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DECLARATION
I hereby declare that the project work entitled An Analysis of consumer satisfaction towards services of Vishal Mega Mart submitted to JK BUSINESS SCHOOL, is a record of an original work done by me under the guidance of Dr. Bhavana Syal , and this project work has not performed the basis for the award of any Degree or diploma/ associate ship/fellowship and similar project if any.
CERTIFICATE OF THE GUIDE This is to certify that the Project Work titled An Analysis of consumer
satisfaction towards services of VISHAL MEGA MART is a bonafide work of YOGESH BABU RATHORE, carried out in partial fulfillment for the award of degree of PGDM in JK Business School under my guidance. This project work is original and not submitted earlier for the award of any degree / diploma or associate ship of any other University / Institution.
PREFACE
The research report is necessary for the partial fulfillment of PGDM curriculum and it provides an opportunity to the researcher in understanding the industry with special emphasis on the development of skills in analyzing and interpreting practical problems through the application of management theories and techniques. It is a new platform of learning through practical experience, which incorporates survey and comparative analysis. It gives the learner an opportunity to relate the theory with the practice, to test the validity and applicability of his classroom learning against real life business situations. The researcher has conducted a research on An Analysis of consumer
ACKNOWLEDGEMENT The research work requires co-operation of many people and this work is no exception. It is difficult to thank individually all the persons who patronized this work. The researcher had asked for favors, borrowed ideas, expressions and facts from so many that it would require one volume to give credit to all. So, the researcher wants to thank all the patrons of this report. First and foremost, I would like to express our sincere and profound gratitude to Dr. Bhavana Syal (Lecturer), whose guidance has given a proper shape to this project. Her attitude towards excellence, her helping nature and her enthusiasm has been source of constant inspiration. Her unhitching support during our work is very admirable. She is the true driving force behind this work throughout, constantly encouraging us to do our best and inspiring us to aim higher. I will be failing in our duty, if I do not express our indebtedness to our Parents and family members for generating Confidence in us right from the commencement of this task to its accomplishment. I are also very thankful to all the faculty members, the whole college staff for providing us with necessary facilities and support, essential for bringing out this work in a short time. Last but not the least, I are thankful to all respondents, who gave us their precious time and support to fulfill this task, without their co-operation the study would not have seen the light of the day.
Literature review
Research Methodology
Data analysis
7 8 9
OBJECTIVES
To know the consumer awareness about VISHAL MEGA MART .
comparison to others .
all other Indian Industries. The retail sector has also contributed to 8% of the employment of the country. The organized retail sector is expected to triple its size by 2010. The food and grocery retail sector is expected to multiply five times in the same time frame. The major reason behind the low participation in the Indian retail sector is the need for lumpy investments that cannot matchup their break even points. The government policies are being revised from time to time to attract investments in this sector.
proportion of the whole industry. The retail stores have proved to be a vantage point for the customers. This implies that the small farmers who used to sell their product in the sabji-mandis and on roadsides are going to lose a significant market share as they can't employ the two profit maximizers economies of scale and economies of scope.
As can be clearly seen, retailing in India is superior to those of its contenders. Retail sector is a sunrise industry in India and the prospect for growth is simply huge. There are many factors that have stimulated the rise of the shopping centers and multiplex-malls in a jiffy. Some of them can be listed as follows:--- Rise in the purchasing power of Indians- the rise in the per capita income in the last few years has been magnificent. This has led to the generation of insatiable wants of the upper and middle class. The demand of new as well as second hand durables has risen throughout the country thus providing the incentive for taking up retailing.
Favorable to farmers- retailing has helped in removing the middlemen and has thus enhanced the remuneration to farmers. This is a new revolution in the agricultural sector in India and will go a long way in amending the condition of agriculture, a major concern among policy makers. Use of credit- a typical Indian is most conversant with using credit cards than carrying money. These have led to a shift of the consumer base towards supermarkets and make the payments in the form of credit. Comfortable Atmosphere- a visit to a retail store appears to be more soothing for the generation-Y. People and kids prefer to shop in an air conditioned a tech savvy manner. The retail industry is the second largest employer in India. It currently employs about 7 percent of the total labor force in India. Finance Minister P. Chidambaram's recent statement salaries ought not to be legislated is a welcome move as most of the organized retail is in private hands. However only about 4.6% of the total retail tradeis in organized sector. It generates about Rs.55, 000 crore ($12.4 billion). The major and minor players desperately need to work hard in this direction so that next time the figures look more decent. The government must also make an attempt to ameliorate the situation as political instability and infrastructure namely power and roads are the major roadblocks in the path of smooth functioning of the market.
Japan- total annual sales for the Japanese retail industry for 2003 amounted to JPY 133,273billion. Japan had 1.2 million retail establishments in June 2004 and there were 42,738specialty superstores. Between 2002 and 2004 annual sales per store increased by 3.8%. Gr owth was ma inl y dr iven b y the g roce r y supe rsto re s but th e nu mb e r of sup ersto re specializing in clothes gradually came down. The organized retail sector in Japan couldn't perform at its full efficiency because of collapse of the 'bubble economy' in the early 90s.
while the corresponding figure for J apan i s 57 % and China is 39 %. Also Indi ans t end to exhaust 40% o f th ei r co nsu me r spending on groceries (foodstuffs). These figures are intensified by the fact that Indians have special preference for lifestyle products and they feel comfortable in buying against credit as the credit card and mortgage market has been growing by more than 30%.We present the results from another survey below in order to strengthen our findings.
The above t able re info rce s our vi ew tha t Indi a has done a gr eat job in re tailing . On e noteworthy point here is that Japan in spite of being one of the most densely populated countries has fared poorly than India. But this euphoria loses its charm if we compare the percentage of organized retail in the total value generated by the retailing sector
According to international standards, a retail store is nominated as organized only when it features more than 10 employees. The above chart clearly portrays the miserable condition of India's organized retail A forecast of 40% annual growth in the organized retail sector s ee ms sound . Th e nu mb er o f shopp ing malls in India has grown from 1 in 2001t o 1 0 0 i n 2 0 0 5 b u t s t i l l m o r e e f f o r t i s needed to turn the predictions into reality. Studies have further showed that non-urban areas account for only about 15% of organized retailing So it is high time that the retail industries pay importance to diversification and reach out to non-urban markets. If they remain confined to the metropolis then they will soon hit a ceiling and will be able to grow no more. But at the same time they must realize that the rustic people are sceptic about the urbane lifestyle habits. The mega retail players will have to drop their policy of full extraction of consumer surplus and will have to employ the local people to overcome the myth that entry of a branded retail will displace the millions of traders, shopkeepers and hawkers. Protests must be welcomed and meetings encou raged making life saner. Retail markets in Germany, South Africa and many other countries allow 100% foreign investment in retail. This has helped in setting up of cash and in creating wholesale markets . However, in India, only 51% FDI is allowed in single-brand retail and that too with prior approval. In case of multi-brand retail, FDI is completely prohibited. This is a perfect beginning but foreign investment should be gradually liberalized to modernize farming and help farmers scale up. Moreover, restricting FDI for protecting mom-and-pop stores seem sun justifiable since Tata, Reliance and Bharti have already made a foray in the sector
However, according to the survey conducted by KPMG for Federation of Indian Chamber of Commerce and Industry (FICCI), among these, the food and grocery is expected to witness the fastest growth followed by clothing as the second-fastest growing segment.
ANDHRA PRADESH ( 3 Stores) ASSAM (6 Stores) BIHAR (7 Stores) CHHATTISGARH (1 Store) DELHI (8 Stores) GOA (1 Store) GUJARAT (2 Stores) HARYANA (8 Stores) HIMACHAL PRADESH (5 Stores) JAMMU & KASHMIR (4 Stores) JHARKHAND (5 Stores) KERALA ( 1 store)
KARNATAKA (1 Store) MADHYA PRADESH (9 Stores) MAHARASHTRA (4 Stores) MEGHALAYA ( 1 Store) NAGALAND ( 1 Store) ORISSA (7 Stores) PUNJAB (11 Stores) RAJASTHAN (14 Stores) TAMIL NADU (1 Store) UTTAR PRADESH (31 Stores) UTTARAKHAND (7 Stores) WEST BENGAL (5 Stores)
COMPANY PROFILE
Hypermarket 1986(Kolkata) Delhi Manufacturing & Retail Annual Rs6026.58cr (2007) Apparels, Departments, Grocery store
Vishal Retail Ltd, a leading player in the Indian retail industry, is a pioneer in discount retailing and is focused on tier II and III cities in the country. It has a strong presence in manufacturing and retailing of readymade garments (apparels); retailing of non-apparels and a large variety of FMCG products. The company has pan-India presence with108 mid-sized hypermarket format stores as on April 28, 2008covering about 2.3mn sq ft retail space area. Vishal is supported by strong manufacturing set-up in Gurgaon, Dehradun and Manesar with a capacity of 5,000 garment pieces per day in each unit. It also has 29warehouses located in 8 key cities in India covering over 1.1mn sq ft area. Vishal started as a humble one store enterprise in 1986 in Kolkata(erstwhile, Calcutta) is today a conglomerate encompassing 117showrooms in 75 cities / 20 states. India is first hyper-market has also been opened for the Indian consumer by Vishal. Situated in the national capital Delhi this store boasts of the single largest collection of goods and commodities sold under one roof in India The group had a turnover of Rs. 1463.12 million for fiscal 2005, under the dynamic leadership of Mr. Ram Chandra Agarwal. The group had of turnover Rs 2884.43 million for fiscal 2006 and Rs. 6026.53 million for fiscal 2007.The group is prime focus is on retailing. The Vishal stores offer affordable family fashion at prices to suit every pocket. The group is philosophy is integration and towards this end has initiated backward integration in the field of high fashion by setting up a state of the art manufacturing facility to support its retail endeavors.
124.74 million and Rs. 30.20 million, respectively. As a result, our sales increased between fiscal 2004 and fiscal 2007 at a CAGR of 89.83% and our profit after tax increased between fiscal 2004 and fiscal 2007 at a CAGR of 302.89%. Vishal Retail was incorporated on July 23, 2001 as Vishal Retail Private Limited as a retailer of ready-made apparels in Kolkata in2001. The company has acquired the business of 'M/s The Vishal Garments' and 'M/s Vishal Garments' in 2001. In 2003, the company has acquired the manufacturing facilities from Vishal Fashions Private Limited and M/s Vishal Apparels. Vishal is one of fastest growing retailing groups in India. Its outlets cater to almost all price ranges. The showrooms have over 70,000products range which fulfills all your household needs, and can be catered to under one roof. It is covering about 2059292 lac sq. ft. in18 states across India. Each store gives you international quality goods and prices hard to match. The cost benefits that are derived from the large central purchase of goods and services are passed on to the consumer.
Supply chain management Our supply chain management involves planning, merchandizing sourcing, standardization, vendor management, production, logistics, quality control, pilferage control replacement and replenishment. Our supply chain management provides us flexibility to adapt to changing patterns in consumer behavior and our ability to add value at various steps/levels. In particular, our supply chain management gains strength from our ability to undertake in-house manufacture, design and development of apparels. Logistics and distribution network Our distribution and logistics network comprises seven distribution centres. Besides, we have our own fleet of 41 trucks, which helps us to transport and deliver our products in a cost and time efficient manner. We believe that our distribution and logistics set up is well networked and allows us to fulfill the store requisition within short time period of generation and receipt of order, which has helped us to optimize in-store availability of merchandise and minimize transportation costs. Our strong distribution and logistics network has enabled us to dispense with the requirement of a dedicated storage space at every store, which is an industry practice, and instead undertake periodical replenishment of depleted stock. Due to adoption of an efficient racking system, we are able to benefit from optimum utilization of the space allocated for display in our stores. This provides us assistance in maintaining a low working capital requirement and less carrying cost. Geographical spread Our stores and distribution centers are spread in various parts and regions of the country. This has not only enabled us to build our brand value but also facilitated us to explore cost-effective sourcing from different locations, identify potential markets and efficiently establish new stores in different locations. An aggregate of 43 of 50 of our existing stores are located in Tier II and Tier III cities, which, we believe, enables us to capture market share in locations where a majority of our target customers are located. Identifying new locations We believe that we possess the ability to identify locations with potential for growth, in particular in Tier II and Tier III cities. We have an exclusive site
identification and assessment team, which undertakes systematic analysis of the business prospects, taking into account factors such as population, literacy levels, and nature of occupation, income levels, accessibility, basic infrastructure and establishment and running costs. Further, we have a dedicated warehouse for the purposes of storing the materials essential for setting up of new stores. Private labels We have a number of private labels for apparels (i.e. apparels manufactured by us) such as Zepplin, Paranoia, Chlorine, Kitaan Studio, Famenne, Fleurier Women and Roseau. In fiscal 2007, our income from our private labels was Rs. 583.60 million, which accounts for 9.68% of our total sales for fiscal 2007. We believe that our focus on our private labels and their recognition in our customer segment enables us to differentiate ourselves from our competitors. Information technology systems We believe that efficient information technology systems, processes and business applications are essential to handle retail chain of our magnitude. Our office processes are computerized which support procurement, supply chain logistics, distribution centers management and store operations including inventory management and billing. We are in the process of implementing SAP. All our stores and distribution centers are connected 25 through a company-wide virtual network connection which helps to efficiently manage our network of outlets throughout the country. Experienced and skilled management team We have an experienced management team which is complemented by a committed workforce. Our management team comprises of talented professionals who are skilled in the retail sector. This has assisted us in management of our stores. We believe we have created the right balance of performance bonuses and other incentives for our employees.
Our Strategy
We intend to pursue the following strategies in order to consolidate our position as an operator in the value retail segment in India. Our growth strategy is based on:
Increasing our penetration in the country by leveraging our supply chain, distribution and logistics network We intend to increase our penetration in the country by setting up new stores in cities where we already have presence, as also entering into new areas in the country. In particular, we intend to focus on expansion in Tier II and Tier III cities. We believe that our existing infrastructure have been designed for a higher scale of operations than our current size, and can help us grow with out the need to significantly increase costs. Moreover, our Continuous effort to improve systems and processes leads us to believe that we can deal with higher scale of operations without any hindrance. Higher business volumes will also improve our negotiating powers and help us get further economies of scale in our buying. Emphasis on Backward Integration We believe that through backward integration we will continue to substantially control the cost of production, resulting in such cost benefits being passed on to our customers. We intend to increase the in-house manufacture, design and development of our products and realise economies of scale. We intend to manufacture at least 25% of our requirement for apparels and may require expansion of our existing manufacturing facilities. This will also enable us to reduce our reliance on external agencies for supply of our products and will result in lower turn-around time. In addition, our focus would be to undertake in-house such functions of the manufacturing processes, which, in our view, would add maximum value and would enable us to reduce our procurement costs. Expansion of FMCG Historically, we have derived significant portion of our revenue from sale of apparels. In pursuance of our business plan to diversify our portfolio of offerings, FMCG products play a key role. FMCG products are usually meant to fulfill the daily needs of consumers and therefore, we believe retailing of FMCG products will bring customers to our stores on a frequent basis and this may in-turn lead to consumption of our apparels. We believe retailing of FMCG products would help us to eliminate the impact of seasonality of the apparels market in India, which depends on factors such as change in weather conditions and festival celebrations. In furtherance of our endeavors to reduce costs, we intend to
procure FMCG products directly from the manufacturers. For this purpose, we have entered into and will continue to explore the possibilities of entering into certain arrangements with domestic FMCG majors on such terms and conditions, which are suitable to our business model. Procurement from low-cost production centres outside India In addition to our strategy to continue procurement of goods from small and medium size vendors and manufacturers which leads to cost efficiencies, we intend to procure FMCG and apparels from low-cost production centres located outside India. Towards this objective, we propose to increase our procurement of 26 finished and semi-finished goods from China and thereby realise economies of scale and pass on the benefits so accrued to our customers. Increasing customer satisfaction and our base of loyal customers We believe that understanding the needs of our customers is of prime importance for the continuous growth of our business. In order to continuously provide customer satisfaction, our customer management team assimilates customer feedback and we endeavour to take necessary steps to address the requirements of our customers. In addition, we have introduced, in association with SBI Cards & Payment Services Private Limited, a co-branded credit card. We propose to continuously undertake such initiatives to increase the satisfaction of our customers. Continue to upgrade information technology systems and processes We believe that any retail business requires efficient information technology systems for control over the functioning of various stores including stock management, pricing and promotion, replenishment, sales, quality control and financial accounting. We are currently in the process of upgrading our information technology set up and have entered into arrangements with leading vendors of information technology services for implementation of more advanced ERP applications such as SAP. We intend to periodically upgrade our information technology systems and processes. Continue to train employees and seek entrepreneurship from employees We believe a key to our success will be our ability to continue to maintain and grow a pool of strong and experienced professionals. We have been successful in building a team of talented professionals and intend to continue placing special
emphasis on managing attrition and attracting and retaining our employees. We intend to continue to encourage our employees to be enterprising and expect them to learn on the job and contribute constructively to our business, either through ideas, personal networks or effective knowledge management. We also intend to continuously re-engineer our management and organizational structure to allow us to respond effectively to changes in the business environment and enhance our overall profitability. The Founders
Promotion
Advertising has played a crucial role in building of the brand. Vishal Mega Mart advertisements are mainly seen in print media i.e. newspapers, Television with Tina Parekhas there in advertisement, and sometime road-side bill-boards. VRPLs category management system is used to plan promotional schemes. They launch promotional schemes weekly. Apart from general sales promotion, the category manager formulates promotional plans for slo w mov ers . I n addition , to pro mo te sal es ,the y f ocus on la yout of th e stor es an d positioning, presentation and display of merchandise, in order to appeal to the customer. In addition, VRPL have introduced, in association with SBI Cards & Payment Services Private Limited, a co-branded credit card. VRPLs propose to continuously undertake such initiatives to increase the satisfaction of their customers. Some of the features of the co-branded card include Rs 250 discount voucher on signing up for the card and a process by which the cardholder earns five reward points on every Rs 100 spent. A cardholder accumulates point son the basis of purchases made and the points accumulated can be redeemed for gifts or purchases. In September 2005, VRPL entered into a long term advertising agreement with Bennett, Coleman & Company Limited (BCCL). Under the agreement, they are entitled to fixed discounts for their advertisement in print publications of BCCL for a period of five years from the date of the agreement. As a part consideration, VRPL had issued 1,670,605Equity Shares of Rs. 10 each and 384,190 Preference Shares of Rs. 146 each amounting to an aggregate of Rs. 300 million.
Investment Rational
Vishal Retail sells ready-made apparels (including its own Brands) and wide range of household merchandise and other Consumer goods such as footwear, toys, watches, toiletries, grocery items, sports items, crockery, gift and novelties. Vishal is value Retail Company catering to middle and lower middle income groups. As Apparel segment contributes 63 percent; it has plans to focus more on FMCG.To reduce cost, Vishal does in-house production of apparels, Procurement of goods directly procurement of goods from the small and medium size vendors and manufacturers. Efficient Logistics and distribution system along with Customized
product mix at stores depending on the regional customer behavior and preferences. Plans of penetrating deeper into Tier 1 and Tier 2 cities to bank upon early mover advantage, where organized retail is yet to make significant mark, which will help establish and build customer loyalty prior to other players. Higher margins of around 5-6 percent in private labels which account for 10 percent of sales in FY07.
Future Prospective
Vishal Retail Ltd has declared that the company has opened four new Showrooms at different localities. The company has opened a store at Shree Ram Palace, Main Delhi Road, Meerut. This is the company is second store in Meerut spreading across an area of 3,600 Sq. ft. (Approx). The company opened a store at Nauchandi Garh Road, Meerut commonly called Dreams, Opp. Samrat Heavens, Meerut. This is the company is third store in Meerut covering up an area of 12,000 Sq. ft. The company has opened a showroom at Enclave, Near BSNL Office,Ranipur More, Haridwar. This is the company is first store in Haridwar spreading across an area of 9,545 Sq. ft. (Approx). The company opened its store at Arcade, Plot No. 56-58, Dumas Road, Pip lad, Surat. This is company is second store in Surat spreading across an area of 38,000 Sq. Ft (Approx). Vishal Retail Limited is an India-based retail company. It was established in 1986. It was formerly called Vishal Retail Private Limited and changed its name to Vishal Retail Limited in 2006. The company is based in New Delhi, India.
As of August 8, 2007, the company operated 53 retail stores, including two stores that are operated by its franchisees. It sells readymade clothes, and a variety of household merchandise and other consumer goods, including toys, footwear, toiletries, sports items, watches, grocery items, crockery, novelties and gifts. Today, the stock is hovering around Rs 724 on the Bombay Stock Exchange. Vishal Retail has seen a 52-week high of 812 and low of Rs423.
Our
Popular
Brands
are
Zeppelin: Mens Shirts & Trousers Fizzy Babe: Ladies & Kids Girls Kitaan Studio : Mens Shirts & Trousers Jasmine: Ladies & Kids Girls Blues & Khakis : Mens Trousers Zero Degree : Kids Boys Paranoia: Mens Shirts & T-Shirts Soil: Mens Shirts Chlorine: Mens Shirts Massa Bay: Mens Trousers & Bermudas Fume: Mens Shirts, T-Shirts, Undergarments.
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