CHAPTER:-1

INTRODUCTION

1
 INTRODUCTION OF INDI AN RETAIL INDUSTRIES:

In the background of high consumerism and income of the urban consumers, in

recent year there are a number of companies have expressed their interest

towards retail sector outlets. As a result numbers of shopping malls have started

their operations in metro and urban areas. Pantaloon, big bazaar, Vishal Mega

Mart, Reliance Fresh are the best known examples of retail sector outlets in

India.

Retailing is the interface between the producer and the individual consumer

buying for personal consumption. This excludes direct interface between the

manufacturer and institutional buyers such as the government and other bulk

customers. A retailer is one who stocks the producers goods and is involved in

the act of selling it to the individual consumer, at a margin of profit. As such,

retailing is the last link that connects the individual consumer with the

manufacturing and distribution chain. Some of the key features of retailing

include:

Selling directly to customers with out having any intermediaries

Selling in smaller units / quantities, breaking the bulk

Present in neighborhood or in the location which is quite convenient to the

customers.

Very high in numbers

Recognized by their service levels

2
 Fitting any size and or location

It is assumed that due to the entry of a number of retail outlets in the urban and

semi urban areas, the mindset of the existing customers have undergone drastic

changes. Besides it is also reported that the traditional retailing such an age old

Grocery shops have directly faced competition with the organized retailing

sector. In some parts of the country, it is reported that the traditional retails are

resisting the entry of organized shopping malls. For instance the traditional

retails of Bhubaneswar with the active support of the consumers at large didnt

allow reliance Fresh to start outlet initially.

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%

Ranked second in a Global Retail Development Index of 30 developing

countries drawn up by AT Kearney.

3
Retailing in India: the present scenario

The present value of the Indian retail market is estimated by the India Retail

Report to be

around Rs. 12,00,000 crore($270 billion) and the annual growth rate is 5.7

percent. Retail

market for food and grocery with a worth of Rs. 7, 43,900 crore is the largest of

the different

types of retail industries present in India. Furthermore around 15 million retail

outlets help

India win the crown of having the highest retail outlet density in the world. The

contribution

of retail sector to GDP has been manifested below:

Country Retail Sector's share

in GDP (in %)

India 10

USA 10

China 8

Brazil 6

As can be clearly seen, retailing in India is superior to those of its contenders.

Retail sector is

a sunrise industry in India and the prospect for growth is simply huge. There are

many factors

4
that have stimulated the rise of the shopping centers and multiplex-malls in a

jiffy. Some of

them can be listed as follows:

Rise in the purchasing power of Indians-

The rise in the per capita income in the last few years has been magnificent.

This has led to the generation of insatiable wants of the upper and middle class.

The demand of new as well as second hand durables has risen throughout the

country thus providing the incentive for taking up retailing.

5
Favorable to farmers- retailing has helped in removing the middlemen and has

thus enhanced the remuneration to farmers. This is a new revolution in the

agricultural sector in India and will go a long way in amending the condition of

agriculture, a major concern among policy makers.

Use of credit- a typical Indian is most conversant with using credit cards than

carrying money. These have led to a shift of the consumer base towards

supermarkets and make the payments in the form of credit.

Comfortable Atmosphere- a visit to a retail store appears to be more soothing

for the generation-Y. People and kids prefer to shop in an air conditioned a tech

savvy manner. The retail industry is the second largest employer in India. It

currently employs about 7 percent of the total labor force in India. Finance

Minister P. Chidambaram's recent statement salaries ought not to be legislated

is a welcome move as most of the organized retail is in private hands. However

only about 4.6% of the total retail trade is in organized sector. It generates about

Rs.55, 000 crore ($12.4 billion). The major and minor players desperately need

to work hard in this direction so that next time the figures look more decent.

The government must also make an attempt to ameliorate the situation as

political instability and infrastructure namely power and roads are the major

roadblocks in the path of smooth functioning of the market.

6
Components of Retail Sector

The major components of the retail sector are:

Food and Grocery, Fast Moving Consumer Goods (FMCGs), Consumer

Durables, Apparel, Footwear and leather, Watches, Jewellery, and Health and

Beauty The anatomy of the retail market has shown that the clothing and

textiles constitutes 39 percent of the organised retail pie, followed by food and

grocery, which accounts for 11 percent of the total retail market.

However, according to the survey conducted by KPMG for Federation of Indian

Chamber of Commerce and Industry (FICCI), among these, the food and

grocery is expected to witness the fastest growth followed by clothing as the

second-fastest growing segment.

7
 OBJECTIVES OF THE STUDY

To understand the different marketing strategies being followed by

Vishal Mega Mart.

To learn their marketing mix.

To know the customer preference towards Vishal Mega Mart.

Marketing help to define the business for the customer's interests, not your own.

It is the process of learning what customers want or need and determining how

to satisfy those wants or needs. It is also used to confirm whether the customer

reacted to a marketing program as expected. The benefits of market research

include:

Learning who your customers are and what they want.

Learning how to reach your customers and how frequently you should try

to communicate with them.

Learning which advertising appeals are most effective and which ones get

no response.

Learning the relative success of different marketing strategies, thus

improving return on investment.

Learning how not to repeat your mistakes.

8
 LIMITATION OF THE STUDY

Although it would have been nice to conduct a perfect research study, but this

study is conducted under certain limitations, which were faced while doing this

research. So it is highly recommended to consider these limitations while going

through the project study.

These limitations are as follows

1. LIMITATION OF DATA

The statistical data regarding the city was not available to us on

secondary source of data and to generate such data on the primary source

was a task, which cannot be achieved in such a short time.

2. LIMITATION OF TIME

The limitation of time was another constraint in the study as the study

had to be conducted in few months therefore many aspects have been

left unexplored. Research period is not just much enough to know fully

about the strategies & consumers perception

3. INHIBITIONS OF THE RESPONDENTS

The respondents did not reply the question with precision as they were

busy with their own work or they were not interested in taking part in

such a research. Employees sometimes feel hesitated while telling about

their view about their marketing strategies.

9
4. RESEARCH HAS BEEN CONDUCTED IN A LIMITED AREA

The research has been conducted for the Vishal mega mart(Shastri Nagar

Garh Road,Meerut) but not all their retail outlet have been covered

therefore it has been mentioned that the research has been conducted in a

limited area.

5. THE SAMPLE SIZE IS SMALL

The sample size taken for this thesis is small; it may not actually

represent the whole population. The data collected were totally

depending on the respondents views, perception, behavior, psychology

related to particular scheme which could base in nature

These limitations were very common and yet we came across these with a

positive note and the subsequent chapters in this report shall explain the

rationality behind the structural compilation.

10
 SCOPE OF STUDY

This project gave me great exposure to the customers perception to the

marketing strategies adopted by the Vishal mega mart because it includes the

service offered by them. The study also identifies the attitudes and preference of

the consumers. The study also focused on Media through which the product

reaches the consumers This project helped me in knowing the market

practically.

11
 RESEARCH METHODOLOGY

Definition of Research

The word research is derived from the Latin word meaning to know. It is a

systematic and a replicable process, which identifies and defines problems,

within specified boundaries. It employs well-designed method to collect the

data and analyses the results. It disseminates the findings to contribute to

generalize able knowledge. The characteristics of research presented below

will be examined in greater details later are:

Systematic problem solving which identifies variables and tests

relationships between them,

Collecting, organizing and evaluating data.

Logical, so procedures can be duplicated or understood by others

Empirical, so decisions are based on data collected

Reductive, so it investigates a small sample which can be generalized

to a larger population

Replicable, so others may test the findings by repeating it.

Discovering new facts or verify and test old facts.

Developing new scientific tools, concepts and theories, this would

facilitate to take decision.

For the proper analysis of data simple statistical techniques such as percentage

were use. It helps in making more generalization from the data available. The

12
data which was collected from a sample of population was assumed to be

representing entire population was interest. Demographic factors like age,

income and educational background was used for the classification purpose.

2.1 Research Design:

It was important to collect detailed information on various aspects for

effective analysis.

Research design can be of three forms:

Descriptive Research: It is conducted to ascertain certain magnitudes

and to provide an accurate snapshot of some aspect of the market

environment. For example: Determining the size of the market, market

share, availability of distributors, sales analysis, studies of consumer

attitude etc.

Exploratory Research: This is used when one is seeking insight into the

general nature of a problem, the possible decision alternatives, and

relevant variables that need to be considered. Little prior knowledge is

required. Research methods are highly flexible, unstructured and

qualitative. For example: What new product should be developed, what

should be the positioning of our product, etc.

Causal Research: Causal studies are designed to determine whether one

or more variables cause or determine the value of other variables. It is an

evidence of relationships of variables. For example: Whether decrease in

13
 price will lead to an increase in the sales of a product, or whether the

presence of a sales person will help in increasing the sales in a retail

outlet, etc.

These three types can be viewed as cumulative. The research design

adopted for project research is Causal Research.

Once the researcher has decided the Research Design, the next job is of

data collection. For data to be useful, our observation needs to be

organized so that we can get some patterns and come to logical

conclusions.

Depending upon the sources utilized, whether the data has come from

actual observations or from records that are kept for normal purposes, statistical

data can be classified into two categories:

2.2 Primary Data

2.3 Secondary Data

2.2 Primary Data:

It is one, which is collected by the investigator himself for the purpose of

specific inquiry or study. Such data is original in character and is generated by

surveys conducted by individuals or research institutions.

It can be obtained by:

Communication

Observation

Questionnaire
14
2.3 Secondary Data:

When an investigator uses the data, which has already been collected by

others such data is called secondary data. This data is primary for the agency

that collects it and becomes secondary data for someone else who uses this data

for his own purpose.

It can be obtained by:

Companys web

Journals

Reports

Newspapers

Government Publications

Publication of professional and research organization.

The research methodology involves the following major steps namely-

2.3.1 Defining data source

2.3.2 Research approach

2.3.1 Defining data source:

In the project, both primary and secondary data were used for the research

process. Secondary data are data that were collected for another purpose and

already exist somewhere. In this project the secondary data are collected

from internet, newspapers and text materials. This constitutes the chief

material on the basis of which research work is carried out.

15
 Primary data are data freshly gathered for specific purpose or specific project

purpose. It is obtained by study specifically designed to fulfill the data of the

problem in hand. Primary data are original in character. Primary data was

collected in two ways: - Observation research and surveys.

2.3.2 Research Approach:

In the project primary data was collected through observation research, surveys

and secondary data from internet, books and text materials. In observation

research, fresh data was collected by observing the relevant parameter of

research. Basically secondary data was used for evaluating the performance of

stock market.

2.4 Sample Design:

For carrying out any research or study on any subject it is very difficult to cover

even 10% of the total population. Therefore the sample size has to be decided

for a meaningful conclusion. For designing the sample size, it was thought

proper to cover a very small percentage of population in various age groups.

The method used for sample technique was non probability convenience

sampling method. This method is used because it is known previously as to

whether a particular person will be asked to fill the questionnaire. Convenient

sampling is used because only those people will be asked to fill the

questionnaires that were easily accessible and available to the researcher.

Considering the constraints, it was decided to conduct the study based on

sample size of 200 people in specific age groups. Scientific method is not

16
adopted in this study because of financial constraints and also because of lack of

time; also the basic aim of doing the research is academic, hence most

convenient way is selected

2.4.1 Sample Size:

I conducted approximately 50 samples during my research.

2.4.2 Sampling Method:

I used random sampling method for my research. Where, I have selected the

persons randomly for research work.

2.5 Method of data collection:

The next step is together the requisite data. There are two types of data

collection method primary data and secondary data

2.5.1 Instrument for data collection:

I have used the questionnaire method in sample survey. If one wishes to find

what people think or know, the logical procedure is to ask them. This has lead

marketing researchers to use the questionnaire technique for collecting data

more than any other method.

In this method questionnaire were distributed to the respondents and they were

asked to answer the questions in the questionnaire. The questionnaires were

structured non-disguised questionnaire because the questions, which the

questionnaire contained, were arranged in a specific order besides every

question asked was logical for the study; no question can be termed as

irrelevant.

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The questionnaire, were non-disguised because the questionnaire were

constructed so that the objective is clear to the respondent. The respondents

were aware of the objective. They knew why they asked to fill the

questionnaire.

2.7 Data-analysis techniques:

The study conducted is a conclusive descriptive statistical study; the researcher

comes to the decision which is precise and rational. The study is conclusive

because after doing the study the researcher comes to a conclusion regarding the

position of the brand in the minds of respondents of different firms groups. The

study is statistical because throughout the study all the similar samples are

selected and group together. All the similar responses are taken together as one

and their percentages are calculated.

Thus, this, conclusive descriptive statistical study is the best study for this

purpose as it provides the necessary information which is utilize to arrive at a

concrete decision.

18
 COMPANY PROFILE

Future is thinking beyond horizon & in order to keep its pace with the modern

retail, Vishal Retail Limited is spreading its wings. Instead of resting on its

laurels the Group are busy identifying new avenues of growth by venturing in

other formats like cash & carry, convenios as well as specialty stores and

inspiring local retailers to grow along with the big names. The group has tied up

with HPCL to open corner stores at their petrol pumps and in addition to the

above Vishal has come up with an institute to train manpower for the service

industry.

As of December 1, 2010, it operates 172 retail stores, including two stores

which are operated by their franchisees. These 172 stores are spread over about

24,00,000square feet and are located in 24 states across India. In its efforts to

strengthen thier supply chain, it has set up seven regional distributions centres

and an apparel manufacturing plant.

Today Vishal Retail Limited, Flagship Company of Vishal Group, engaged in

Hyper Market stores with an average area of 25,000 to 30,000 sq. ft.

According to Mr. Ram Chandra Agarwal, CMD, Vishal Retail Limited, the

group owes its origin to a small 50 sq ft shop in Kolkata's Lal Bazaar that

started selling readymade garments. In tune with the pulse of the market, he

envisioned a mega store that would sell garments at prices none other could

match. . The first big store opened in Calcutta's Esplanade area in 1997, under

the banner of Vishal Garments. He was involved in all the aspects of the
19
business: right from sourcing the garments to interacting with customers. And

this led to his greatest finding The Vishal Group.

After identifying the immense market in fashion garment for the masses,

He moved to Delhi in 2001 and opened his first store in Delhis Rajouri

Garden by the name of Vishal Mega Mart (The jewel in Vishal Groups crown)

and then there was no looking back for Mr. Ram Chandra Agarwal. At present,

in addition to garments, Vishal Mega Mart stores retail the entire range of

household products, FMCG and electronic goods. Vishal's prices are roughly 15

to 20 per cent less than other mass market garment labels.

Mr. Ram Chandra Agarwal, CMD, Vishal Retail Limited believes that the

shopping habits of Indians are changing due to their growing disposable

income, higher aspirations, relative increase in the younger population, and the

change in attitudes towards shopping. The emphasis has changed from price

consideration to design, quality and trendy. Age is also a major factor that

affects the spending decisions of an individual. Consumer spending is an

important factor that affects the economic growth and development in a country.

As a trend, consumer is more educated. He has access to all reforms taking

place through various arrays of communication. He is becoming a value

shopper everyday.

Keeping this in mind, the group is now looking for franchisees to join

hands with Vishal and grow under common banner. This partnership will help

small retailers to survive the onslaught of organized retail as it will enhance

20
their competitiveness. Small stores can avail of the benefits on account of the

economies of scale, a key advantage for big retailers.

As per the plans, Vishal Retail will completely take over the supply chain

of its franchisees and provide them with technology, new practices, visual

merchandising skill and special promotional schemes, besides its brand and

customer base.

Some of the Franchisee exclusive business categories are:

Mens Fashion

Ladies and Kids

Footwear

Toys and Games

Home General

Convenience (FMCG)

CDIT

Watches

Mobile

It follows the concept of value retail in India. In other words, their business

approach is to sell quality goods at reasonable prices by either manufacturing

themself or directly procuring from manufacturers (primarily from small and

medium size vendors and manufacturers). It endeavour to facilitate one-stop-

shop convenience for their customers and to cater to the needs of the entire

family. It believes this concept has helped them grow to thier current size within

21
a short time frame of their years. Mr. Ram Chandra Agarwal has been ranked as

the 28th most pitiful person in the Indian retail industry.

In order to reduce costs and take advantage of economies of scale it has

embarked on backward integration of their products. Thier apparel

manufacturing plant is located at Gurgaon, Haryana. For ensuring efficiency in

supply chain, it has set up seven regional distribution centres located around

Kolkata, Thane (Maharashtra), Jaipur (Rajasthan), Ghaziabad (Uttar Pradesh),

Ludhiana (Punjab), Gurgaon (Haryana) and Delhi. Further, it has focussed on

developing a cost and time efficient distribution and logistics network, which

currently comprises seven distribution centers and a fleet of trucks for

transportation.

Retailing is an engine for taking merchandise to the end-users. There

is a lot of opportunity in this sector for us since demand of the potential

consumers are not being met under the existing facilities. Therein lies the road

to success. says Mr. R C Agarwal

22
 Board of Directors:

Mr. Ram Chandra Agarwal, Chairman & Managing Director

He holds a bachelors degree in commerce from St. Xaviers College,Kolkata.

Mr. Agarwal has more than 20 years of experience in the retail industry and has

been with VRPL since their inception in 1997.

Mrs. Uma Agarwal, Executive Director

She holds a bachelors degree in arts. Mrs. Agarwal has more than 7 years of

experience in the retail industry. She has been associated with accounts

department of VRPL.

Mr. Surendra Kumar Agarwal, Executive Director

. . He holds a bachelors degree in commerce. Mr. Agarwal has more than 17

years of experience in the retail industry. He has been associated with store

development and management at various locations of VRPL.

Mr. Bharat Jain, Independent Director

He holds bachelors degree in commerce. Mr. Jain is engaged in the business of

leather garments and accessories and has more than 23 years of work

experience. Mr. Jain joined VRPL Board on May 8, 2006.

23
 Mr. Rakesh Aggarwal, Independent Director

OUR PROMOTERS AND GROUP COMPANIES

Our Promoters

The following individuals are the Promoters of our Company:

a). Mr. Ram Chandra Agarwal;

b). Mrs. Uma Agarwal; and

c). Mr. Surendra Kumar Agarwal.

The following companies are the Promoters of our Company:

a). Unicon Marketing Private Limited;

b). Ricon Commodities Private Limited; and

c). Vishal Water World Private Limited.

In addition, the following HUFs are the Promoters of our Company:

a). Mr. Ram Chandra Agarwal (HUF)

Name of Shareholders & Number of Shares % of shareholding

1. Unicon Marketing Private Limited 315,000 49.53

2. Ricon Commodities Private Limited 300,000 47.17

3. Mr. Ram Chandra Agarwal 12,010 1.89

4. Mrs. Uma Agarwal 9,010 1.42

Total 636,020 100.00

24
 VISION STATEMANT:

We share the vision and belief that our customers and stakeholders shall be

served only by creating and executing future scenarios in the consumption space

leading to economic development

Because of increasing number of nuclear families, working women,

greater work pressure and greater commuting time, convenience has become a

priority for Indian customers. They want ever thing under one roof for easy

access and multiplicity of choice. The growth and development of organized

retailing is driven by two main factors lower prices and benefits the customer

cant resist. India is rapidly involving into a competitive market place with

potential target consumers in the niche middle class segments. The market trend

indicates tremendous growth opportunities.

MISSION STATEMENT:

We shall deliver Everything, everywhere, everytime for every Indian Consumer

in the most profitable manner.

VRPLs BUSINESS:-

VRPL started as a retailer of ready-made apparels in Kolkata in 2001. In 2003,

VRPL acquired the manufacturing facilities from Vishal Fashions Private

Limited and M/s Vishal Apparels. Subsequently, with evolution of retail

industry in India and change in consumer aspirations, VRPL diversified their

portfolio of offerings to include other retail goods. Currently, VRPL sell ready-

made apparels and a wide range of household merchandise and other consumer

25
goods such as footwear, toys, watches, toiletries, grocery items, sports items,

crockery, home furnishing, beverages, drinks, gift and novelties.

VRPL follow the concept of value retail in India. In other words, VRPLs

business approach is to sell quality goods at reasonable prices by either

manufacturing themselves or directly procuring from manufacturers (primarily

from small and medium size vendors and manufacturers). VRPL endeavor to

facilitate one-stop-shop convenience for their customers and to cater to the

needs of the entire family. VRPL believe this concept has helped them grow to

their current size within a short time frame of 10 years.

In order to reduce costs and take advantage of economies of scale VRPL

have embarked on backward integration of their products. VRPLs apparel

manufacturing plant is located at Gurgaon, Haryana. For ensuring efficiency in

supply chain, VRPL have set up seven regional distribution centers located

around Kolkata (West Bengal), Thane (Maharashtra), Jaipur (Rajasthan),

Ghaziabad (Uttar Pradesh), Ludhiana (Punjab), Gurgaon (Haryana) and Delhi.

Further, VRPL have focused on developing a cost and time efficient distribution

and logistics network, which currently comprises seven distribution centers and

a fleet of trucks for transportation.

VRPL Business Processes:-

VRPLs business process can be summarized as below:

26
Establishment of Stores:

Selection of location

In selecting location for a new store, VRPL start by identifying the city/town.

VRPL target primarily cities/towns which may be classified as Tier II or Tier III

cities. In this regard, an analysis of the demography, literacy levels, nature of

occupation and income levels. Within a city/town, VRPL target locations with

good infrastructural facilities such as easy accessibility, provision for water,

electricity, parking, security and other basic amenities. VRPL prefer to locate

their stores in areas where real estate is available at reasonable prices. The

efforts of VRPLs retail business are targeted towards families having total

income which can be classified under the lower middle and middle income

groups. Accordingly, VRPL plan their strategy to search for areas within cities

where such customers are domiciled in large numbers and make efforts to locate

themselves within the reach of such customers.

VRPL believe that adoption of standard formats for their stores has led to their

brand establishment and identification among their customers and will increase

their base of loyal customers. In pursuance of this, they have adopted standard

parameters for store planning and establishment. For ensuring standardized

formats

of their stores, VRPL consider various factors, such as internal and external

dcor and colour schemes, allocation of store space, stock mix and pricing and

accounting methods.

27
 Insurance

VRPL maintain comprehensive insurance coverage with Tata AIG, Bajaj

Allianz, Royal Sundaram and IFFCO-TOKIO for their existing stores,

distribution centers, manufacturing facilities and trucks. VRPL insurance

policies include comprehensive coverage for electronic equipment, fire and

special perils and burglary. Further, VRPL has filed a claim of Rs. 22.50 million

on account of fire in their store at Meerut as on July 7, 2006. In this regard, they

have received Rs. 7.50 million as an interim payment.

Factories

VRPLs existing manufacturing facilities are located at Plot No. 224, Phase 1

Udyog Vihar, Gurgaon, for which they have leasehold interest until May 4,

2009. In addition, VRPL have recently acquired freehold interest in relation to a

land admeasuring 7.24 acres in Dehradun, Uttaranchal, where they are exploring

the possibilities for establishment of another manufacturing facility.

Other Properties

VRPL have recently acquired freehold interest in relation to a land admeasuring

82,830 square feet in Hubli, Dharwad.

Merchandise Planning

VRPLs merchandise planning is based on the concept of category management

rather than traditional brand management practices.

28
 Apparels and Non Apparels

Under category management for, say, apparels, VRPL create and cater to

products across length and breadth of a category at different price points,

fabrics, designs, shapes, seasons, colors and sizes. VRPL formulate annual

merchandising plan for each division of merchandise taking into consideration

factors such as past sales data, regional customer tastes and preferences, number

of stores (established and proposed), likely fashion and trends, in-house

production resources, vendor management and price. Each division is further

divided into major categories (for instance, mens apparel as a division is

further divided into three major categories, namely, upper, lowers and sports

and ethnic wear). These major categories are in turn segregated into various

subcategories. For example, mens upper as a major category would be further

divided into several sub-categories such as formal shirts, casual shirts, party

wear etc. Each sub-category consists of pre-defined SKUs, which are classified

on the basis of price point, brand, style, pattern and size.

VRPL draw annual sales projections for different SKUs and, accordingly,

ascertain their sourcing requirements. Based on such information and lead time

estimates for supplies, purchase orders with delivery schedules are issued. The

inventory position for each SKU is reviewed fortnightly taking into account the

actual sales and variations from the budgeted plans. Regular visits to the stores

are made by the category merchandising team to identify the slow-moving-

SKUs and explore the options to expeditiously dispose of them.

29
For certain non apparel categories, their merchandise planning and scheduling

also depends on introduction of new products and schemes by the vendors. For

instance, if a branded home appliance manufacturer replaces a product with a

new version, then their planning for the product would need to be reviewed

based on the acceptability of the new version.

In-house Manufacturing

VRPL benefit from backward integration and in-house manufacturing of part of

the apparel products sold in their stores. Through their manufacturing

capabilities, VRPL is able to attain relative independence from intermediaries

with a competitive advantage in terms of value and cost. VRPL use their

manufacturing strengths to focus on enhancing product knowledge and their

experiences from manufacturing enable them to negotiate better terms from the

vendors and job workers.

VRPL currently have an apparels manufacturing plant at Gurgaon, Haryana.

The manufacturing plant is well-equipped with fully automatic machines for

fusing, buttoning, embroidery and welt pocket-making operations. The factory

has a capacity to manufacture 5,000 pieces per day. The plant was

commissioned in 2004 and achieved a capacity utilization of 80%. It has 450

machines and is operated by 500 workers. Further, VRPL are exploring the

possibilities for establishment of another manufacturing facility, for the

purposes of which they have acquired certain portions of land admeasuring 7.24

acres in Dehradun, Uttaranchal.

30
In addition to in-house manufacturing, they have outsourced some parts of the

manufacturing to job workers who work in their factory premises. VRPL

undertake quality control measures by way of random sampling to ensure the

pre-determined quality standards are met. To verify that the quantity of supplies

is as per the order, they undertake count-check for every receipt of the goods.

VRPLs manufacturing team works closely with their design team to understand

trends, develop products, value engineer and finally create season wise

collection that cater to regional tastes.

Purchasing

Purchasing or vendor management assumes critical importance in retail

business where one has to deal with multiple products. VRPL have in place a

vendor management system, under which they identify vendors all over the

country and overseas and seek to develop alliances and arrangements with them.

They regularly interact with the vendors and share information such that the

vendors remain familiar with their goals and targets. It has been their strategy to

procure goods from small and medium sized vendors and manufacturers, which

they believe has led to reduction in the cost of goods they sell and increase in

their profitability.

Upon ascertaining the procurements needs based on each SKU, VRPL explore

the various options for sourcing the products. They continuously strive to

procure goods from the place of origin to reduce the costs and control the

quality. For identifying the vendors, VRPL assess the various possible options

31
on factors such as capacity, credibility in the market, quality awareness and

experience.

After identifying the vendors for the goods, VRPL place purchase orders based

on their SKU-wise plan, estimated lead time of each vendor and quantity to be

procured from each vendor. VRPL follow a policy of payment on delivery to

negotiate better prices with the vendors and in certain cases they also release

payments in advance. To ensure quality of supplies, VRPL check quality by

way of random sampling at the time of receipt of the goods. To verify that the

quantity of supplies is as ordered, they undertake count-check for every receipt

of the goods. For FMCG products, VRPL procure from large as well as small

and medium size manufacturers. For procurement from the large manufacturers

or their distributors,

they endeavor to enter into formal arrangements for supply of products to all

VRPL stores, such that they are able to derive fixed margins from sales of such

products, irrespective of the locations. Under these agreements, they benefit

from special discretionary discounts and offers directly from the manufacturers

or their distributors.

32
VISHAL Apparels Brand

Vishal Mega Mart is one of Indias fastest growing retail chains.. The

chain currently has 172 company stores in 24 states / 110 cities in India. The

Vishal brand is known for great modern style for men, women and children.

Vishal offers high level fashion styling. Since 1986, our name has been

synonymous with quality, value and fashion integrity. We offer an unparalleled

collection of clothes for the entire family. Each garment is hand selected for

quality and contemporary styling. Vishal manufactures majority of its own

garments and out sources some under its direct quality supervision. This

enables us to offer the lowest possible and most reasonable prices.

Our goal is to provide a range of fashion wear to suit every pocket. Our product

mix represents the most current fashion trends in tops, bottoms, formals and

accessories for men, women and kids. Our courteous staff will ensure that

consumers get a perfect fit.

33
Popular Brands are:

Zeppelin : Mens Shirts & Trousers Fizzy Babe : Ladies & Kids Girls

Kitaan Studio
Mens Shirts & Trousers Jasmine : Ladies & Kids Girls
:

Blues &
Mens Trousers Zero Degree : Kids Boys
Khakis :

Paranoia : Mens Shirts & T-Shirts Soil : Mens Shirts

Mens Trousers &

Chlorine : Mens Shirts Massa Bay :
Bermudas

Mens Shirts, T-Shirts,

Fume :
UnderGarments.

Apparel Manufacture

The basic raw materials required for the manufacturing process of apparels

includes fabrics and accessories. VRPL merchandising teams source fabrics

from local manufacturers in India depending upon their production plan. VRPL

also source fabrics from the place of origin. VRPL source various other

components and accessories from vendors in various parts of the country and

also import them from China.

Inventory Management, Distribution Network and Logistics

VRPLs distribution network and logistics encompasses all activities to ensure

34
that goods are dispatched in right quantities and at right time to reach stores

with sufficient time in hand to promptly cater to customer demands and

optimization of inventory position.

They have built a system to monitor the inventory position on a real-time basis

at each store, under which a stock requisition or delivery order is generated

when pre-determined stock or re-order levels are reached. The re-order levels

for stores are determined based on factors such as display levels, lead time for

replenishment and average daily sales. VRPL review these re-order levels on

continuous basis to factor in variances in demand based on seasons, trends and

promotional schemes.

VRPL have seven distribution centers over approximately 385,033 square feet.

These distribution centers are located around Kolkata (West Bengal), Thane

(Maharashtra), Jaipur (Rajasthan), Ghaziabad (Uttar Pradesh), Ludhiana

(Punjab), Gurgaon (Haryana) and Mahipalpur (New Delhi). VRPL have clearly

demarcated the stores which will be serviced by each distribution centre. The

reorder levels for distribution centers are ascertained on the basis of factors like

average daily sales of all the stores services, lead time for replenishment and

buffer stock, which caters to both the existing and proposed stores to be fed. As

for the stores, they regularly review these re-order levels.

VRPLs distribution centers and stores are connected through company-wide

virtual network connection through broadband which helps to efficiently

manage their network of stores and distribution centers throughout the country.

35
They primarily utilise their own vehicles to transport the inventory to their

stores from the distribution centers. In addition, VRPL use the services of

logistic solution providers including low cost transport service providers in

order to deliver products on time to VRPL stores and optimize transportation

costs. Distribution centers operations have been streamlined through the

standardisation of racking system, layouts and implementation of automatic

replenishment system.

Under arrangements with some of their merchandise manufacturers, they

receive payment on account of display of their products.

Product Categories

- HOME FURNISHING

Drawing Room Bedroom

Door Mat Bed Sheet

Carpet Pillows

Curtains Pillow Cover

Kitchen Bathroom

Apron Bath Mats

Kitchen Napkin Towel Gift Sets

36
FOOTWEAR

BOYS GIRLS

Shoes Slippers

Sandals Sandals

LADIES MENS

Shoes Shoes

Slippers Slippers

MENS

Upper Lower

Shirt Casual Jeans(MP)

Shirt Formal Cotton Trouser(MPC)

Ethnic & Sports Winter Wear

Night Suits Suit(WMC)

T-Shirts Blazer(WMB)

Dupatta Windcheater(WMW)

Sherwani Jacket

37
LADIES ACCESSORIES

Upper Lower

Kurta Pants Jeans

Skirt Top Capri

Ethnic Winter Wear

Nighty Jackets

Lancha Stawl

Sharara Blazer

Salwar Suit Track Suit

INFANTS

Garments Accessories

Hot Pant Bed Sheet

Frock Under Garments

Baba Suit Socks

WOMEN

Sarees Personal Items

Fancy(SRF) Cap(LCA)

Synthetics Socks(Las)

Banarsi

Jewellery Cosmetics

38
 Necklace LIp Gloss

Ring Nail Polish

KIDS BOYS

Lower Sets Winter Wear

Jeans Night Suit Suit

Bermudas Baba Suit Blazer

Dungries Jacket

Upper Ethnic

Shirt Formal Kurta- Pyjama

T-Shirt Sherwani

KIDS GIRLS

Lower Sets Winter Wear

Hot Pant Night Suit Hipster Set

Skirt Capri Set Blazer

Dungries Jacket

Upper Ethnic

Tops(GWT) Sharara

Frock(GFK) Lancha

39
HOUSEHOLD

Dinner Set Jug Cake Server

Home Aids Pressure Cooker Non Stick

Floor Wiper Cooker Handi

Sanitary Brush Pressure Pan Dosa Tawa

General PlasticElectrical App. Bone China

Goods

Coffee Mug Chopper Soup Set

Bucket Microwave Oven Dessert Set

Glass Ware Thermo Ware Porcelain

Cup Tiffin Cup & Saucer

L$emon Set Container

LIFESTYLE

Time Zone Opticals Gifts & Novelties

Ladies Wrist Watch Ladies Sun Glass Flower Vase

Mens Wrist Watch Mens Sun Glass Key Chain

Mens Accessories Electric &Perfume/Deo

Electronics Items

Belts Battery(ABT) Spray

Wallets Calculator(EEC) Deo

40
TOYS & GAMES

Soft Toys Dolls Cycles & Scooters

Musical Toys Barbie Doll Cycles

Non-Musical Other Dolls Scooters

Board Games Infant Toys Video Games

Wooden Blocks Teether T.V. Video Game

Puzzles Swing Hand Video Game

FOOD MART

FOOD & BEVERAGES

Snacks

Drinks

41
CUSTOMER SATISFACTION

42
 CUSTOMER SATISFACTION

Customer satisfaction is the individuals perception of the performance of the

products or service in relation to his or her exceptions. Customers usually will

have drastically different expectations.

The concept of customer satisfaction is the function of customer expectations. A

customer whose experience falls below expectations will be dissatisfied and

customer whose expectations are exceeded will be highly satisfied or delighted.

The research indicates that there are rewards for having satisfied customers

which is depicted as below:

43
 SATISFIED CUSTOMERS

CUSTOMERS TO PURCHASE FROM YOU

(As long as nothing better comes along)

ARE LIKELY TO PROVIDE YOU WITH 3 TO 5 REFERRALS OVER

THEIR LIFETIME OR PURCHASING

44
UNDERSTANDING THE CONSUMER BASED ON VARIOUS

PERSONALITY TYPE :

Marketers are interested in understanding how a difference in personality

influences consumption behaviour because such knowledge enables them to

understand consumer and to segment and target those consumers who are likely

to respond positively to their product or service communications.

45
ATTRACTING CUSTOMERS

Todays customers are becoming harder to please. They are smarter, more price

conscious, more demanding, less forgiving and they are approached by many

more competitors with equal or better offers. The challenge, according to is not

to produce satisfied customers but to produce delighted and loyal customers.

Companies seeking to expand their profits and sales have to spend considerable

time and resources searching for new customers. To generate leads, the

company develops ads and places them in media that will reach new prospects;

it sends direct mails and makes phone calls to possible new prospects; its sales

person participate in trade choice where they might find new leads; and so on.

All this activity products a list of suspect. The next task is to identify which

suspects are really good prospects.

CUSTOMER RETENTION :

The over objective of providing value to customers continuously and more

effectively is because the competitors also to try to acquire highly satisfied (

Even delighted) customers ; the organizations strategy of customer retention

makes in the best interest of customer to stay with the company rather than

switch to another firm. In almost all business situations it is more expensive to

win new customers than to keep the existing ones. Studies have shown that

small reductions in customer defections produce significant in profits because of

the following reasons.

1. Loyal customers buy more products

46
 2. Loyal customer are less price sensitive and pay less attention to

competitors advertising

3. Servicing existing customers, who are familiar with the firms offering

and processes, is cheaper.

4. Loyal customers spread positive word or mouth and refer other customer.

Further, more, marketing efforts involved in attracting new customers is

expensive, rather in saturated markets, it may be impossible to find new

customers.

RELEVANCE OF POST PURCHASE BEHAVIOR

After purchasing the product, the consumer will experience some level of

satisfaction or dissatisfaction. The marketers job does not once the produce is

sole. Marketers need to constantly monitory post purchase satisfaction, post

purchase actins an post purchase produce uses.

47
POST PURCHASE SATISFACTION:

What determines whether the buyer will be highly satisfied, somewhat satisfied,

or dissatisfied with the purchase? The answer to this question can be given as:

buyer satisfaction is the function of the closeness between the buyers

expectation and the products perceived performance.

Consumers from their expectation on the basis of messages received from

sellers, friends and other source that give information for instance even a sales

promotion offer. As the gap between the expectations and performance becomes

larger and larger the greater is the consumer dissatisfaction. This is where the

consumers coping style comes in to play. Some consumers magnify the gap

when the produce is not perfect, and they are highly dissatisfied, others

minimize the gap and are less dissatisfied.

The importance of studying the post purchase satisfaction suggests that the

product names must truthfully represent the products likely performance. Some

sellers might even understate performance levels, so that consumers experience

higher than expected satisfaction with their product.

Customers Satisfaction is the critical strategic for any enterprise as we move

towards the 21st century. The message is simple:

Every company must regard each of its customers as a valuable, irreplaceable

asset and treat him or her as they themselves would wish to be treated. The

customers are the organizations natural resources. The organization will be

doomed as a civilization in spite of all the material accomplishment if its

48
squanders its natural resources. The organization will face an equally bleak

future if it let its customer resources depart without any conscious efforts to

retain them.

Customer Satisfaction is so powerful that it can be quantified. Customer

satisfaction deals with data, nor theory, and there is a beauty of data:

If we can define it we can measure it

If we can measure it we can analyze it

If we can analyze it we can control it

If we can control it we can improve it

49
DATA COLLECTION

AND

ANALYSIS

50
SWOT ANALYSIS

51
Strength:

High Brand Equity in evolving retails markets

State-of-art infrastructure of Big Bazaar outlets

POP to increase the purchase

One stop shop for variety of products, increasing customer time and

available choices

Weakness:

Unable to meet store opening target so far

Falling revenue per square feet

Opportunity:

Organized retail is just 4.15%of total pie of Indian retail market

Evolving Customer preferences in recent years.

Threat:

Competitors, global big players planning to foray into market

Government policies are not well-defined in India

Unorganized retail market of India

52
1. How do you know about Vishal MegaMart?

T.V Hoardings Newspaper Friends Net

70 40 50 20 20

10%
10% T,V
35%
Hordings
25%
20% Newspaper
Friends
Net

53
2. How often you visit to Vishal MegaMart?

Within a week Within 2 week Within a month Above 1 month

70 40 35 55

27.5% Within a week

35% Within 2 week
17.5%
20%
Within a month
Above 1 month

54
 3. What excites you most for shopping at Vishal Mega Mart?

Discount Buy one get one Cash back Free gift

free

76 62 38 24

Discount
12%
Buy one get one
free
19% 38% Cash back

Free gift

31%

55
 4. What do you usually buy from Vishal Mega Mart?

FMCG Child care & Appareals Electronic All product

products toys goods

45 20 60 20 55

35
30
25
20
IN %
15
10
5
0
FMCG Child care & Appareals Electronic All product
products toys goods

56
 5. Are you satisfied with the quality of the products offered by Vishal

Mega Mart?

Yes No Its ok

114 48 38

60

50

40

30
Data In %

20

10

0
Yes No Its ok

57
 6. How is your shopping experience at Vishal Mega Mart?

Very Satisfactory Average Unsatisfactory Poor

satisfactory

40 50 72 22 16

60
50
40
30 Data in %

20
10
0
Very Satisfactory Average Unsatisfactory Poor
Satisfactory

58
7. Do you want to changes in Vishal Mega-Mart?

Yes No

96 104

48% Yes
52%
NO

59
8. What changes you want?

Better service Better packaging Better products Home delivery

45 25 60 70

35
30
25
20
15 Data in %
10
5
0
Better service
Better packaging
Better product
Home delivery

60
9. According to you which promotional activity is effective?

Road show Campaign Sampling Premiums Any other

40 76 30 24 30

40
35
30
25
20
Data in %
15
10
5
0
Road show Campaign Sampling Premiums Any other

61
10. What you think about sales promotion strategy of company?

Best Good Average Not good

46 56 78 20

40
35
30
25
20
Data in %
15
10
5
0
Best Good Average Not good

62
11. Does sales promotion strategies beneficial for sales?

Yes No

146 54

27%

Yes
No
73%

63
12. At what percent sales promotion strategy is useful for increasing sales

Up to 10% 20-30% 30-40% More than 40%

75 58 40 27

40
35
30
25
20
Data in %
15
10
5
0
Up to 10% 20-30% 30-40% More than
40%

64
 FINDINGS

1. The choice of a store location has a profound effect on the entire business

life of a retail operation. A bad choice may all but guarantee failure, a

good choice, and success.

2. Choosing a retail location is, at best, a risky undertaking. Considering the

consequences of choosing a location that proves to be unsuitable, it pays

to get as much assistance as possible. According to a survey more than

60% of the customer prefers to shop in a retail store which is easily

accessible to them.

3. Advertising plays a very important role in achieving growth for any retail

company. This is evident from the fact that Advertising by Retail Industry

registered a rise of 12 percent during January - May 2007 over January -

May 2006.

4. The right location, trained manpower, software assistance, product with a

distinct differentiation, a strong value proposition, efficient supply chain

management - these are the factors that influence the success of a retail

outlet. With competition in this segment increasing, differentiation and a

strong value proposition assume significance. Retail chains are realizing

that they cannot be another me-too store. The differentiation today

among the 5-6 retail chains has come through private labels, which in

some cases account for as much as 70 per cent of the total merchandise in

the outlet.
65
5. Variety offered by any retail store is of very much important to attract all

type of customers in the stores. A large variety of products caters to each

segment of customers.

6. Shopping experience within a store also has a great impact on selecting a

product from a particular retail store. Overall ambience includes

infrastructure facilities provided by the store such as air conditioners,

lighting etc.

7. Pricing is in fact a dramatic controller of at least 3 key strategic elements

to any company's success: Companys image, the product and services

company sells and consumer behavior. The Importance of Pricing their

Products' will give them an insight into developing appropriate costing

methods and the impact of getting it wrong in today's competitive

creative market. This topic should be of interest to anyone who is unsure

if they are getting it right. Remember the difference between over or

under-pricing their work can mean a very short future for any business.

Approximately 60% customers think that Price is the most important

factor while they go for shopping in a retail stores

8. Quality in everyday life and business, engineering and manufacturing has

a pragmatic interpretation as the non-inferiority, superiority or usefulness

of something. This is the most common interpretation of the term. The

quality of a product or service refers to the perception of the degree to

which the product or service meets the customer's expectations. Quality

66
 has no specific meaning unless related to a specific function and/or

object. Quality is a perceptual, conditional and somewhat subjective

attribute. And in addition to that, more than 90% of customers place

quality as the most important factor than anything else in the list to shop

in a retail store.

9. More than 70% of customers place variety as an important factor to shop

in a particular retail store.

10.Brands name bears an important role while shopping of any type of

goods. So building a brand for a retail store is important as 80% of

customer still prefer to buy branded clothes in the retail store instead of

local or unbranded clothes.

67
CONCLUSION

&

SUGGESTIONS

68
 CONCLUSION

Given the developments and prospects, the Indian retail sector is in its nascent

stage of evolution. While there are obstacles, there are clear opportunities in

modern retailing in India. There are many lessons that India can take from other

countries, which have moved along the path of retail evolution. The retail sector

has proved to be of immense significant from macro-economic point of view.

The sectors capability to give strong growth momentum by creating multiplier

effects on other sectors is not in dispute. It is now necessary to cautiously

expand and develop the sector, as the government, at present, has done by

permitting partial FDI in the sector. Given the scope, the retail sector is

certainly expected to fetch the long-term economic benefits for the country.

The convenience and personalized service offered by the unorganized sector

holds its future in good stead for the future. Organized retail of late has seen a

tremendous boom and is attracting more people to the malls.

What is to be seen is how organized retail can duplicate the same level of

personalized customer service levels offered by the unorganized sector to have a

higher conversion ratio.

The target audience for both the organized and unorganized retail formats

remains relatively the same. When shopping in malls, people value the

experience related to the trip the most and return most frequently for the same.

69
Besides, while enjoying the experience they seem to buy high ticket and items

of conspicuous consumption most frequently.

Gaining and maintaining consumer preference is a battle that is never

really won. Continued and consistent branding initiatives that reinforce the

consumers purchase decision will, over time, land the product in consumer

preference sets. Attaining and sustaining preference is an important step on the

road to gaining brand loyalty

70
 SUGGESTIONS

1. Include more trained sales person to help customers in the store while

shopping.

2. Improve quality of the products especially clothes.

3. Play good songs or soothing music in the store rather than cheap filmy

songs.

4. Customer care service can be introduced

5. More branded products can be displayed in the store as people still prefer

branded clothes than offered by local vendors.

6. Constant reminder of discounts through pamphlets, speakers inside the

store for inducing consumers for impulse buying.

7. Add more cosmetic products as its having a huge market of consumers

attached to it.

8. Display of product should be improved so that the product is easily

visible to the consumers.

9. Proper advertisement in press and outdoor to make Vishal Mega Mart

should be visible in the eyes of consumers.

10.Should have parking spaces in front of every store.

11.Hire more salesgirls as in ladies section its very difficult for both the

consumers and salesman to interact with each other.

12.Regular training to sales person to improve there overall performance.

13.Customization of clothing should be given an important consideration.

71
14.Proper packaging and provide contrast labelling in displays of product.

15.Should apply electronic supply chain management for better inventory

management.

16.Proper power back up as air conditioners are not working to their full

capacity at many stores.

17.Proper placements of Gondola in the stores as space between them are

very less.

18.Proper display in the gondola and top most rack of the gondola should be

used for storing of inventory rather than display of product.

19.Should provide more festival schemes and at proper time.

20.Should use psychological pricing-more discounts by increasing the price

21.Proper display of cutlery items

22.Clothes should be in sync with fashion.

72
 BIBLIOGRAPHY

Books referred:

Retailing Management

Pradhan, Swapna

Retail Management A Strategic Approach

Berman, Barry & Evans, Joel R.

The Art Of Retailing

Websites:

www.google.com

www.wikipedia.com

www.vishalmegamart.com

73
 QUESTIONNAIRE

1. How do you know about Vishal Mega Mart?

a. T.V.
b. Hoardings
c. Newspaper
d. Friends
e. Net
2. How often you visit to Vishal MegaMart?
a. Within a week
b. Within 2 week
c. Within a month
d. Above 1 month
3. What excites you most for shopping at Vishal Mega Mart?
a. Discount
b. Buy one get one free
c. Cash back
d. Free gift
4. What do you usually buy from Vishal Mega Mart?
a. FMCG products
b. Child care & Toys
c. Apparels
d. Electronic goods
e. All products
5. Are you satisfied with the quality of the products offered by Vishal
Mega Mart?
a. Yes
b. No
c. Its ok

74
6. How is your shopping experience at Vishal Mega Mart?
a. Very Satisfactory
b. Satisfactory
c. Average
d. Unsatisfactory
e. Poor
7. Do you want to changes in Vishal Mega-Mart?
a. Yes
b. No
8. What changes you want?
a. Better services
b. Better packaging
c. Better products
d. Home delivery
9. According to you which promotional activity is effective?
a. Road show
b. Campaign
c. Sampling
d. Premiums
e. Any other
10. What you think about sales promotion strategy of company?
a. Best
b. Good
c. Average
d. Not good
11.Does sales promotion strategies beneficial for sales?
a. Yes
b. No

75
12.At what percent sales promotion strategy is useful for increasing
sales.
a. Up to 10%
b. 20-30%
c. 30-40%
d. More than 40%

76