Académique Documents
Professionnel Documents
Culture Documents
Project Report
On
The Study at Dr. A.S. Rao Nagar with reference to Spencer’s Retail Ltd on
Market Potential and Customer Preferences.
A Project Report Submitted in partial fulfillment for the award of
POST GRADUATE DIPLOMA IN MANAGEMENT
Submitted By:
Ajay Kumar Gupta
(Registration No.: 08/06)
Some Says “Managers are born and some says managers are made”. I was also in
some dilemma before commencing my Summer Internship Project. But after the
successful completion of my summer internship project, I came to know that
managers are made if they are guided properly and are motivated to work willingly
towards fulfillment of specific goal.
It is with a sage sense of gratitude, I acknowledge the efforts of whole hosts of well
wishers who have in some way or other contributed in their own special ways to the
success and completion of this summer internship project.
First of all, I express my sage sense of gratitude and indebtedness to my Principal,
Prof. S. Zarar of “ICBM-School of Business Excellence”, Hyderabad, from the bottom
of my heart, for his unprecedented support and faith that I do the best and his valuable
recommendation and for accepting this project.
I sincerely express my thanks to our Marketing lecturer Prof. Jitender Govindani
for his valuable guidance and intellectual suggestions during this project.
Also, I also express my sincere thankfulness to my mentor Dr. P Sai Rani, Mr.
Khaja Qutubuddin and Mrs. Annie Kavitha for their kind advice, suggestions and
constant help in a lot of various ways during project course.
Further I express my sage sense of gratitude to Mr. Sudhakar Balivada, Regional
Marketing Manager of Spencer’s Retail Ltd (A RPG Group enterprise) and Mr.
Rajneesh Jha, who were kind enough to give an opportunity to work under their
immense expertise. I sincerely thank to both of them for their valuable suggestions,
motivation and encouragement. I express my thanks to the Spencer’s Supporting Team,
for their support and encouragement in bringing out this project report.
I would be failing in my duty if I don’t express my profound gratitude to the entire
respondent who has spent their valuable time to answer the questionnaire.
Date:
This is to certify that the project entitled “The Study on Market Potential and Customer
Preferences with reference to Spencer’s Retail Ltd at Dr. A.S. Rao Nagar” is a bona fide
work of Ajay Kumar Gupta, a student of ICBM-School of Business Excellence bearing Roll
No. PGDM/08-10/06, and was successfully conducted at Spencer’s Retail Ltd. Hyderabad,
from 1stMay to 15th June ’09, for the partial fulfillment for the award of Post Graduate Diploma
in Management (PGDM). To the best of my knowledge this is an original piece of work.
TABEL OF CONTENTS
S.No. CONTENTS
1. Executive Summary
2. Introduction to Retailing
3. Objective of the Study
4. Research Methodology and Scope of the Study
5. Assumption of Study
7. Company Profile
RPG Group
Spencer’s Retail Ltd.
8. Introduction to Market Potential and Catchment Analysis
9. Data Analysis and Interpretation
10. Findings of the Study
11. Challenges and Opportunities
12. Suggestions and Recommendation
“A Customer is the most important visitor on our premises. He is not dependent on us. We are
dependent on him. He is not an interruption on our work. He is the purpose of it. He is not an
outside of our business. He is a part of it and we are not doing him a favor by servicing him. He
is doing us a favor by giving us an opportunity to do so.”
Mahatma Gandhi
• China has issues of median age 30-34 years at the early stage of development and
psychology issues after implementation of “one child policy”
• Housing Boom – due to nuclear family, low interest rates, tax benefits from government
and lastly strong Indian values driven by savings and “owning home”
• Economy - 4h largest economy in the world on PPP basis (next only to USA, China and
Japan) -One of the fastest growing economy with 6.5% average growth in GDP for last
10 years and is expected to rank 3rd by 2010, just behind the US and China
• Fragmented retailing with 5 million retailers and 95% less than 500 sq ft – nation of
shop-keepers -brilliant trading and entrepreneur community
• Over 3.9 million tourists visited India this year, up from 3.0 million last year.
• India is on the track to be the servicing capital of the world (As China is manufacturing
capital) and Organized retail growing at 25-30%+ p.a. compound growth.
• IPL has again drastically changed the outlook of the whole world towards India. It has the
highest paid players across the Globe / Sports.
• Driven by changing lifestyles, strong income growth and favorable demographic patterns,
Indian retail is expanding at a rapid pace.
• Besides the 6 metros, India has 61 other cities with populations greater than 0.5 million
and contributes about 14% to the country’s GDP.
India Vs World
• Indian retail is fragmented with over 12 million outlets operating in the country which is
13 times more the all retail outlets operating in USA (0.9 million outlets).
• 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 (Spencer’s, Big Bazaar, Shoppers' Stop, Westside, Lifestyle) can
compare.
• 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 have inventory turns
levels between 4 and 10 - KPMG surveyed.
• 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.
Retailing is emerging as a sunrise industry in India and is presently largest employer after
agriculture. Some economists say that Retailing is one of the pillars of the economy in India, and
some say it is gold mine of Indian economy. Retailing in its present form started in the latter half
of 20th century in USA and Europe. Retail industry is divided into organized and unorganized
sectors. Over 12 million outlets operate in the country and only 5% of them being larger than
500 sq ft (46 m²) in size. Organized retailing in India is projected to grow at the rate of 25-30%
p.a., is estimated to grow from the US $ 330 billion in 2007 to US $ 427 billion by 2010 and US
$ 637 billion by 2015. Indian Retail Sector is growing very fast with so many new players are
coming in this growing organized sector and trying to attract customers by giving attractive
offers and offering competitive prices etc.
Spencer’s Retail Ltd is India’s leading retailer that operates in multiple formats. The company
operates over 6 million square feet of retail space, has over 350 square feet of retail stores across
60 cities in India and employs over 4500 people.
The motive of the study is to know the market potential at Dr. A.S. Rao Nagar, Hyderabad with
reference to Supermarkets & find out the customer’s perception about Supermarkets & what are
the customers’ expectations from Spencer’s Retail. The main purpose of the study is to find out
the target customers, preferences of the customers and sales potential with reference to
Spencer’s.
The study is done with the help of primary data given by respondents during survey and
secondary data to know the market potential and customer preferences at Dr. A.S Rao Nagar,
Hyderabad market with reference to Spencer’s Retail Ltd, and also to understand the current
market position of Spencer’s Daily at that area and know the potential customers. This study is
done with the help of area mapping and catchment analysis technique. Primary data is collected
through personal interview using structured questionnaire and secondary data is collected from
management of the Spencer’s Retail Ltd, various book, journals and from Spencer’s website.
The reason for visiting super markets as mentioned by the respondents varied from better
services to pricing to variety of products available with the super markets. 44.75% respondents
visit super markets for the prices offered by the super markets and 46.75% mentioned that the
quality of product provided by the super markets is the reason for their visit to super markets.
The other factors which attract the respondents to various super markets are variety of products
offered, fresh products like fruits and vegetables, availability of dairy products, home delivery,
parking facilities, accepting debit/ credit cards, fast billing, booking counters, customer service,
courteous and friendly behavior and ambience.
Most of the customers complained regarding customer service, variety of product with deep
assortment, store image, arrangement of products, pricing, product knowledge of employee,
quality of products, parking space, product updation, closing time at Dr. A.S. Rao Nagar with
reference to Spencer’s Daily.
Company can enhance its business or increase its sales by doing these things; provide better
customer service than its competitors, increase the variety of merchandise with deep assortment,
arrangement of product should be in proper way that creates good store image, provide club
Spencer’s membership card to the customers. Company should also include apparels segment in
the store, should advertise through pamphlets about various offers, provide parking space and
employ knowledgeable sales staff.
2. Introduction to retailing
The word retail has its origin in French word retaillier and means “to cut a piece off’’ or “to
break bulk”. The term Retailing is defined as “All activities involved in selling goods and
services directly to final consumers for their personal and non-business use”. In simple terms, it
implies a first-hand transaction with customer. Retailing involves a direct interface with the
customer and the coordination of business activities from end to end right, from the concept or
design stage of a product or offering, to its delivery and post delivery service to the customer.
The industry has contributed to the fastest changing and dynamic industries in the world today.
Retailing, it is an emerging trend in the India and Hyderabad is not far behind which is also
witnessing the stupendous growth and opportunities presented by this sector. Many institutions-
Manufacturing, Wholesalers and retailers – do retailing, but most retailing is done by Retailers.
A business wholesales come from primarily from retailing. It is a proven fact that in India the
retail industry has become the 2nd largest employer after agriculture. Indian retail sector is in
boom period and many reasons are contributing to it.
The retail scenario in India is unique. Much of it is in the unorganized sector, with over 12
million retail outlets of various sizes and formats. Almost 95% of these retail outlets are less than
500 sq. ft. In size, the per capita retail space in India being 2 sq. ft. compared to the US figure of
16 sq. ft. Thus India’s per capita retailing space is the lowest in the world.
With more than 9 outlets per 1000 people, India has the largest number of outlets in the world.
Most of them are independent and contribute as much as 95% to the total retail sales. Because of
the increasing number of nuclear family, working women, greater work pressure and increased
commuting time, convenience has become a priority for the Indian consumers.
The Indian retail market is the 5th largest retail destination globally. It is estimated to grow from
the US $ 330 billion in 2007 to US $ 427 billion by 2010 and US $ 637 billion by 2015.
In Hyderabad, Spencer’s Retail came up as the organized retail outlet in the form of a
Hypermarket in the year 2001, with its inception in Hyderabad, shopping got an altogether new
meaning in Hyderabad. Some of the striking features of Spencer’s Retail – a big and different
formats having nice store image, along with soothing music and luring visual display of the
products with self-selection facility magnetizing customers to choose from a wide assortment
and variety of the products priced with entrancing discounts and fabulous offers.
The emergence of organized retailing has led to competition which has resulted to the
demographics & psychographic changes in the life of urban consumers. The life style and
purchasing power of the middle class & upper class segment have fuelled the growth of
organized retailing to intense competition among the big players.
Spencer’s Retail is facing big intense competition from organized retail outlets like Big Bazaar,
More, Vijetha, Hyderabad Central, Spar, Shopper’s Stop, Pantaloon’s, Heritage fresh @, Food
World, Reliance fresh, Vishal Mega Mart etc, to name a few, and from unorganized retailers like
Kirana shops, Garment shops etc. Competition in retail sector has become extremely keen. Many
new players coming in the retail market has increased the degree of competition by adopting 5
P’s (i.e. place, product, price, promotion and people) for successful retailing. While some of the
exiting retailers survived, others failed to do so.
• To study about the perception of customers with reference to availability of products and
services in supermarket/Spencer’s.
• To know the target customer’s of Spencer’s Retail/Supermarket at Dr. A.S. Rao Nagar.
With the help of primary data given by the respondent during survey and secondary data, study is
done to help the Spencer’s Retail Ltd to understand the market potential at Dr. A. S. Rao Nagar,
Hyderabad market, also to understand the customer preferences and, potential customers and
current market position of Spencer’s Daily at that area.
The Indian retail market, which is the fifth largest retail destination globally, has been ranked
the 2nd most attractive emerging market for investment after Vietnam in the retail sector by AT
Kearney’s seventh annual Global Retail Development Index (GDRI), in 2008. The share of retail
trade in the country’s gross domestic product (GDP) was between 8-10% in 2007. It is currently
12%, and is likely to reach 22% by 2010.
A McKinsey report 'The rise of Indian Consumer Market', estimates that the Indian consumer
market is likely to grow four times by 2025. Commercial real estate services company, CB Richard
Ellis' findings state that India's retail market is currently valued at US$ 511 billion
The analysts foresee bright future of the retail sector. A huge number of shopping malls, nearly
100, have come up in the recent past, generating 20mn sq ft. retail space, extending more space
of about 12mn sq ft to it. Nearly 60 malls are on the verge of completion and may be operational
by the end of current financial year. A forecasted number of nearly 200 malls, in a move to make
additional 50mn sq ft of retail space, will be completed within the next two-years.
India retail industry is expanding itself most aggressively; as a result a great demand for real
estate is being created. Indian retailers preferred means of expansion is to expand to other
regions and to increase the number of their outlets in a city. It is expected that by 2010, India
may have 600 new shopping centers. In the Indian retailing industry, food is the most dominating
sector and is growing at a rate of 9% annually. The branded food industry is trying to enter the
India retail industry and convert Indian consumers to branded food. Since at present 60% of the
Indian grocery basket consists of non- branded items. The global retail giants like Wal-Mart,
Spar International, Tesco, K-Mart/SEARS, Carrefour, ZARA, FCUK, Carrefour Group and The
Home Depot, NEXT, Mother Care, lKEA, Trussardi, DKNY and many more have made plans to
march in the Indian market.
Companies like Spencer’s, Shoppers Stop, Trent, Reliance, Lifestyle, Pantaloons Tanishq,
Crossroads, Vishal and More already have planned to invest over Rs 5,000cr. Trent is on the
edge to take both its brands 'Star India Bazaar' and 'Westside' to new cities, meanwhile Shoppers'
Stop has recently geared up for expansion of present ones and to add 11 new stores including two
hypermarkets. Pantaloon has planned to add eight 'Big Bazaar' malls within the next 6 to 8
months and also Spencer has geared up for opening 15 hypermarkets in near future.
• RPG Retail-Formats: Music World, Books & Beyond, Spencer’s Hyper, Spencer’s
Super, Daily, Express & Fresh
• Pantaloon Retail-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion
Station, Brand Factory, Depot, aLL, E-Zone etc.
• The Tata Group-Formats: Westside, Star India Bazaar, Steel junction, Landmark, and
Titan Industries with World of Titans showrooms, Tanishq outlets, Chroma.
• K Raheja Corp Group Formats: Shoppers’ Stop, Crossword, Hyper City, Inorbit
• Lifestyle International- Lifestyle, Home Centre, Max, Fun City and International
Franchise brand stores.
• Pyramid Retail-Formats: Pyramid Megastore, True-Mart
• Nilgiri’s-Formats: Nilgiri's’ supermarket chain
• Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom discount chain.
• More-Formats: Supermarket chain and hypermarket chain
• Vishal Retail Group-Formats: Vishal Mega Mart
• BPCL-Formats: In & Out
• Reliance Retail-Formats: Reliance Fresh
• Reliance ADAG Retail-Format: Reliance World
• German Metro Cash & Carry:- Wholesale
• Shoprite Holdings-Formats: Shoprite Hypermarket
The world's largest retailer, Wal-Mart, has tied-up with Sunil Mittal's Bharti Enterprises to
enter Indian retail market.
• Microsoft's first shop-in-shop pilot has been launched with the Tata Group subsidiary
Infiniti Retail's multi-brand consumer durables retail format, Croma.
• The Walt Disney Company, consumer product retailing arm of global animation giant,
• World's leading coffee chain, Starbucks' enters India through a tie-up with the country's
• Apple Inc has entered into an exclusive marketing and distribution deal with Reliance
RPG Enterprise
Founder(s):- RP Goenka
Employees: - 58000
Website: - www.rpggroup.com
RPG Enterprises:-
• Power
• CESC
• Noida Power Company Limited
• Tyres / Tires
• CEAT
• CEAT Srilanka
• Phillips Carbon Black
• Harrisons Malayalam
• Transmission
• KEC International
• RPG Transmission
• Nitel
• Technology
• Zensar Technologies
• RPG Cables
• RPG Life Sciences
• Raychem RPG
• Spencer's Retail
• Music World
• Books and Beyond
• RPG Cellucom
• Entertainment
• Saregama
• Other
Wide-ranging businesses, growing returns and a reputation to reckon, makes working with RPG
an enriching experience. Where entrepreneurial skills are valued, excellence is the by-word, and
performance is a pre-requisite.
• Management
The RPG Management Board is the backbone of the conglomerate. Its members are
highly qualified professionals, well experienced in their respective fields.
• Values
RPG’s business ethics promote higher levels of excellence. The group’s values of
Customer Sovereignty, People Orientation, Innovation & Entrepreneurship, Transparency &
Integrity and Passion for Superior Performance, Anticipation, Speed and Flexibility propel it
to perform and excel in all spheres of the business.
• Quality
For RPG quality determines success. Continuous process improvements are carried out to
ensure complete satisfaction of customer and market requirements.
• 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).
• 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.
• RP Goenka currently oversees the group’s affairs as “Chairman Emeritus”. Today, RPG
has more than twenty companies across eight business sectors, with a Turnover of Rs.
13,500 cr.
• The group recorded a turnover of Rs 11,500 crore (equivalent to Rs. 115 billion) for fiscal
year 2007.
Management Board
RPG Enterprises is not only one of the biggest, but also of the most respected names in the
industry. A US $ 3.25 billion dollars business conglomerate, RPG is one of the powerhouses that
drive Indian industry. With more than twenty companies, it spans six business sectors - Power,
Tyres, Transmission, Technology, Retail and Entertainment. With such a diverse portfolio, RPG
Enterprises has had unrivalled success which speaks very highly of the efficiency and vision with
which the group 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.
Spencer’s has retail footage of over 6 million square feet and over 350 Spencer’s stores in 60
cities. The company operates through the following formats:
• The Spencer's hyper stores are destination stores, of more than 15,000 sq. ft in size. They
offer everything under one roof. The merchandise ranges from fruits & vegetables,
processed foods (Ready to Eat, Ready to Cook, FMCG products),specialty foods
including international, sugar free, organic foods, etc…..groceries, meat, chicken, fish,
bakery, chilled and frozen foods, garments, consumer electronics & electrical products,
home care, home décor & home needs, office stationeries, soft toys. Besides, the stores
also comprise book & music retailing, electronic gadgets and IT accessories. On an
average, a Spencer’s hyper stocks 70,000 SKUs across 35,000 items.
• The Spencer's stores are neighborhood stores ranging from 1500 less than 15000 sq. ft.
These stores stock the necessary range and assortment in fruit and vegetables, FMCG
food and non-food, staples and frozen foods and cater to the daily and weekly top-up
shopping needs of the consumer. Some of these stores which have floor area of more than
10,000 sq ft sometimes offer home care products; personal care products, bakery, chilled
and frozen food; baby care, basics in garments and limited range of electronics and
electrical.
Important Point:-
• Fastest growing retail stores with multiple formats and retailing food, apparel, fashion,
electronics, lifestyle products, music and books.
• Established in 1996 and headquarter is in Chennai.
• Retail footage of over 6 million square feet and over 350 Spencer’s stores in 60 cities.
New Ventures
• Spencer’s retail has announced a tie-up with British retailer Woolworths Plc for
exclusively selling its famous toy brand Chad Valley through its outlets.
• Besides the Chad Valley range of toys (available at prices Rs. 49 upwards), Woolworths
is also planning to introduce the Ladybird range of kids wear.
Vision
To “build Spencer’s as the most professionally managed retail business in the country through:-
• Excellence in all operating processes;
• Nurturing and facilitating a learning and growth culture;
• Building a unique retail experience for the customers;
Mission
Strives to exceed the aspirations of its customers for a healthy and fulfilling lifestyle by
providing:-
• The most innovative consumer goods and delectable taste experience.
• The ultimate shopping experience.
• Unsurpassed customer service.
• Unbeatable value
• It will be going in for public issue within the next 12 months to raise capital for
expansion.
• The company plans to focus on the larger format stores in the identified growth clusters
with higher market potential value and stronger brand equity for Spencer's. These clusters
are Bangalore, Hyderabad, Coastal Andhra Pradesh, Chennai, Delhi NCR, East UP, Pune,
Mumbai, South Kerala, Aurangabad, Punjab and Kolkata.
• The company will be investing Rs. 10 billion over the next 3 years using both internal
source and an IPO.
• The company has already reserved 1 million square feet of space all over the country and
will be creating close to 10,000 jobs in its different formats.
• Spencer’s Retail currently employee’s 4,500 people and has 6 million square feet of
space.
• In every financial year, Spencer’s is increasing its stores from 150 to 250 with a target of
expanding by 400 more in the next two years.
• The company had last year announced a Rs 1,500 investment plan to expand its business
across the country.
• Spencer’s was the first to introduce the concept of music retailing with "Music World"
chain of stores, followed by "Books and Beyond"[Retail chain of Book Stores] and
"RPG Cellucom"[Retail Chain of Mobile Stores]. They are planning to setup 1,500
cellcoms and 400 Music Stores by 2010.
• Spencer’s has announced that it will very soon launch CRT TVs under the brand name
Yashika.
• Spencer’s has retail footage of over 2 million square feet and over 350 Spencer’s stores in
60 cities.
• The company operates through the following formats:-
Spencer’s Hyper:- A fast growing retail network of hypermarkets with large format
stores in Hyderabad, Mumbai, Gurgaon, Ghaziabad, Lucknow, Calicut, Vizag,
Vijayawada, Aurangabad, Durgapur, Kolkata, Gorakhpur and Warangal.
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 daily household needs.
Spencer’s Express: - Food and grocery store next door.
Spencer’s Fresh: - Spencer’s Fresh stores provide with an enjoyable convenient
shopping environment in very own neighborhood.
Spencer’s Hyper:-
Spencer’s Super:-
• One of the largest supermarket chains in the food and grocery segment in India.
• The Spencer’s Super is the place to go for weekly and monthly shopping.
• About 8000-15,000 square feet in size, the Spencer’s Super not only caters to the daily
needs but also stocks Home care products, Personal care products, Bakery, Chilled
and frozen food, Baby care besides groceries and staples, Fresh fruits and vegetables
and many more............
Spencer’s Express:-
• Spencer’s express positioned as the food and grocery store next door.
• These stores are around 1000 square feet in size. They are open from 7 am to 9 pm and
also provide with home delivery.
• The Express store stock dairy products, fruits and vegetable, bread and bread
products, cut vegetables/ready to cook, fruit juices, fresh butter, fresh coffee/tea,
fresh masalas, fresh pickles, fresh ghee, fresh fish and meat.
Spencer’s Daily:-
• Small format stores conveniently located with a range of product to meet daily household
needs.
Spencer’s Fresh:-
Spencer’s Fresh stores provide with an enjoyable convenient shopping environment in very own
neighborhood. These 2000 square feet air-conditioned stores are well stocked with fresh food of
the very best quality, such as fresh farm produce, vegetables, fruits, 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 mandi’s or local vegetable markets and at Spencer’s
Fresh consumers not only do get fresh, clean and tasty farm produce but also lowest possible
prices in the locality, yes even lower than sabziwala!
Snapshot:-
8. Introduction to Market
Potential and Catchment
Analysis
Planned expenditure
Industry marketing expenditures
Market demand as a function of Industry marketing expenditures
Fig (1): Market Demand
Figure (1) shows the relationship between total market demand and various market conditions. In
this figure, upper limit of market demand is called Market Potential.
Companies have developed various practical methods for estimating total market demand.
A common method to estimate total market demand is as follows:-
Q=n×q×p
Where Q = total market demand
n = number of possible buyers in the market
q = quantity purchased by an average buyer per year
p = price of an avg. unit
• Understand market potential for a single store, network of stores or a new market.
• Deploy resources effectively by ranking markets in priority order.
• Forecast total opportunity in terms of number of customers and revenue potential.
• Estimate your market share.
In other words, market potential = (how many * how much* how often)
• A Bottom Up approach to market sizing starts with a company customers. How much
and often do they buy? What is their profile? How many potential customers do you have
in the market based on your customer profiles? How can you reach them?
• A Top Down approach starts with market and industry data. It takes a close look at a
geographic market area and profiles the consumers and/or businesses to let you know
their propensity to buy your products and services.
Estimating the market or market potential for a new business or business expansion is critical in
determining the economic feasibility of a venture. But market potential is very essential for the
company and by knowing market potential a company can make its position in the market by
finding how many players are there in that sector.
Dr. A.S. Rao Nagar is developing area of Hyderabad and it consists of all class of family. In his
area 5.4% families belong to Socio Economy Class (SEC) A+, 38.6% families belong to SEC A,
52% families belong to SEC B and 4% families belong to SEC C. All this result has been found
with the help of Area Mapping technique and catchment analysis, all these data are approximate.
By all these data we can find that this area is having good market opportunities retail
Supermarket.
• If a company doesn’t know who its shoppers are, how can company give them what they
want? If company doesn’t know where they come from, how can company communicate
with them? Finding answers to these questions is vital but catchment analysis is very
helpful in that.
• A company or retail store will be able to optimize its activities if and only if company
knows its market in depth. Its market penetration, its success and its potential depend on
geographical factors, hard to grasp, hard to fully understand, but catchment analysis is
very helpful.
It is hub of the catchment area around the outlet, from where maximum number of people
comes to the retail stores for shopping.
Secondary Catchment
This area is called secondary catchment area which is around 2 km far away retail stores
from where some people come to the shop for shopping.
Tertiary Catchment
The area from where only some selected or loyal customers come to the retail stores that
is more than 2 km far from outlet.
Outer Catchment
Outer catchment area is totally outer area from where only less no. of person sometimes
comes to the outlet,
Research in retail is very essential, as customer preferences and choices are dynamic and change
frequently, the retail company needs to understand these before redesigning its processes for
enhancing business and many more. Since customer interaction takes place at the store and near
store, there is a big opportunity to gather first hand information and feedback from customers
through research and survey. Research is carried out at the retail level for concept testing,
business feasibility analysis, identification of the right product mix, target customer and market
potential.
This table explains about No. of family member’s in a family of Dr. A.S. Rao Nagar, Hyderabad.
Table-2
No. of Family and Family Member's of Respondent
Member's of family No. of Family % of Family
1 2 0.5
2 20 5
3 42 10.5
4 123 30.75
5 138 34.5
6 54 13.5
7 15 3.75
Column Chart-2
Occupation of Respondents
This table describes the occupation of respondents who gave the answer of questionnaire and explain
class of customers of Dr. A.S. Rao Nagar, Hyderabad.
Table-4
Occupation of Respondents
% of
Occupations No. of Respondents Respondents
Student 73 18.25
House Wife 27 6.75
Service 172 43
Business 87 21.75
Others 41 10.25
This question tells about respondents shop at Spencer’s or not and also it tells about brand
awareness of Spencer’s in market.
Table-6
No. of Respondents who visit Spencer's for shopping
No. of Respondents Shop at Spencer's % of Respondents
203 Yes 50.75%
197 No 49.25%
This table reveals the opinion of customers for visiting a Supermarket. It means the convenience
of the customer to visit a supermarket based on the different factors like better price,
accessibility, availability of variety of products, parking facility, store ambience (it determined
by store layout, soothing music, tempting visual display of the products with self selection
facility, etc.), customer service, range of items, product quality, value for money, offers and
discounts, after sales service.
Table-8
Table-9
Table-10
Kind of Services customers expect
Services Important Not Important No Response
Fast Billing 90.25% 4.50% 5.25%
Ticket Booking
Counter's 24.50% 69.25% 6.25%
Ample Parking 70.25% 24.25% 5.50%
Home Delivery 79.50% 15.25% 5.25%
All C. & D. cards
Should accept 92.50% 2% 5.50%
Column Chart-24
After completing the survey and analyzing the responses of the persons contacted. I came across
the following facts—
• Consumer life style and spending pattern are changing, more and more customers are
visiting supermarket.
• Demographics of Dr. A.S. Rao Nagar are very nice for retail business. In this area 38%
people belong 26-35 age group category, 33.5% people belong to 18-25 age group
category, and 14% people belong to 36-45 age group category and rest other age group.
Out of these 5 Supermarkets, on the basis of customer preferences, market survey Ushodya
Supermarket is holding 1st position, Spencer’s Daily 2nd, Food World 3rd, More 4th and Heritage
fresh@ 5th.
Challenges at Dr. A.S. Rao Nagar Market:-
• Customers are flexible towards discount and offers with respect to Supermarket’s.
• Despite high footfalls, the conversion ratio has been not good in the Spencer's Daily.
• More is creating intense competition before Spencer’s with the help of MORE @ YOUR
DOOR.
• Promotional activities of More Supermarket are continuously going on in the market with
the help of Templates, Kiosks Show and Club More Membership Card.
• On the basis of customer’s preferences, Ushodya Supermarket is having several varieties
of products with deep assortment and Ushodya has covered more market.
• Personalized service offered by Mom-&-Pop stores.
• Brand awareness of Spencer’s is not quite good only 50.75% people shop at Spencer’s.
• 29% people shop at Kirana Stores.
• Knowledgeable sales person inside store for motivating to the customers.
• Competitors follow competitive and discount pricing strategy.
• Fast moving consumer goods (FMCG) or daily used items should be available in more
number of varieties because customers of Dr. A.S. Rao Nagar complain regarding this
and FMCG product should be placed near exit door as customers can purchase the daily
use items at the time of exit, which can directly increase the sales of Spencer’s as done in
other retail outlets.
• Most of the customers believe that stock is not updated and no offer schemes are
provided by Spencer’s on the old stock. Same price is charged for both the fresh stock
and old stock. Respondents feel offers should be provided on the old stock, as is done in
other retail stores.
• As the majority of population at Dr. A. S. Rao Nagar area are falling into the age group of
26-35 and 18-25.Company should concentrate on the need of people falling into that
category.
• People of Dr. A.S. Rao Nagar, say that Spencer’s should employ experienced sales staff
so that they can better explain the quality and features of the products.
• Some of the people find in-store environment of Spencer’s very dull, so try to maintain
nice store image which attracts the customers and it works in word of mouth marketing
for attracting more customers.
• Variety of products should be increased for better selection by the customers so that
customers can choose from a huge lot of items of different companies having different
features as the customers of Dr. A.S. Rao Nagar complained more regarding variety of
products.
• Store layout should be redesigned that a customer can have easy access to the product.
• Spencer’s should provide club Spencer’s membership card (apart from HSBC Loyalty
card), on that card one unique no. should be there and offer some point system on every
purchase that will attract the customers, through that Spencer’s can increase its sales.
• People generally search for the product on offer so the high margin product should be up
fronted that mean those item should be in the eye height so that it easily catches the
customers’ attention and generates impulse purchase.
• At Dr. A.S Rao Nagar area, the percentage of family member group 5 and 4 is more.
Therefore company should try to attract that family by providing family pack apparels.
offer at discount rate
• To improve Product visualization the Company should do visual merchandising in better
way.
• Variety of products should be increased with deep assortment for better selection by the
customers so that customers can choose from huge lot of items of different companies
having different features.
• Customers are very eager to know about offers, discount schemes provided by
Supermarket’s/Spencer’s then Spencer’s should do better marketing for creating
awareness about offers and discount schemes.
• Complained and feedback should be taken care in well manner to create the loyalty and
goodwill.
• Merchandise should be arranged properly.
• Company should offer competitive price with good quality of products because most of
the customers visit to Supermarket for better price and quality of products.
• Company should give information to the customers through the marketing gimmick
(sms) using database of customers.
• Keep high quality fruits and vegetables in the stores, employees must be courteous and
friendly as most of the customer gave their preferences regarding these.
• Billing should be fast because customers don’t want to stay in the store after purchasing
the products.
• The sample size chosen is limited to 400 only because of time and financial constraint.
• This study was based purely in Dr. A.S. Rao Nagar, Hyderabad.
• Data collected may not be a representation of the entire population.
• The time duration for this project was only for a period of 45 days.
• I also took the view of respondents who don’t shop from Supermarket’s.
• This study was limited to the capabilities and willingness of the respondents in
appropriately answering the questions and information given by respondents may be
correct and may not be correct.
FEEDBACK FORM
Name:-
Address:-
Contact No:-
4. Your Occupation
1. Student 2.House Wife 3. Service 4.Business 5. Others
Better Price 1 2 3 4 5
Parking Facilities 1 2 3 4 5
Convenience/Opening hours 1 2 3 4 5
Product knowledge of 1 2 3 4 5
Employee
Security
Close to where you live
Convenience of
parking
Courteous friendly
employees
Offers several brands to
choose from in a
category
High quality fruits &
vegetables
Offers different variety
of dairy products
Sells fresh Non-Veg. &
seafood
Home delivery
SUGGESTIONS
THANK YOU
Spencer’s Retail Ltd.
Bibliography
Reference:-
• www.google.com
• www.rpggroup.com
• www.indiaretailing.com
• www.retailindustry.com
• www.spencersretail.com
• www.ibef.org
• www.thebrandreporter.com
• www.fiber2fashion.com