LOCATION! LOCATION! LOCATION!

GROUP MEMBERS: RADHIKA NANDA NITESH GULRAJANI NIRMAL PHILIP RAHUL KHETRAPAL

Presentation flow
Time wear industry in India. About Ram & Avatar Sons. About World Of Watches. Case questions. Conclusion.
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TIMEWEAR INDUSTRY IN INDIA

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The Indian watch market which is approx. 3%, set to more than double in the next five years to around Rs. 8,500 cr. Growing at 10-15 per cent every year, driven by youth and premium segment of consumers. The current size of watch market in India is about Rs. 4,000-4,200 cr.(As per the report - Indian Time Wear Industry 2010 - published by All India Federation of Horological Industries (AIFHI) and consultancy firm Technopak Advisors) Factors like growing economy, increasing consumerism, strong middle class and a large number of high net worth individuals, would favour the growth of the market.

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Figure 1 (http://jaithaliyasiddharth.blogspot.com/2009_03_01_archive.ht ml)

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RAM & AVATAR SONS

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It started retailing in watches in 1994 under the name Ram Sons in Sadar market. When they started there were 15 shops selling watches in the sadar market, now there are about 20 to 25. Ram & Avatar Sons is largest and best known. In fact they are the largest watch outlet in the whole state of Haryana They keep a large variety of branded watches and also a franchisee of Time Zone. It is spread over two floors and two more floors are planned to be added to the Sadar Bazaar outlet. Few competitors for RAM & AVATAR SONS in sadar bazaar market: > Goel watch company , Gurgaon > Om watch house, Gurgaon > Prakash watch company, Gurgaon.
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WORLD OF WATCHES
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World of watches situated at first floor in metropolitan mall, Gurgaon. Started its operation in 2005 , with opening up of its 1st store. Face competition from stores like kapoor watch company and world of titan in the same mall.

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CASE DISCUSSION
Q.1)Has Dinesh did adequate market research before deciding on Q.1) the location of his second outlet? What else could he have done?
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Is the facility located in an area zoned for his type of business? Is the facility large enough for his business? Does it offer room for all the retail, office, storage or workroom space he need? Does it meet his layout requirements? Does the building need any repairs? Do the existing utilities-lighting, heating and cooling-meet his needs or will he have to do any rewiring or plumbing work? Is ventilation adequate? Are the lease terms and rent favourable? If taken on rent or lease. Is the location convenient to where he live? Can he find a number of qualified employees in the area in which the store is located? Do people he want for customers live nearby? Is the population density of the area sufficient for his sales needs?
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y y y y

CONTD.
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If he choose a location that's relatively remote from his customer base, will he be able to afford the higher advertising expenses? Is the store consistent with the image he would like to maintain? Is the store located in a safe neighbourhood with a low crime rate? Is exterior lighting in the area adequate to attract evening shoppers and make them feel safe? Will crime insurance be prohibitively expensive? Are neighbouring businesses likely to attract customers who will also patronize his business? Are there any competitors located close to the store? If so, can he compete with them successfully? Is the store easily accessible to his potential customers? Is parking space available and adequate?
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CONTD.
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Is the area served by public transportation? Can suppliers make deliveries conveniently at this location? If his business expands in the future, will the facility be able to accommodate this growth? What type of competition does he face in the mall? Can he advertise his shop, in the foot court, Cineplex area?

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Q.2) Should the watch outlet have been located on the ground floor instead of first floor- what data/information is needed before taking this decision?
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Data should be collected about the floor plan of the mall. Target costumer should be selected, focus should not only be on any niche segment of customers. Decision should be taken keeping in mind the finance factor as to what will be the rent or price of per square feet. Working out plans, like whether it will be feasible to give such high rent at the time of launching of the store or not. Data should also be collected about the class of customer profile the mall caters to. Target customer should be selected. After deciding the target customer, pricing strategies for the range of watches will be decided and accordingly the location for the store.

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CONTD.
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Decision should be taken keeping in mind that even a small number of business transactions made is worth high in value for a retail outlet. Whether there is already someone having the same business on the ground floor. The rent must not be so high that affects the budget for other promotional activities at the time of launching the store. Collecting information like where can the Visual merchandising activities and any other promotional activities on the ground floor can be done. Whether the space requirements are fulfilled on the ground floor or not.

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Q.3) What are the advantages and disadvantages of a location in a mall like the Metropolitan Mall compared to a location in a central business district like Sadar bazaar?

Advantages
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Peaceful shopping experience is given to the shoppers with clean surroundings and attractive stores. They have a planned environment or area which caters to all kind of people whereas market like sadar bazaar doesnt offer any planned shops instead the lanes are narrow and congested. Competition is high in these malls. Stores in malls have better window display which acts as a silent seller for the brand. No issue of parking is there as these malls provide ample parking facility to its buyer whereas with narrow and congested lanes sadar bazaar market cant provide proper parking.

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CONTD.
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Many recreational activities like lunch or dinner in food court, movie theatre, entertainment area etc. is being provided by these malls so people not just come there for shopping. One can find many things under one roof with cool air conditional environment as compared to a market like sadar bazaar. Everything is organized in these malls from parking to restrooms. Better staff assistance in stores of a mall as compared to stores in sadar bazaar. Malls have modern and futuristic infrastructure as compared old and regular infrastructure in market like sadar bazaar. Cooperative planning and sharing of common resources in these malls by the retailers.
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Disadvantages
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Still the market is dominated by unorganized market. Markets like sadar bazaar is established from a long time so they have a bigger reach and hold trust of its customer than the malls have and can attract more customers easily. Many formalities are there to be fulfilled to open a shop in a mall which is less in opening up a shop in a market like sadar bazaar. Rentals and maintenance is much higher in an organized store in a mall whereas being an unorganized store in a market like sadar bazaar the maintenance cost is low. Overhead expenses are high in stores which are there in a mall as money is spent on window display, housekeeping and basic amenities whereas local trader in a market like sadar bazaar need not spend much as it has fixed number of customer.

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CONTD.
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The price of the merchandise is little higher in these malls as compared to a market like sadar bazaar. The availability of space in a good mall is less, if it is there, its costly. If the sector is impacted by recession period, then customers prefer to shop at their local stores rather than spending time to drive to these malls. The reach of malls is still less in tier 2 and tier 3 cities, people living there still prefer to shop in local markets.

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CONCLUSION
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Location plays a very important role in depicting the future of a store. Dinesh without much research work opened a store in a mall, he might have been right or wrong but jumping from unorganized retail to organized retail needs lots of research work to be done not only the experience alone can work. If Dinesh could have looked into several facts for looking out for a better location and better space, he could have landed with best location. Not every time research can be correct and fruitful but still little efforts about making a checklist about the particular location or placing his store on ground floor in mall or looking on the advantages or disadvantages he will get for opening a second store in this mall over the store in sadar bazaar could have helped him.

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THANK YOU

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