Table of contents

Page no.
Title page
Declaration
Project completion certificate
Company Certificate
Acknowledgement
1. Executive summary
2. Introduction
a. Industry Profile
b. Organization Profile
3. Need for Study
4. Literature Review
5. Objectives and Hypotheses
6. Research Methodology
a. Research Design
b. Detailed description
c. Marketing and Promotional Strategies
d. Outcomes of the project
_____
e. Analysis
7. Findings from the research
8. Suggestions and Recommendations
9. Limitations of your project
10.
References

DECLARATION

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07-11
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13-29
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Savegenie E-Marketing Pvt. Ltd.

SCF 26, Basement, Huda Market, Sector 4,
Urban Estate, Gurgaon-122001
Phone: +911244276464
E-Mail: info@savegenie.in
www.savegenie.in
CIN No: U74999HR2014PTC051518

I hereby declare that the information provided along with my report are
based upon the facts made by savegenie team. It is completely true and
rechecked by the companys vice president Mr. Priyatam vusala.

Date
:
Your name :TABISH AHMED
Roll no
: PGD13096
Batch
: 2013 - 2015

PROJECT COMPLETION CERTIFICATE

Name of the Student:TABISH AHMED
Roll Number: pgd13030
Project Title:
1. Study and design of database for an e-commerce startup.

2. Launch an e-commerce website and lead the initial sales push.

3. Marketing and sales strategy for an e commerce startup.
4. Create an advertisement and sales promotion campaign for
savegenie.in

This is to certify that TABISH AHMED, a student of Institute of

Management Studies, Noida has successfully completed his summer
internship in the above mentioned projects under my supervision. The
student has submitted the final report.

Certificate of Completion
This document certifies that

Mr. TABISH AHMED

B2B(BUSINESS TO BUSINESS), B2C(BUSINESS TO
CUSTOMER), External Operations, Market Research,
Database Management, Image Processing, Social Media
Marketing, sales and advertisement

SavegenieE-MarketingPvt.Ltd. SCF26, Basement,HudaMarket, Sector4, Gurgaon-122002.Ph: 01244276464

Acknowledgement
Savegenie E-Marketing Pvt. Ltd., right from the start provided a wide range of professional
experience to me. During the course of my project I was always guided and nurtured which has
helped me to grow more rational and practical in my thinking and approach.

I am extremely grateful to my mentor Mr. PriyatamVusala, vice president, savegenie

E marketing Pvt Ltd. and Mr. Mahesh NathSahu, Vice president, Savegenie E Marketing Pvt.
Ltd. for providing me an opportunity to work in an able startup as a summer intern under their
guidance and giving me the opportunity to work on various wide ranged projects which
helped me in integrating my theoretical and practical knowledge, thereby allowing me to
experience and learn from the challenges in an organization of this stature from a managerial
perspective.

My special thanks to Mr. Amit Verma, Founder, Savegenie for helping me throughout
my internship period and enlightening me with his deep knowledge. I am grateful to him for
showing me the right direction.

I am also grateful to the entire staff of Savegenie E-Marketing Pvt. Ltd. for their
continuous help and support.

1. Executive Summary

Being a new startup the opportunities for learning in Savegenie were immense. Our work
started by gathering knowledge about the working of the company and the work done till now
by other interns who joined earlier than us.
I was involved initially in the making and upgrading the databases that were to include all the
product SKUs (stock keeping units) collected from various shops through tie ups that were
finalized before we joined.
Thereafter, I was involved in B2B(BUSINESS TO BUSINESS) activities of going through
various shops and collecting data of product SKUs(stock keeping units) present in various
shops allover Gurgaon.
After completing the B2B(BUSINESS TO BUSINESS) works, I was involved in designing
questionnaire and doing pre-launch surveys to know about the notion of the customers
regarding our future website. In the meantime the IT and photo shop team would integrate the
collected data and pictures of product SKUs (stock keeping units) with the website.
Thereafter, I was convinced form the results of the surveys that the website will be a success
and had knowledge about which features of the website is liked and disliked the most and
hence, we altered our strategy accordingly.
Finally, I was ready with the beta version of our website, while in the meantime we continued
with the pre-launch surveys.
After the final launch of the website,I was also involved in B2C (BUSINESS TO
CUSTOMER) works , wherein we again went through the procedure as followed in the
surveys and went from market to market and park to park supervising pamphlet distribution,
collecting e-mail IDs/phone nos and working on other marketing domains so as to make this
website a hit.
In the final phase of our internship we did promotion (advertisement) of our company, we
went to different malls and societies. We meet their RWA officers/managers and collecting the
information about his societys advertisement costs means how much they charge for putting
their standees, flaxes, canopies, umbrellas, notice boards and drop boxes. We have motivate
them to charge less amount to us (datas mention below). We meet some brokers also who
takes some commission and make sure to do advertisement they charge some percentage to
promote the company. After that we went to manufacturer of all these things (like canopy,
standee, umbrella, flaxes etc.) and also motivate him to charge less amount and then after
further going on to the promotion.During this period, two months of our internship period
were completed with an indispensable experience of working and marketing a startup.

2. Introduction

2.1: Industry profile

Being first in the market contributes a lot towards the success of any product or
service. The first and second laws of The 22 immutable laws of marketing also
reinforce this assumption by stating that It is always better to be first than to be
better and If you cant be first in a category, create a new category in which you
can be the first. Savegenie E-Marketing Pvt. Ltd. is a start-up venture which
followed these two laws in creating its product savegenie.in

The internet has seen a sudden spike in the number of online grocery stores since
2011. Even though there have been closures and bankruptcies in the initial days,
the large customer base and the ever increasing penetration of internet usage in the
Indian customer market is luring entrepreneurs into this business. Big players like
Sahara and Godrej have also entered this fray with Saharas Qshop and Godrejs
Nature basket. But all the online grocery stores currently in operation, buy and
sell the goods themselves. This gives the feeling of visiting a single super store to
purchase all the groceries, which leaves a void in the heart of the typical Indian
customer when he buys online. The personality of the Indian customer is naturally
imbibed with an instinct to compare the prices of products in multiple stores in
order to save more money.
Savegenie has addressed this point by creating its own category in online grocery
stores with a new business model. It aims at creating an online market place for
consumers and retailers to come together for business. The customers get the
benefit of comparing prices of products from various stores online and buy
accordingly while sitting at home and thereby saving their time, money and effort.
There are around 12 million unorganized kirana stores in India. These medium and
small scale retailers face stiff competition from major enterprise like Reliance, Big
Bazaar and now online retailers has enhanced their competition, making their
survival tougher. Retail sector is now working on Darwins law Survival of the
fittest.

2.2: Organization profile

Savegenie has launched its e-commerce business in January 2014 and is in the
nascent stage of establishing itself in the Indian e-market.
SaveGenie E-marketing Private Limited is working to leverage this unorganized
business into an organized one through its ecommerce portal in the retail space
with Gurgaon as its target market.
SaveGenie will provide these small and medium scale retailers a new marketplace
for selling their products online. It will be one of its own kinds of business model
in Gurgaon. With its marketplace model SaveGenie will bridge the gap between

the retailers and the customers. It will act as a service provider and a channel to
maintain a proper information and communication between them. SaveGenie will
benefit both the customers and the retailers. This will help the retailers to increase
their sales and provide the customers a marketplace where they can order their
grocery from various retail stores, especially to those who still choose traditional
shops over branded stores.
Researches show that there are many factors for online groceries to thrive in the
world of ecommerce.Most of the consumers dislike the chore of grocery shopping
and many of them even suffer from shopping stress. Thus, convenience and time
saving can be the dominant reasons for consumers to shop for groceries online and
Savegenie focuses on providing its customers convenience, time saving with less
effort.
Founders and Directors
The company is founded by three people Mr. Amit Verma, Mr. Uppkar Aggarwal
and Mr. SharadGoenka and incorporated successfully as Savegenie E-Marketing
Private Limited on 8th January 2014 in accordance with the laws of India.
Mr. Amit Vermais a management professional with deep interest in
entrepreneurship and consulting with well-rounded skills in strategy, finance,
marketing, operations and technology who believes that a business is a sum total
of all these areas and to understand business environment a balanced view of every
skill is required. He is an alumni of National Institute of Kurukshetra and Indian
Institute of Management Kozhikode. He is the also the Founder of and
Management Consultant in Apogee Consulting Limited based in Mauritius.He has
previously worked in Daewoo Motors Limited, MarutiUdyog Limited, GE Capital,
HSBC, DTOS Limited and Ireland Blyth Limited.
Mr. Uppkar Aggarwal, Executive Director of Savegenie of E-Marketing
Private Limited. He is an alumni of National Institute of Kurukshetra and currently
working as Principal Engineer at Tejas Networks.
Mr. SharadGoenka is a pure finance professional with a vast experience
in various financial institutions. He is an alumni of Sydenham College of
Commerce and Economics, Mumbai University and Indian Institute of
Management Ahmedabad. He is also certified Chartered Accountant and Chartered
Financial Analyst.

4.1 Vision and Values:

Vision:
To give value added time back to busy families by drastically reducing time
and effort from non-value added routine but must to do things that have low
entertainment value specifically grocery shopping (both food and non-food items)
through internet retailing.
Mission:
To establish ourselves as customers preferred market integrator by being relevant
to each stakeholder in the chain through providing value, ease, comfort,
fun and certainty by achieving 10-15% share of purse for the geographical
market we enter in within 2 years.

Key Definitions
Value- Right quality at right price, benefit to all stakeholders
Ease- Process is understandable, easy, integrates seamlessly, Customer facing
interfaces simple to understand and act
Comfort- Accessible all the time through various online, offline platforms, nonintrusive
Fun- Process should try to maximize the fun element, like some graphics that
show savings and keep the buyer tuned in as real life experience can

Certainty- Peace of mind, order placed should mean delivery as per order, no
negative surprises, commitment to timely delivery, deliver what you promise.
Services-Savegenie is a marketplace where the customers meet retailers and make
an educated choice of buying groceries. Savegenie does not provide groceries to
any customers directly or indirectly. Savegenie does both business to customer as
well as business to business.
Savegenie provides the local retailers a marketplace to have a presence online and
to compete with big retailers. Thus giving them opportunity to gain more profit,
increase their serving area and increase of customer base. Thus Savegenie helps
the local retailers of various sectors of Gurgaon to have a global presence.

Savegenie serves as a link between the customers and the retailers. Savegenie
saves three key things for customers, Time and Money and Efforts the three
most valuable factors in the modern world. The available products ranges right

from fresh Fruits & Vegetables, Rice, Dals, Spices and Seasonings to Packaged
products, Beverages, Personal care products, Meats, etc. Customers can easily
make their order and pay with their convenient option via Credit/Debit card, Net
banking or Cash on Delivery.

The key features which differentiate Savegenie from other online grocery websites
are

Swapping between the products.

Switching the stores.
Merging & combining the list.
Splitting the list
Pickup & delivery
Tracking the product prices.

4.2 Business Operations:

Savegenies interface is designed as per the best in class industry standards.
It provides the customers all the features they would need to choose their
preferable groceries. The website has all the features which would help the
customers save their most valued time and money. Once the customer is registered
he/she would be redirected to the Savegenie main page where he/she could
continue with shopping.
To provide the customer wide range of products to choose from, data
(product SKU, size of the package, brand etc.) from the retailers who are
associated with Savegenie is collected and was uploaded on the website in the
required format.
Our Customers are those individuals/groups who visit and purchase through our
website. Before they start purchasing, they need to register to the website. After
registering they would be getting an SMS and an e mail to verify the link. On
clicking the link it will direct to a page where they have to fill further information
to complete the registration process.
Once the registration process is complete, Customers will surf the site and
purchase items they need. After the items are added to the cart, they will use
features from Savegenie to save money and subsequently the time. They will be
again getting an SMS when they place an order. After that order form will be
forwarded to the respective retailers who will deliver the products to the customers
at the scheduled delivery time.

In order to provide the customer best experience in-house call center will be
developed to answer their queries.

4.3 Demand and Supply Analysis

Increased internet usage.

Growing online shoppers.
Growing e-commerce market in India.
Increased affluence level of people.
Customer driven, not investment driven
Flexible delivery option (Pick up/ Delivery, Time Slots)
Convenience
Multiple mode of payments: Cash, Internet banking, Credit Cards and Debit
Cards.
Availability of products.
Switching between the store
Swapping between the products

3. Need for study

Being first in the market contributes a lot towards the success of any product or
service. The first and second laws of The 22 immutable laws of marketing also
reinforce this assumption by stating that It is always better to be first than to be
better and If you cant be first in a category, create a new category in which you
can be the first. Savegenie E-Marketing Pvt. Ltd. is a start-up venture which
followed these two laws in creating its product savegenie.in
The internet has seen a sudden spike in the number of online grocery stores since
2011. Even though there have been closures and bankruptcies in the initial days,
the large customer base and the ever increasing penetration of internet usage in the
Indian customer market is luring entrepreneurs into this business. Big players like
Sahara and Godrej have also entered this fray with Saharas Qshop and Godrejs
Nature basket. But all the online grocery stores currently in operation, buy and
sell the goods themselves. This gives the feeling of visiting a single super store to
purchase all the groceries, which leaves a void in the heart of the typical Indian
customer when he buys online. The personality of the Indian customer is naturally
imbibed with an instinct to compare the prices of products in multiple stores in
order to save more money.
Savegenie has addressed this point by creating its own category in online grocery
stores with a new business model. It aims at creating an online market place for

consumers and retailers to come together for business. The customers get the
benefit of comparing prices of products from various stores online and buy
accordingly while sitting at home and thereby saving their time, money and effort.
There are around 12 million unorganized kirana stores in India. These medium and
small scale retailers face stiff competition from major enterprise like Reliance, Big
Bazaar and now online retailers has enhanced their competition, making their
survival tougher. Retail sector is now working on Darwins law Survival of the
fittest.

A Fresh Look at Online Grocery

When e-commerce was first recognized as a sea change in business, many companies
tried to enter the realm of online grocery. But many of these pioneers failed when the
Internet bubble burst, and in the decade since, online grocery sales have grown much
slower than the overall e-commerce market.
For the most part, customers in Western countries continue to shop for their groceries by
going to bricks-and-mortar stores. However, the online market is growing quickly in some
countries. The United Kingdom has a particularly vibrant market, with Internet grocery sales
comprising 4.5 percent of total grocery sales in 2010. In other countries with similar
characteristics, however, growth has been slow; the Internet comprises just 0.2 percent of total
grocery sales in Germany.
We recently studied the state of the online food retail industry in partnership with the
University of Cologne. We found an industry with significant potential for growth. While our
research centered on Germanys online food market, our findings are relevant in markets with
high gross domestic product (GDP) and well-urbanized regions (see sidebar: About the
Study).
This paper examines the business models for online food retail, discusses why food
shoppers are often hesitant to purchase groceries online, and outlines the factors that will
help grocery retailers succeed online.

Delivering the Goods

France, Switzerland, the United Kingdom, and the United States all have major online food
retailers that offer a full range of groceries. The U.K. market is the most developed, with
annual combined online grocery sales of major players Tesco, Asda, Sainsburys, and Ocado
totaling $4.6 billion, or about $110 per person. Switzerlands market in 2008 averaged $20 per
inhabitant, mostly generated by the two leaders, LeShop and Coop@home. In Germany,
where the food retail market is dominated by discounters, online grocery has made only a
minor dent in sales.
One reason for the gaps across similar countries is that each country has different food retail
markets. Unlike Germany, the United Kingdom and France have highly consolidated food
markets, with less price competition and fewer hard discounters. This opens the door for
high-value service retail concepts such as online grocery. Furthermore, some of the require-

ments for establishing an online grocery marketlarge metropolitan areas with fewer grocers,
high broadband usage, and lots of online shoppersvary considerably across countries.
Online grocers have to adapt their business models, products, and services accordingly.
For our study, we examined how both traditional retailers and pure online players are setting
up operations and reaching customers. Figure 1 shows the two primary ways customers
receive their goods, depending on which method is used by which online retailer. Customers
either have groceries delivered, or they pick them up at a store or a distribution facility in a
click-and-collect service. The vertical axis indicates where retailers full fill the orders for later
delivery to customerseither in a shadow warehouse inaccessible to customers or in
traditional stores.
Online food

Store to home
Grocers use existing
stores to supply
online shoppers

retailers

Click-and-collect
Online shoppers
collect goods at
grocery stores

generally use
one or any
combination of
four
approaches to
distribute

grocery orders to customers (see sidebar: Four Retailers, Four Approaches on page 6).

Figure
Business models of online food retailers

Home delivery

Pickup

In-store
picking

Warehouse to home
Online start-ups (and
some bricks-and-mortar)
deliver from warehouse

Drive-through
Some grocers
are adopting this
time-saving approach

Warehouse
picking

retailers, such as Sainsburys

in the United Kingdom and Colruyt in Belgium, offer more than one approach. Tesco goes even further
already offering both in-store click-and-collect service and home delivery, it has begun investing in
shadow warehouses to increase the efficiency of home delivery. The following describes the online

grocery approaches of some of the more established retailers:

Shadow warehouses (pickup). The shadow warehouse approach already used
by companies such as Chronodrive, Leclerc, and Systme U has become popular in France.
Traditional retailers such as Intermarch and Carrefour are currently in test phases with this
approach, and German retailer Real has initiated a test phase in two markets. In the United States,
one example of this approach is Farm Stores, a Florida-based online grocer with drive-through
pickup.

One major obstacle to online grocery is quite simply that customers

are happy with how they get their groceries now.
The advantage of the drive-through pickup is the time savingsonline shoppers can often collect their
groceries without having to get out of their vehicles. Chronodrive, a sister company of French
hypermarket chain Auchan, is currently expanding the number of its outlets to 32 in France and boasts
that its pickup process takes less than five minutes. The approach succeeds because of its efficiency;
on the other hand, the absence of personal contact can hamper both marketing and customer service
efforts.
Shadow warehouses (home delivery). Similar to the first approach, home delivery managed from a
central distribution center is frequently used by pure online retailers that do not have traditional retail
stores. It is common in the United States, where Peapod (founded in the United States in 1989 and
now owned by Netherlands-based Ahold), Fresh Direct, E food Depot, and Net grocer have made a
dent. This approach is moving forward in Europe, too, led by Switzerlands LeShop, which has
partnered with the Swiss postal service for delivery, and the U.K.s Ocado. Even traditional retailers
that offer home delivery, such as Tesco, are opening centralized shadow warehouses to benefit from
more efficient picking and delivery.
The efficiency and time-saving features of this approach can be valuable to customers, but the level
of customer service involved can also make it comparatively expensive.
Store- based (pickup). This business model allows customers to pick up pre-packed groceries from
traditional retailer outlets. Publix and Albertsons in the United States have abandoned store-based
home delivery in favour of pickup. This approach is easy for traditional grocery retailers to adopt
within their existing structures. But customers often see little difference between online and offline
channels and, ultimately, may prove unwilling to pay
a premium for the service. When moving into the online business, traditional food retailers often
choose to offer both click-and-collect and home delivery from their stores.
Store- based (home delivery). Traditional retailers entering the online business often take advantage
of their retail outlets and pick customers products for delivery from their existing stores. The U.K.s
Asda uses this approach, while others such as Sainsburys, Simply Market,
Colruyt, and Delhaize offer in-store picking and click-and-collect. In-store picking is waning in
popularity among retailers because of delivery inefficiency, costs, and availability. Further-more, trade
chains are encountering local competition; for example, in many countries, including the United
States, it is already common for some single-location stores to offer home delivery in two hours.

Shopping Around: Its All In the Details

After examining the leading business models for online grocery, our survey findings helped identify
ways to improve online grocery retail. The improvements fall into three categories: customers,
operations, and success factors.

Customers
Our focus turned to how and what online grocery shoppers buy. In general, executives agree that the
customer base will widen with the Internet-savvy generation. Busy young professionals who value the
opportunity to save time and young mothers seeking to avoid busy supermarkets are the main target
group in online groceries. As one young mother puts it, Online grocery shopping is convenient and it
saves time. I do not need to carry heavy bags and I can avoid long lines.

Shoppers are happy with the status quo. One major obstacle to online grocery is the simple fact
that customers are happy with how they get their groceries now. Seventy-three percent of
respondents say they do not buy groceries online because they are satisfied with their usual
shopping opportunities and cannot see the added value of online food shopping. In addition, some
people dont decide what to buy until they are on their way home from work or even in the
supermarket, so online food purchases are not always a viable option. For many, personal contact is
important. While only a few respondents blamed a lack of skills or avail-ability for not shopping
online, these could also be underlying factors.

There is little margin for errorshoppers do not forgive mistakes

made by online food retailers.

Online shoppers are not online food shoppers. Frequent online shoppers are more likely to try
buying groceries online than others, with almost one-third of Web grocery shoppers saying they
shop online at least once a week for other products. But they do not purchase groceries online as
often as other products. Fewer than 10 percent of shoppers say they have bought non-perishable
groceries online, and only 2 percent have bought fresh food from a
website. And of the 60 percent of shoppers who buy something online at least once a month, only 1
percent log on to buy groceries every month.
While some customers happily accept home delivery charges, most are not willing to pay for just the
assembly of the order. Sixty percent of respondents say they would pay between $1.30 and $6.50
(1 and 5) for home delivery, and 17 percent stated they would pay up to $13
(10). On the other hand, few are willing to pay extra when they pick up, either at warehouses or
supermarkets.

Operations

Operations plays a major role when determining the best approach to developing and imple-menting a
customer-friendly strategy. The top companies focus on providing high-quality service, whether delivery
or pick up.

Get the service model right. Many consumers today see value in home delivery, which may make
it the dominant approach as online food retail matures. But home delivery has its challenges; the
supply chain for online food retail is completely different from all other online products. Each order
consists of multiple products, some of which may require cooling, and delivery accuracy is
important. A wide product selection, particularly of fresh foods, may prove difficult.
Pickup service might alleviate shoppers hesitation in buying fresh food online, as they can check the
quality before leaving the collection point. But, of course, pickup service does not offer the same time
saving or convenience as home delivery. And, to date, most customers
appear to have little interest in pickup stations, afraid that they will not be able to examine the
products or, in the event of a problem, address it directly.

Get the picking approach right. While pure online players use semi-automated shadow
warehouses to pick groceries for customers, some traditional retailers also run store-picking
systems. Shadow warehouses provide almost triple the efficiency of traditional stores.
Todays shadow warehouses are mainly located close to urban areas. Traditional food retailers often
start with store-picking systems to keep costs low and build the shadow warehouses as the market
grows. Once again, these findings show the trade-off between seeking upfront savings and investing
in the benefits of long-term efficiency.

Success factors
These factors focus on how to succeed in the online grocery market.

Educate customers. One striking finding from our study is how many shoppers are not even
aware that online grocery service exists. Eighty-two percent of our respondents have no experience
with online food retailing, and only 1 percent say they buy groceries online on a monthly basis.
Many online grocery stores are difficult to find online, and traditional retailers havent yet
aggressively advertised their online shopping efforts.
Additionally, many online food shoppers use the Internet to obtain a few select products almost
always dry goodsthat are cheaper online, difficult to find elsewhere, or more convenient to
have shipped. While these customers are easy to target, massive marketing and communication
is required to convince them to buy more groceries online.

Develop a unique selling proposition. A successful business normally stands out by offering
something unique to customers. Online food retail still struggles with this. Most players assume that
the unique selling proposition is the time saved through home delivery or store pickup, and our study
findings support this view. As one online shopper explains it, I can order at any time and it gets
delivered to my flat when I am home. As a result, current online retailers say they target customers
with time constraints. Tescos Home plus has succeeded in this area (see sidebar: Groceries, a
Smartphone, and the Subway). However, product selection is also important, as more than 40
percent of our survey participants say they shop online to obtain a product they cannot easily find
elsewhere (see figure 2 below).

Figure
Why do people buy groceries online?

Study participants who have bought food online

%
%
%

%
%

Home
delivery

Unique
online
product

Curiosity

Time

Price

Promotions

Win their trust. Customer retention is a major challenge for online retailers, and turning this problem
around starts by minimizing mistakeswhich already-skeptical consumers may not forgive. Because
customers are not able to touch online products, they cannot be certain about the quality and are
often wary of the inconvenience of getting a refund for defective goods. One person in our survey
says, I do not shop online regularly, first because I have to plan ahead to take the delivery, and
second, when I shop online, I often do not get the items I order.
Because shoppers are generally satisfied with traditional food retailing, online shopping must offer
additional value while also upholding (or surpassing) traditional standards. This might mean higher
operating costs during start-up to ensure excellent picking operations, or a higher rate of spoilage
because of selecting only the freshest goods.

Smart Shopping, Smarter Delivery

In most Western countries, the online food market is still in its infancy and a niche segment. One
reason is that initial investments are high, with outlays required for infrastructure (mainly new or
upgraded operations), software, and marketing, among other things, and potentially higher operating

costs. The investments also come with higher risk because of market
uncertainties. A well-balanced assortment is vital for sustainable growth as profitability, logistics
requirements, and costs differ significantly across product categories (for example, canned food versus
fresh food).
Pure online grocers find it difficult to enter the market on a broad scale, because of fierce price competition
and start-up costs. They are more likely to operate as niche players in large metro-politan areas working
with logistics and shopping partners (such as Amazon) to provide home delivery services. They primarily
sell small assortments of premium fresh products geared to less price-sensitive shoppers.
Traditional grocery retailers will not enter until they have looked at the risks and rewards of being an onlinefood retail pioneer. Those struggling under competitive pressure are most likely to enter as part of a
differentiation strategy, offering an online channel as an additional service. Any competitor that goes big into
online retail will entice others to follow. Traditional grocers will need to decide between staying traditional
and risk losing long-term market share, or investing now to gain an edge in a promising market.
Whether talking to a niche online grocer or a traditional grocer with an online presence, both understand the
importance of providing customer-friendly delivery plans. Most online grocery shoppers prefer (and are
willing to pay for) home delivery over pickup. But, they are neither willing to stay home all day to wait for
their groceries, nor are their homes set up for grocery drop-off, especially fresh goods that require cooling.
In many ways, smart delivery solutions are the tipping point for online grocery success.

4. Literature review
This study identifies variables with a significant influence on residents preference for using a
grocery store at a proposed infill development in their neighborhood, and roughly quantifies their
desire for the new store by comparing significant preferences and current behaviors.
To understand the inner workings of this topic it is necessary to understand existing scholarly
research in several areas, and to understand the history of the River Road nodal development.
The scholarly research reviewed in the report include : land use, especially urban sprawl, smart
growth and nodal development; an overview of the retail grocery industry; and a look at
consumers decision making behaviors. The site specific information in this study covers the
details of nodal development in lower River Road, and a brief overview of the Community
Planning Workshops Neighborhood Needs Survey Report.

Urban Sprawl
Urban sprawl is the unplanned, uncontrolled spread of urban development along the edge of a

city (Gale 2009). Urban sprawl consumes significant amounts of resources, adds to travel costs,
and creates large areas with uniform land uses (Burchell 1998). The burden of sprawl on living
systems can be seen in the deterioration of natural areas, water and air pollution, and the
depletion of non-renewable resources (EPA 2009). Humans are not immune from the deleterious
effects of urban sprawl. The growth pattern contributes to socio-economic segregation (Talen
1999), (Frumpkin 2002), breaks down social networks (Putnam 2000), Freeman 2001), and
contributes to obesity and other illnesses (Ewing & Mcann 2003), (Ewing, et al 2003).
In spite of its deleterious effects, urban sprawl is intimately linked to the fulfillment of The
American Dream. US citizens like urban sprawl because it dilutes congestion, accommodates
unlimited automobile use, provides a heterogeneous economic mix, and fosters neighborhoods
separate from blighted core areas where housing values will appreciate (Gearhart 1999).
More and more, decision-makers in the US are recognizing that the short term economic benefits
of sprawling development cant outweigh the cost of sprawl on the public sector (Litman 2003).
Opening a new highway may bring jobs and tax revenue to a municipality now, but the burden of
providing services and maintaining roads outweighs the tax benefit when the area is developed at
a low density (Hirshman 2009). In our collective rush to spread roads that serve sprawling needs,
our country has under-funded infrastructure, postponed replacement of outdated infrastructure,
and not taken full advantage of technological improvements in infrastructure.
The River Road neighborhood where this study takes place could not be considered sprawl.
Rather, it is a historically rural community that the City of Eugene has grown around. The River
Road neighborhood now occupies a central location in the Eugene area. Because of its rural
history it has a low population density and presents a viable opportunity for nodal development
urban growth that embodies smart growth principles and seeks to counter sprawl.
Smart Growth
Our countrys backlog of infrastructure repairs and increasing health care costs point to the fact
that we can no longer afford the sprawling development that has been commonplace for the last
50 years. Smart Growth is the term for land use patterns that seek to mitigate the worst costs
of urban sprawl.
The Urban Land Institute explains that Smart Growth is development that accommodates growth
in economically viable, environmentally responsible, and collaboratively determined ways. It
calls for building communities that are more hospitable, productive, and fiscally and
environmentally responsible than most of the communities that have been developed in the last
century. Smart Growth seeks to identify a common ground where developers, environmentalists,
public officials, citizens, and others can all find acceptable ways to accommodate growth (Porter
2002).
The Smart Growth Network recognizes that the values expressed above have different meanings in
different communities. To promote a comprehensive definition of Smart Growth, the group formulated
ten common smart growth principles. The principles that have the greatest bearing on the topic of this
paper are the principles of promoting a mixture of land uses, and promoting growth within existing
communities. These principles are meant to optimize existing infrastructure, increase community tax

bases, increase the proximity of jobs to housing, and preserve rural open space. However, they raise the
question of how existing communities can redevelop without losing their existing neighborhood
character.

Nodal Development
Nodal developments are one method for incorporating smart growth principles into existing
communities. Nodal developments are high density, pedestrian friendly developments that
combine commercial uses with multi-family and single-family dwelling units. They are a
desirable method for integrating smart growth into existing communities because they balance
increased housing densities with the jobs and commercial services needed to support those
residents. Nodal developments increase the number of destinations within walking distance for
neighborhood residents and can become local centers that evoke civic pride. In Lane County,
Oregon, where this study takes place, Nodal developments are considered an effective
infrastructure investment for fostering compact development patterns in communities,
encouraging the availability and use of transportation alternatives, enhancing livability and
economic competitiveness (LCOG 2002).
This study will focus specifically on resident opinions related to the development of a nodal
development in the River Road neighborhood of Eugene, OR. A 2007 market evaluation
determined that there is a need for 40,000 additional square feet of retail development in the
neighborhood by 2015. The development concept promoted in conjunction with the evaluation
proposed a 15 acre development with 250 housing units, and 60,000 square feet of retail with the
anchor tenant being a 20,000 square foot supermarket. Retail space is provided over the amount
needed by 2015 because the development site lies over existing commercial areas where square
footage will be lost (Hovee 2008).
River Road community members have identified in multiple surveys that a supermarket is the
commercial tenant they want most in the proposed development. Research by Condon and
Handy echoes this desire in general, supermarkets are the commercial tenant residents desire
most for infill developments. Local desire for a grocery store can be further explained by the
closure of a Safeway store in the neighborhood in September 2007. The reason that grocery
stores are perceived as valuable additions to a residential neighborhood lies in both the utility of
grocery shopping trips and trends in the grocery retailing industry. In the following sections of
the literature review I will first provide a brief history of grocery retailing, then define the
spectrum of typologies defining retail grocery outlets. Then, I will review current research on
consumers grocery shopping preferences.
Grocery Retailing
Over the last century, grocery retailing in the US has been characterized by a reduction in store
locations, but an increase in store size. Average annual sales per grocery store grew from about
$195,000 in 1934 to about $3 million in 1991 (both in 2008 dollars). Today, the store type that
shoppers are most familiar with, the supermarket, averages around $17 million in sales per year.
Average grocery items per store increased from 867 in 1928 to 45,000 in 2006. As grocery stores

increased in size, the total number of grocery stores decreased from 386,900 in 1939 to 168,016
in 1991 (Messinger 1995). Today there are about 34,000 supermarkets with annual sales over $2
million in the U.S. (FMI 2007).
In Retail Concentration, Food Deserts and Food Disadvantaged Communities, Troy Blanchard
and Thomas Lyson (2003) describe the causes and impacts of growing supermarket sizes:
The impetus for the shift from a large number of widely dispersed small scale local
grocers to a concentration of supermarkets and supercenters into a limited geographic
area has been fueled by the globalization of food production and distribution resulting
in a handful of corporations controlling the majority of sales Globalization allows
supermarket and supercenter chains to purchase large quantities of food from suppliers
in order to sell at lower prices. The buying power possessed by large retail chains, such
as Wal-Mart, Target, Sams Club, Albertsons, and others, provides these corporations a
distinct advantage over smaller chains and mom and pop grocers.

The majority of grocery shopping trips are made to supermarkets. The Food Marketing
Institute (2007) defines a supermarket as, any full-line self-service grocery store generating a
sales volume of $2 million or more annually. Other traditional grocery store formats include:
food/drug combo stores, warehouse stores, super warehouse stores, limited assortment stores,
corner groceries, and convenience stores. The popularity of the supermarket and other traditional
formats are in decline as a variety of new store formats are increasing in market share.
The supercenter is a recent addition to grocery retailing. It is a large food/drug combination store
and mass merchandiser under a single roof. The most popular retailer in the new format is
Walmart. The company opened their first supercenter in 1988. Non-traditional food retailers
include hypermarkets, supercenters, warehouse clubs, mini-clubs, drugstores, dollar stores,
specialty markets, fresh format stores, and the internet. For more information on these store types
see Figure 2.1. Non-traditional retailers are a rapidly growing market segment. When Walmart
opened its first supercenter, 13.8% of food purchases were made at non-traditional stores. In
2006, 32.6% of food purchases were made at non-traditional stores (Martinez & Kaufman 2008).
The following literature on shopping preferences sheds some light on the reasons for the success
of large format stores and provides the basis for the variables analyzed in this study.

Figure 2.1 Traditional and Non-traditional Grocery Store Formats

Retail Grocery Shopping Behavior

Food is essential for life and the average U.S. citizen spends about 6% of his disposable income
on groceries (FMI 2006). However, the variables considered by individuals when they consider
which grocery store to patronize and how to do it range from utilitarian to emotional.
Marion (1991) states that we classify grocery stores by the range of prices, services and
products that they provide. Different combinations of these variables are enticing to different
types of consumers and the strategy of the grocery store determines its customer base.
Figure 2.1 shows that non-traditional grocery store formats that offer very low prices like deep
discount drug stores, and limited assortment stores have increased in popularity. However, fresh
format stores and internet grocers that offer items at a premium price have increased in
popularity as well. Industry wide, retailers are able to offer relatively lower prices because
increased store sizes allow locations to profit on smaller per item margins.
The products that some shoppers desire most are fresh fruits, vegetables, meats, and dairy. An
increasingly popular store type is the fresh format store that emphasizes perishables usually
ethnic, natural or organic products. These stores will also carry special prepared products that
emphasize health concerns like preservatives and transfats (Martinez & Kaufman 2008).
Another product based marketing technique is providing general merchandise or services like
banking and vision centers in conjunction with grocery items. They success of this format can be
seen in the increased market share of supercenters (Messinger 1995).
Tauber (1972) hypothesizes that the motivation to shop includes desire for the activity of
shopping as well as prices, services and products. Some people are merely shopping for
physical activity, sensory stimulation, or social motives. Handy and Clifton (2001) found support
for this shopping mentality from respondents who replied, My wife uses our supermarket
because she says it has personality, and My supermarket plays better music! These shoppers
are likely to have a specific type of shopping experience in mind when they consider what
grocery store to patronize.
The grocery retailing industry has responded to these emotional shopping desires with
advertising campaigns that emphasize the social consciousness of their corporations, customized
marketing campaigns, and creating more pleasant shopping environments (Martinez & Kaufman
2008). Other considerations of shoppers include local ownership and local products.
Grocery stores that meet consumers price, product, service, and emotional needs may not be
patronized if they are difficult to access. The gravity model of travel behavior suggests that
minimizing travel costs is the dominant variable influencing destination choices (Huff 1964), and
Holton (1958) adheres to this model by defining grocery shopping trips as convenience
shopping trips, where the consumer purchases goods frequently, immediately and with
minimum effort. Considering Taubers emphasis of the non-product benefits derived from

shopping it is more likely that grocery shopping trips are not purely based on proximity. Grocery
industry research supports this idea by indicating that 70% of the variance in peoples choice of
grocery shopping destination is determined by the location of the market (Progressive Grocer
1995). Consumers in store-dense areas are less likely to use proximity as the defining store choice
variable. Handy and Clifton (2001) found that store choice models suggest the greater the
distance between a household and the closest store the less likely residents are to bypass that store
to shop at a further option.
The vast majority of shopping trips are made by personal automobile (NHTS 2003). However,
some neighborhoods allow more opportunities to use alternative transportation for shopping
trips. In highly accessible areas walking and biking become desirable over travel by personal
vehicle because of the difficulties associated with congestion and parking (Frank & Pivo 1994).
Not all alternative transportation users live in dense urban areas. The existence of the desire to
use alternative modes for shopping trips may be attributed to the impact of attitudinal and
lifestyle variables on travel demand (Bagley, Mohktarian 2001). Residents want to walk or bike
to get groceries because, well . . . they want to.
The conventional unit used to measure travel behavior is trips - direct travel from an origin to a
destination. However, consumers often plan their trips so they can travel to a similar location for
multiple unrelated needs; or maximize the advantage derived from a required trip by visiting an
additional shopping destination (Krizek 2003). Both of these behaviors are called trip chaining.
Trip chaining limits the effectiveness of conventional trip based travel analysis because it
obscures the reason consumers choose to travel to a particular grocery shopping destination.
The lifestyle variables that shape shopping preferences and shopping travel demand have a strong
correlation with the demographics of the shopper. The primary demographic variable considered
in the literature on grocery store choice is household income. Income influences the degree that
the consumer is able to look away from low price options and indulge his emotional shopping
needs. Household size is also an important factor because it influences the basket size of the
shopping trip. Age of household members is also an important consideration because
consumption patterns vary over an individuals lifespan. Shopping travel behavior also varies
with age. Another important household characteristic is vehicle access. Households without an
automobile have difficulty accessing distant stores and making large purchases.
Neighborhood Needs Survey Report Summary
The literature review concludes with an overview of the methodology and results of the
Neighborhood Needs Survey drafted in the 2008 report by the Community Planning Workshop.
Survey Methodology
The Neighborhood Needs survey was mailed out to a random sampling of River Road
neighborhood home owners within approximately a one mile radius of a proposed mixed use

development site. The sampling area is shown in Figure 3.1. The survey included seven pages of
questions regarding residents shopping trip travel modes and shopping preferences. It also asked
residents to project changes in their behavior based on the existence of additional shopping
options in a local Study Area. The City of Eugene mailed out 1500 surveys and received 379
surveys back, a 25% response rate. Assuming the survey sample was perfectly random and there
was no response bias then the survey has a 2.5% margin of error at the 95% confidence interval.
In simple terms, this means that if survey were conducted 100 times, the results would end up
within 2.5% of those presented in this report.
Survey Results: Demographics
The Community Planning Workshop found that respondents under 44 were under-represented
when compared to the River Road population. This may be due in part because the survey was
sent only to homeowners and likely excludes residents under the age of 18. Younger people are
more likely to rent and less likely to own than older age groups. Survey respondents were overrepresented in all age categories above the age of 55. The overrepresentation is typical of mailed
surveys, but may not be quite as extreme as indicated - nearly 55% of survey respondents said
that they had lived in the River Road neighborhood for 10 years or more. This population has
aged in place. Today, 2000 Census demographics would not accurately represent their age
groups.
Two-person households were the most common household size for Neighborhood Needs Survey
respondents. The average household size was 2.31 persons. This is slightly lower than the 2.48
person average household size recorded for the area in the 2000 U.S. Census.
About one third of survey respondents reported a household income between $50,000 and
$74,999. An additional 27% made $25,000 to $49,999. As compared to 2000 U.S. Census data,
the Neighborhood Needs Survey has more response from higher income households and less
response from lower income households. Part of the discrepancy between the Census and Survey
data can be accounted for by inflation. A household earning $42,000 a year in 2000 would be
making $50,000 a year in October 2008.
It is important that the reader realize that the conclusions drawn in this article are based on the
opinions of lower River Road homeowners that may be older and wealthier than the average
resident.
Survey Results: Shopping and Travel Behavior
Nearly two thirds of survey respondents indicated they make very few or none of their
shopping trips in the neighborhood. Less than 10% indicated they made all or most of them
to destinations in the neighborhood. The most commonly used shopping location outside the
neighborhood is the Santa Clara/Division Avenue shopping area. The types of commercial

businesses that respondents would like to see more of in the neighborhood include a
grocery store, and a restaurant or caf.
Ninety-seven percent of respondents stated that the quality of the product or service they
purchased was an important factor in determining where their household shops. Some
aspects of quality that are important to respondents include organic food and locally
grown food, However the majority of respondents prefer conventional groceries. Forty
two percent of the respondents indicated they purchase local produce very often or
often.
The majority of residents drive on shopping trips, but a considerable percentage walk or
bike as well. Respondents recognized the lack of close destinations and the quantity of
motor vehicle traffic as the two factors preventing them from using active transportation
modes more often. If more services were available in the neighborhood, 60% of
respondents said they would drive less often, 71% would walk more often and 63% would
bicycle more often.

5. Objectives and hypothesis

Objective
Small grocery store companies have many objectives. They usually outline
these objectives in their business plans well before the start of new fiscal
years. These companies can best reach their objectives by staying
customer-focused, offering products and services their customers want.
That is why most grocery store companies also develop comprehensive
marketing plans to reach their key objectives. Marketing plans help the
owners better define their target customers and store concepts, such as
whether they serve specialty markets like organic food eaters.

Building Sales and Profits

The major objective of most grocery store companies is to sell products
and earn the highest profits possible. However, grocery store owners face
major competition from other retailers like restaurants and mass
merchandisers. One strategy grocery stores use to counter the
competition is to serve more take-out meals, according to a December
2009 report from the Bureau of Labor Statistics. These ready-to-eat meals
serve the customer sector that is looking for convenience. Small grocery
store companies may also offer movie rentals, check cashing services and
non-food products to build sales and profits. These strategies focus on
customers more interested in one-stop shopping.
26

 Increasing Customer Traffic

Small grocery store companies also strive for more customer traffic in
their stores. The best way to achieve high customer traffic levels is to
locate stores in high-traffic areas. This may include business districts or
areas close to residential or apartment buildings. Customer traffic can also
be enhanced by providing plenty of parking spaces and easy access to
and from major roads. Owners can also increase customer traffic by
providing proper lighting and security for those who shop at night. For
example, a small ethnic grocer may hire a security guard at night to patrol
the parking lot.

Building Customer Loyalty

Small grocery store companies aim to increase customer loyalty in their
stores. Loyal customers are those who repeatedly come back each week.
One way a small grocer builds a repeat customer base is through loyalty
programs. Loyalty programs are designed to reward customers according
to their purchase volumes. These rewards can include coupons on popular
items or even free products. Grocers may distribute magnetic stripe cards
to track customers' purchases. These plastic cards can be obtained
through marketing agencies that specialize in merchandising.

Improving Department Ratings

Some grocery store companies conduct periodic marketing research on
their various departments: Produce, deli, meat, dairy and customer
service. The impetus behind such research is that grocery stores are only
as strong as their weakest link. Customers expect high-quality food and
exceptional service when shopping for groceries. They expect the quality
and service to be the same whether they are shopping for dairy products
or produce. Grocers can hire marketing research agencies to conduct
phone surveys among customers, for example. Each department may be
rated on quality, service, cleanliness and other key factors. The research
company may use a 1-to-5 rating scale for each of the attribute ratings -with 5 being the highest. Customers should be encouraged to make
comments on their ratings. That way grocers can study the survey results
and make the necessary changes to upgrade certain departments.

Hypothesis
Being a new business category, online grocery shopping has received less attention so far.
Few researches have been made in this field till now. Bangalore based online grocery store
27

Aaraamshop has started publishing an annual report of its sales online which gives some
insights into the current state of online grocery in India across various cities. The major
observations from these reports and other researches are:
1. Number of male buyers has been increasing over the years and now it is higher than the
number of female buyers
2. 75% of buyers are above 24 years. Online grocery is not a Youth thing. 18-24 year
olds consist of 24%
3. Average purchase value of men increased to Rs.580 and crossed that of women at
Rs.552
4. Most orders are done between 6:00 A.M to 12:00 P.M and 90% of them are same day
delivery requests by late afternoon or by early evening
5. Mostly buying happens on Saturday, Sunday and Monday
6. Share of top brands decreased indicating that buying pattern has spread out over a large
variety.
7. Brands like Aashirvad, Amul and Haldiram continue to top sales both in value and
volume
8. Many people claim that they purchase goods only of select brands, but when inside a
store they make their decisions based on the best deal available
9. People feel grocery shopping as a chore and they do not like spending time on it. They
believe that that time could be used for some leisure activities
10. If information of prices of products are made available, people instinctively switch
stores to buy from the lowest priced shop. They tend to purchase from big stores
mainly because of the convenience they provide

6. Research Methodology
The study adopts an online secondary research data collection followed by a primary
survey based research. In the first phase, i.e., the secondary research, information was
gathered from various websites online and the distribution of residential sectors in Gurgaon
was identified. Details regarding the population, apartment buildings, shopping options in
the vicinity and distance to nearest store are collected with as much detail as possible. The
second phase of the research employs this data to identify the areas to be covered for the
primary survey.

6.1:

Research Questions

The research is mainly aimed at getting answers to a specific set of questions which are
mentioned below.
1.
2.
3.
4.

How much time do people spend shopping groceries?

Do people like spending time on grocery shopping?
Share of wallet for groceries?
What is more convenient delivery or pick-up?
28

5.
6.
7.

6.2:

Where do they buy groceries Branded stores like Big Bazaar and Easy day or
local Kirana stores or vegetable carts?
Type of store for small purchases and big purchases.
People's propensity of swapping brands based on price

Benefit of Research

The aim of this project is to identify and get deeper insights into the consumers perspective
of online grocery shopping and thereby form an effective marketing and sales strategy for
the company. It is also aimed at evaluating the USPs of the Savegenie website with the
consumers. The questionnaire is designed in a way that it not only is used in the survey but
also serves as a subtle marketing tool for the company. The analysis of the research data
will also help in identifying the costs that will be incurred in setting up canopies and
distributing fliers in different places. The marketing strategy will be formed in a way that
maximum people can be tapped with minimum resources.

6.3: Expected results

The analysis of the data was expected to provide greater insights into the buying pattern of
consumers in grocery shopping. The main answers looked for are peoples propensity to
swap brands and switch stores based on price differences. This helps in estimating how big
the Savegenie product can expand to be. Also the analysis was expected to provide details
of the demographic, geographic and economic distribution of the target customers to
formulate the marketing and sales strategies effectively.

Research Design
6.5: Sampling Frame
The targeted sample for data collection was a minimum of 1600 responses with not less
than 100 responses from each targeted sector. It was agreed that the sample should consist
of respondents of different age groups with at least 60% responses from people between 25
and 40 years of age.

6.6: Data Collection Procedure

The study involved a focus group discussion to prepare a questionnaire, which when used
in a survey, serves as a study of the target market and also as a subtle marketing tool for
savegenie. The questionnaire was designed in such a way as to find out the consumers
propensity to switch between various SKUs, brands and stores to save money and also to
find their willingness to buy online. Instead of targeting shopping malls, residential areas
and vegetable markets are targeted for data collection to get better responses from the target
29

market. The data collection procedure employed going to people shopping for groceries,
asking them the questions and manually entering their responses in the questionnaire.

6.7: Data Analysis and Form of Outputs

The data analysis was done using Microsoft Excel and the various outputs were depicted in
pie charts and bar charts. The detailed looked out for are:
1.
2.
3.
4.
5.
6.

Descriptive statistics Frequency analysis of all the factors

Residents economic class distribution among the sectors
Areas where people from most sectors visit
Frequency of grocery shopping and average monthly spending on grocery
Propensity to swap brands and switch stores
Readiness to shop online for grocery

Detailed Description
The major operations of Savegenie can be divided into two categories viz. B2B(BUSINESS
TO BUSINESS) operations and B2C(BUSINESS TO CUSTOMER) operations

B2B(BUSINESS TO BUSINESS) Operations

The B2B(BUSINESS TO BUSINESS) operations of Savegenie are carried out in the
following fashion:

Savegenie team approaches a store.

The team explains about the website and its commercial benefits.
Store is interested in partnership with Savegenie.
Store agrees and allows Savegenie to collect data about SKUs and prices.
Savegenie collects data of all SKUs and its respective prices in the store.
Data is organized and stored in the standard format comparing to the master
database.
Store chooses a suitable plan to serve the households, from the schemes available.
Store writes a cheque to Savegenie for the selected scheme.
Savegenie and the store come in to contract and a legal agreement is signed.
Store has to abide by all the points mentioned in the agreement.
Store registers to the site by entering all the details like store name, slots available,
pick-up and delivery options, store open and close time, liaison details, areas to be
served, etc.

30

The revenue generation model of Savegenie has been decided to operate according to the
following table:

Table 1: Revenue generation Model

Store Selection Criteria :

Vision- To have stores as partners who have vision to differentiate and provide value added
services and financial and strategic capability to understand new age selling
Kind of phone he is carrying
Kind of till (any computerized/semi computerized selling aid in shop)
Behavior towards customers (consultative/smiling/matter of fact/annoying)
Physical look and dressing etiquettes
Size of store
Variety of products
Variety of brands
Willingness to be e-enabled
Personal ambition and strategy if any
Arrangement in shop
Behavior towards his employees
Home delivery
MRP/Discounts
Credit card /no credit card
Professionalism
Age group
Language spoken
Kind of hoardings/sales material
Number of sales staff
Ability of store owner to create a larger mega store through alliances in his area
31

 Ability to invest around 25k for training and software /hardware installation and pay 3
months of rental in advance.

Store Household Ratio:

Sales Target- each store on average should get INR 200,000 per month as gross
revenue from our website i.e. approx. INR 20,000 of gross profits
Assuming each household has monthly spend of INR 8,000 and we get 50% share
within 6 months, 1 household will give gross revenue of 4000.
So each store should on average be serving a min of 50 households
Given our target penetration rate of 15% of households in a chosen area in one
month, we shall not have more than 1 store for 330 households
So for example maximum number of stores in 4 sector should not be more than 10
(2200 odd houses, including tenants and nuclear sub units around 3300 households)
Each store can serve a few areas of his choice including the area which he is
residing in. we can probably restrict the geographic area he can serve in basic tier
membership. We can have tiered rental rates and commission structure based on
geographic reach a store wishes to have
Gurgaon has around 150,000 households. Assuming relevant market is 30%. 45000
households is our target and assuming penetration of 15%, our immediate target is 6750
households for which we need 135 stores to start with.
With our target of 40% penetration we can go up to 360 stores within 6 months.

Delivery areas Decision:

Objective criterion
Household choice criterion
High target density
Vertically spread buildings preferable than horizontal spread

Subjective criterion

Feedback/demand from stores

Ease of identifying households or navigating through area
Cash on delivery success

B2C(BUSINESS TO CUSTOMER) Operations

Households

Divide Gurgaon into 6 units

Select areas in this portion to deliver:
Granular data on housing blocks (identify GPRS co-ordinates, google map data)
Resident size
Internet penetration
Quality of households
Income group
Occupation
Habitant or expat
32

Shops currently serving these areas

Size of shop
Variety of goods available
Format of shop
Proximity to large format formal branded store like Reliance etc.
Home delivery data if possible (how many shops and do people order over phone)
Variety of shops
Peak hour data of shops- how much local crowd buys from local shops
Number of shops within 1 km of household
Variety of shops (stationary, kirana, food, multiple stores, pharmacy etc.)

Household Buying behavior:

Who buys the goods? maid, owner, young family member, breadwinner, parents of
the breadwinner
Frequency at which they buy the goods
Average ticket size of the goods
Do they change buying behavior if the shopkeeper recommends them something
Do they ask shopkeeper to choose their brand
Can shopkeeper easily substitute the brand
What all products can you see in the basket of the people who are leaving the
market (variety of products)
What all the people do in the market when they come in
What kind of clothes are the wearing (sports, casual, formal office wear)

Households Choice Criterion:

Vision- To convert 15%, 30%, 40% of households in the community to be buyers from
Savegenie within 1/3/6 months of launch in that area and gain a share of wallet of 50% or
INR 4000 per household per month
High internet penetration
Working nuclear household with expat population density-high
High Average ticket size
Proximity buying high
Parent buying low
Home delivery percentage high.
IT/BPO or new age sector professional high.

Marketing and Promotional Strategies

Branding
Store
Hoarding carries Savegenie logo and Savegenie registered store
Employees at least delivery staff wears Savegeniet-shirt
Delivery staff trained on etiquettes to display Savegenie values and SavegenieBehavior
33

 All paper bags /poly bags carry Savegenielogo

Delivery

Delivery Staff
Packaging
Environmental benefits due to car-pooling of groceries
Use segregated delivery trays (second round not initially) to deliver clients goods in
environmental and food safety mechanism
Delivery cycle/bike

Social Media integration

Integrate in code Facebook like status at time of delivery confirmation, order booking,
time and money savings etc.
Tweet about our campaigns and what customers have to say
Local newspaper and print media advertising
Hoardings to launch /showcase success

Social
Take up high visibility low cost community projects (second stage)

Area Launch Strategy:

Canopy

Demonstrate key product features

Assist in navigation
Inform about a demo video
Inform through pamphlets the number of stores serving that are and their profile
Inform about the free gifts on registration and buying
Use political discourse and political messaging around that time to transfer interest on
to us like tame inflation etc.
Door to door campaign (with effective MIS) to target high conversion rates
Team exchanges to capture the last household

Media Advertising
Poster/pamphlet/newspaper campaign
You tube , Facebook and other campaign
Provide transparent feeds to let registered customers know the people who are being
added periodically
Reproduce original saving rates, time and money both through social media and
emails/SMS
Targeted SMS campaign
Use mobile videos to spread the word around

Use Local elderly people and community leaders

Identify local influencers and demonstrate them for wider VOC campaign

Stores
Use local stores area of influence and his client sets to make a noise about Savegenie
Give the local stores free visiting cards or pamphlets which they can use to spread
word about their new e-strategy
Local store should ideally have a demonstration video

Outcomes of the project

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6.8: Time frame

The internship consists of four stages which have to be executed over a period of two
months. The stages and their approximate time periods are given below.
I.
II.

Stage 1 : Secondary research (Week 1)

Stage 2 : Primary research Collection and analysis of data (Week 2 to week 4)
Data is collected over a period of 3 weeks till the targeted sample
responses are received. An average of 80 responses was collected per day.

III.

Stage 3 : Formulation and presentation of marketing and sales strategies

Estimation of costs, logistics and necessary resources (Week5 to Week 6)

IV.

Stage 4 : Execution and generating leads (Week 7 to Week 8)

6.9: Analysis of data collected from the research

For the survey people from various parts of Gurgaon were given a questionnaire and then
asked for their responses. Based on the responses, the following research analysis have been
carried out. The total number of samples in this case is 1098.

Fig 1: Gurgaon Map

For simplicity, entire Gurgaon was divided into 6 divisions and the research was then carried
out.
Group A: Sector 4,5,7,8,9,9A,10,10A,11,12,12A,33,34,36,37,37C
Group B: sector
2,3,13,14,15,17,17A,17C,18A,18B,19,20,21,21A,21B,22,22A,23,23A,31,32
Group C: Sector 24,25,26,26A,27,28,29,41,43
Group D: Sector 51,52,53,54,55,56
Group E: Sector 48,49,57,58,61,62,63,65,69,Sohna Road
35

 Group F: Sector 30,38,39,40,44,45,46,47,50

Based on the responses collected the following analysis has been

made.
6.10:

Analysis
Income Distribution

24%

27%

28%

21%

Under 35000
60001-100000
Fig2: Income Distribution on a monthly basis

36

35001-60000
>100000

Visitors economic class

80%
70%
60%
50%
40%
30%
20%
10%
0%

Under 35000
60001-100000

35001-60000
>100000

Fig3: Sector wise SEC

Residents economic class

50%
40%
30%
20%
10%
0%

Under 35000
60001-100000
Fig 4: SEC based on different groups

37

35001-60000
>100000

100%
90%
80%
70%
60%
50%
% of visitors from each area

40%
30%
20%
10%
0%

Survey locations
Fig 5: Sample Sector Mix

Online Shoppers (Gender)

Male
Female
0%

20% 40% 60% 80% 100%120%

Yes
Fig 6: Gender mix of Online Shoppers
38

No

Online Shoppers (Age)

0%

20%

40%

60%

Yes

80%

100%

No

Fig 7: Age mix of Online Shoppers

Pick-up preference
100%
80%
60%
40%
20%
0%

Female

Male
No

Fig 8: Pick-up vs Home delivery

39

Yes

120%

60%

51%

50%
40%

37%

42%

45%

43%
35%

35%

35%

30%
20%
10%
0%

Time

Variety
Female

Convenience

Price

Male

Fig 9: Sales pitch for men and women

Survey Locations: Time/Convenience/ Variety/ Price

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Fig 10: Survey Location parameters

40

70%
60%
50%
40%
30%
20%
10%
0%

Bulk

Need-to basis

Fig 11: Order Volume preference (group wise)

40%
35%
30%
25%
20%
15%
10%
5%
0%

<3000

3001-6000

Fig 12: Average monthly order (group wise)

41

6001-10000

>10000

44%
56%

Need-to basis

Bulk

Fig 13: Grocery Buying Behavior

Frequency of buying in bulk

23%
57%

5%
15%

2-3 times a month

Once a week
Fig 14: Frequency of Order

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2-3 times a week

Once in a month

Income vs Grocery spending

160
140
120
100
80

Grocery Expenditure

60
40
20
0

Monthly Income
Fig 15: Income vs spending on groceries

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Fig 16: Ratio of online user

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Willingness to use website with feature for store comparison

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Fig 17: Ratio of people willing to explore Savegenie features

44

Buying preference
80%
70%
60%
50%
40%
30%
20%
10%
0%

Same brand

Decide in store

Fig 18: Brand Loyalty

Brand Swapping given they look for same brand in stores

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Yes

45

No

Fig 19: Ratio of people willing to switch to other brands if offered a lower price

7. Findings from the Research:

Survey included people from all targeted income groups.

Regions with rich visitors (Greater than 60,000) :
Sectors - 14, 22, 27, 4, 49, 57

Regions with rich residents (Greater than 60,000):

Groups - A, D, E, F

No effect of Gender on online shopping

Target young population <40 years
Males and Females shows similar behaviour when asked about their preference for
pick-up.
Males give more importance to time.

Females give more importance to price.

In spite of having Same Brand preference, people are showing interest to swap brands
given they are priced low.

Suggestions and recommendations

According to me,savegenie.in has to develop unique, dual interfaces tailored

to the expectations and needs of the first-time user versus the experienced
users. For first-time shoppers, consider a comprehensive interactive tutorial
that guides the journeyshowing where to start and directing progress
through each department/category. Provide ways for experienced users to
take shortcuts and personalize their experience.
It has to grow distribution networks to satisfy desire for near-term delivery.
Creating local partnerships will help them to facilitate fresh merchandise, local
items, and quicker turnaround. This enhances more spontaneous shopping
and usage occasions.
It has to do mass advertisement on a regular basis until word-of-mouth takes
over. They need to create a sales and marketing team dedicated to the cause.
Increasing the customer visits to the site is of primary importance as this is the
only way to increase sales to the retail partners. Major chains use regular
advertising on daily, weekly or biweekly basis through mediums like social
networking sites, newspapers etc. If multi-page insert cant be done every
week, targeted advertising can be done in various sections of the newspaper.
Segments like the cooking section should be targeted as it correlates with the
products being sold at savegenie.in
46

 Introductory offers like discount coupons and cash backs should be offered to
attract the customers.
Apart from mass media advertising, they can also organise some
eventsinpopular public places. This will increase the recall and engagement of
the customer.
More resources has to be allocated as the company is in launch stage. The
growth of the company is proportional to the input given. Hence, allocating the
right human power for the marketing purpose is recommended.
Short term and long term targets have to be pre-planned and monitored on
regular basis to see if the growth track is in the right pace or not.
It should also plan on creating a dedicated call centre catering to the customer
needs.

Limitations of your project:

Software:
Printing technology
SDK and customization
HTML resource
Picture cutting
Website loading- call on weekend
Marketing:

Sales Manager- IIM/IIT vs full time strategy

Sales staff

Shopkeeper one time installation staff

T- Shirt

Polybag

Advertisement strategy any other

Operations & logistics:

Training of delivery boys- outsource behavioral training (training module)

Call center

Vehicle if any

Office rental & fitment & location

Finance, Secretarial and Legal :
Bank Account
Pan Card- filed
TAN number
Accounting staff- AA initially
Capitalization to induce capital- resolution
Savegenie TM registration
Budgeting
Closure of pre -incorporation accounts
47

References
Articles
Sudheer,P.(2012),Online Grocery Shopping:Rising trend in India.
Atul, M. and Hemant. K.(2011), Comparison of Online grocery business of India and western
countries.

Reports

Aaraamshop.in, State of Online Grocery Stores (SOGS Report) 2012.

Aaraamshop.in, State of Online Grocery Stores (SOGS Report) 2013.
Google and Wikipedia.

www.Savegenie.in
www.businessknowhow.com

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