Shiny Provision Store: Retailing Challenges In the Indian Context

By, Mayank Chowdhary, Mohit Kothari, Nishant Agarwal, Pankaj Bhutoria, Mekhala Maiti, Siddarth Garg

Background
Madhvan Anandan, the owner of Shiny Provision Store.

He wondered about his traditional managing and market-based skills in running the retail store

Objective
The objective of case study is to
a) develop a strategy to assist Anandan and stand him in good stead b) Ascould not afford the high investments that MNC were able to make in professionals management

Indian Retail Market

Retail context emerged from its diversity. The country has 28 states and seven union territories Consumers segments differed significantly in terms of lifestyle, income, religious practices and custom
Example: Urban India accounted for 64 percent of consumption

Indian Retailing Scenario

Existed since Mohenjodaro days Major traditional retail forms are : a) Fairs b) Shandies c) Village shopkeepers d) Public distribution shops(PDS)

Composition of the retail sector

Growth of Retailing
Kirana shops are like the mom and pop shops of the west Ranges from 25 to 400 sq.ft

Preferably unbranded stuffs

Food and grocery market valued US$236 billion in 2008( 60% of retail sales) Created employment opportunities

Growth: Over the years

Initially, retailing focused on basic necessities

Year 1950

No . of Shops (millions) 0.25

1978
1997 2005

2.335
5.13 12.77

Modern Retail Formats

Organized retailing:
a) Transparency in accounting b) Organized SCM c) Centralized quality control

d) Centralized sourcing
e) Not a standalone shop

 Unorganized retailing:
a) Operated by a single owner

b) Lacks technical standards

c) Lacks Accounting standards

Types of Modern retailing formats

Supermarkets: a) Includes food and household products
e.g.: Food World, More & Nilgiris

 Departmental Stores: a) Includes life style driven products

e.g.: Lifestyle, Shoppers Stop, Westside, etc.

 Hypermarkets: a) Large volume driven discount based stores

e.g.: Reliance Fresh, Big Bazar

 Specialized Killer stores: a) Extensive range of products under a single category

e.g.: Croma, Vivek & Co.

 Factory Outlets: a) Present in Urban areas b) Out of Vogue products sold at discount rates
e.g.: Louis Philippe in apparel, Nike in footwear, etc.

Kirana Shops Vs Modern Retail Outlets

Kirana Shops: a) Unbranded stuffs b) Monthly expenditure same as MRO Modern Retail Outlets: a) Branded products b) Monthly expenditure same as Kirana stores c) Has an edge in basically all the fields

Practical scenarios
Kirana Stores: a) Customer-Trust ratio is very high, thus affecting consumer behavior b) Very fast billing c) As Indian FMCG customers, none of us can run to the supermarket every now and then d) Unplanned and sudden purchases

e) Perishable items are more fresh f) free home delivery service

g) An edge in terms of providing months credit to its regular customers

Porters 5 Forces model

Forces Rival Intensity Kirana Stores High Modern Retail Outlets High

Threat of Entrants
Threat of Substitutes Power of Buyers

High
High High

High
Low High

Power of Suppliers

High

Low

4Ps of Marketing: Kirana Vs MRO

PRODUCT MODERN RETAIL OUTLETS Variety in each category Expensive as well as low end items More attraction of branded products KIRANA STORES Product SKUs are limited Cheaper and daily use items Unbranded products

PLACE MODERN RETAIL OUTLETS KIRANA STORES

Located in densely populated area

Area: 3000-3500 sq. ft.

Located on busy cross-roads

Area: 600-1000 sq. ft.

PRICE MODERN RETAIL OUTLETS Synergy due to bulk purchasing Central warehousing and transportation KIRANA STORES Variable depending on type of consumer No proper SCM in place

PROMOTION MODERN RETAIL OUTLETS KIRANA STORES

Promotion in regional and national level

Loyalty Card Scheme No such Provision

Promotion is a rare event

Bargains with regular customers Provide free home delivery

Recommendations
The shopkeepers should be polite and warm in greeting their customers. They can take feedback from the customers in order to improve their product line. They can give discounts on selective fast moving products.

Questions ?