported premium quality goods (competition from IKEA)
Proper alignment of supply chain

Pricing
Premium brands at higher margin
Charge a premium for a complete solution to customer

Promotion
Special construction magazines, opinion leader on blogs etc.
Use of hoardings/advertisements at prominent locations

6. Please analyse the category layout at Muebles
against potential and actual sales and suggest
changes in terms of visibles and invisibles
[12]
There are 5 major categories
1. Kitchen accessories
2. Bathroom
3. Hardware
4. Electrical equipments
5. Furniture & Furnishings

Net Sales Rs.77million
Home building (Invisibles): 8% = 6.16 million
Hardware &Electrical equipments(Visible) 30% = 23.1 million
Furniture & Furnishings(Visible) 25% = 19.25 million
Actual Sales of store is consistently higher than projected so it is doing well.

Total % of Invisible Potential customer: 20% (Building own house)
Maximum margin from Furnishing and furniture & Hardware & Electrical : mostly visible
Invisible goods give meager margin: 8% so it makes sense to reduce Invisible from stores
6. Please analyse the category layout at Muebles
against potential and actual sales and suggest
changes in terms of visibles and invisibles
[13]
Category
Display
space (%)
Purchas
e (%)
Purchase
/Space
Margin Conclusion
Bathroom Fittings 20 18 90% NA
Maintain
space for this category
Furniture 15 4 27% >25%
Increase space for this
category
Kitchen and
accessories
15 23 153% NA
Increase space for this
category
Lightning 12 10 83% NA
Decrease space for this
category
Hardware 15 13 87%
30%
Increase space for this
category
Electrical
Appliances
12 16 133%
White Goods 4 0 0% NA Insufficient data
Other (Paints,
furnishings Etc.)
7 16 229% NA
Increase space for this
category
6. Changes in terms of visibles and invisibles
[14]
Visibles(wood,marble/granite,hardware/sanitary ware,fittings,glassware,electrical
fittings,paints)

Invisibles(cement,sand,Badarpur bricks,metal rods,stone charcoal)

The visible and high involvement products replaced the invisible and low
involvement ones on the shelf.
Customers could place an order for the invisible products though they were not
stocked.
Persuading the contractor or builder(overawed
With Muebles ) to buy the invisibles from Muebels was a challenge.
Homebuilder package: Incentivising a mass of professionals by rewarding their
purchase and providing them Muebels accreditation through a professional course)
Apartment package: Direct mails and tie-ups with companies such as
Electrolux,Pergo and ICI to give special deals to the five different types of apartment
owners. HR personnels of companies were targeted and offered special deals.

6. Please analyse the category layout at Muebles
against potential and actual sales and suggest
changes in terms of visibles and invisibles
[15]
The potential Mr. Muebels should be provided a compelling reason to visit its store.
The new Mr. Muebels was a young professional who was well educated and had a
post graduate degree and earned well(more than Rs.30,000/month).
He had a big car,credit cards and owned all the consumer durables.He is very well
informed of Muebels









Conclusion
[16]
Perception of Muebles:
One stop shopping experience - 28%
Quality Products - 24%

Purchase Influencers:
Alone - 40%
Spouse - 32%
Mainly purchasing Kitchen and Bathroom accessories & Electrical fittings

Own House: 74%
Durable Ownership: Most of them own A/c Washing m/c Microwave, VCD
Spending more on high quality living and lifestyle

Consumer profile
Professionals: 49%
Businessman: 25%
THANK YOU
[17]